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Updated: 30 min 43 sec ago

Tesla is disrupting more than just the car business

Sat, 2016-02-06 16:01

Tesla Motors is building the world's biggest battery factory just outside of Reno, Nevada. The company is calling it the “gigafactory,” and when it’s up and running in 2016 it’s expected to make Tesla’s electric cars much more affordable. 

“In a single factory we're doubling the worldwide capacity to manufacture lithium-ion batteries,” says J.B. Straubel, Tesla's chief technology officer. 

That's significant enough. But the company also plans to develop batteries for use with solar-power generation – giving Tesla a shot at challenging public utilities as an energy source, Straubel says.

“At the price points that we're expecting to achieve with the gigafactory ... we see a market that is well in excess of the production capability of the factory,” says Straubel.

The market for batteries is an offshoot of the booming business for solar panels, particularly in states such as California, where solar is becoming commonplace.

“We sign up approximately one new customer every minute of the workday," says Will Craven, director of public affairs at California-based SolarCity.

Much of the excess energy harnessed by solar panels is returned to the power grid, Cravens says. This means homeowners and businesses may earn a credit from their power companies, but have no say over when and how that energy is used.

The partnership with SolarCity will use rooftop solar panels fitted with Tesla’s battery packs to allow customers to keep that energy in-house. That means they can use it however, and whenever, they want. The concept puts Tesla in direct competition with utility companies.

“Stationary storage, or backup storage, is really being considered the ‘Holy Grail’ of renewable electricity generation,” says Ben Kallo, an analyst with the Robert W. Baird financial services firm.

Kallo points out that the intermittent nature of renewable energy sources makes them less reliable because the wind doesn’t always blow and the sun doesn’t always shine.  But with the ability to store that energy, renewable energy sources can compete head-to-head with utility companies for customers.

“There are still many utilities out there who kind of have their head stuck in the sand and just hope that this goes away. What we're seeing is really building momentum,” Kallo says.

Forward-minded utilities might look at Tesla’s business model as an opportunity, he says.  Energy-storage technology could be used to build capacity in their existing grids, and also build new infrastructure for battery-powered cars and homes.

 

The business of climbing rocks

4 hours 39 min ago

People have been climbing hills, mountains and rocks as a form of exercise for years. The disruptor – which is really only a couple of decades old – is doing it inside.

The first indoor climbing gym in the U.S. opened in the 1980s, but there's been a boom of late.

"These gym owners have figured out that they don’t necessarily need people who have climbed Yosemite or Annapurna," says Clare Malone, who wrote about the new climbing craze for the New Yorker. "They just need who are sort of looking for a cool, different, alternative way of working out."

Rock climbing gyms are not limited to areas that are surrounded by mountains and hills. They’re up and coming in the Midwest, and very popular in Los Angeles and New York. The new, key demographic here are millennials in cities.

"A lot of the spending in the outdoor industry, which sort of covers a range of different products and stuff, but it’s a lot of young, affluent urban people," says Malone. "People really like it because it feels so real and so tangible."

Listen to Kai's conversation with Malone above, and read more from our follow-up email interview, which has been lightly edited for clarity and length.

 

You cite one report that estimates young urbanites account for about a third of spending on outdoor clothing and gear, while hardcore outdoorspeople account for just 17 percent. Can you trace that to the increase in indoor facilities? Or is climbing’s popularity the result of more interest in athletics — and the athletic look — among young people?

 

While I can't say for sure, I do think that the proliferation of climbing gym probably means that more people are buying climbing gear—a demographic of people who might not have done so 20 years ago. It's of course not just climbing alone that accounts for the uptick in sales, there's trail running, camping, etc. But for whatever reason, younger people are looking to the outdoors for exercise novelty.

But the outdoor look is also pretty popular--you look around New York this winter and you'll see a lot of Canada Down jackets, a lot of puffer coats. They're hip, as opposed to the old wool coat I'm walking around in! And I think all these outdoor brands are certainly taking advantage of that trend. 

 

Have you noticed a meaningful difference in the way brands market to the growing number of indoor climbers, as opposed to outdoor climbers?

 

I don't think there's a meaningful differentiation in branding between outdoors and indoors. Outdoors is obviously the aspirational side of the sport, so I think brands typically will use those star athletes doing crazy things out on the mountains to catch an audience's attention, but they are also heavily involved in the gyms.

Over and over, people kept on telling me that almost all of the next generation of star climbers will have started in a gym and then moved outdoors. So I think they see those two markets eliding. 

 

You mention in the piece that some larger brands are hoping to leverage the “mainstream” athletes they sponsor into more exposure for climbing. What's keeping the sport out of the mainstream? How does social media play into that?

