An Experiment in How We Think

 

At the September 1, 2010 meeting of LICN, we all participated in an experiment pertaining to our thinking processes.

 

After performing an experiment, you should write it up... which I did. I tried to adhere to the accepted format that we learned in school, but I did allow myself some liberty to deviate.

 

Since we all participated as co-experimenters, I invite you to present you own thoughts, conclusions, discussions, etc.

 

I also want to take this opportunity to thank you for your participation and the lively discussions. It was fun.

 

Murray Kleiner 

 

Click the "Continue reading" below for the complete report

An Experiment in How We Think

(Conducted at an LICN meeting on Wednesday, Sept. 1, 2010)

       Prepared by Murray Kleiner

  

Purpose:

To observe the presence or influence of the following attributes in our thinking processes: entrepreneurship, innovation, risk taking, willingness to fail, and the influence of cultural thinking (negative and positive).

 

Background:

 

At the July, LICN meeting I mentioned to the membership that I had read a book entitled Start-Up Nation by Dan Senor and Saul Singer. The book attributed Israel’s success in out-producing many countries with start up businesses to the above mentioned attributes. Many of these skills, according to the authors, are incorporated in military training. I was also quite intrigued how some societies, and perhaps even our own, are influenced by negative and positive cultural thinking (e.g., fear of losing face if a business venture fails).

 

I asked the membership if they would be willing to participate in an experiment that allows us to explore these attributes within our own thinking processes. They agreed.

 

Hypothesis:

 

The LICN membership is comprised of engineers, I.T. consultants, and people with other technical specialties. It is their nature to be innovative… to design and build new things… to find solutions… to make things work. Some of our LICN members are inventors, have written white papers, and hold patents. Given a challenge, I anticipated that rather than saying, “it can’t be done,” the predominant attitude would be, “let’s see how we can make it work.”

 

I also felt that innovation would lead to risk taking and possibly entrepreneurship. Once you have an idea and figured out how to implement it, at some point you want to make it a reality.

 

I was not sure how to detect the influence of cultural thinking. I anticipated that it would become evident during our discussions.

 

Equipment:

 

· PowerPoint presentation with laptop and digital projector.

· Easel, pad, and pens.

 

Procedure:

 

I presented three different topics for discussion: (1) Would I Invest in the Electric Car? This is based on Shai Agassi’s concept as discussed in Start-Up Nation. (2) Would I have signed the Declaration of Independence?/Would I have led the Continental Army? (3) Develop plans for employment survival/job creation.

 

The topics themselves were secondary. The intent was to detect/recognize the above mentioned attributes during the discussions.

 

In the electric car discussion, each person was to think of himself/herself as an investor or venture capitalist, and Shai Agassi was asking for $100M. It was expected that this would introduce risk taking, possibility of failure, and entrepreneurship into the discussions.

 

In the second discussion, the question was asked, considering the risks, if you would have signed the Declaration of Independence or led the Continental Army as George Washington did.

 

The third discussion had two parts. The first part presented a business idea of a private camp/school to teach/train students (high school through college) about: entrepreneurship, innovation, risk taking, accepting failure, and developing networking and social skills.

 

The PowerPoint presentation consisted of 11 slides and was used for introducing the experiment and each topic.

 

Prior to the meeting, I asked Jerry Brown and Peter Buitenkant to record their thoughts and observations during the meeting. In addition, I was going to record notes on an easel. Together, these notes would serve as the Results section of this write-up.

 

I also advised the group that each person can serve as a “co-experimenter” by taking notes and either giving them to me or emailing them to me. I would incorporate those notes into the write-up.

 

Results:

 

This section consists of the notes I recorded on the easel and the notes provided by Peter Buitenkant and Jerry Brown. Although everyone else was invited to take notes as a co-experimenter, none were submitted.

 

Easel:

 

(Note: After the meeting I recalled some comments that I failed to record. I added them to the easel notes.)

