Case studies on 11 successful US enterpreneurs and their business ideas

This list includes people such as John Bogle (Vanguard), Scott Cook (Intuit), Al Neuharth (USA Today) and Tom Stemberg (Staples). These accounts show a wide variety of approaches for successful enterpreneurship. There are meticulous analytical researchers as well as gut-driven decision makers. One common theme - high degree of motivation and self-confidence.

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Suggestion on Accounting for the Stock Options: (Options: Clearing the Fog for Investors by Timothy J. Mullaney in Business Week, Sept 23, 2002)

Accounting for the stock options has become a hot issue in today's corporate climate where investors are clamoring for increased transparency and quality disclosure. The author thinks that 'expensing out' options exaggerates what options really cost. As an example-
"...expensing options often produces profit numbers wildly out of whack with cash flow although the two numbers ought to move in tandem. Last year, for instance, eBay Inc. turned $748 million in sales into $252 million in operating cash flow. If eBay had expensed options, it would have posted a $14.5 million loss, not the $90.4 million profit it actually reported. Why? Mostly because the formulas for expensing options penalize volatile stocks--even though eBay's profit growth was rock solid. Stock volatility doesn't alter the economics of a business. So why should it drive earnings?"

Instead, the author suggests, a better idea may be to add all the outstanding options (irrespective whether they are in-the-money or not) to the number of shares. So, the Net Income figure would remain the same but the EPS will get diluted. This "tells investors how much of their company and its cash the option holders could claim, without exaggerating." This 'Superdiluted EPS' is different from 'Fully Diluted EPS' currently reported by the companies as the latter considers only 'in-the-money' options.

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Commentary on Microsoft's efforts to capture the 'mid-market' in application software: (A Field Day by Justin Hibbard in Red Herring, Sept 13, 2002)

... Microsoft intends to take a big bite out of the next upgrade pie--a bite from right in the middle. Through its second- and third-largest acquisitions ever, the company is vying for the so-called midmarket in application software, generally comprised of companies with $50 million to $1 billion in annual revenue. Long the domain of niche software vendors, the segment is highly fragmented, underserved by big tech companies, and full of pent-up demand; this makes it potentially lucrative when the U.S. and European economies improve and software spending increases.

None of this has been lost on other software makers. As sales to large corporations have slowed, SAP, Siebel Systems, and other big-business apps suppliers have begun moving down market, while small-business software specialists, like Intuit, have headed up. As these high- and low-end players approach Microsoft in the middle, a train wreck awaits. Fatalities will result, but Microsoft won't be among them. "The revenues from Microsoft's applications suite will be in the league of Siebel, SAP, and PeopleSoft," predicts M.R. Rangaswami, an angel investor and former vice president of worldwide marketing at the business-software maker Baan. The largest of those companies, SAP, last year generated $4.8 billion in sales of software and maintenance, nearly one-fifth Microsoft's total sales.

... Trouble is, many software companies serving the midmarket are Microsoft's partners. That is, they build applications that run on Microsoft's operating system, database, and other infrastructure programs. (In industry parlance, such companies are called independent software vendors, or ISVs.) Naturally, some of them are perturbed. "Microsoft's entry into business-management software is a serious issue for some of the small players," says Evan Goldberg, CEO of NetLedger, a Web-based business-applications provider funded by Oracle CEO Larry Ellison. "Anyone who sells sales-force automation or accounting software to small and medium-size companies is now competing with Microsoft, whom they once thought was a partner."

Implications of Microsoft's Palladium Initiative (to implement "trusted computing architecture" on Windows platform) on privacy, security, Digital Rights Management (DRM) and (of course) antitrust: (Antitrusting Microsoft by Lawrence Lesig in Red Herring, Sept 10, 2002)

... Named after the mythical statue that guarded Troy, Palladium implements a "trusted computing architecture" on the Windows platform. If this crucial bit of the operating system works as designed, a Palladium-enabled machine could give users interacting with it assurance that the machine will do just what it says. If you sent a Palladium-equipped machine an email, but told it not to forward the email, the machine would obey the restriction. If Disney sent a movie, and said, "play this only three times," the machine would obey that restriction, too. A trusted architecture would make it easier for users interacting with trusted machines to control how those machines use their content. And for anyone who's had an email turn up somewhere it shouldn't, this type of control doesn't sound all bad.

