Entrepreneurs follow Constructal Law

Adrian Bejan is author of the theory about natural phenomena knows as the Constructal Law. Basically his theory thus far has been used to explain how systems such as river basins, mechanical designs, and even the NFL offense [WSJ 9/10/09 p. D8]  become more efficient. This blog extends Bejan’s theory to entrepreneurs and entrepreneurship and in so doing drives a stake into the ground.

Bejan has been quoted as stating, inter alia, “Good ideas flow fast and far and keep on flowing.” Entrepreneurs conjure “good ideas,” get them going {flowing}, and hopefully turn the original idea into flows that are “far and keep on flowing” in the form of great companies.

The Constructal Law specifically is stated as follows: "For a finite-size (flow) system to persist in time (to live), its configuration must evolve such that it provides easier access to the imposed currents that flow through it." [Wiki] In  layman terms, his theory suggests people and businesses seek efficiency which is “one of the laws of nature – the tendency of all things to evolve toward efficiency.” [WSJ] Certainly, bigger better faster cheaper [more efficient] is the most basic tenant of most if not all entrepreneurial endeavors.

It will be most interesting to learn how the fresh minds of Purdue students approach this extension to Bejan’s theory. Want to know where I’m coming from? View the video below. Your feet won’t always be able to touch the bottom of the swimming pool [nor is it your best interest that they do so!] Hank

Wilkeson Sandstone Quarry, LLC

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Wilkeson Sandstone Quarry, LLC is on the edge of the small town  Wilkeson, WA, (wiki) some 50 miles southeast of Seattle in the shadow of Mount Rainier. Back in the late 1800s, it was home to a large coal mining operation. Consisting of some 600 residents, the largest (only) commercial operation there now is “the Quarry”, owned by a near-relative and long-time personal friend of ours, Chuck Nelson.

Chuck backed into running a stone quarry; seems the previous owner was indebted to Chuck and paid off his debt with the quarry. A little about Chuck: He is a Civil Engineer from Purdue, an ex-Navy attack-plane pilot (Vietnam era), and a retired Northwest Airlines 747 pilot. Chuck is an entrepreneur extraordinaire – he looks at life as a way to make money one way or another. One of his exploits on active duty Navy was to dive in water hazards for golf balls, followed by a lead business based on repurposing lead from military firing ranges, and later, to importing construction equipment from Korea, a Northwest Airlines layover, to the US. Chuck smells money where others only see smelly stuff.

The quarry has gone from weeds when Chuck took ownership to a multimillion dollar operation with a crew of almost 10 full-time employees running full out. Some of his saw equipment runs 24/7. Chuck does not advertise – he sells all he can make. But Chuck has a problem – the huge Ogyu diamond wire saw used to saw huge chunks of sandstone dynamited from the quarry are water cooled, and produce a slurry that presently Chuck is carting off to isolated parts of the quarry and dumping. The EPA is OK with this, and the slurry, a mud-like substance, is 100% natural sandstone powder plus water. See toward the end of the first video below for evidence of this. Chuck would like to make something out of this slurry, something that can be sold for a profit. He has had thoughts of a product line for women’s depilatory or dead skin removal product but knows there are better uses. Chuck would probably provide samples of the slurry if asked. Can you solve his problem?

Wonder what people to in Wilkeson, WA do for entertainment? See the second video below. A slide show of the town is presented in the third panel below. Music therein is by the German bluegrass band Helmut & the Hillbillys. Hank

Are you swinging for the fences?

Sarah Lacy, a writer for TechCrunch, recently wrote  about the 2009 TC50 with the following lead: “I did interviews with most of the TechCrunch50 experts backstage and there was a common gripe about the companies launching there: Not enough passion, not enough swinging for the fences, not enough trying to change the world. There were too many people building safe businesses, too many companies just trying to make existing things slightly better, and too many people wanting to be the next Mint.com, not the next Google.”

My two ENTR200 classes recently presented preliminary concepts for the “new businesses” they are going to “start” as part of learning about entrepreneurship. Of the twenty concepts presented, few pushed the envelope, either socially or technically. But is this caused by environmental factors – our current economic meltdown, uncertainty in the political landscape, movement toward a society that actually saves money, or is it a generational-learned behavior?

