More on E-Books and Higher Ed

There have been a number of recent announcements on new e-book readers to compete with the Kindle and the Sony Reader. Barnes & Noble is introducing a reader and Korean conglomerate Samsung will also be putting out a reader. I also saw a mention that Apple’s tablet computer will likely serve as a reader as well.

Our friend’s over a Schumpeter’s Century pointed out a recent WSJ article on the use of e-books by universities. From their post:

The article gives the impression that results were about mixed, at best. So many students are used to video and other supplemental online content that the e-books seem antiquated relative to a similarly sized netbook. But in general, it seems like many students were happy enough to be rid of their textbooks. It looks like the question will be what device students end up using, rather than print vs. digital.

I agree with their point that digital is the futue, and this is good for entrepreneurs and students as physical books are incredibly costly and continue to be one of the greatest expenses in the higher education basket of goods that students and families struggle with.

Here is a link to the original WSJ article on e-book pilot programs by Ryan Knutson and Geoffrey A. Fowler. Here is a snippet:

Proponents tout e-books’ potential to do things that old-fashioned textbooks can’t. Since e-books aren’t printed and don’t need to be sold through physical distributors, they should theoretically be less expensive than regular books and can save students and schools money. What’s more, e-textbooks are environmentally friendly, can lighten backpacks and keep learning materials current.

But the transition has sparked controversy among some educators. They say that digital reading comes with drawbacks, including an expensive starting price for e-book readers and surprisingly high prices for digital textbooks. Also, publishers make e-texts difficult to share and print, and it is unclear how well students will adapt to reading textbooks on a screen, some say. The earliest versions of these devices lack highlighting, note-taking and sharing capabilities, and one leading provider’s e-books expire after several months, meaning they can’t be kept for future reference.

So surprised that people are pushing back on this innovation. From publishers to student groups.

I also love how people always claim ‘e’ things are better for the environment. Really, how do we make all the parts for e-readers (screens, chips, plastic bodies)? What about the batteries/electricity we use to charge them? Not sure which is worse (text versus e-book), but I always find the ‘green’ argument to be ignoring the realities of producing and powering electronic devices.

Anatomy of An Entrepreneur in Word and Images

A couple of weeks back, Kauffman announced the results of a new study by Vivek Wadwa, Raj Aggarwal, Krisztina Holly and Alex Salkever that claims to ‘profile’ the typical high growth, successful entrepreneur. The survey is titled The Anatomy of an Entrepreneur. There is some interesting stuff in there and the thrust of the promotion and coverage is that entrepreneurs don’t like like Mark Zuckerberg or Bill Gates (when he founded Microsoft). From the Kauffman press release (where you can download the study):

The survey found that more than 90 percent of the entrepreneurs came from middle-class or upper-lower-class backgrounds and were well-educated: 95.1 percent of those surveyed had earned bachelor’s degrees, and 47 percent had more advanced degrees. Those from lower-upper-class backgrounds, however, were more likely to have been extremely interested in starting a business than the average entrepreneur surveyed (25 percent vs. 18.5 percent).

Seventy-five percent of the respondents ranked their academic performance among the top 30 percent of their high school classes, and 52 percent said they ranked among the top 10 percent. In college, 67 percent of the founders ranked among the top 30 percent of their undergraduate classes, and 37 percent ranked their performance among the top 10 percent.

More than half of the company founders surveyed (52 percent) had at least some interest in entrepreneurship while in college. Of those who described themselves as “extremely interested” during college, 47 percent went on to found more than two companies.

Founders tended to be middle-aged—40 years old on average—when they started their first companies. Nearly 70 percent were married when they became entrepreneurs, and nearly 60 percent had at least one child, challenging the stereotype of the entrepreneurial workaholic with no time for a family.

One of the most interesting findings to me is that roughly 15% of the entrepreneurs in the survey hold MBAs. This is similar to what Amar Bhide found in looking at the Inc 500 in his monumental study — The Origin and Evolution of New Businesses. It is also interesting because it supports my theory that the growth of entrepreneurship programs in graduate schools of business may be a wasteful use of resources.

BusinessWeek has graphically displayed many of the findings from the study here.

Check out the study and the images from it. There are some obvious shortcomings with the sample (in my opinion) that we will discuss further in later posts.

