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James Hong

Sunday, March 21, 2010

My letter to Vivek Wadhwa

I recently tweeted the following:

"I disagree with almost every TC post i've ever read by Vivek Wadhwa. Financial incentives < Cultivating real interest http://tr.im/RPT3"

It looks like I was not the only one:

"@VCMike: RT @shervin: RT @rabois his posts are garbage. RT @georgezachary RT @jhong :disagree w/TC posts i've ever read by Vivek Wadhwa"

Today I got an email from Mr. Wadhwa:

"James, I cherish criticism because I always learn from this. Would love to lean what you disagree with about my posts. Here is my latest: http://techcrunch.com/2010/03/20/integrating-ethics-into-the-core-of-your-startups-why-and-how/ "

Here was my response, I thought i'd post it here on my blog too:

Hi Vivek,

Sure, I am happy to provide some feedback.

WRT to your latest post, there is not too much to disagree with the
concept that strong corporate values can help companies endure. I
think most people understand that ethical behavior leads to trust,
which is a cornerstone of sustainability. I whole heartedly agree with
the concept that companies and people should operate ethically. That
is, for example, why I was against the scamville offers
(http://techcrunch.com/2009/11/01/scamville-hotornot-plentyoffish-facebook-myspace/)

I'm not sure you successfully make that point in your article though.
The data you provide just shows that of companies that were Forbes 100
in 1917, most did not survive. Then you imply based on his statements
about which financial companies survived in 2008 that this was the
same reason for the older companies failing. But you offer no proof of
that, and you don't cite anyone's research that proves this specific
point.

The other issue I have with this article is that it's not clear the
behavior of subprime lending was unethical. Having a short term focus
and making bad loans was ultimately unsustainable and in retrospect a
bad business decision, but it is a bit of a cop out academically to
say that they are inherently unethical. Seems a bit like you are
pandering to a populist audience that presumes that the recession is
only the bank's fault and not their own as well (for borrowing in an
irresponsible manner or for having a short-term mentality themselves
when voting for politicians.)

Are people who took subprime loans unethical, or just unwise? People
adapt to the environment and the rules setup around them.. a lot of
the mess we are in I attribute more to bad public policy decisions..
but even then, I would not call Alan Greenspan unethical, I think he
just made very bad decisions.

If you had just said "these companies failed because they had short
term mentalities and didn't want to hear anything about it from their
employees" that would have been easier to digest. I think your recipe
for framing things has too many parts sensationalism and not enough
parts substantiation.

Incidentally, I do think there are things some banks have done that
have been fairly unethical. I just don't think you listed any of them.

WRT your last post, which was the debate with craig barrett, my
fundamental problem with it was that I believe that the passion and
obsessive thinking needed to make technical breakthroughs are
typically the behavior of people who are genuinely interested in their
subject matter. You can pay a person to become a scientist and do
their job, but you can't pay a person to care.. and my gut tells me
that the people who care are the good ones. If you look at history,
you will find that scientist have not traditionally been wealthy.

What motivated the team that put men on the moon was the challenge and
the glory, not the payoff. That's not to say that large prizes do not
serve as a fun incentive (ala x-prize) and focus/coordinate collective
efforts, but the root of the problem is not one of financial
incentives. Kids don't go around saying they don't like math because
there's no money in it.

If you get someone interested in a subject at an early age, they will
think about the subject whether there is money in it or not.. and in
some pretty cool cases, those people might not even care about the
money when it IS there for them, as is the case of Dr. Perelman of
Russia who recently solved one of the greatest math problems but has
shunned publicity and possibly a one million dollar prize (
http://www.nytimes.com/2010/03/21/science/21award.html)

If you believe otherwise, I'm afraid you are spending a bit too much
time with MBAs and not enough time with the people you are actually
writing about.

Best Regards,
James

5 Comments:

Blogger Hot Chocolate said...

Great post! Very thoughtful. My opinion is also that Vivek Wadhwa leans too much towards sensationalism. Also, instead of accepting critical comments, he acts like he is some sort of activist whistleblower - "exposing" the truth to the horror of insiders. In fact, he is just slicing the data whichever way suits his preconceived notions and trying to come up with the most controversial article.

James - you should be posting on TC rather than him!

7:07 PM  
Blogger Hot Chocolate said...

Great post! Very thoughtful. My opinion is also that Vivek Wadhwa leans too much towards sensationalism. Also, instead of accepting critical comments, he acts like he is some sort of activist whistleblower - "exposing" the truth to the horror of insiders. In fact, he is just slicing the data whichever way suits his preconceived notions and trying to come up with the most controversial article.

James - you should be posting on TC rather than him!

7:09 PM  
Blogger George Zachary said...

James,

thank you! Couldn't have said it better myself.
George

8:58 PM  
Blogger Vivek said...

James, thanks for your email and for your criticism. But, frankly, I am a little disappointed with your response. You tweeted that you disagreed with almost every of my posts. These have, most recently, been about the dearth of women in engineering, the importance of having our engineers focus on solving problems that really matter, whether entrepreneurs fit the "young arrogant male stereotype" or can be educated, importance of startup visas for skilled immigrants, the need to open State contracts to bids from Silicon Valley entrepreneurs, stealth mode being a bad idea, R&D in India, etc.

In your response, you nitpick small parts of my last two posts, on ethics and my debate with Craig Barrett. Your criticisms didn't refute the key arguments I had made.

Let's discuss these criticisms (which I accept, by the way):

On the data that I cited from Harvard Business School professor Mike Beer's book -- I simply summarized some of his research and provided links for readers to get more information. How could I possibly cover all of the issues about the financial services meltdown in a 1200 word blog post and then get to the point I wanted to make? My intent was to provide a high level overview of information which could be found elsewhere. And by the way, I strongly disagree with your defense of subprime lenders. These financial products were gimmicks to make a quick buck, and we are all paying for the ensuing disaster. Ethics have been in short supply in the investment banking industry.

As far as the debate with Craig Barrett goes, I presented both sides of the issue in the article itself. I believe that you are sadly out of touch with the financial problems that S&E researchers face. Education is very costly and students need to repay hefty loans. It is not fair to put scientists and engineers at such a severe financial disadvantage just because they have a passion to solve problems. I am not going to repeat myself as I have already covered these points in my post...which perhaps you should re-read along with the comments that were posted by scientists and engineers.

I look forward to learning what your real issues are and for your criticisms on my other articles. It would be very helpful if you would focus on the message of the article.

Regards,

Vivek Wadhwa
Visiting Scholar, UC-Berkeley
Director of Research, Center for Entrepreneurship and Research Commercialization and Exec in Residence, Pratt School of Engineering, Duke University
Senior Research Associate, Labor and Worklife Program, Harvard Law School
Columnist, BusinessWeek, Contributor, TechCrunch
Research: www.GlobalizationResearch.com, Downloads: http://ssrn.com/author=738704
Twitter: http://twitter.com/vwadhwa

8:58 PM  
Blogger Glenn Gutierrez said...

"Kids don't go around saying they don't like math because
there's no money in it." Agreed. It's all about the passion.

http://blog.ted.com/2009/01/sir_ken_robinso_1.php

12:44 AM  

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