 

I.    Electric Car    

A.   Ideal as a rent-a-car.

B.   Mileage varies per charge as it does with gasoline.

C.  What is the practical range (cannot wait until 100 miles to recharge).

D.  Problem with Li-ion battery catching fire. Determined that there were differences in Li-ion batteries, and that some were safer.

E.   Won’t make decisions that involve trusting government.

F.   May choose to limit risk by investing different percentages over time.

G.  Some people fill up more frequently (i.e., when the gas tank is only half-empty).

H.  Battery-exchange locations need to store lots of batteries. Will they have sufficient room?

I.    This idea will not work or consider using it as a second car because average mileage is 33 miles/day (12,000/year).

At the conclusion I asked how many would have considered investing. One person said he would consider partial investments. No one else was willing to invest.

 

II.   Declaration of Independence/George Washington

A.   Colonists were entrepreneurs. They were willing to fight.

B.   Business relations determined your position during the war. Some New Yorkers did business with England. Others wanted to move westward but were prevented by the British.

C.  Some wanted to fight because of ego.

At the conclusion I asked who would not have signed the Declaration of Independence. No one raised their hands. I also asked who would not have led the Continental Army. No one raise their hands.

III. Employment Skills/Job Creation

A.   Compartmentalization of skills (we do it to ourselves and we allow others to do this to us). This does not work and limits what the individual can contribute.

B.   We have to think like entrepreneurs.

C.  We are solution providers but not problem solvers.

D.  Businesses that think “Green” have the proper attitude that can be applied towards their “obligation” of job creation.

E.   Businesses do not have long term (greater than 1 year) incentives. This eliminates job creation from their goals.

 

Peter Buitenkant’s Notes:

 

- A big question among the membership was what is the difference between a risk taker and an entrepreneur.

 

- Israeli young people develop a highly competitive outlook from their universal service in the army.

 

- The question was presented: "Would we invest $US100M for the development of the electric car infrastructure in Israel."

 

- There was a lot of technical discussion on the merits of the investment. (But not enough financial discussion).

 

- Jack L. asked what percentage of his assets did the $US100M represent.

 

- After taking a vote only 1 person was willing to invest, and that would be a limited investment.

 

- In reference to the Declaration of Independence the consensus was that the signers were entrepreneurs and risk takers.

 

- Almost everyone agreed that business in the US has a short attention span. "Long term" is considered one year.

 

Jerry Brown’s Notes:

 

Carl Schwab: Enterprise Car Rental thinks the Nissan Leaf may be ideal for rentals. They sit in one place a lot of the time. Going to start out with 500 in CA.

 

Visitor: U.S. is different than Israel. Lots of alternatives. What if one of those becomes system of choice. Israel might be left with white elephant.

 

Jack Lubowski: Is 100 mile range absolute limit? Can’t drive to the end of range before refueling.

 

Harry ?: Safety is big concern with Lithium.

 

Others: There are ways to solve safety problems. Standards are already in place.

 

Marty: You should have two types of car. A gasoline-powered car for long range trips and an electric for short range. Most of our driving is short range.

 

Jerry: What about need for increase in electric power demand? Won’t this cost a lot?

 

Murray:  Israel estimates their plan will increase electrical consumption only 6%.

 

Peter: There will be a big problem with throughput at battery charging stations.

 

Discussion:

 

The majority of the time was devoted to Topics 1 and 3. There was minimal discussion regarding Topic 2.

 

Topic 1: Electric Car 

 

Only one person voted that he would invest in small amounts. Everyone else voted against investing. This does not necessarily indicate a fear of failing or a lack of entrepreneurship or any of the other attributes mentioned above. The concept may, in fact be a bad idea. Shai Agassi has unsuccessfully lobbied some congressmen in Washington DC, and it’s certainly conceivable that he has been turned down by a number of investors.

 

The attributes that we were looking for would have been evident during the discussion. Almost all of the comments, however, were negative with one or two possible exceptions. When one person mentioned that Li-ion batteries tend to catch fire that cannot be extinguished with water, another person responded that neither can a gasoline fire be extinguished with water. That person also pointed out that there are other types of Lithium-ion batteries that are considered safe.