“Tell me EXACTLY what you want, and I might do that, and NO MORE.” Oh, and by the way, I need Fridays off so I can play golf; forget Mondays, I party on weekends, and won’t move away from XYZberg because that’s where I want to live. OR, are entrepreneurs playing a wait and see game, stifling their creative juices until which way the ball bounces becomes more clear. What say you? Hank

Let’s Disrupt the Textbook Industry

This post is entirely from here: What do you think about taking on the textbook industry? Hank

#4- The Textbook Publishing Industry

The textbook industry is literally called a broken market when it comes to economic theory.  Books cost too much for students, professors hate the content, and authors don’t see any money from re-sales.  A new age textbook company should have the following characteristics:

• 100% digital with the option to print and modify it as you like.
• Available online and all other formats known to man with zero DRM (iphone, kindle, PDF, other ereaders, mobile web format)
• A living document that is corrected frequently and also has continuous updates that interject current events.
• Enriched by video.  It’s undoubtedly helps people learn better, especially with hands on subjects like computer science.
• Content that doesn’t suck.  Kids won’t learn with using the “Widgets example” 100x over.  Make it simple and make it up to date with current events.
• Make it  social.  Why can’t I interact with student x from Stanford while I’m at UNC?  Why can’t I see the questions asked by all students with the book on Problem Set #8 ? Make textbooks Facebook Connect enabled.
• Make it a platform.  Let teachers remix the content and fit their lesson plans.  Even let people develop apps upon the content and subject manner.  Learning ruby on rails?  Someone should be able to plug in a simple app that helps you learn code. Exactly like this.

The elevator pitch is this:  Do to educational publishing what new media has and is doing to traditional media.

To update a traditional textbook you usually need to do the following:

• Isolate all the minor changes and go through tons of committees to publish them.
• Wait till enough are there to print a new edition.
• Spend tens of thousands of dollars to print this new edition.
• Spend more money marketing it to colleges and piss off those who just bought the previous edition
• Waste more money creating silly value adds like CD-Roms, so you can justify a new edition.
• Be irrelevant by the time it gets printed.

Cost: Lots of money Time: Lots Value: None.

To update a textbook of the future:

• Open Wordpress/Custom built CMS to manage the content
• Make correction and its updated immediately.

Cost: None Time: under 5 minutes Value: Incremental and immediate.

You need to choose wisely where to start here.  Don’t go after k-12 markets and bureaucracy.  Start with home schooling or start with niche subjects.  Build up properties one by one and eventually you may be able to take on the major publishers in large markets.  California is open to change, and I assume that most other states will be, especially if you build a great track record + can show how it can reduce costs for them.  Here’s a great primer on why the textbook industry is a pain in the ass and needs disrupting.

Have A Happy Friday: As long as it’s pizza, we’ll eat it

Windmills & Birds: What’s the true price of wind energy?

On 9/7/09 Robert Bryce wrote an article in the WSJ titled “Windmills Are Killing Our Birds.”In it, citing various sources, Robert stated U.S. wind turbines kill 75-275,000 birds per year and further, for each megawatt of capacity, we can expect 1-6 bird deaths/year. Since a government mandate to generate on the order of 20% of U.S. electrical power requirements from windmills is imminent, which maps to 300,000 megawatts, we’re on track to kill on the order of 300,000 to 1,800,000 birds per year. A significant number of the birds being killed are Golden Eagles and other desirable species.

It is logical to ask, how many birds are we willing to kill to support the public’s increasing demand for electricity? When’s the last time you caught yourself leaving a light, appliance, or computer on unnecessarily, thinking I’m killing X-number of birds by doing so? Or does the entitlement generation even care? I’d really appreciate your insights.  I’ve included several references provided by one of the commenters to  the WSJ article for further insights should you be so inclined to delve further into this subject.

