Laura Rittenhouse’s Candor Analytics; Inspired by Warren Buffett, a former Lehman analyst figures out that plain-speaking companies have higher performance

September 3, 2013

Sally Helgesen is an author, speaker, and leadership development consultant, whose most recent book is The Female Vision: Women’s Real Power at Work(with Julie Johnson; Berrett-Koehler, 2010).

Laura Rittenhouse’s Candor Analytics

Warren Buffett’s annual shareholder letters are famous, a key element of his mystique. Inevitably, they’re described in the business media as “folksy.” But this description misses the reason these letters compel admiration from and influence the behavior of investors. The true strength of Buffett’s missives lies in their candor. (For example, here’s Buffett in the 2012 annual report of his firm Berkshire Hathaway, on his controversial investments in local newspapers: “Charlie and I believe that [some newspapers] will remain viable for a long time. We do not believe that success will come from cutting either the news content or frequency of publication. Indeed, skimpy news coverage will almost certainly lead to skimpy readership.”) Read more of this post

The Enduring Management Wisdom of Lincoln

Posted: August 26, 2013

James O’Toole is a senior fellow in business ethics at Santa Clara University’s Markkula Center for Applied Ethics and the author of 17 books, including The Executive’s Compass and Leading Change.

The Enduring Management Wisdom of Lincoln

Headlines espousing the relative decline of the U.S. industrial base, despite arecent upsurge, have left American managers focused on today’s news and this quarter’s results. As a result, few have heeded the invaluable lessons of the country’s longest-running manufacturing success story. For nearly a century, the Lincoln Electric Company has consistently ranked among the most productive manufacturing enterprises in the United States, all while not laying off a single permanent employee for more than 60 years and, for 75 years, paying bonuses to its workers that average 60 to 100 percent of their annual salaries. Yet not a single other company in the country has adopted the unique system that led to Lincoln Electric’s continuing record of success—one in which owners, managers, and workers have strong incentives to cooperate to meet the needs of customers.  Read more of this post

MIT’s Williams Decodes Economics of Gene Sequencing

MIT’s Williams Decodes Economics of Gene Sequencing

Heidi Williams’s dad helped with her high school science-fair projects by driving her two hours from their North Dakota town to get books on World War II German cryptography. After studying up, she would present new ways to crack the cipher. These days, Williams is trying to help scientists as they unlock the secrets of a different code: the human genome. The 32-year-old Massachusetts Institute of Technology economist is examining health-care innovation with a $430,000 National Science Foundation CAREER grant, an award given to “exceptionally promising” junior faculty who excel as educators and researchers. Read more of this post

Billionaires Halt Mining Deals on Rupee Erosion

Billionaires Halt Mining Deals on Rupee Erosion: Corporate India

Indian billionaires led by Kumar Mangalam Birla are stalling purchases of mines overseas as the rupee’s 13 percent drop this year inflates the cost of deals. The Aditya Birla Group, which runs the nation’s second-biggest copper and aluminum maker, has put acquisition plans on hold, said a person with direct knowledge of the matter. JSW Steel Ltd. (JSTL), controlled by the billionaire Jindal family, would prefer to wait, Commercial Director Jayant Acharya said. Read more of this post

Sino Biopharm, Market Cap $3 Billion, Plunges After CCTV Bribery Report

Sino Biopharm Plunges After CCTV Bribery Report: Hong Kong Mover

Sino Biopharmaceutical Ltd. (1177) plunged the most in about 13 years before being suspended in Hong Kong trading, after a report by state-run Chinese Central Television alleged bribery at a unit of the medicine maker. Sino Biopharmaceutical fell 16 percent to HK$4.76, headed for the largest drop since October 2000, before being halted at 11:49 a.m. The stock has been suspended pending an announcement to clarify certain information in recent press reports, the drugmaker said today. Two groups of doctors attended 50-minute meetings organized by the company in China and then left on sponsored trips, according to the broadcast yesterday evening. Read more of this post

