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CEO Daily Brief – Nov. 12, 2010

New Business Models Are America’s Most Undervalued Export President Obama’s trip to Asia has inspired a wave of worried commentary …

New Business Models Are America’s Most Undervalued Export

President Obama’s trip to Asia has inspired a wave of worried commentary about America’s diminished standing in the world economy. And there’s no bigger worrier than New York Times columnist Thomas Friedman. Friedman normally focuses his anxiety on China, but this past Election Day, he looked at India and a new generation of startups poised to disrupt established business models.

In particular, Friedman told the story of a startup in South Delhi called EKO India Financial Services. The fast-growing company uses cell-phones, software, and text messaging to allow migrant workers without access to traditional banking to transfer funds and save money — a low-cost answer to a big-time problem. In just 18 months, the company has 180,000 users doing 7,000 transactions a day and is already turning a profit.

It’s a wonderfully uplifting story — as well as, according to Friedman, a potentially big worry. “In the next decade,” he predicted, “we will see some really disruptive business models coming out of here — to a neighborhood near you. If you thought the rate of change was fast thanks to the garage innovators of Silicon Valley, wait until the garages of Delhi, Mumbai and Bangalore get fully up to speed. I sure hope we’re ready.”

Bill Taylor says he guesses he should be worried, although he is not sure why it’s bad for the United States if brilliant entrepreneurs in India make life a little easier for their poorest countrymen, and eventually introduce their ideas to our economy. Isn’t that called progress?

To read more from the Harvard Business Review, please click here.

Columbia Sportswear Chairwoman Thwarts Home Invasion

Gert Boyle, the 86-year-old leader of Columbia Sportswear fooled a robber by tripping a silent alarm at her Oregon suburban home, summoning police and leading to the capture of a suspect. She was roughed up when the robber tied her hands Wednesday afternoon, police said, but wasn’t seriously injured.

Boyle, who chairs the Oregon-based company’s board, did take an unusual day off from work Thursday. She burnished her hard-nosed reputation after her husband died of a heart attack and she took over Columbia in 1970.

On Wednesday, police said, Boyle pulled into the driveway of her home in West Linn and the robber approached her posing as a delivery man. But when she got suspicious, he pulled a gun and ordered her inside the house. Boyle told the robber she had to disable the alarm but instead tripped a silent panic button that summoned officers. When one arrived, he saw that Boyle’s hands were bound and someone appeared to be inside the house. But the robber escaped through a back door and into a ravine.

Six hours later, an officer saw a man limping outside a McDonald’s where he had apparently been trying to clean himself. His face was scratched, and he told the officer he had been working on the trees. The man identified himself as 39-year-old Nestor G. Caballero and police booked him on charges of burglary, robbery and kidnapping. They found jewelry that appeared to be from Boyle’s house, he said.

The Oregonian reported that Boyle emerged from the ordeal with just a few bumps and bruises. She was just a bit shaken up, and she has a fat lip.

For more from The AP on the incident, please click here.

Former KB Home CEO Bruce Karatz Sentenced to Five Years’ Probation

Bruce Karatz, whose 20-year run as chief executive of home-building giant KB Home was derailed by allegations that he manipulated the value of stock options, was sentenced Wednesday to five years’ probation, including eight months of house arrest.

U.S. District Judge Otis D. Wright II also fined the former executive $1 million and ordered him to perform 2,000 hours of community service. Wright rejected prosecutors’ request for a lengthy prison sentence, noting that there was no evidence that the crimes damaged KB Home or its shareholders.

Karatz, 65, was convicted in April on charges that he lied about the Westwood-based company’s practice of backdating options. Prosecutors said the misinformation was given to KB accountants and also appeared in a 2006 quarterly report filed with the Securities and Exchange Commission.

Karatz is one of the most prominent corporate executives to be prosecuted in the government’s long-running crackdown on options backdating and one of the few to be convicted. Only a handful have received prison sentences.

For more on the sentence from the Los Angeles Times, please click here.

The Secret Life of Start-Ups: An Inside Story on the Perennial Silicon Valley Revolution

Never have the possibilities seemed more endless, never has it seemed cooler, even patriotic, to be a tech entrepreneur. But when four out of five small businesses fail each year, tech start-ups have the odds stacked against them. The prolonged recession and a downturn in venture investment haven’t made it any easier.

Yet despite the odds, the last 18 months has seen a spike in start-ups. Many entrepreneurs have been bumped out of jobs, are disillusioned with their careers, or are new college grads looking to make their mark, according to Howard Greenfield, president, Go Associates.

More than half a million people started new companies in 2009, up 4% from the previous year, according to the Kauffman Index of Entrepreneurial Activity. The trend also seems to be true in Europe, with start-ups increasing by over 17% in Sweden in the first half of 2010.

The allure of starting the next Amazon or Google is irresistible — a Silicon Valley bug that has spread to college students and garage entrepreneurs and been exported to the far corners of the world. As the price of computing power plummets, new ventures become more affordable, less risky, and more first-time entrepreneurs are taking the plunge.

Among early incubator occupants of the so-called “Lucky Building” in Palo Alto, California, were high-tech stars PayPal, Logitech, and Google. The latter, which grew from 6 to 60 employees before moving to bigger offices, now has 10,000 people and a market cap around $175 billion.

For more about start-ups from The Huffington Post, please click here.

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