Category: Business

Famed Aerospace Designer Burt Rutan on the Government’s Role in Technology Development

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Leonard David:

?And we?re sitting there amazed throughout the 1960s. We were amazed because our country was going from Walt Disney and von Braun talking about it?all the way to a plan to land a man on the Moon?Wow!?
The right to dream
But as a kid back then, Rutan continued, the right to dream of going to the Moon or into space was reserved for only ?professional astronauts? ? an enormously dangerous and expensive undertaking.
Over the decades, Rutan said, despite the promise of the Space Shuttle to lower costs of getting to space, a kid?s hope of personal access to space in their lifetime remained in limbo.
?Look at the progress in 25 years of trying to replace the mistake of the shuttle. It?s more expensive?not less?a horrible mistake,? Rutan said. ?They knew it right away. And they?ve spent billions?arguably nearly $100 billion over all these years trying to sort out how to correct that mistake?trying to solve the problem of access to space. The problem is?it?s the government trying to do it.?

I believe Rutan is correct. Government should generally provide incentives for private industry to address problems that we as a society believe need attention. Examples include: broadband (true 2 way), education, energy and space exploration.

Revolution at the Water Cooler: Corinne Maier

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Sebastian Rotella:

Maier herself has withstood her share of boring meetings. But she did something about it. She wrote a 112-page manifesto titled “Hello, Laziness: Of the Art and Necessity of Doing the Least Possible in Business.”
And France reeled.
Maier’s satiric book, which denounces corporate culture as rigid, empty-headed, avaricious and ruthless, has zoomed to the top of the bestseller lists here, selling more than 120,000 copies at last count. In urging office workers to smile and look busy while sabotaging the system from within, she has ignited a national debate about the French work ethic ? or lack thereof.
“What you do ultimately means nothing and you could be replaced tomorrow by the first passing cretin,” Maier writes. “So work as little as possible, and spend some time (but not too much) on ‘marketing yourself’ and ‘building yourself a network’ so you will have support and be untouchable (and untouched) in case of a restructuring.”

Maier is a part time employee with EDF: Electricite de France.

A Pravda View of Guild.com

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Jason Stein points to Madison’s Guild.com as an example of how “critical that [venture capital] funding can be”:

In the late 1990s, Sikes dreamed of turning her Madison art catalog and publishing business into an Internet site that could sell pieces of art directly to the public. With millions in venture money to strengthen it, Guild.com survived the dot.com bust and now has 35 employees.
“Venture capital helped build this company to what it is today,” Sikes said. “The reason most start-up businesses fail is because they’re undercapitalized. There is an enormous need in Wisconsin for more venture capital.”
Fred Schwarzer, managing director of Charter Life Sciences in Palo Alto, Calif., said most venture capitalists stay relatively close to their East and West Coast offices and don’t get a chance to discover Madison companies like Guild.com.

Rather than drinking the kool aid and simply printing Guild CEO Toni Sike’s statements, Stein should have dug in a bit and run a quick Google search and found that:

  • Local investors lost millions during Guild’s chase for west coast VC money
  • Guild was bought back from Ashford for less than pennies on the dollar

Holding up guild.com as a local vc success story would be like the folks in Silicon Valley point to their substantial VC investments in massive failure webvan as an example of why they need more venture funding. Local NBC affiliate channel 15 (now a friend of Capital Newspapers madison.com site (!)) ran a brief story on Guild a few years ago. No mention was made of their financial history. I phoned the reporter after the segment aired and asked why this was omitted. She said: “well, the local investors got to keep their [worthless] stock”.
I’m not sure we can point to any successful VC backed firm here. Rather, we can look to those firms that have built businesses brick by brick, such as Epic systems. This lack of big numbers points to the real problem, too few folks are willing to take risks…. (Sikes took some, for sure, but let’s tell the whole story).
Unfortunately, this type of hype is quickly dismissed by anyone doing their homework, which the serious VC’s will do.

Decline of the US Creative Class?

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Richard Florida discusses [$6.00 PDF] America’s looming creativity crisis. Timely article, given WTN’s recent report.

The strength of the American economy does not rest on its manufacturing prowess, its natural resources, or the size of its market. It turns on one factor–the country’s openness to new ideas, which has allowed it to attract the brightest minds from around the world and harness their creative energies. But the United States is on the verge of losing that competitive edge. As the nation tightens its borders to students and scientists and subjects federal research funding to ideological and religious litmus tests, many other countries are stepping in to lure that creative capital away. Ireland, Canada, Australia, New Zealand, Denmark, and others are spending more on research and development and shoring up their universities in an effort to attract the world’s best–including Americans.