Hello Kitty Billionaire Found as Plush Toy Sales Surge

Hello Kitty Billionaire Found as Plush Toy Sales Surge

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Tanya Stanich, a 43-year-old lawyer, clutched a handful of pink and black Hello Kitty notebooks at Sanrio Co.’s (8136) store in Manhattan’s Times Square and touched a sequined bag adorned with the face of a cartoon cat. Growing up in Wisconsin, Stanich was introduced to the white feline, which sports a red bow and no mouth, by a California aunt, who sent her a Hello Kitty lunchbox, stickers, hair clips and pencils. Now a resident of New York’s West Village neighborhood, Stanich says she still buys the stationery to brighten up her life. “It’s nice to have something a little girly and flashy and fun,” said Stanich, a slender brunette who keeps her iPhone in a Hello Kitty case. “I could go nuts in here.” Loyal fans like Stanich have helped make Shintaro Tsuji, the 85-year-old founder of Tokyo-based Sanrio, a billionaire. Since introducing Hello Kitty in 1974, Tsuji has captured the hearts and wallets of girls, women and celebrities such as Lady Gaga by licensing the character, which appears as stuffed toys, as well as on airplanes, golf bags and even vibrators. Sanrio’s shares have doubled this year, more than the 39 percent gain in Japan’s benchmark Nikkei 225 (NKY) Stock Average, and reached a 52-week high yesterday. The company, which sells gift cards featuring cartoon characters, operates theme parks and produces and distributes movies, had 74.25 billion yen ($898.6 million) in sales its last fiscal year ending in March. “It must be way up there in terms of the most recognized franchises in the world,” said Ted Bestor, director of the Reischauer Institute of Japanese Studies at Harvard University in Cambridge, Massachusetts. “It’s very hard to see any diminution for the Japanese fondness for cuteness.” Read more of this post

How Wal-Mart’s Waltons Maintain Their Billionaire Fortune

How Wal-Mart’s Waltons Maintain Their Billionaire Fortune: Taxes

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Visitors to the Crystal Bridges Museum of American Art in Bentonville, Arkansas, leave appreciative notes on a glass wall near the entrance. “Thanks Alice!” reads one. “Merci Alice Walton, pour la vision!” reads another. Wal-Mart Stores Inc. (WMT) heiress Alice Walton founded Crystal Bridges in 2011 in a wooded ravine next to her childhood home, supplying dozens of paintings from her personal collection. Bankrolled by more than $1 billion in donations from her family, the museum attests to the Waltons’ generosity and vast wealth. It’s also a monument to their skill at preserving that fortune across generations. America’s richest family, worth more than $100 billion, has exploited a variety of legal loopholes to avoid the estate tax, according to court records and Internal Revenue Service filings obtained through public-records requests. The Waltons’ example highlights how billionaires deftly bypass a tax intended to make sure that the nation’s wealthiest contribute their share to government rather than perpetuate dynastic wealth, a notion of fairness voiced by supporters of the estate tax like Warren Buffett and William Gates Sr. Read more of this post

More Boom-and-Bust Seen in Dubai’s Cash-Driven Recovery

More Boom-and-Bust Seen in Dubai’s Cash-Driven Recovery

After five years living in Dubai, Akanksha Goel and her husband decided to buy a property instead of paying $68,000 a year to rent their three-bedroom house. It never happened. Though Goel, the owner of a small advertising agency, and her cameraman husband, were prepared to pay 50 percent upfront, the couple was classified as “high-risk” because she’s self-employed. They were offered a mortgage for 30 percent of the home’s value at double the rate given to buyers with the best credit. Read more of this post

Tesla Challenges BMW on Home Turf as Germans Go Green

Tesla Challenges BMW on Home Turf as Germans Go Green

Tesla Motors Inc. (TSLA), the electric-vehicle maker led by billionaire Elon Musk, is pushing beyond the friendly confines of California to take on the world’s biggest luxury-car brands in their home market. Tesla will have six stores in Germany after adding locations in the coming months in Berlin and Stuttgart, home to Mercedes-Benz parent Daimler AG. The start-up already has sales centers in Frankfurt, Dusseldorf, Hamburg and Munich, Bayerische Motoren Werke AG (BMW)’s hometown. Read more of this post