Higher Ed Competition Heats Up

Showing they are no dummies, leaders of community colleges are pressing hard to begin offering 4 year degrees. They are taking advantage of the recession and the cost sensitivity of consumers in making this move. Moreover, Obama’s recent proposals on higher ed call for $12 billion more for community colleges. From the AP article by David N. Goodman:

Obama announced a $12 billion proposal to increase community college graduates by 5 million by 2020. Community colleges now graduate about 1 million students a year. The president said the nation’s economic future depends on building a skilled work force.

“We will not fill those jobs — or keep those jobs on our shores — without the training offered by community colleges,” Obama said.

So far, community colleges have won the right to offer four-year degrees in Florida, Georgia, Indiana, Hawaii, Minnesota, Nevada, New Mexico, New York, North Dakota, Oklahoma, Texas, Vermont, Washington and West Virginia, the Community College Baccalaureate Association says. Legislative efforts to extend the practice could come soon in Arizona and California, said Beth Hagan, executive director of the Fort Myers, Fla.-based group.

There is no doubt that the leaders of community colleges are acting entrepreneurially in taking advantage of changed market forces. It will be interesting to see how traditional colleges and universities respond. (btw, recent reports suggest that private school matriculation is shrinking during this recession while community college enrollment is booming!).

Movies that Inspire Entrepreneurs + Some Quotes

Found this great list of movies from a young blogger/entrepreneur/social media guy named Bradley Will (@bradleywill). I have not seen everything on this list, but there are some great films listed. Below is a snippet from his post, 21 Movies that Can Inspire Every Entrepreneur (I don’t agree with his title, I don’t agree with all his picks, and I don’t agree with his analysis of all the films, but hey, its still a great post). I shared the Tucker write up b/c I think it is the best entrepreneurial movie of all time.

Tucker: The Man & His Dream (1988)
Message: Leaders never give up on their vision.
Summary: Based on a true story. Shortly after World War II, Preston Tucker is a grandiose schemer with a new dream, to produce the best cars ever made. With the assistance of Abe Karatz and some excellent salesmanship on his own part, he obtains funding and begins to build his factory. The whole movie also has many parallels with director Coppola’s own efforts to build a new movie studio of his own.

BTW, Will also has a nice entry called 12 Quotes Every Entrepreneur Should Have Tattooed on Their Arms. There are a range of people represented — from Ghandi  (be the change you want to  see in this world) to John Wooden (Make everyday a masterpiece). Some good stuff in there, though I think some may be mis-attributed. No matter, the meaning is still there.

Vote for Entrepreneur Mags College Entre of Year

Voting is now open for Entrepreneur Magazine’s College Entrepreneur of the Year. There are 5 entrepreneurs in the running, you can read about each and watch a video on each. You get only one vote. Here is a snippet on one of the entrants: Jonathan Shriftman of USC. A 21 year old entrepreneur major.

In cosmopolitan cities, a popular trend originated by the “hipster” youth of riding fixed-gear, single speed bikes has emerged. These rare bicycles are usually built piece by piece, with parts traditionally imported. Once a bike is finished, it will total an average amount that most can’t afford.

Sole Bicyles will be the first mainstream provider of affordable, fully built, fixed-gear bikes, selling them through e-commerce, then shipping them directly to the consumer’s door. We solve the pain for people who want these awesome track bikes, yet simply can not afford to buy one, or don’t have the resources to custom-build one.

Sole Bicycles’ mission is to be an innovative provider of fixed-gear bicycles, serving as the tipping point to bring a hip, socially responsible trend mainstream by offering the most competitive, fair prices, ease of purchase, all for the utmost in supreme, quality products.

Policy Makers Plan to Abuse Entrepreneurs on Healthcare

In a move that highlights the politics of stupidity, leaders of the house announced a health care plan that will force the smallest employers to provide health care or pay a tax. According to an article in the WSJ, “Under the House measure, employers with payrolls exceeding $400,000 a year would have to provide health insurance or pay the 8% penalty. Employers with payrolls between $250,000 and $400,000 a year would pay a smaller penalty, and those less than $250,000 would be exempt. Certain small firms would get tax credits to help buy coverage.”

Read the article by Janet Adamy and Laura Meckler (reg required). BTW, the WSJ just ran an article on the  rising costs of health care and how it is already causing major problems for small business and entrepreneurs. In that piece from a July 13th special report, Simona Covel writes

At some businesses, in fact, health care is the highest expense after salaries—with devastating consequences. Owners must skimp on vital investments like marketing and research. Some can’t hire the people they want because top candidates demand premium coverage. Or they end up understaffed because of the high cost of insurance—and lose potential clients as a result.

