Why Do I Teach? We should judge teaching not by the amount of knowledge it passes on, but by the enduring excitement it generates

MAY 22, 2013, 11:45 AM

Why Do I Teach?


As I wind up another semester of teaching at Notre Dame, I’ve been thinking about what I’m actually accomplishing in the classroom.  The standard view is that teaching imparts knowledge, either knowing how (skills) or knowing that (information).  Tests seem important because they measure the knowledge students have gained from a course.  But how well would most of us do on the tests we aced even just a few years ago?  Discuss the causes of the Thirty Years War.  Mary is 20 years old, which is twice the age Ann was when Mary was the age Ann is now: how old is Ann?  How do Shakespeare’s early comedies differ from his late romances?  Give a quick summary of Mendel’s Laws.

Overall, college education seems a matter of mastering a complex body of knowledge for a very short time only to rather soon forget everything except a few disjointed elements. (To return to the test questions above: it was about religion; you would need to set up an equation; the comedies were supposed to be funny, the romances not so much; something about the genetics of peas).  Of course, almost everyone eventually learns how to read, write, and do basic arithmetic—along with the rudiments of other subjects such as history and geography.  But that’s because such knowledge is constantly reviewed as we deal with e-mail, pay bills and read newspapers— not because we learned it once and for all in, say, third grade. Read more of this post

Investors Beware: Corporate Financial Statements Decline in Predictive Value

Investors Beware: Corporate Financial Statements Decline in Predictive Value

by Bill Snyder | May 22, 2013

Over time, financial statements of public corporations show more losses, intangibles, and earnings restatements, which lower their value for predicting corporate bankruptcies

Corporate bankruptcies, like earthquakes, are rare events. But when they do occur, says Maureen F. McNichols of Stanford’s Graduate School of Business, the results can be financially devastating for investors and other stakeholders. An important role of financial statement information is to permit investors to assess the likely timing and amount of future cash flows. Recent research by McNichols and coauthors examines the usefulness of financial statement and market data for investors who want to ascertain the likelihood of bankruptcy. The results of that research are not completely reassuring.  Read more of this post

Embrace the Business Model That Threatens You

Embrace the Business Model That Threatens You

by Leonard Fuld  |   8:00 AM May 22, 2013

If your company is already well established and has smart management, it is likely that it will become a hybrid in the next ten years, blending its legacy business with a new business model that is rising to threaten it. Take Walmart, for example. After suffering several years of Amazon’s online hegemony, Walmart responded with a hybrid approach. Merchandise ordered online can now be drop-shipped for same-day pickup at local stores. This and other creative solutions have driven over $9 billion of online sales to Walmart. (It’s no surprise that Amazon — which has no physical stores — has mirrored the move from the other direction, installing lockers in neighborhood stores to allow for direct pickup.)

Entertainment and medicine are other industries where hybrid models are beginning to emerge as resilient success stories. Netflix, formerly a media distributor increasingly threatened by the very entertainment companies whose programming it sells, has begun producing its own original programming (such as the recently released series House of Cards.) According to Netflix, offering popular original programming has attracted its customers to order more items from the rest of its media catalog — a hybrid win-win. The Veterans Administration hospital system has formed an alliance with Bosch Healthcare to offer a more efficient means to monitor and diagnose the elderly or infirm remotely, from their homes. Read more of this post

How to Create True Customer Advocates

How to Create True Customer Advocates

by Bill Lee  |  12:00 PM May 22, 2013

Who sells your products or services? This may seem like a silly question, the answer being of course, the sales & marketing team. But increasingly, the most important person selling what you’re offering is — your customer. More specifically, your customer advocates. And, as buyers increasingly expect to learn about products and services from their peers who are using them, companies are getting more creative at putting their happy customers in front of those buyers. The forms that this kind of community marketing can take are varied, and might include straightforward references and referrals, customer blogging or video (an area of exceptional creativity), participating in communities, associations or consortiums, speaking at industry events…it’s a growing list. One predictable result of this activity has been increasing demand from marketing and sales leaders to find more such advocates to showcase, in some cases creating a “beast that needs to be fed” similar to what you see in traditional media channels — like sports or the entertainment industry — that experience rapid growth in popularity. So the question becomes: in order to keep the advocate pipeline filled, should you incent customers with rewards, discounts, even payments of some sort? My strong suggestion — based on actual experiences from companies who are not incenting customers to advocate — is to avoid this slippery slope. It’s not good for them, or for your business. So then, how do you make this happen? How do you create the conditions that generate not only happy customers, but true customer advocates? Here are some key elements for creating an overarching value proposition that fosters customer advocates and preserves the integrity of their advocacy:  Read more of this post