Henkel to Expand Beauty Care Business in Smaller Chinese Cities

Henkel to Expand Beauty Care Business in Smaller Chinese Cities

Henkel AG, the German maker of adhesives and Soft Scrub cleaners, plans to step up expansion in China as the company pushes to sell hair and skin care products in smaller cities outside Beijing and Shanghai. The company will invest “heavily” to lift the proportion of China sales at its consumer business to 30 percent from the current 20 percent, Chief Executive Officer Kasper Rorsted said in an interview today. Adhesives account for 80 percent of the company’s China revenue, he said. Read more of this post

Trigger Finger – Apple fires biometrics into the mainstream

Trigger Finger – Apple fires biometrics into the mainstream

6:04am EDT

By Jeremy Wagstaff and Malathi Nayak

SINGAPORE/SAN FRANCISCO (Reuters) – By adding a fingerprint scanner to its newest mobile phone, Apple Inc is offering a tantalizing glimpse of a future where your favorite gadget might become a biometric pass to the workplace, mobile commerce or real-world shopping and events. Although Apple’s executives said at Tuesday’s launch that its Touch ID technology embedded into the iPhone 5S’ home button would only provide fingerprint access to the phone and its own online stores, analysts said Apple’s embrace of such technology, called biometrics, would be key to wider adoption. Read more of this post

Fashion designers look to patents to fight knockoffs

Fashion designers look to patents to fight knockoffs

5:02pm IST

By Erin Geiger Smith

NEW YORK (Reuters) – Design companies tending to the details of fashion shows have more to think about than skirt lengths and handbag clasps – they must decide whether to seek U.S. patent protection for their looks. Diane von Furstenberg, famous for her wrap dresses, has a design patent on a chain mail-style bag. The popular French line Celine has one on the envelope-style handbag sported by countless fashion experts at New York Fashion Week. Read more of this post

Internet security: Kill or cure; Internet users whinge about passwords but are none too keen on the alternatives. Good news for crooks

Internet security: Kill or cure; Internet users whinge about passwords but are none too keen on the alternatives. Good news for crooks

Sep 7th 2013 |From the print edition

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PASSWORDS are a pain. People forget them. Hackers pinch them—this year Twitter lost 250,000 and Evernote, an online notebook service had to reset 50m after a breach. Many companies have been found to store passwords without “salting” them (adding extra data to flummox hackers) or even encrypting them at all. Firms are demanding harder ones: a minimum number of characters, plus numerals and upper- and lower-case letters. Busy and careless people skimp on security: the typical internet user, research suggests, uses just seven passwords to manage 25 online accounts. Even those tend to be easily cracked variations on a theme: “Bageh0t”, “Bageh1t”, “Bageh2t”, etc. The search for alternatives is both urgent and potentially lucrative. Google, along with other behemoths like PayPal and hardware-makers such as Lenovo and LG, have forged the FIDO Alliance, to develop alternative authentication employing a panoply of gadgets. These include USB sticks, chips on fobs and other tokens. (Google is working on a ring.) Read more of this post

More than Just Contrarians: Insider Trading in Glamour and Value Firms

More than Just Contrarians: Insider Trading in Glamour and Value Firms

Alan Gregory University of Exeter – Xfi Centre; University of Exeter Business School

Rajesh Tharyan University of Exeter Business School

Ian Tonks University of Bath School of Management

September 2013
European Financial Management, Vol. 19, Issue 4, pp. 747-774, 2013

Abstract: 
This study examines the patterns of, and long‐run returns to, directors’ (insiders’) trades along the value‐glamour continuum in all stocks listed on the main London Stock Exchange and analyses what these directors’ trades add to a naïve value‐glamour strategy. We consider alternative definitions of value in defining trades and in the construction of our benchmark portfolios so that directors’ trades are evaluated net of any value‐glamour effect, variously defined. We find that directors consistently trade in a contrarian fashion, buying more value stocks and selling more glamour stocks, with purchases following price falls and sales following price rises. Directors’ buy signals in value stocks generate significant positive abnormal returns while the sell signals in glamour stocks generate smaller and generally insignificant negative returns. In contrast to the results from US studies, we find that the positive abnormal returns in value stocks persist for up to two‐years after the initial directors’ trading signal. Abnormal returns are particularly concentrated in smaller value stocks, and are robust to alternative definitions of value.