At the same time, to keep costs in check, countless companies are slashing coverage or dropping it entirely. Some are turning to freelancers or offshore workers instead of hiring full-timers and locals. And some would-be entrepreneurs find insurance so onerous that they’re not even starting a business in the first place.

What’s more, it isn’t just individual companies at risk. It’s the entire economy. Historically, small businesses have boosted recoveries significantly. Since they can’t simply make mass layoffs and hunker down, as so many big companies do, they must take risks to survive—like investing in innovative ideas and hiring more workers to implement them. But stratospheric health-care costs threaten to damp that enthusiasm and choke off investment.

Politicians Continue to Pressure Job Creators

Last week my friends at SchumpetersCentury emailed me an post by Jonathan Ortmans — a Kauffman Fellow — arguing that Obama gets entrepreneurship. Then my father sent me an editorial from the Investor’s Business Daily exposing how our policy makers are destroying America’s job creation engine — entrepreneurs. I know which is closer to the truth.

Even more sick is that today’s WSJ highlights Biden’s saying that the administration ‘misread how bad the economy was’ — what this really means is that their policies are not working and they want another stimulus plan. Don’t let it happen. From the must read IBD Op-Ed – Stop the Madness That’s Killing Jobs:

But 18 months into this downturn, we’re still losing jobs — with 2.7 million gone in the private sector just since January, when the Democrats took full control of the government.

Shrinking GDP has crushed investment. First quarter gross private domestic investment — a proxy for business investment — plunged 20%, or nearly $450 billion, annually. The outlook is grim.

Worse, the June jobs data mark a milestone of sorts: Our unemployment rate equals that of the no-growth Eurozone nations.

Why is this job decline happening? The private sector — the real engine of economic and job growth — won’t hire because it’s scared of what it sees coming out of Washington.

On the horizon, as far as the eye can see, are higher taxes, uncontrolled spending and layers upon layers of new regulations.

Who would hire new workers faced with that?

Also, the federal government is meddling in the private sector as never before — in essence, nationalizing two of the three major carmakers with $200 billion in subsidies and capital infusions, turning our banking system into a fourth branch of government through the $700 billion TARP program, spending $200 billion to take over Fannie Mae and Freddie Mac and put them back in the business of lending to people who can’t pay their loans — which is how we got into trouble in the first place.

And that’s only what’s been done in the last half year or so. What really scares private businesses is what’s in the pipeline.

Please, read the whole editorial and then call your elected reps: tell them to stop the madness!

Gladwell Reviews Anderson’s New Book, Free

While it feels a bit incestuous to me, Malcolm Gladwell reviews Chris Anderson’s new book Free in the New Yorker. The review titled Priced to Sell: Is Free the Future. The book and the review hit on a lot of concepts we discuss here — digital readers, the value of information, and the future of media. As many of you know, my startup — FamilyFantasySports.com — is based in part on the free model as we offer free games to families interested in playing fantasy football together.

From the review:

Anderson is the editor of Wired and the author of the 2006 best-seller “The Long Tail,” and “Free” is essentially an extended elaboration of Stewart Brand’s famous declaration that “information wants to be free.” The digital age, Anderson argues, is exerting an inexorable downward pressure on the prices of all things “made of ideas.” Anderson does not consider this a passing trend. Rather, he seems to think of it as an iron law: “In the digital realm you can try to keep Free at bay with laws and locks, but eventually the force of economic gravity will win.” To musicians who believe that their music is being pirated, Anderson is blunt. They should stop complaining, and capitalize on the added exposure that piracy provides by making money through touring, merchandise sales, and “yes, the sale of some of [their] music to people who still want CDs or prefer to buy their music online.” To the Dallas Morning News, he would say the same thing. Newspapers need to accept that content is never again going to be worth what they want it to be worth, and reinvent their business. “Out of the bloodbath will come a new role for professional journalists,” he predicts, and he goes on:

There may be more of them, not fewer, as the ability to participate in journalism extends beyond the credentialed halls of traditional media. But they may be paid far less, and for many it won’t be a full time job at all. Journalism as a profession will share the stage with journalism as an avocation. Meanwhile, others may use their skills to teach and organize amateurs to do a better job covering their own communities, becoming more editor/coach than writer. If so, leveraging the Free—paying people to get other people to write for non-monetary rewards—may not be the enemy of professional journalists. Instead, it may be their salvation.

Don’t think I will shell out the $26.99 for this book. I also wonder why it is not free? Is that too obvious a question?