How Email App Mailbox Turned A Desperate Situation Into An ~$100 Million Exit 37 Days After It Launched

How Email App Mailbox Turned A Desperate Situation Into An ~$100 Million Exit 37 Days After It Launched

Alyson Shontell | May 22, 2013, 5:09 PM | 2,593 | 1


Gentry Underwood, co-founder of Mailbox

In January, an email organization app called Mailbox launched, and it promised to help users reach inbox zero. Thirty-seven days later, cloud storage company Dropbox acquired it for a reported $100 million. We sat down with the app’s founder, Gentry Underwood, who told us how he was able to flip the app so quickly and what it is like working for $4 billion Silicon Valley company, Dropbox. To summarize:

Underwood isn’t sure if his app is actually worth $100 million. He also wouldn’t confirm if that was the actual sale price.

Underwood says the quick sale was the result of Underwood’s team being able to determine product-market fit.

Mailbox went viral before the app even launched. Here’s how he drummed up attention for it: Read more of this post

VMware Public Cloud Software Challenges Amazon, Microsoft

VMware Public Cloud Software Challenges Amazon, Microsoft

VMware Inc. (VMW) is debuting a service that lets customers use the Web to access information and programs stored in its data centers, an effort to challenge Amazon.com Inc. (AMZN) and Microsoft Corp. (MSFT) in cloud computing.

Early testers of the vCloud Hybrid Service include News Corp. (NWSA)’s Fox Broadcasting and the state of Michigan, VMware Chief Executive Officer Pat Gelsinger in an interview. The product will be more widely available in the third quarter, he said.

VMware, the biggest provider of software that lets computers run multiple operating systems, is expanding in cloud-computing to bolster sales as U.S. customers trim technology spending. With the new product, VMware is entering the fastest-growing part of the cloud market, according to Gartner Inc., which estimates that sales of so-called infrastructure-as-a-service will surge by an average 38 percent annually to $30.6 billion by 2017 from $6.17 billion last year. Read more of this post

5 Mobile Payments Data Points That Will Blow Your Mind

5 Mobile Payments Data Points That Will Blow Your Mind

Josh Luger | May 22, 2013, 12:56 PM | 1,376 | 1

Consumers gravitate to convenience. That’s as true with payment technologies as it is with anything else. A prime example is the decades-old trend away from cash or checks and toward credit cards. Now, the mass adoption of smartphones and tablets has set the stage for a new move — away from fixed-point, card-based transactions and toward those completed on mobile. The old dream of the “digital wallet” is coming true in a very particular mobile-led fashion. In a recent report from BI Intelligence we explain the main types of mobile payments, analyze the state of the mobile payments race, examine the matchup between card readers and near-field communications (NFC), look at how traditional banks, credit card companies, and card processors are responding to the mobile payments threat, and detail who is furthest along in developing the all-in-one solution for merchants and consumers.

Here are 5 data points that help underscore the explosion:

$640 million: eMarketer has estimated mobile payments as adding up to $640 million in transaction volume in the U.S., up from $170 million in 2011. However, this figure does not include swipes on mobile credit card readers like Square and PayPal Here, only consumer-side mobile payments in-store.

$10 billion: Card readers are building real scale. Square’s mobile payments volume rose to $10 billion in 2012, up from $2 billion in 2011Starbucks is switching its credit and debit card processing to Square, and as of January 2013 accepts the “Square Wallet” app at 7,000 locations. 

$14 billion: Though much of that volume was from PayPal-enabled mobile commerce, and not in-store payments, that’s still evidence of mobile catching on as a transactional platform.