Equity Vesting and Managerial Myopia

Equity Vesting and Managerial Myopia

Alex Edmans London Business School – Institute of Finance and Accounting; University of Pennsylvania – The Wharton School; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Vivian W. Fang University of Minnesota – Twin Cities – Department of Accounting

Katharina Lewellen Dartmouth College – Tuck School of Business

September 2013
NBER Working Paper No. w19407

Abstract: 
This paper links the impending vesting of CEO equity to reductions in real investment. Existing studies measure the manager’s short-term concerns using the sensitivity of his equity to the stock price. However, in myopia theories, the driver of short-termism is not the magnitude of incentives but their horizon. We use recent changes in compensation disclosure to introduce a new empirical measure that is tightly linked to theory – the sensitivity of equity vesting over the upcoming year. This sensitivity is determined by equity grants made several years prior, and thus unlikely to be driven by current investment opportunities. An interquartile increase is associated with a decline of 0.11% in the growth of R&D (scaled by total assets), 37% of the average R&D growth rate. Similar results hold when including advertising and capital expenditure. Newly-vesting equity increases the likelihood of meeting or beating analyst earnings forecasts by a narrow margin. However, the market’s reaction to doing so is lower, suggesting that it recognizes CEOs’ myopic incentives.

Think Strategically to Enable Growth in Tough times; Strategy is not about the plan

Think Strategically to Enable Growth in Tough times

by Dr. Grant Sieff | Sep 11, 2013

Dr Grant Sieff, Director of the Strategic Thinking and Execution for Growth Programme at the University of Cape Town’s Graduate School of Business, offers five steps towards thinking strategically to enable growth in tough times

The passing of Margaret Thatcher is a signifier of the times: Thatcherism is certainly gone, and so too is any naivety that we can depend on any one simple formula for global economic stability.  Dr Grant Sieff, CEO of IC Growth Group and Programme Director of Strategic Thinking and Execution for Growth at the University of Cape Town’s Graduate School of Business (GSB), describes the environment we find ourselves in as economic anarchy. “It’s not a slow evolution, it’s more like a series of shocks – more shaken than stirred,” he says.  “The nature of business is that it is in constant flux – globally, economies are slowing once again; and technology continues to evolve rapidly. Google Glass, for example, is about to come out, and could revolutionise the way we examine possibilities,” he says. However, Sieff says that inside this cauldron of radical change lie opportunities for businesses to innovate and get ahead; executives who have the ability to think strategically and execute strategies to ensure ongoing growth in the face of uncertainty and change, will prosper. But for that to happen, leaders and executives need to develop the skills to be able to identify and leverage opportunities. Sieff says that these skills can be distilled into five key steps.   Read more of this post

Asia’s Outlook Turns Murky After the 2008 Crisis

September 11, 2013, 2:51 p.m. ET

Asia’s Outlook Turns Murky After the 2008 Crisis

Region Roared Ahead of West, but Ground Has Shifted; Debt Levels Rise

ALEX FRANGOS

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HONG KONG—The early verdict on the global financial crisis was that Asia came out on top. Strong banking systems and a government-directed lending spree in China quickly boosted the region’s economies back to growth. By 2010, investors were betting that there had been a permanent shift in the balance of economic power. They pushed Asian stock markets and currencies to record highs. Just over two years after the failure of Lehman Brothers, Asian stocks were up 40%, outperforming U.S. stocks by 42 percentage points. Read more of this post

Bond investors face annual losses for only third time in 33 years

Bond investors face annual losses for only third time in 33 years

Only a “highly unlikely” fall in interest rates can prevent bond investors losing money over the course of 2013, BlackRock executive says.

