Accidents are the mother of invention

Here’s a nice piece on the invention of the Slurpee (via Marginal Revolution). An excerpt:

Knedlik’s [Dairy Queen] franchise didn’t have a soda fountain, so he began placing shipments of bottled soda in his freezer to keep them cool. On one occasion, he left the sodas in a little too long, and had to apologetically serve them to his customers half-frozen; they were immensely popular.

When people began to show up demanding the beverages, Knedlik realized he had to find a way to scale, and formulated plans to build a machine that could help him do so.

You never know what customers are going to like. Here’s a secret, kids,– they do not teach you how to figure that out in business school. There’s not a formula or process to follow to do it, other than trial-and-error.

I think executives who are trying to find ways to grow their company should consider using more low-cost, trial-and-error discovery .

Sebelius

When I saw the alert that Kathleen Sebelius is going to resign her post as Secretary of Health and Human Services, the classic Warren Buffett quote came to mind:

When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.

The business of attempting to solve problems caused by government intervention with more government intervention is a business with bad economics.

Good from afar, far from good

I realized that quip to describe the phenomenon where someone of the opposite sex looks attractive from a distance, but less so the closer you get to them, also applies to the poor and needy.

Deserving from afar, far from deserving?

I’ve noticed that the folks who tend to be strong advocates for the generic needy (the needy from afar), become less so the closer they get to specific needy people and to their own wallets.

I, again, recall a conversation with a friend who owned a car lot. He was a strong advocate for the deserving and faceless “minimum wage worker,”, because they were powerless against employers. But, apparently the car salesmen on his lot weren’t deserving of that treatment since he treated them as contractors so he wouldn’t have to be locked into paying them minimum wage.

Health insurance is another example. The faceless uninsured was used to garner support for Obamacare because everyone ‘deserves access to health care’. But, put faces on some of the uninsured and look at some of the choices they’ve made — like paying for an expensive cell phone plan, instead of buying insurance — and the ‘deserving’ moniker starts to make less sense.

This exposes a good tactic to use in conversations with people who have the ‘deserving from a far, but far from deserving’ affliction. First, put some faces on those who they think are deserving.

Their next argument will be that those are only a few abusers or outliers and ‘that should be fixed, but doesn’t take away from the vast majority of the other (faceless) deserving.’

To which, a good response is, “How do you know? Are you guessing?”

Better than charity

I agree (2nd to last paragraph), somewhat, with Google founder Larry Page: Give money to capitalists instead of charity (via Carpe Diem).

Where I disagree is that you don’t need to give them money. Rather, invest in them. Invest in entrepreneurship. Maybe get kids diddling less time away chasing college scholarships to play sports heavily subsidized by taxpayers and more time creating stuff of value.

Here’s more from me and Richard Branson on the subject.

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Think about that

From John Goodman’s piece in the Wall Street Journal, A Costly Failed Experiment (emphasis added):

With Sunday marking the fourth anniversary of the Affordable Care Act being signed into law, it’s worth revisiting the initial purpose of the president’s signature legislation: Universal coverage was the main goal. Four years later, not even the White House pretends that this goal will be realized. Most of those who were uninsured before the law was passed will remain uninsured, according to the Congressional Budget Office.

Democrats also fixated on another goal: protection for people with pre-existing conditions. One of the first things the new law did was create federal risk pools so that people who had been denied coverage for health reasons could purchase insurance for the same premium a healthy person would pay. Over the next three years, about 107,000 people took advantage of that opportunity.

Think about that. One of the main reasons given for interfering with the health care of 300 million people was to solve a problem that affected a tiny sliver of the population.

More recently, the president has had to explain why between four million and seven million people are losing their health insurance despite his promise that they would not.

Yes, think about that. Thinking isn’t something we do very much of this country anymore.

Good point on inequality and education

Here’s Mark Perry, of Carpe Diem, regarding John Goodman’s post: If you really care about income inequality, you need only focus on one thing: the inequality of educational opportunity.

As Goodman puts it:

Poor kids are almost always enrolled in bad schools. Rich kids are almost always in good schools.

As they point out, the left seems more concerned with protecting teachers unions than providing quality education.

But, I think it’s worth pointing out that the blame of bad schools doesn’t fall only on the administrators and teachers, though they are partly to blame.

As one commenter on Mark Perry’s blog post pointed out, what do you think would happen if you switched the kids in the good schools with the kids in the bad schools? Do you think the reputation of the schools would remain intact? No.

I think it’s worth considering why that is. It’s not because of inequality. It’s because different people value education differently, just like any other product or service.

Even in a country that provides publicly for education, people still get to make choices based on a number of factors. Those who value education more tend to choose to live in areas where their neighbors value it as well. Those who don’t value education as much are left in the bad schools.

Charters a good way to give more choice to the people who do value education, but happen to be stuck in the areas where their neighbors don’t value it as much.

But, charters won’t convince those who don’t value it, to value it more.

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