Week Five

5. February 6
The Heroic Entrepreneur

Question: what role do “new economy” thinkers assign to individual “entrepreneurs” (in contrast to groups, teams, whole professions, governments and nations?

Quotes for Class Nine

The capitalist was reinterpreted as a heroic life-force, a bringer of growth, innovation and riches to others as well as himself, associated with giving and generosity rather than meanness and avarice.  As Gilder explained: “Capitalism transforms the gift impulse into a disciplined process of creative investment based on a continuing analysis of the needs of others.”
-- Anthony Sampson

Seed investing requires a special kind of hunger.  [Steve] Jurvetson's parents were immigrants from Estonia, and he was reared in Dallas by the creed that what he was to make of his life was entirely up to him; there were no entitlements. In an undergraduate psychology class, he  answered a series of Enneagram questions meant to divine his character type. He so fit the description of a Type 3, the Performer (as in star performer), that he was  asked back in following semesters to lecture about the traits of Type 3's: tremendous need for achievement, with an inner drive to do something beyond  the ordinary.
               That drive is why he belongs dead center in the creation zone of the new economy: where there's constantly a new goal to keep him from getting bored, and where he has all of Silicon Valley as an audience to perform for.   He seems very similar in character to the headstrong young entrepreneurs he deals with, and perhaps that is partly why they mind-meld with him so well.
-- Po Bronson, The Nudist on the Late Shift

Assignments:
Michael Lewis, The New New Thing: A Silicon Valley
Story  pp. 13-159.

            

February 8
Distortions of Monopoly

Questions: Does the new economy have a bias toward size and concentration?  If so, how does size and concentration interact with innovation?

Quotes for Class Ten

Its Windows operating system claims some 86% of [the PC] software market, and its Office suite of productivity programs, including a spreadsheet and word processor, has an 87% lock.  . . . Microsoft is expected to reel in more than $4 billion in profits this fiscal year, which ends in June, on $14 billion in revenues, up 23% over a year ago.  . . . . In calendar year 1996, its $8.7 billion in revenues accounted for 10% of all sales for the 613 publicly traded software and information-services companies . . . More significantly, its $3.1 billion in operating profits was a remarkable 30% of all such profits.
                With the company’s pockets lined with riches from Windows and related software, it can spend a staggering $2.5 billion a year on new-product development -- more than the annual profits of the next 10 largest software companies combined.  And what it can’t develop fast enough, the company can buy,
-- Business Week 19 Jan 1998.

Wealth is never created by income. It's created by capital gains.  If you can't let your profits run untaxed, you lose a huge compounding advantage. As a broker or a doctor or a lawyer, you're  essentially paid by the hour. If you stop going to the office, you stop making money. The only way to wealth is to be an entrepreneur. How many people do you know  who are worth tens of millions of dollars and have worked for a living all their life? On the other hand, most entrepreneurs’ resumes won't get them hired as  CEO of a $10 billion company. You have to go build it yourself.
-- Dick Heckmann, founder and CEO of US Filters, Success magazine (1997)

 Truly original thinkers tend not to be entrepreneurs who've spent 10 years at Cisco and can be trusted to know what they're doing.  They tend to be 26 years old and highflying. They often have a very childlike mind, with some naivete. We're impressed by people who don't know what can't be done.
-- Steve Jurvetson, venture capitalist firm Draper Fisher

The nation’s largest Internet company has ordered an Aurora [Colorado] woman to stop selling and promoting her book You’ve Got Male because of the similarity to the America Online phrase ‘You’ve got mail.’” First time author Madelene Sabol says, “I’ve spent the past three-and-a-half years doing research and writing the book and invested at least $10,000 in it . . . My attorney told me, ‘You may as well change the name of the book because you can’t fight a big company like that.  But why is a big company coming after a little girl like me.’”
-- Denver Rocky Mountain News 20 Aug 2000

Assignments:
Lewis, Michael, The New New Thing, pp 160-268