7.9 million: As of year-end 2012, only 7.9 million U.S. consumers (less than 90 percent of the total) had adopted a consumer-facing NFC-compatible system like “Google Wallet,” or apps that use QR codes or other methods to generate a payment. Card readers seem to be way ahead in the game.

$3.95 trillion: With more than $3.95 trillion of non-cash transaction volume recorded in the U.S. alone in 2011, the stakes are high in this space.

How Marc Beer Scipted Aegerion Pharma’s Success Story

How Marc Beer Scipted Aegerion Pharma’s Success Story

by Matthew Herper | May 23, 2013


Marc Beer (right) and Daniel Rader created a great drug—and a hot stock

Marc Beer was done starting companies—until he met a doctor who could help patients with a rare and terrible disease. Investors couldn’t be happier

When Marc Beer sold his first public company, the biotech ViaCell, to PerkinElmer for $300 million in 2007 it seemed like the beginning of an amazing entrepreneurial career. But just months later it was cut short: His wife of 18 years died suddenly from a pulmonary embolism at the age of 42, and he committed himself to parenting his three teenagers full-time. Two years later, his 14-year-old daughter told him to start another company. “Dad, you’ve been preaching purpose to me my entire life,” she said. “I don’t think purpose is driving me home from school.” Just a few weeks after that conversation, Daniel Dubin, a physician, old friend and vice chairman of Leerink Swann, told him about a promising drug being shunned by investors but backed by one of cardiology’s best minds: Daniel Rader, chief of translational medicine and human genetics at the University of Pennsylvania. Beer called Rader and found himself sold. “All I did was listen,” Beer says. “He just needed to be listened to.” The result of that listening is one of this year’s biggest biotech success stories: Aegerion Pharmaceuticals. On Christmas Eve, less than two years after Beer took the helm, the tiny company won approval from the Food & Drug Administration to sell its drug, Juxtapid, as a treatment for patients with a rare genetic disease that frequently causes fatal heart attacks before age 20.

SECOND CHANCES.indd Read more of this post

Can China’s leaders revive the economy and reform it at the same time?

Can China’s leaders revive the economy and reform it at the same time?

May 18th 2013 | HONG KONG |From the print edition


EVERY economy, like every story, has two sides: supply and demand. The supply side of China’s economy is the stuff of legend: 767m workers, perhaps $20 trillion-worth of machinery, buildings and other kinds of capital, combined with rapidly advancing techniques and technologies, many of them assimilated from abroad. This combination of labour, capital and know-how dictates how much the economy can produce. But whether it actually does produce all it can depends on the other side of the economy—the demand side—which reflects the spending decisions of consumers and investors. The supply side sets the scene; the demand side provides the drama. Sadly, demand is recovering more slowly than expected. Figures released this week showed somewhat disappointing growth in fixed-asset investment and industrial production last month, following a similarly underwhelming first quarter. Economists who were expecting growth of 8-8.5% this year are now projecting something closer to 7.5%.

But as the drama darkens, the scene may also be shifting. A meeting of the State Council, China’s cabinet, on May 6th outlined a long list of structural reforms designed to improve the supply side of the economy. Some of the reforms, such as extending the value-added tax to services, are already under way. Others, such as liberalising capital flows, will reach fruition only gradually. The reforms are also in keeping with pronouncements by former leaders like Wen Jiabao, who liked to talk the reform-talk. But the new agenda “goes far beyond Wen-era platitudes in its boldness and specificity,” argues Andrew Batson of GaveKal Dragonomics, a consultancy in Beijing. The “walk-to-talk” ratio is improving, he believes. Read more of this post

About China’s capacity to absorb more capital

About China’s capacity to absorb more capital

Kate Mackenzie | May 22 10:30 | 42 comments | Share

We’ve all heard, many times, the story that China’s capital stock is nowhere near that of more advanced economies, therefore it will inevitably increase. And we can count on continued efforts to build roads, buildings, airports, and other infrastructure — just look at how the less-developed eastern provinces have been pouring money into new projects, the argument has gone, more recently. Or went. We really hope it’s not necessary, here, to go into the weaknesses of that argument. Here are a few places to start, but it’s partly a causal problem — does growth cause increased capital stock or vice versa? What kind of growth are we talking about, anyway? Fine. But surely investment is still a net positive if it creates infrastructure that people will actually use, sooner or later? Leaving aside the question of financing burdens, we’ve struggled here with the idea that there’s ‘bad’ and ‘good’ investment. How does one know, in the short term, which is which? Read more of this post