Richard Florida Links: All The Web | Clusty | Google | Teoma | Yahoo

Why Spend taxpayer $’s when we don’t Capitalize on what we have now?

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WTN’s recently released report [5.6MB PDF]includes these highlights:


  • Academic research and development activities in Wisconsin total about $883 million in the latest year. That includes the UW System, the Medical College of Wisconsin, other private colleges and universities, the Marshfield Clinic?s research arm and the research programs of the Veterans Administration hospitals.
  • Academic R&D is responsible for more than 31,000 jobs, directly and indirectly, in Wisconsin. That is according to an economic multiplier used by the U.S. Department of Commerce Bureau of Economic Analysis and the Association of American Universities.
  • Academic R&D represents an area where Wisconsin performs well versus other states in attracting federal dollars. Wisconsin is 15th nationally, even without the inclusion of the Marshfield Clinic and the Veterans Hospitals.
  • Academic R&D in Wisconsin has continued to grow, even as the economy retrenched in 2000-2003. In the last year alone, for example, R&D conducted in the UW System grew by $47.5 million.
  • Academic R&D in Wisconsin could be at risk unless state support for the infrastructure supporting such research is maintained. Other states are investing in their infrastructure because they believe it makes sound economic sense.

The report contains these recommendations:



  • The governor and Legislature should continue to invest in capital improvement programs such as BioStar and HealthStar, which leverage the assets of the UW-Madison and help to create spinout companies and jobs.
  • The governor and Legislature should begin, in the 2005-2007 state budget, the process of restoring state support for UW System operations. Although many states have experienced similar budget difficulties, the erosion in the UW budget has been relatively steady for years and cannot continue if the state wants to protect its investment.
  • The governor and Legislature should create a Wisconsin Innovation and Research Fund to help secure federal and corporate grants by providing small matching grants to UW System and private college faculty who collaborate with business on R&D.
  • The UW-Madison, the Medical College of Wisconsin and the Marshfield Clinic should re-examine already strong collaborative research relationships to look for more opportunities to joint attract research funding and conduct science. Incentives to conduct inter-institution and interdisciplinary research should be established. This is similar to an approach being followed in Minnesota, where the University of Minnesota and the Mayo Clinic have recently announced joint initiatives.
  • The governor and the Legislature should establish a commission, similar to the Michigan Commission on Higher Education and Economic Growth, to explore other options and to more deliberately track ?best practices? in other states.

Judy Newman interviewed local scientists, along with other interested parties.
I continue to believe the primary issue for us is not money, rather risk taking. We’ve certainly spent a great deal of academic research, only to see WARF license the technology to firms such as California based Geron, among other non Wisconsin entities.
These licensing activities beg the usual question: why should the taxpayers continue to pay when the fruits go elsewhere, similar to the long time discussion of our brain drain (two of my four UW roommates are in Colorado and California….)?
My View: Why spend more taxpayer money when we don’t capitalize on what we have now! I can’t imagine yet another government level technology council….
UPDATE: Tom Still (Report Editor and President of the WTN) sent me a followup email:

Jim — Thank you! It’s good to get the information out and let people debate how to set priorities. I appreciate your thoughtful approach.
— Tom

Send him yours: tstill at wisconsintechnologycouncil.com

“Creative Destruction”

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A term coined in 1942 by Joseph Schumpeter in his work, Capitalism, Socialism and Democracy, to denote a “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”
I thought of this concept (which I learned in High School many years ago) and refined at the UW recently while visiting with a local small business owner. This guy’s firm formerly sold voice mail systems. That business has changed quite a bit therefore, he is now selling services and IT solutions including replication, archive and “secure” email products.
I told him that I was impressed by his ability to zig and zag as the market changed. It’s clear that every worker today, at any level must be ready for new challenges and opportunities, as this article on the NY Times outsourcing plans illustrates.

Nicole Miller’s unplanned business success story

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I remember buying a number of Nicole Miller ties in the early 1990’s…

he first Nicole Miller boutique opened on New York’s Madison Avenue in 1986. The store did well, but Miller’s first big break came by accident.
Miller had made a series of silk dresses with a print made out of a design of theater tickets. Bud Konheim, her business partner of 22 years, remembers the dresses were “awful.” Konheim and Miller discussed using the silk to make women’s scarves but settled on men’s ties instead. A security guard at the Madison Avenue boutique also happened to work nights at the Metropolitan Opera. He borrowed one of the ties and showed it to a buyer of the Met’s gift shop.

Elizabeth Blair