The US Federal Reserve, chaired by Ben Bernanke, wants to stop buying bonds Photo: AP

By Richard Evans, Investment Editor

3:59PM BST 11 Sep 2013

Investors face losses on their bond holdings this year for only the third time in more than three decades, a senior expert in the field has said. Jeffrey Rosenberg, who is the chief investment strategist for fixed income at BlackRock, which manages bond investments worth $1.2 trillion or £750bn, said bond investors had lost 3.65pc so far this year and that “avoiding an annual loss will require a major shift lower in interest rates, something we do not expect”. Read more of this post

Companies Act on Rising Interest Rates; Pension Contributions, Trade, Borrowing for Deals All Are Affected

September 11, 2013, 8:15 p.m. ET

Companies Act on Rising Interest Rates

Pension Contributions, Trade, Borrowing for Deals All Are Affected

NOELLE KNOX And VIPAL MONGA

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Interest rates for long-term business borrowing have shot up to the highest levels in two years. That’s pushing corporate executives to not only rethink their borrowing and refinancing strategies, but also to adjust pension contributions and overseas trade. Some may even accelerate plans for deals. While most experts say it is too early to see an increase in the number of mergers and acquisitions, which can take months to negotiate, rising rates were a driving factor in Verizon Communications Inc.’s VZ +0.11% recent agreement to buyVodafone Group VOD.LN +1.08% PLC’s stake in their joint U.S. wireless business. That is because fresh funds for acquisitions and other deals will only get more expensive as rates go higher. “Interest rates are presumably the real catalyst here,” said Craig Moffett, senior research analyst at Moffett Research, referring to Verizon. Read more of this post

Mystery of acquiring another language; Neurology helps to learn a language, but hard work is what matters

September 11, 2013 4:13 pm

Mystery of acquiring another language

By Michael Skapinker

Neurology helps to learn a language, but hard work is what matters

In 1987 I interviewed Robert Maxwell, the publishing and printing magnate, at his London headquarters in Holborn Circus. His death and disgrace were some years away. As well as the Mirror newspaper group, Maxwell headed the biggest printing company in Europe and one of the largest in the US. But I was relieved, as he ordered senior managers around for my benefit, that I was observing rather than working for him – and what struck me, apart from the bullying, was his extraordinary English. Born in 1923 in a village on the Czech-Romanian border, Maxwell arrived in Liverpool in 1940 and joined the British army. Although he only started to learn the language at 17 years old, his English was fault-free and spoken with a booming upper-class accent. Read more of this post

Negotiation Tactics: The 10 Minute MBA Course On Negotiation

SEPTEMBER 9, 2013 by ERIC BARKER

Negotiation Tactics: The 10 Minute MBA Course On Negotiation

Want to learn the negotiation tactics of an MBA? I’ve cleaned up and distilled notes from the excellent negotiating course I took in MBA school taught by MIT lecturer John Richardson.

Preparation

Always, do your homework. Success in negotiation is strongly correlated with time spent preparing. Preparing in a group helps; others will come up with things you didn’t. Be ambitious. There’s usually a connection between aspiration level and what people get. (Obviously, you can go too far, so look at your benchmarks.) It’s very valuable to have things you don’t want in a negotiation so you can give them away for things you do. Read more of this post

Retailers Paul Zahra and Mark McInnes among Australia’s ‘least narcissistic’ CEOs according to an analysis of speech patterns by the Macquarie Graduate School Of Management

Michael Bailey Deputy editor

Retailers Paul Zahra and Mark McInnes among Australia’s ‘least narcissistic’ CEOs. Which sector has the biggest egos?