China Should Stop ‘Micromanaging’ Auto Industry, Researcher Says

China Should Stop ‘Micromanaging’ Auto Industry, Researcher Says

China should refrain from “micromanaging” the automotive industry and allow market competition to spur innovation and weed out weaker automakers, the Chinese Academy of Social Sciences said in a report.

The government should focus instead on building a fair and competitive environment and abandon monopolistic polices aimed at creating fewer and bigger automakers, the state-backed research institute said in an annual report on industrial competitiveness released this week. Read more of this post

China Rule Changes May Halt Copper-Financing, Goldman Says

China Rule Changes May Halt Copper-Financing, Goldman Says

New rules from China to control capital inflows are likely to end commodity-financing deals, hurting the short-term outlook for copper, analysts at Goldman Sachs Group Inc. wrote in a research report today.

The regulations from the State Administration of Foreign Exchange, effective from June, will probably mean an end to Chinese use of copper as a tool to enable interest rate arbitrage, Goldman said. The London Metal Exchange market may need to “carry” as much as 250,000 metric tons of additional physical copper over one to three months, about 4 percent to 5 percent of quarterly global supply, the bank said. Read more of this post

In China, food scares put Mao’s self-sufficiency goal at risk

In China, food scares put Mao’s self-sufficiency goal at risk

Wed, May 22 2013

By David Stanway and Niu Shuping

BEIJING (Reuters) – The discovery of dangerous levels of toxic cadmium in rice sold in the southern city of Guangzhou, the latest in a series of food scandals, has piled more pressure on China to clean up its food chain – possibly at the expense of Mao Zedong’s cherished goal of self-sufficiency.

The ruling Communist Party has long staked its legitimacy on its ability to guarantee domestic staple food supplies, and has pledged to be at least 95 percent self-sufficient even as demand increases and the fastest and biggest urbanization process in history swallows up arable land. Read more of this post

China’s Not Hiring; the number of new jobs advertised on leading recruitment website Zhaopin.com fell sharply by 22% in April, the steepest decline since Zhaopin started collecting data in 2010

May 22, 2013, 11:29 p.m. ET

China’s Not Hiring


China’s labor market has been a bright spot amid economic gloom. Strong jobs data over the past year has helped offset concerns about slowing growth. But there are signs employment is beginning to weaken too. The official job numbers in China are irregular and, in some cases, inaccurate. But other sources of data fill in the blanks. For instance, the number of new jobs advertised on leading recruitment website Zhaopin.com fell sharply in April. With the first quarter peak hiring season, some falling off in April is expected. But a 22% drop in new job postings from the previous month was the steepest decline since Zhaopin started collecting data in 2010. Business surveys suggest the downturn is broad-based across manufacturing and services too. The preliminary reading for the HSBC HSBA.LN -3.23% China Manufacturing Purchasing Managers’ Index in May showed factories trimming their workforce for a second month. Worryingly, the HSBC Markit services PMI also points to job losses. If labor markets are turning down, they are at least doing so from a position of strength. China’s private sector wages rose 14% in real terms in 2012 according the National Bureau of Statistics. Demand for workers outstripped supply by a record amount in the first quarter. The drop in new job adverts on Zhaopin came after a record high in March. Read more of this post

China’s SASAC Steps in to Save Bleeding SOEs

SASAC Steps in to Save Bleeding SOEs

By Kang Yi (康怡) and Zhang Xiangdong (张向东)
Issue 620, May 20, 2013
Over recent weeks, some of China’s biggest state-owned enterprises have been visited by their biggest investor – the State-owned Assets Supervision and Administration Commission (SASAC).  The supervisory body that administers the operations of more than a hundred of China’s biggest and most powerful state-owned companies has been dropping by the offices of those companies that have dragged down the overall profits of the state sector in 2012 with their huge losses.  Read more of this post

