Category: Entrepreneurs
A New News Media Emerges for Our New World
Summary: One indicator of the massive changes sweeping America is the destruction of longtime solid business models. This post discussed colleges; today we look at the news media. Tons of ink have been spilled on this, but IMO ignoring some likely outcomes.
The major news media are on a treadmill. Loss of credibility shrinks their audience, hence less revenue, hence reduced funding. Which reduces the quality of their product, hence even less audience. Worse is the loss of advertisers to new media (e.g., Craigslist and Google), which means less revenue, less funding for news collection, and smaller audiences.
This posts speculates about the future, what new models might emerge from this turmoil. Here are some guesses.
The Rise and Fall of Henry Ford’s Forgotten Jungle City By Greg Grandin
We revere Henry Ford: the inventor of modern mass production; the man who put Americans on wheels; the stolid Midwesterner whose ingenuity, common sense and hard work built an empire. Yet this same man was a bundle of contradictions: a pacifist who built tanks and warplanes, and who unleashed frightful brutality against his own striking workers; a hardheaded tycoon who strove to restore a sentimental vision of small-town life. He was, in short, the quintessential American: a hero and a fool.
“Fordism” also became a beacon for the world. Lenin’s Russia, Hitler’s Germany and many poor countries looked to the magic of mass production – and the magic of automobiles – to catapult their way to prosperity. Still, it’s a little surprising that Greg Grandin wants to explain Henry Ford’s America by taking us up the Amazon, where an old-fashioned water tower rises out of the jungle, hinting at a lost utopia.
Grandin, author of “Ford-landia,” has rediscovered one of Ford’s most ambitious but least known ventures. In 1927, Ford obtained a Connecticut-size chunk of the Brazilian jungle. His immediate goal was to establish a rubber plantation to supply his factories’ insatiable demand for tires and gaskets, but he also saw an opportunity to bring Brazil the same blessings that he prided himself on bringing to his Michigan workers: good wages, plus the standards of middle-class propriety that spelled the difference between civilization and chaos.
The Author as Performer
Late last year, for one night only, fans of the musical The Lion King were turned away from the Lyceum theatre in London’s West End. If they had been able to peer inside at the stage they would have witnessed not Simba, dancers in multicoloured costumes and “The Circle of Life” but a solitary, slender 45-year-old Canadian with bouffant hair standing behind a lectern. There were no props, apart from the video screen relaying his image around the huge auditorium, but this didn’t bother the youngish crowd who had bought 4,000 tickets at around £20 a piece to listen to one of two consecutive performances.
The speaker was the influential journalist, author and ideas entrepreneur Malcolm Gladwell, in town to promote his latest book, Outliers: The Story of Success. But this wasn’t a book reading or a Q&A session of the kind authors traditionally submit to. Neither was it a slide show, as you might expect to find at a lecture. Instead, the author recounted a single vignette from the book – the tale of why a plane ended up crashing, from the perspective of the pilots and those in the control tower – and burnished it into a narrative with all the chill and pace of a traditional ghost story. Even the lighting was kept deliberately low to create the right atmosphere. The performance lasted precisely an hour and five minutes, and no questions were invited after Gladwell had finished speaking. Rather than a talk about a book, it looked more like a carefully choreographed stage show.
Lunch with the FT: Sir Simon Rattle
attle found the criticism painful. Popping another tomato in his mouth, he lets slip that the reason Lunch with the FT took so long to arrange – more than a year – was that he was stung by what I had written. “That’s why I avoided speaking to you.”
. . .
But last year his Berlin contract was extended to 2018 – an impressive vote of confidence from an orchestra that, unusually, is entirely self-governing while receiving most of its funds from the state. And a visit to the London Proms revealed a man who had matured and mellowed. He had finally begun to learn German. He still struggles to speak it (“anyone less linguistically gifted than me is hard to imagine”, he confesses), but by attempting to do so he had broken an important psychological barrier. His podium gestures were as jubilant as ever, but his Brahms had acquired unmistakable depth.