Published 11 September 2013 11:44, Updated 12 September 2013 07:32

They might operate at the more glamorous end of the economy but David Jones chief Paul Zahra, and his predecessor turned Premier Investments boss Mark McInnes, are among the 10 least narcissistic CEOs of ASX-listed large companies, according to an analysis of speech patterns by the Macquarie Graduate School Of Management. The MGSM measured the personal pronoun use of 100 CEOs, among Australia’s 140 largest listed companies, in the Q&A sessions of analyst briefings used to discuss their company’s earnings during the reporting season just past. The narcissism score for each CEO was the ratio of first person singular pronouns to total first person pronouns used in their speech. To avoid embarrassment and lawsuits, the MGSM has not named Australia’s most narcissistic CEOs, but have named the least egotistical bosses. In ascending order they are: Read more of this post

ASX100 CEOs: Their path to the corner office

ASX100 CEOs: Their path to the corner office

24 September 2012 Myriam Robin

Want to be a CEO? Being an executive is a crucial first step, but not all leadership roles are likely to lead to the corner office. LeadingCompany analysed the backgrounds of the ASX100 CEOs, and discovered most were promoted after delivering results in their own little fiefdom. The rest of them were chief operating officers and chief financial officers, leaving other C-suite positions out in the cold. Australia’s top boards are opting for leaders who’ve either already demonstrated leadership success, or who bring operational mastery to the chief role. Read more of this post

The product as market research: The lower cost of digital prototyping helps innovators test lots of ideas simultaneously

September 11, 2013 5:25 pm

The product as market research

By Ian Sanders

In a set of studios close to London’s Old Street roundabout, Stef Lewandowski and his team are working on changing how digital products are built and tested. What sets Mr Lewandowski, co-founder of Makeshift, apart from many of his neighbours in London’s tech community is that his business releases a new product each month, a rate that it achieves by developing multiple ideas simultaneously rather than focusing on one single product. Read more of this post

Scientists create reprogrammable mouse in stem cell breakthrough, opening a new way to regenerate failing tissues in patients with diseases ranging from heart failure to diabetes

September 11, 2013 6:04 pm

Scientists create reprogrammable mouse in stem cell breakthrough

By Clive Cookson, Science Editor

Scientists in Spain have produced the world’s first embryonic stem cells within a live animal rather than in a laboratory dish. The experiment with mice at the National Cancer Research Centre in Madrid could open a new way to regenerate failing tissues in patients with diseases ranging from heart failure to diabetes. Therapeutic applications – for example to repair damaged spinal cord or make new insulin-producing cells – are distant. Even on the most optimistic assumptions clinical trials in people are unlikely to start in less in than five years, according to Dr Serrano. Read more of this post

Vietnam Property Market Struggles

September 12, 2013, 7:02 AM

Vietnam Property Market Struggles

By Nguyen Pham Muoi

HANOI — Vietnam’s property market is sluggish, reflecting a rise in inventory because of slow sales of newly built apartments Hanoi, Ho Chi Minh City and other big cities. That is the conclusion of  former Deputy Minister Dang Hung Vo of National Resources and Environment, the office responsible for land management in the country. The sluggishness coincides with some financial help from the government for low-income and other buyers to try to stimulate the market. But, property specialists say, the government incentives are too small to make a difference. And other problems – such as Vietnam’s traffic jams, high taxes, and governmental policies that discourage foreign investors – have meant that foreign buyers haven’t been rushing in to pick up property at discount prices. Read more of this post

Patent Fight Erupts Over Kids’ Fad; Amid a Bracelet-Crafting Craze, a Legal Battle Has Begun Over a Tiny Plastic Clasp

September 11, 2013, 7:51 p.m. ET

Patent Fight Erupts Over Kids’ Fad

Amid a Bracelet-Crafting Craze, a Legal Battle Has Begun Over a Tiny Plastic Clasp

SARAH E. NEEDLEMAN And ADAM JANOFSKY

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Rainbow Loom says it has sold more than 1 million bracelet kits. Rainbow Loom’s creator, Cheong Choon Ng, has been mired in legal disputes over his bracelet-crafting kit.