 

Another person started off with a negative comment that the concept is not workable, but then concluded that it would work as a second car that averages 12,000 miles/year (33 miles/day).

 

Two additional comments were that Israel could get stuck with a white elephant and mistrust of all governments. Although these are valid concerns, do they suggest an aversion to risk taking?

 

The hypothesis assumed that although there would be negative comments, there would also be positive comments and attempts at figuring out possible solutions. This did not happen.

 

Topic 2: Would I have signed the Declaration of Independence?/Would I have led the Continental Army?

 

This topic had minimal interest. At the conclusion, we asked who would have voted against signing the Declaration of Independence and who disagreed with George Washington. These could be considered as “loaded” questions and couldn’t be taken seriously. Everyone agreed that they would have signed the Declaration of Independence, and they agreed with George Washington.

 

Topic 3: Develop plans for employment survival/job creation.

 

There were two parts to this topic. The first part proposed a business idea for developing a school/camp for students from high school through college that would focus on the attributes discussed above. In addition, it would teach/train networking and social skills. The immediate responses were: (1) It’s already being done elsewhere, and (2) it was already done a long time ago (i.e., junior achievement). There was no attempt to discuss the differences or similarities between these concepts and the plan being proposed or how to make improvements.

 

There was an interesting comment regarding “compartmentalization of skill.” Individuals define their skill set and refuse to address issues outside of it. Employers do the same thing by defining the skill sets for their employees. This limits what an individual can contribute. You can think like an entrepreneur without actually being one by avoiding compartmentalization.

 

The second part dealt with creating jobs. I started the discussion by referring to an article written by an Intel CEO where he complains about government. I made a general statement that people who write articles are complainers. Business complains about government and vice versa. No one suggests getting together and formulating plans. They usually leave that to government. I tried to steer the discussion so that we would come up with some ideas of our own.

 

There were no suggestions for job creation. Most of the comments were critical of business. A possible exception was that companies that think “green” have the right attitude that can be applied towards job creation. That is they think beyond the immediate profit.

 

Conclusions:

 

The actual results were the opposite of the anticipated results as stated in the hypothesis. In any experiment, however, it is first necessary to question the validity of the hypothesis, the experimental method and the objectivity of the experimenter. We also have to identify the variables involved. Would the results have been different had I chosen different topics or the manner in which I introduced them? What are the other variables, if any?

 

Since all of us participated as co-experimenters, I invite your thoughts.

 

Comments

[Dick LaRosa]

I found it hard to imagine that I had $100 mil to invest. My cowardly thinking prevailed. I noticed most attendees acted like engineers and analyzed the merits of the electric car scheme and avoided a statement about investing. Some were willing to invest in increments while looking at progress. A venture capitalist wants a return so he would not be really long term either. Dave Rost's comments are worth looking at and merit serious answers before saying we might invest. Do we worry about failure with our money or somebody else's?

Hard to imagine that I had George Washington's leadership skills - or guts. I've always lived a sheltered life. Would I break free and venture out on my own if provoked enough? Don't like to think about it. Retreat to safer and more comfortable questions.

People from NYU/Poly had been thinking and working on developing entrepreneur skills and attitudes. I thought their ideas were well organized.

Len Anderson seems to have the entrepreneur type of thinking and the talent to back it up. Jerry Brown also.

[Jerry Brown]

There was one important difference between the U.S. and Israel that didn't get discussed. Israel has universal health care system that works. That makes a big difference for potential entrepreneurs.

There were several points in my career where I might have attempted a private venture; but I had a history of heart disease and could not get private insurance on any terms.

I'm not an advocate for a government-based single payer system and I'm skeptical about the economic viability of the plan that was put in place this year. But, I do believe that the system we've had has chained potential entrepreneurs to corporations.

[Carl Schwab]

Murray,

I appreciate your effort in preparing the presentation and also this blog that has given me a chance to digest a little. All my engineering life I have been a "techie" and even have turned an offer to be CEO-----------it just wasn't me. From experience way more than 9 out of 10 new start fail.

But again thanks. I enjoyed.
Carl Schwab