Sitting across the lunch table, I begin to understand why. Rattle is settling into comfortable middle age. The blue T-shirt may advertise a man still young at heart but the curls are white and thinning. Yesterday’s boy wonder is now older than most of his orchestra. He has begun to slow down, to be slightly less sensitive to criticism.
But there’s another factor at work. Rattle has made his home in Berlin, something not even Herbert von Karajan, his most illustrious predecessor, had done. He lives in one of the city’s leafy quarters and is often seen doing the family shopping in its open-air markets. It’s as if he has gone native. So what has he learned about the Germans?
“People are more subtle and complicated than they are made out to be,” he answers, pouring some of the red wine he has brought outside. Does this mean Germans are not the humourless caricature peddled by England’s tabloid newspapers? Rattle sighs. It wasn’t until his late twenties, he says, after discussing the horrors of the Nazi era with Viennese conductor Rudolf Schwarz, a Belsen survivor who resumed his career in Birmingham after the war, that he became aware of the complexities of national identity.
Organic Dairies Watch the Good Times Turn Bad
When Ken Preston went organic on his dairy farm here in 2005, he figured that doing so would guarantee him what had long been elusive: a stable, high price for the milk from his cows.
Sure enough, his income soared 20 percent, and he could finally afford a Chevy Silverado pickup to help out. The dairy conglomerate that distributed his milk wanted everything Mr. Preston could supply. Supermarket orders were skyrocketing.
But soon the price of organic feed shot up. Then the recession hit, and families looking to save on groceries found organic milk easy to do without. Ultimately the conglomerate, with a glut of product, said it would not renew his contract next month, leaving him with nowhere to sell his milk, a victim of trends that are crippling many organic dairy farmers from coast to coast.
For those farmers, the promises of going organic — a steady paycheck and salvation for small family farms — have collapsed in the last six months. As the trend toward organic food consumption slows after years of explosive growth, no sector is in direr shape than the $1.3 billion organic milk industry. Farmers nationwide have been told to cut milk production by as much as 20 percent, and many are talking of shutting down.
How David Beats Goliath
When Vivek Ranadivé decided to coach his daughter Anjali’s basketball team, he settled on two principles. The first was that he would never raise his voice. This was National Junior Basketball—the Little League of basketball. The team was made up mostly of twelve-year-olds, and twelve-year-olds, he knew from experience, did not respond well to shouting. He would conduct business on the basketball court, he decided, the same way he conducted business at his software firm. He would speak calmly and softly, and convince the girls of the wisdom of his approach with appeals to reason and common sense.
The second principle was more important. Ranadivé was puzzled by the way Americans played basketball. He is from Mumbai. He grew up with cricket and soccer. He would never forget the first time he saw a basketball game. He thought it was mindless. Team A would score and then immediately retreat to its own end of the court. Team B would inbound the ball and dribble it into Team A’s end, where Team A was patiently waiting. Then the process would reverse itself. A basketball court was ninety-four feet long. But most of the time a team defended only about twenty-four feet of that, conceding the other seventy feet. Occasionally, teams would play a full-court press—that is, they would contest their opponent’s attempt to advance the ball up the court. But they would do it for only a few minutes at a time. It was as if there were a kind of conspiracy in the basketball world about the way the game ought to be played, and Ranadivé thought that that conspiracy had the effect of widening the gap between good teams and weak teams. Good teams, after all, had players who were tall and could dribble and shoot well; they could crisply execute their carefully prepared plays in their opponent’s end. Why, then, did weak teams play in a way that made it easy for good teams to do the very things that made them so good?
Khosla on Renewable Energy
EC (13:40): In the past 90 days we have seen something like a billion dollars being put into solar investments – whether in the form of equity or debt. Is that stupid money?