... Trusted platforms could change the debate about digital rights management (DRM). For, by increasing trust at the ends of the network, Palladium would weaken an argument that Hollywood now pushes: that Congress regulate every machine on the Internet to protect Hollywood's content. Trusted platforms could enable a different kind of DRM--indeed, I would say, a "better DRM"--one less damaging to innovation and more supportive of content competition.

To see the point, distinguish between DRM systems that control copying (copy-protection systems) and DRM systems that control who can do what with a particular copy ("token" systems that Palladium would enable). Copy-protection systems regulate whether machine X can copy content Y. Token systems regulate whether, and how, machine X is allowed to use content Y.

The difference can be critical to network design: if a technology could control who used what content, there would be little need to control how many copies of that content lived on the Internet. Peer-to-peer systems, for example, depend upon many copies of the same content living in many different places across the Net. Copy-protection systems defeat this design; token systems that respect the network's end-to-end design need not.

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9/11 anniversary has prompted some thought-provoking media articles. Some excerpts:

How education with as much emphasis on values of life as on science can be helpful in curbing extremism and terrorism: (An Apology from an Arab by Ali Salem in Time, Sept 11, 2002)

... In my part of the world, the Arab Middle East, a great tragedy results from our governments' well-intentioned attempts to cure society of extremism through education. These leaders, however, don't teach what they should to produce the values they want. They seek moderation and enforce piety. They seek citizens who value life, yet their school curriculums exalt the value of science and ignore philosophy and history and the liberal, humanistic values they embody. That is why those who excel in such a system are no less immune to the call of extremism

... Extremists are pathologically jealous. They feel like dwarfs, which is why they search for towers and all those who tower mightily. We must admit that we failed to teach these people that life is worth living.

The emergence of new forms of/ alternatives to nation-state: 'Market-State' and 'Virtual State' (Get Ready for the Next Long War by Philip Bobbitt in Time, Sept 11, 2002)

... Al-Qaeda, the group responsible for the attacks that day, represents a new and profoundly dangerous kind of organization—one that might be called a "virtual state." The virtual state has many of the characteristics of other states (a trained standing army and intelligence cadre; a treasury and a source of revenue; a civil service and even a rudimentary welfare system for the families of its fighters) but is borderless; it declares wars, makes alliances with other states and is global in scope but lacks a definable location on the map.

... In the 21st century, what might be called "market states" could replace nation-states. Market states will have the same borders and political systems as nation-states but will shift important responsibilities from government to the private sector; multinational corporations will become surrogate agents of government, filling roles that government can no longer play and blurring the boundaries between political and corporate leadership. Because the market is private, global and transactional, market states are better able than nation-states to cope with a war that is partly private, partly international and partly defensive, as future wars will be.

... Market states will be forced to integrate the private sector into strategic planning. They will have to develop international patterns of cooperation—pooling intelligence, for instance—or lose the war against virtual states and terrorism. Above all, market states will change the premise of governing: unable to deliver on the promise of ever increasing well-being for all, states will promise only to increase opportunity and minimize the risk for all as best they can. And because markets are not effective at encouraging such positive collective behaviors as loyalty, civility, respect for family life, reverence for sacrifice or regard for privacy, the evolution toward market states will require societies to find new ways to encourage these public goods.

... [The wars of 21st century and beyond] could be characterized by aging nation-states trying to fight off rising market states, with a virtual state entering into an unofficial alliance with one side or another. More likely it will see clashes between competing forms of market states. It may be a chronic war of low-intensity interventions—police actions on humanitarian grounds, to undergird states in which law has collapsed, or against terrorism. Or this war could be a series of regional cataclysms, perhaps between nuclear powers on the Indian subcontinent or in Northeast Asia or the Middle East. The war could even come between regions, perhaps between great powers that launch disguised cyberattacks on one another's infrastructure—then see the hacking and disruption escalate into armed conflict.

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Can India Catch Up? (Fortune, April 29, 2002)
Anecdotal commentary on history and destiny of India.

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Commentary on and brief history of Tata group (Fortune, April 29, 2002)

"...Tata likes to see itself as the embodiment of Indian values--and in many ways it is. Like India, Tata is a loose federation that somehow hangs together. Like India, it has missed chance after chance to progress as others have passed it by. Like India, part of Tata is open, efficient, global, and forward-looking, but most of it is not. And like India, Tata knows its business culture must change but hasn't had the nerve, or the heart, to fully break with the past that holds it hostage..."

"...[Tata group is] a corporate masala: part Oracle, part Bethlehem Steel, part Ford, part AT&T, and a dusting of small, obscure businesses..."

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