Local government financing platforms have “prominent potential risks” that pose grave challenges to controlling debt, the China Banking Regulatory Commission (CBRC) said

05.22.2013 15:58

Risks in Financing Platforms Pose a Challenge, CBRC Says

Regulator’s calculations show debts have risen to 9.5 trillion yuan, 50 percent more than government revenues last year

By staff reporter Wen Xiu

(Beijing) – Local government financing platforms have “prominent potential risks” that pose grave challenges to controlling debt, the China Banking Regulatory Commission (CBRC) said in a recent meeting. The debts they have taken on are a heavy burden on public finance, the banking regulator said. The CBRC’s calculations show that the amount of outstanding platform debts has reached almost 9.5 trillion yuan this year, not including those borrowed through trust products. That is more than 50 percent higher than local governments’ revenue last year, and up to 40 percent of the debts will mature within the next three years. The CBRC aims to stop platform loans from further increasing and wind down existing loans orderly while guaranteeing the financing needs of important projects. But the task is getting harder to achieve because local governments are electing leaders and new officials always tend to splash out on investments, the regulator said. The platforms have increasingly relied on bank loans to finance new projects because most other channels to raise funds have been blocked over risk concerns, the CBRC said. That said, the banking regulator noted that some financing platforms had been circumventing restrictions to borrow through less-regulated channels because they could not get loans from banks. Many local officials resorted to personnel connections with bankers to try to get more loans, a bank executive said. But that means cutting into others’ lending quota because the overall amount of loans banks can make to financing platforms had been capped, he said. That is all the more concerning from a regulatory perspective, the CBRC said, since local small banks could be forced to bend lending rules.

Honeymoon’s Over for Sweethearts of SOE Reform; Less than two years after tying the knot, Ping An Trust’s relationship with Jahwa Group, held as a model for SOE reform, is on the rocks

05.22.2013 18:19

Honeymoon’s Over for Sweethearts of SOE Reform

Less than two years after tying the knot, Ping An Trust’s relationship with Jahwa Group is on the rocks

By staff reporters Shen Hu, Zheng Fei and Wang Xiaoqing

Corporate wedding bells were ringing in 2011 when a trust controlled by insurer Ping An Insurance Group forged a partnership with a Shanghai-based cosmetics maker called Jahwa Group and its listed subsidiary Jahwa United. The tie-up was duly praised for diversifying Jahwa’s ownership in line with a Chinese government push to reform the shareholder structures at state-owned enterprises (SOEs). China Ping An Trust Co. paid the Shanghai government’s Municipal State-owned Assets Supervision and Administration Commission some 5.1 billion yuan for 100 percent of Jahwa Group. It also got a 27.8 percent stake in Jahwa United. But what looked like a match made in corporate heaven – and a model for SOE reform – is now on the rocks. Read more of this post

Chinese enterprises are expanding overseas rapidly and on a large scale, but many of these projects are seeing poor returns

Chinese Enterprises Struggle Overseas

By Sun Qizi (孙琦子)
Issue 620, May 20, 2013
Chinese enterprises are expanding overseas rapidly and on a large scale, but many of these projects are seeing poor returns. China Mobile Communications Corporation (CMCC), for example has invested in six major overseas projects since 2005. But according to data from the National Audit Office, among these projects three have suffered losses altogether totaling nearly 3.2 billion yuan. Why do so many of these projects fail to take off? How does one choose an overseas investment that will see a reasonable return? Economic Observer asked Xu Jing (许京), vice president of China International Trade Association, Chen Weidong (陈卫东), chief economist at the Energy Economics Research Institute of China National Offshore Oil Corp, Andrew Zhu (朱桉), a tax partner and cross-border mergers and acquisitions specialist at Deloitte, and Claire Yang, managing director of Accenture Greater China. Read more of this post