VK: The people who are putting in gobs of money, behind people chasing First Solar at billion dollar valuations – I won’t say it’s stupid but it’s not something I would do with my money. (EC: That pretty much counts as stupid). A diversity of opinion is good. I am often wrong. (EC: Sometimes you are). You only need to be correct once in a while because in our business you only lose one time your money but you can make 100 times quite easily. I don’t have to be very right.
(RR: I would like to hear that during his next congressional testimony where he is trying to drive the direction of energy policy: “I am often wrong.” But this also gets to the heart of why I often object to what he is saying. If he uses his high level of influence to help put us down the wrong path on energy policy, then what are the consequences of being wrong? They could be severe.)
EC (14:38): How many companies do you currently have in your portfolio?
VK: Our clean tech portfolio has probably about 50 companies.
EC (15:48): Which was the biggest disappointment?
VK: We have not had any large cut-offs – I am trying to think – in our clean tech portfolio. When we have invested a lot of money, there’s one or two places – well one we wrote off; one called Altra. (RR: Altra is a corn ethanol producer that is on the ropes). There’s one place we actually decided to change the plan – Cilion – and made it capital neutral, so they don’t need a lot of cash. Got rid of the debt; the company is going fine, but sort of on the slow boat.
Why Sourdough is the Best Bread
San Francisco’s food scene is probably the most vibrant in the Americas. Whether they’re starting trends or perfecting them, Bay Area chefs have long been among the world’s most creative. But amidst all the innovation, there has been one faithful and beloved constant on the city’s many tables: sourdough bread.
It’s hard to find someone who doesn’t like sourdough, but even rarer are people who know what makes it so distinctive. It’s often thought to be a flavouring, or perhaps a baking technique, something pioneered in Gold Rush-era San Francisco. In fact, sourdough is simply bread in which the rise comes not from a package of shop-bought yeast, but from wild yeast that is in the air everywhere.
As the original leavened bread – all bread was “sourdough” until Louis Pasteur’s germ theory led to packaged yeast – sourdough has a long and storied past. But as a let-them-eat-cake epoch gives way to home pleasures and the local food movement, sourdough is equally suited to our own times. Classic, inexpensive and uniquely local, sourdough is as fascinating to kids and novices as it is to practiced bakers and mad scientists of all ages.
Sourdough is an ancient art, but with just two ingredients its simplicity is as remarkable as its heritage. Flour and water are mixed and left to stand on a windowsill or kitchen counter. In a matter of days wild yeast take over and the mixture begins to froth and bubble with life. If you’ve ever wondered at the origins of this or that cooking method – “who on Earth thought to try this?” – sourdough is that rare thing, a miraculous culinary phenomenon that won’t give you that feeling. With yeast naturally in the air, it’s easy to imagine how an afternoon’s forgetfulness in ancient Egypt led to the invention of leavened bread.
How Bailouts Can Butcher Capitlism
One unhappy hallmark of the Great Recession is a dramatic spike in financial distress. Moody’s predicts that the default rate on corporate debt–which helps foretell bankruptcies–will be three times higher this year than in 2008. Home foreclosures are already at record highs, and going higher. Defaults on credit cards and other consumer debt will crest right behind mortgages.
The Obama administration is on the case, bailing out banks and homeowners and aiding dozens of industries either directly, through a financial-rescue scheme that could top $2 trillion, or indirectly, through the $787 billion stimulus bill. Automakers, furniture companies, real estate developers, and even porn magnates have their hands out.
[See a tally of the bailout efforts so far.]
Those efforts ought to help soften a sharp recession. But the unprecedented aid to the private sector may also unleash new problems, the way antibiotics have generated stronger strains of bacteria. “There’s something fundamental about the need for failure,” says Syd Finkelstein, a professor at Dartmouth’s Tuck School of Business and author of Think Again: Why Good Leaders Make Bad Decisions and How to Keep It From Happening to You. “We’re tinkering with the genetic DNA of a capitalist society.”