Wednesday, April 30, 2014

Entrepreneurs power the best economies

Should this be surprising? (Telegraph)

Indeed, entrepreneurialism is strongest in countries that share the English common law tradition – five times higher than those with a French legal origin. There is also a strong correlation between high rates of entrepreneurship in a country and low taxes. Equally, a low regulatory burden correlates strongly with high rates of entrepreneurship. On the other hand, those government and supranational programmes that politicians love to announce to encourage entrepreneurship – such as the EU’s Lisbon Strategy – tend to fail.

The lesson is clear: to encourage innovation and entrepreneurialism, governments should do as little as possible, beyond cutting taxes and regulations.

Longtime US politician "discovers the profit motive"

Among other things. Kind of a neat story (WashingtonPost):

Bonior said if he had the power, he would lighten up on pesky regulations.

“It took us a ridiculous amount of time to get our permits. I understand regulations and . . . the necessity for it. But we lost six months of business because of that. It’s very frustrating.”

Monday, April 28, 2014

Bridging the gap between economists and ecologists

Written by an ecologist turned economics journalist: And why we're not running out - (WSJ):

In 1972, the ecologist Paul Ehrlich of Stanford University came up with a simple formula called IPAT, which stated that the impact of humankind was equal to population multiplied by affluence multiplied again by technology. In other words, the damage done to Earth increases the more people there are, the richer they get and the more technology they have.

Many ecologists still subscribe to this doctrine, which has attained the status of holy writ in ecology. But the past 40 years haven't been kind to it. In many respects, greater affluence and new technology have led to less human impact on the planet, not more. Richer people with new technologies tend not to collect firewood and bushmeat from natural forests; instead, they use electricity and farmed chicken—both of which need much less land. In 2006, Mr. Ausubel calculated that no country with a GDP per head greater than $4,600 has a falling stock of forest (in density as well as in acreage).

Haiti is 98% deforested and literally brown on satellite images, compared with its green, well-forested neighbor, the Dominican Republic. The difference stems from Haiti's poverty, which causes it to rely on charcoal for domestic and industrial energy, whereas the Dominican Republic is wealthy enough to use fossil fuels, subsidizing propane gas for cooking fuel specifically so that people won't cut down forests.

Part of the problem is that the word "consumption" means different things to the two tribes. Ecologists use it to mean "the act of using up a resource"; economists mean "the purchase of goods and services by the public" (both definitions taken from the Oxford dictionary). [...] human activities actually increase the production of green vegetation in natural ecosystems. Fertilizer taken up by crops is carried into forests and rivers by wild birds and animals, where it boosts yields of wild vegetation too (sometimes too much, causing algal blooms in water). In places like the Nile delta, wild ecosystems are more productive than they would be without human intervention, despite the fact that much of the land is used for growing human food. If I could have one wish for the Earth's environment, it would be to bring together the two tribes—to convene a grand powwow of ecologists and economists. I would pose them this simple question and not let them leave the room until they had answered it: How can innovation improve the environment?

Sunday, April 20, 2014

How culture does matter

Heh. Communication patterns around the world (BusinessInsider via SwissMiss).

A good discussion on startup culture

Starting with the advice to one startup from Peter Thiel: Don't f*** up the culture (HN).

Psychological traits of successful startup founders

Makes sense (Stanford, PDF via DavidJaxon):

Personal Exceptionalism. Definition: A macro sense that you are in the top of your cohort, your work is snowflake-special, or that you are destined to have experiences well outside the bounds of “normal”; not to be confused with arrogance or high self-esteem. Benefit: Resilience, stamina, charisma. Deadly risk: Assuming macro-exceptionalism means micro exceptionalism; brittleness.

Dichotemous Thinking. Definition: Being extremely judgmental of people, experiences, things; highly opinionated at the extremes; sees black and white, little grey. Benefit: Achieves excellence frequently. Deadly risk: Perfectionism.

Correct Overgeneralization. Definition: Making universal judgments from limited observations and being right a lot of the time. Benefit: Saves time. Deadly risk: Addiction to instinct and indifference to data.

Blank Canvas Thinking. Definition: Sees own life as a blank canvas, not a paint-by-numbers. Benefit: No sense of coloring outside the lines, creates surprises. Deadly risk: “Ars gratis artis”, failure to launch, failure to scale.

Schumpeterianism. Definition: Sees creative destruction as natural, necessary, and as their vocation. Benefit: Fearlessness, tolerance for destruction and pain. Deadly risk: Heartless ambition, alienation.
Related: 35 habits of highly productive people (with a somewhat dizzying infographic). (Entrepreneur)

In blind test, soloists prefer new violins over old

In a way it's sad (as an erstwhile violinist), it's kind of romantic to think that the history some of these old violins have seen, resonate in the music they carry. On the other hand, it's massively democratizing (

Tuesday, April 08, 2014

In praise of inconvenience?

Services that provide convenience or rich experiences give people a reason to pay more for products or services. But would you pay more just because it's local? Posts like this from the swissmiss strike me as silly. Not only does she infer that ordering from services like Amazon is something to "feel guilty" about, she bemoans the convenience its new Amazon Dash adds.

Certainly it's her right and prerogative to support local businesses - but all things being equal, isn't that rewarding them for their lack of efficiency, their lack of differentiation and an admission of expectations that they can't actual provide anything else of value for their customers? What's next? Trashing automated looms because they destroy jobs? (Wikipedia)

While I celebrate her freedom to choose, I can't help but wonder if she would do the same for other consumers when it comes to stores like Walmart.

Monday, April 07, 2014

The psychological price paid by many entrepreneurs?

Quoting Jessica Bruder (AFoundersNotebook):

According to researchers, many entrepreneurs share innate character traits that make them more vulnerable to mood swings. “People who are on the energetic, motivated, and creative side are both more likely to be entrepreneurial and more likely to have strong emotional states,” says Freeman. Those states may include depression, despair, hopelessness, worthlessness, loss of motivation, and suicidal thinking.
More at the link.

Beyond parody... anti-growth protesters in San Francisco

Anti-tech protesters circulate flyers claiming tech founder is a "parasite" for investing in startups/creating jobs that pay more than so-called "service workers" (TechCrunch). Successful tech workers are being turned into scapegoats for others.

More from Instapundit: "At core, their politics are based on envy, resentment, and a wholly-earned sense of inferiority."