Overcapacity set to blight China’s LED industry

Overcapacity set to blight China’s LED industry

Staff Reporter 2013-05-23

The same overcapacity issues that rocked China’s solar power sector now threaten to take their toll on the country’s LED industry, the Chinese-language Beijing Business Today reports. A recent announcement by the Shenzhen city government that it will suspend its 2009-2015 plan to develop the local LED industry has sparked concerns that it may soon suffer a similar fate as the photovoltaic industry, with the solar sector seeing a capacity utilization rate of 60%. When the Shenzhen government first revealed its plan in March 2009, it declared the city would become an global base for the industrial development, research and manufacture of LED products. In the same year, 44.3% of China’s’s LED businesses were based in Shenzhen, with a further 24.7% in other cities in the southern province of Guangdong. Luo Qi, general manager of Zongke Optoelectronics Equipment, a Shenzhen-based LED company, said that he was yet to be received confirmation concerning the government’s suspension of its investment plan, though it is not a surprise as the industry has already encountered a series of operational difficulties, with high costs and excess inventories resulting in overcapacity. According to market research website gg-ii.com, over 80 LED enterprises in Shenzhen closed down last year alone. Chen Yansheng, deputy chairman of the China Association of Lighting Industry, also forecasts that more companies will face economic difficulties in the near future due to the expected increase in companies within the upstream LED chip manufacturing industry this year. Last year, several LED companies recorded a significant drop in their sales and net profit, with LED chip maker Elec-Tech International recording a net profit of 168 million yuan (US$27.4 million), down by 57% from the previous year. Luo said his company’s orders had steadily declined from October and so far this year, the volume of orders has fallen by 40%-50%, compared with the same period last year. He Zaihua, a senior researcher at CI Consulting, said the key to resolving the overcapacity crisis is in the hands of those in the LED sector and the government. Companies must take active measures to expand both the overseas and domestic markets, while trying to expand their core technology research and development at the same time, he added.

Luxury brands to be sold at supermarkets in China

Luxury brands to be sold at supermarkets in China

Staff Reporter


Luxury goods brands are breaking the confinements of major department stores and boutiques to enter supermarkets in cities across China, reports the Chinese-language Guangzhou Daily. Some experts note that the move is in response to the recent sluggish demand for luxury goods but added that offering discounts on their products and entering the new market may not be enough, the paper said. China’s largest domestic retailer, Lianhua Supermarket, recently began to sell seven brands of luxury products in its outlets, including international brands Gucci, Prada and Armani. A representative of Okaicheng, a luxury brand agent that will help sell the products, said that Lianhua’s decision to sell luxury goods in their stores was based on appealing to the company’s 2 million store-value card holders. In the first two hours of the luxury goods being place on the supermarket shelves, Okaicheng closed six deals, four of which were carried out by store card customers. It’s hard to imagine purchasing high-end items at a supermarket, since many consumers that purchase luxury goods prefer a topnotch shopping environment and experience, a luxury goods salesman told the paper. Ms Li, who often buys luxury brands, said that “Luxury goods are no longer luxury goods once they are sold in a supermarket, they become like oil, rice and salt.” Luxury goods have suffered from sluggish sales in China this year. Fondazione Altagamma, the Italian luxury goods industry trade association, reported recently that due to slowing sales in Europe and the global economic slowdown, luxury-goods sales are expected to grow by only 4%-5% this year, lower than the 5% growth achieved in 2012. The current market climate has led Gucci and Louis Vuitton to slow down the pace of their expansion in China, the Guangzhou Daily said.


Once described as “China’s Amazon,” e-commerce website Dangdang.com is finding itself fighting to stay afloat due to rabid competition

Major e-commerce pioneer struggling to survive

English.news.cn   2013-05-22

BEIJING, May 22 (Xinhua) — Once described as “China’s Amazon,” e-commerce website Dangdang.com is finding itself fighting to stay afloat due to rabid competition.

The company started selling leftover stock on May 7 despite of an earlier strategy aimed at middle and high-end clothing. CEO Li Guoqing told the Beijing News that his company is struggling to balance its expansion. The price of Dangdang’s shares has dropped from 35 U.S. dollars per share to less than 5 U.S. dollars, despite a booming e-commerce sector that has enjoyed average annual growth of 66 percent. Read more of this post

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