Posts Tagged ‘entrepreneur’
Steve Jobs was an inventor on over 300 patents. He is the quintessential American inventor entrepreneur. He and Steve Wozniak started Apple in January of 1977. The company went public in December of 1980 and was the largest IPO (Initial Public Offering) since Ford in 1956. Apple goes on to launch the MacIntosh in 1984 with its now famous television ad that played off the book 1984, where IBM played the role of Big Brother. This launches the graphical user interface (GUI) as the standard for computers.
This fairy tale start to Apple is marred by John Sculley, former president of Pepsi, being appointed CEO of Apple and firing Steve Jobs in 1985. Strangely enough, Jobs foreshadowed this event in his Playboy interview in which he talked about how Polaroid fired Edwin Land, their creative founder and how Polaroid floundered thereafter. Once Jobs was fired, Apple floundered for over a decade, and in the late 1990’s was all but dead. Jobs returned to Apple 1997 and to profitability by 1998. This is a cautionary tale for all those management gurus who ignore the technical creative genius and believe running a business is all about people skills, management, or finance. Real wealth is created by invention and Jobs was a consummate inventor as his patent record shows.
An interesting question is raised in the book Great Again is could Apple have been successful today? They answer the above query with a series of questions:
Could a twenty-year-old college dropout, just back from six months in an ashram somewhere, attract funding for a capital-intensive venture based on the manufacture (yes, they manufacture) and sale of a $2,500 consumer product unlike any that had ever been bought by consumers before? One whose potential uses were at best unknown, and possibly nonexistent? And one for which the total current market size was exactly zero?
Not only could Apple not get funded today, it probably could not go public. Nor would Apple have received its first patent (USPN 4,136,359) in only 20 months. The book asks “how many of today’s Apples are not getting a chance?” Perhaps the death of Steve Jobs is the right time to examine this question.
 XEROX’s PARC center deserves a significant amount of credit for inventing the GUI. Unfortunately, the FTC’s absurd attack on XEROX in the early 1970s for being a technological leader caused this great American company to pull back on commercializing a number of great inventions, including Ethernet. This is a shameful history in American government that is being repeated today. For more information see http://hallingblog.com/jobs-the-economy-and-patents/.
About a year ago I finished my book The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation. The book argues that the US economy was faltering long before the financial crises because changes to our laws were inhibiting investment in technological advances. Intellectual, financial, and human capital are the three foundations necessary to develop new inventions and all three have been undermined since 2000. In this post I will review how the policies affecting these foundations have changed in the last year.
Intellectual Capital: patents mainly represent this prong. The good news is that David Kappos replaced the incompetent and traitorous Jon Dudas. Kappos is a patent attorney and therefore also has a technical background. Unfortunately, he spent his whole career working for large companies and does not understand the challenges of individual inventors and technology start-up companies. The bad news is that Supreme Court again illustrated their utter incompetence in the Bilski decision. None of the Justices understand the difference between the utility requirement under 35 USC 101, the novelty requirement 35 USC 102 and the obviousness requirement 35 USC 103. The justices demonstrated that they do not understand the need for a working embodiment (35 USC 112) in order to even evaluate 101 and 102 issues. They presented nonsense hypothetical’s in oral argument that were not enabled and then demanded to know whether these hypothetical’s meet the utility requirement. They also made absurd statements that patents limit the flow of information. Another low point in the year was the farcical ruling in the ACLU v. Myriad case. The judge ignored the law and wrote 100 pages of nonsense to his cover up his crime.
Despite some progress in this area, overall the US continued to weaken the Intellectual Capital foundation necessary for economic growth, job creation, and investment in inventions.
Financial Capital: Sarbanes Oxley significantly undermined this foundation. The only good news is that the financial reform bill raised the threshold for the application of SOX to $60 million in market capitalization. However, SOX did incredible damage to our economy in only 60 pages. The financial reform bill is 2700 pages and no one knows all the damage it will cause, but it certainly was not a step in the right direction. The major issue financial reform should have addressed was Fannie and Freddie and it did not even address this issue.
There was no progress at all in this area.
Human Capital: this was undermined by the FASB rules requiring the expensing of stock options. Despite the fact that accountants are unable to understand the simple fact that dividing a pie does not reduce the size of the pie, this idiotic policy continues unchallenged.
The US has made no progress in the last year in implementing policies that would encourage technological entrepreneurship. The US is continuing its corny capitalism policies that reward political connections over true economic progress.
The US is also likely to increase the capital gains tax rate from 15% to 20% in 2011. This will further damage the incentive to invest in new technologies. The Obama administration is proving that it is even more incompetent than the Bush administration.
Technology start-ups drive innovation. According to the book, The Decline and Fall of the American Entrepreneur, a start-up needs almost a billion dollars in sales to justify going public because of the cost of complying with rules such as Sarbanes Oxley, depriving our technology sector vital financial capital.
Decline and Fall clearly shows:
*Sarbox fails to achieve its goals;
*Thriving IPOs are critical to providing capital for technology companies, even if most of those companies never go public;
*The SEC estimates the cost of Sarbox compliance at $91,000/yr per company, the actual cost is closer to $4.0M/yr!!!
*Is the medicine worse than the disease!!
Percentage of World IPOs:
1996 – 60% in U.S.
2005 – 20% in U.S.
*Decline and Fall shows how we can turn this around- Make the US the world leader again in Innovation. Jobs. Capital.
Your copy of The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation, by Dale B. Halling, is at Amazon.com.
Now the U.S. is a static corporatist society filled with political groveling worthy of a Dostoyevsky novel.
What has happened? How did the U.S. go from endless possibilities to endless nightmares?
How did the U.S. go from endless possibilities to endless nightmares? The book The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation, by Dale B. Hallling, will clearly explain-
That the 90s were more innovative than the decade of 2000-2009;
That innovation is the key to real per capita increases in income;
Why the venture capital model is defunct;
How little known laws have undermined the three pillars on which the innovation of the 90s was built; and
How the U.S. can regain its preeminence as the most successful and dynamic economy in the World.
This long overdue book is now available for $21.95 on Amazon.com.
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Dale B. Halling is a patent attorney, founder of several start-ups and author of the book “The Decline and Fall of the American Entrepreneur.”
- How Competition Between Countries for Investment is Affected by Patents
- Evolution, Economics, and Patent Law
- If It’s THE ECONOMY STUPID: Then It’s ECONOMIC FREEDOM STUPID
- Another Study Shows How Far the U.S. Has Fallen
- Economic Freedom on the Decline: U.S. Falls Four Slots
- Great American Inventor Steve Jobs Dies
- My Book: The Decline and Fall of the American Entrepreneur Now Available on Kindle
- Austerity: Why it is Key for Both Short Term and Long Term Economic Growth
- Elizabeth Warren’s Hate Speech
- OECD Patent Quality Measurement – Confusing Patent Quality with Innovation