Skip the MBA

The Economist article Think Twice makes excellent arguments against the so-called value of an MBA (the author has a Harvard MBA) and agrees with much of the analysis found in The Management Myth.

Social Media and the Government

EFF obtains docs that reveal when authorities can get your data from social media companies - Boing Boing.

This is puzzling to me. This information didn't exist in this form, in a nice, neat package, a few years ago. It only exists because people are willing to give it up in the interest of being social. But now that it does exist, the government wants to be able to access it.

You wouldn't volunteer this information to the government because you don't trust them. But when you volunteer it to Facebook, for another purpose, somehow it's OK for the government to say "my, that's some convenient information you have there! We'd like to get our hands on it."

If Facebook gives your information to the government -- or to advertisers, for that matter -- you've been tricked. You volunteered it for one purpose, and it's being used for another, that you didn't agree to (well, you probably did when you clicked "OK" for the license agreement that no one reads).

As long as this kind of trickery goes on between a company and its users (not "customers," who are the advertisers that users are sold to), eventually the users will become unhappy and go elsewhere. In this case, "elsewhere" will be someplace they feel safer, but I suspect that the next version of social media will also have a lot more user-oriented features. The fact that my imagination of what I'd like in social media is far ahead of what Facebook is doing is a bad sign for them; in the best of worlds they would be surprising me with new things that had never occurred to me. Instead they are surprising me by giving my data to people I might not like.

The Myths of Entrepreneurship

I love books and studies that show that something we believe is completely wrong. I'm not sure why I find these so intriguing -- perhaps it's the thrill of upsetting the status quo. Or maybe I see great leverage possibilities when everyone is certain about something that's wrong. So when I saw Malcolm Gladwell (himself a great shaker-up of what we "know") recommend The Myths of Entrepreneurship by Scott Shane, I procured it in short order.

I admit it: In junior high school, I was that guy who had to show he was smarter by correcting people. For which I paid dearly. However, I eventually learned to tone it down, and to evaluate my audience.

Shane didn't learn this. He starts off strong, setting the hook in the introduction. But in chapter one, he begins by giving us the dictionary definition of "entrepreneur," which says that it's anyone who starts their own business. This, Shane points out, means that plumbers and accountants and pool cleaners and farmers and anyone with a one-person operation counts as an entrepreneur.

Most of his analyses in the book is based on this definition, pointing out that entrepreneurship isn't really growing and the hotbed of entrepreneurship (in terms of per-capita firm formation) is Laramie, Wyoming. And other fun facts.

This is irritating, because most people buying this book are not interested in the dictionary definition of "entrepreneur." They won't care about the trends and characteristics of the creation of one-person operations that have little likelihood of growing.

One of the great things about the English language is that it's flexible and evolves. To most people that might buy this book, "entrepreneurship" is about creating companies around new inventions. Such companies have much higher risk than starting a plumbing company, and such companies will change their core model -- whatever they are trying to invent -- several times before they are successful or run out of funding. A successful one of these companies will most likely expand to employ significant numbers of people, anywhere from a handful to hundreds or thousands, far more than a plumbing shop would ever hope to.

Thus, the average person buying this book will have to sigh and skim over every point made about "all entrepreneurs," being annoyed because Shane's conclusions for those points are basically meaningless and worthless.

Because of Gladwell's recommendation, I tried to slog through the whole book, then skimmed, then finally realized that he neatly summarized all his points at the end of each chapter so you don't actually have to read the chapters unless you want the gritty details. He has entire chapters on "Why don't women start more companies" (they're just not interested and don't have the financial goals; gender, he says, is an extremely strong predictor) and "Why is Black entrepreneurship so rare?" (shortage of capital, that's all).

There are a lot of conclusions in this book that feel like the author, ironically, made up his mind about the conclusion ahead of time, and then pointed his findings there. The biggest one, which just feels wrong, is his claim (backed up by data filtered through his interpretation) that new businesses don't actually generate the numbers of new jobs that we've been told, and his conclusion that "A strategy that revolves around increasing the number of new businesses every year is flawed." Instead, we should figure out -- using the data in this book -- what characteristics increase the probability of successful growth businesses, and pursue those. Although this sounds plausible, what he never does in the book is analyze whether business formation and success follows a power-law distribution. Yes, only a few companies make it into the stratosphere and end up producing most of the jobs and wealth, but perhaps by encouraging all forms of entrepreneurship, we ultimately raise the likelihood of these stratospheric companies. Even if Shane's premise that we can predict areas of success and should follow guidelines to do so is correct, most of his guidelines -- polluted as they are by mixing non-innovative self-employers together with inventive companies and calling everyone "entrepreneurs" -- would not be the ones to use.