Just 6 millimeters wide, a plastic C-shaped fastener enables kids around the U.S. to connect loops of colored rubber bands to form bracelets. Now, that clasp is at the center of a legal dispute among the entrepreneurs and retailers cashing in on the hottest crafting craze in years. In August, the founder of three-year-old Rainbow Loom—a rubber-band jewelry-making kit that is a blockbuster seller this fall—sued rival Zenacon LLC, claiming it copied the “distinctive trade dress” of Rainbow Loom’s “unique” C-shaped clips with its competing FunLoom product. Read more of this post

Teaching Entrepreneurship Is in the Startup Phase; Students are clamoring for instruction, but it’s hard. There are no algorithms for success

September 11, 2013, 7:29 p.m. ET

Teaching Entrepreneurship Is in the Startup Phase

Students are clamoring for instruction, but it’s hard. There are no algorithms for success.

BILL AULET

Forget medical school or law school. These days, record numbers of high-school and college students say they aspire to be entrepreneurs. At Yale University, for example, over 20% of the undergraduates indicate that they are interested in pursuing entrepreneurship as a career. Compare that with 1980, the year I graduated from Harvard. I didn’t know what the word “entrepreneur” meant—and neither did any of my friends. There is good reason for this trend. Traditional career paths no longer offer the security they once seemed to guarantee, and startups promise young people independence, control and the possibility of making good money. Read more of this post

Vinod Khosla: 70-80% Of VCs Add Negative Value To Startups; In The Next 10 Years, Data Science Will Do More For Medicine Than All Biological Sciences Combined

Vinod Khosla: 70-80% Of VCs Add Negative Value To Startups

KIM-MAI CUTLER

posted 11 hours ago

Vinod Khosla, one of the co-founders of Sun Microsystems who later went on to create Khosla Ventures, says that the vast majority of VCs aren’t in a position to offer decent advice to startups. In fact, most of them probably hurt startups, he argued. TechCrunch founder Michael Arrington prodded Khosla to single out VCs that were horrible on boards. “Who is the VC who is the most full of shit that you’ve ever heard?” Arrington asked. “I would be offending too many people,” Khosla retorted. “Maybe some percentage that’s substantially larger than 95 percent of VCs add zero value. I would bet that 70-80 percent add negative value to a startup in their advising.” He said that most VCs “haven’t done shit” to know what to tell startups going through difficult times. “I don’t know a startup that hasn’t been through tough times,” he said. He said that founders should listen politely and just do what they want to do anyway. He said of his approach toward helping entrepreneurs: “I give them advice, but I tell them what I’m uncertain about. I’m confident that I screwed up more often than most people in this room. Hopefully, I can advise entrepreneurs to avoid mistakes. But you can never be sure if you’re trying something new and unreasonable.”  Read more of this post

“The C in 5C does not mean ‘cheap’ as I had hoped. It means clueless, as in clueless about how the vast majority of new smartphone users are paying for their phones.”

FRED WILSON: Apple Is ‘Clueless’

JAY YAROW SEP. 11, 2013, 2:49 PM 10,453 44

Influential venture capitalist Fred Wilson is not happy about Apple’s iPhone 5C. In a post he writes, “The C in 5C does not mean ‘cheap’ as I had hoped. It means clueless, as in clueless about how the vast majority of new smartphone users are paying for their phones.” For the past few months, Wilson has been saying Apple should release a low-cost iPhone to slow the ascent of Google’s Android operating system. Android is now powering 80% of smartphones on the planet, and Wilson isn’t comfortable with one company having such a dominating influence over a key technology like mobile phones. There were a lot of rumors that Apple was preparing to go for market share with a cheaper phone. Obviously, that didn’t happen. It didn’t change anything about its pricing plans. The iPhone 5C is $99 with a two-year contract, or $549 without a contract in the U.S. In China, where the smartphone market is booming (and Apple is getting whooped) the iPhone 5C will cost over $700. “The reality of much of the world is that people don’t sign two year contracts like we do here in the US,” says Wilson. “They buy pre-paid sim cards and stick them into unsubsidized phones. And on that basis, the 5C is a big disappointment.” Read more of this post

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