The direct costs associated with launching and use of windmills is straight forward. The “social cost of windmills” is the “the monetary valuation of incremental damage from each windmill constructed and placed into operation.” Bird-kill is only one component of this social cost. The whump-whump noise pollution, visual aspects, and impingement on the privacy of nearby residents are a few of the others. This is the component of Cost-Benefit Analysis being ignored. Hank

——————Links below from WSJ Comments—————–

“This Alamont, CA video should answer some of your questions as it has the data you seek:
http://www.youtube.com/watch?v=RtgBWNKwBkE&feature=related
This is the SRC Scientific Review Committee link for Altamont, CA:
http://www.altamontsrc.org/alt_agreements_and_recommendations.php
The House Subcommittee on Fisheries, Wildlife and Oceans
Oversight Hearing on: “Gone with the Wind: Impacts of Wind Turbines on Birds and Bats.”
Testimony of Donald Michael Fry, PhD
Director, Pesticides and Birds Program
American Bird Conservancy
May 1, 2007
Room 1324 Longworth House Office Building.
http://www.abcbirds.org/newsandreports/releases/070430_testimony.html
Mark Duchamp of Spain is an expert on bird kill by wind turbines:
INCONVENIENT VIDEOS :
www.iberica2000.org/Es/Articulo.asp?Id=3729
The dark side of windfarms :
www.iberica2000.org/Es/Articulo.asp?Id=1228
Pictures of windfarm victims ( eagles etc. ), of turbines on fire, of collapsed turbines, of soil & water contamination etc. :
http://spaces.msn.com/mark-duchamp
I hope you find these studies to be helpful. “

• Link

ENTR former student has opportunities

Below is an email [urashid-at-westmonroepartners.com ]I received last week from a new Purdue grad and former ENTR200 student: Opportunity knocks. Hank

Hey Hank,

I gradated Purdue this spring and started working for a company called West Monroe Partners.
They’re a business and technology consulting firm.. I love it- it’s the best job I’ve ever had…tomorrow for our company meeting we are going to the Chicago Cubs game.. What more can you ask for? [besides going to a Sox game instead]

This year to cut costs on recruiting West Monroe Partners will only be attending the computer routable, but we are looking for other majors too (I’m a Krannert alum myself).. We’re looking for people with technical skills (CS, Coding, etc) as well as business related majors.. We’re not searching for a particular major more of a ‘who is the best fit’ and who can learn quickly. I was hoping you could pass that information on to your students?

I’ve included a PDF with all the event details…I want to make sure people know even though we’re attending the computer roundtable we ARE looking for other majors as well. We are recruiting for both full time and internship slots.

With that said, I don’t think an art or philosophy major would be the best fit for the firm, but hey you never know.. The ENTR program was GREAT, I’ve recommended it to all my friends who go to Purdue.

If you have questions or any students you think would be particularly good match please let me know.

Thanks!!

Boiler up!

Have you been SPANX’D by Sara Blakely?

This blog entry was authored by Beth Carroll, a fellow ENTR200 instructor and entrepreneur involved in women’s clothing sales and marketing. My thanks to her for stepping up. BTW, the tagline associated with the Spanx logo is “We’ve got your butt covered!” Hank

How does a girl who failed her entrance exam to law school twice, have the brains to launch, grow and sustain a $350 million-dollar undergarment company? Her only prior business experience had been a seven year stint in photocopy sales! Sara Blakely graduated from Florida State University with a degree in communications. She has an engaging personality and enough spunk to have toyed with standup comedy as a hobby. In the year 2000, When Sara was 27 years old, she stumbled upon an idea while trying to solve her problem of panty lines showing while wearing a pair of white pants. Her solution? She cut off the feet of a pair of control top panty-hose and wore them under her pants, something women had done thousands of times before. Sara had a sudden “Aha” moment, knew this product had potential, and SPANX was born. Before launching the product she talked with girl-friends (her target market) to make sure they thought her idea was a good one (guys she talked to just didn’t “get it”). She then researched the product and wrote her own patent for footless pantyhose. Today SPANX has grown its product line to include: body shapers, slimming camis, hosiery, panties, and bras in both regular and plus sizes. All sized women wear SPANX and the product can be bought nearly everywhere you look. SPANX even does private label shape-wear for Target and Chico’s.

Sara did have a very lucky break when Oprah endorsed SPANX early in the products inception. With-out that initial boost, would SPANX and Sara be where they are today?

Curtis "50 Cents" Jackson Interview

No father present, an addicted mother, shot at and hit, Jackson has lead a very interesting life. Read the story of his life here: We can all learn about entrepreneurship from him. Hank

"In his discussion on CNBC – video below, Curtis “50 Cent” Jackson expressed his opinion about music piracy, offered insight about the music industry, and provides his own advice on getting rich."

Purdue +$105 Million = Quake Research

My thanks to fellow ENTR200 instructor Mike Cassidy for a heads up. Hank