 

I think climbing has typically been a subculture — hippie-dippie adventurer types who were mostly white and out west. So what we're seeing now in the sports's cultural revolution, if you will, is white urbanites appropriating the culture of crunchy white people.

Quite a few people in the climbing world expressed the hope that the proliferation of gyms in certain areas would open up this narrow demographic. And social media is definitely part of this. The sport has also tended to be more male — but again, a lot of people I talked with are hoping that this opens up, and that more women and girls get involved.

The moment where the sport's at right now might be, one person told me, how gymnastics was right before it reached critical mass: Got some superstars, and pretty soon little girls all over America were taking Saturday morning tumbling classes. 

 

This quote stuck out to me, from a climbing gym co-owner: “Are we selling climbing or are we selling this vibe?” To what degree are people in the climbing industry comfortable with this kind of attention?

 

I think that's a question that certainly cuts to the heart of a culture clash — or perhaps it's better to say a "slight discomfort" — that maybe more seasoned, hardcore climbers have.

To a certain degree, no matter what you're talking about — music, sports, a cult movie — early adaptors love being the ones who were in-the-know, who liked it before it was cool.

So I think some people are rubbed the wrong way by climbing gyms that see themselves as event venues rather than hardcore training facilities. But the people on the business side —apparel makers and gym owners alike — couldn't be happier with the spike in popularity.

How German higher education controls costs

5 hours 3 min ago

The next time you pull out your checkbook to pay that hefty tuition bill or pay down your student loan, consider this: there are countries where students pay nothing to attend university. Denmark, Sweden and Germany for example all have tuition-free college.

WGBH Radio’s "On Campus" team wondered how these countries do it, and if there are things the U.S. can learn from their model. Their search to understand how German universities keep costs down and quality up began in the Rhineland.

It was a frigid evening on the banks of the Rhine in the medieval city of Cologne. Under the vaulted ceiling of an old Gothic church, the 80-piece university orchestra was tuning up.

In the land of Beethoven and Handel, it makes sense that a university would invest a lot in its orchestra. But that commitment extends far beyond the music program. In Germany, one of the world's wealthiest countries, taxpayers fully subsidize the cost of public higher education. While American students now graduate with an average of nearly $30,000 of debt, college in Germany has always been free.

Since tuition is free here, German students don’t really worry about student loan debt. Instead, they worry about their exams or learning a trade. Seventy percent of the students at the University of Cologne work part-time jobs. Students, parents, administrators and business leaders of all political stripes say the same thing: higher education in Germany is seen as a public good.

Controlling costs

The University of Cologne is Germany’s largest university with 48,000 students, a medical school and a law school.

"I have to be honest, I really like this university even though it's not the most beautiful one, as you can see," says tour guide Valerija Schwarz, a Ph.D. student in German Literature.

The university’s central square swarms with bicycles. Many students bike to school or take public transportation, Schwartz explains — that’s why there’s no big parking garage.

Students park their bikes outside one of the University of Cologne's newest buildings.

Photo by Mallory Noe-Payne/WGBH

Students in Germany also tend to stay local, so there aren't any dorms. There are no active student clubs, or big football stadium. And every lecture hall looks huge.

“Most of the time you don't even know who is sitting next to you or who your professor is,” Schwarz says. “You just listen and then reproduce your knowledge during the exams.”

All of this translates to savings: the average cost of an undergraduate degree in Germany is $32,000, paid for by the state. In the U.S., some schools charge that much for one year, and student loan debt has surpassed $1.2 trillion.

South 160 miles from the University of Cologne, tucked in the heart of Heidelberg’s quaint but vibrant city center, the University of Heidelberg offers a full program of courses from ancient history to biochemistry. It is one of Germany’s oldest and most prestigious institutions.

“A majority of German voters agree that a decent start in life includes the possibility of a free higher education,” says Frieder Wolf, a political science professor at the school.

To limit spending, Wolf says, professors teach more and earn less than their American colleagues.

"This is not to complain. I love my job and I have a lot of freedom but this is how we keep costs down — larger classrooms,” Wolf says. “We’ve got courses with 40 participants, 50 participants in the social sciences, where [American universities] might have tutorials of four or five students.”

And unlike their American counterparts, German universities have very little administrative bloat.

"Many administrative tasks for which you would have specialized personnel in the States is done by the teachers and professors here,” Wolf says.

The trade-off

But are German students getting the same quality learning experience?

Germany isn't widely known for having top-tier colleges like Harvard, Yale and Princeton. But, says Wolf, what it does have is “reliable quality."

"With all due respect, [America has] the best colleges but [it also has] some of the worst,” Wolf says. “There’s probably a new sort of class divide between people who get there and who don’t get there, where as in Germany basically most everybody who wants to go to an average college can go there and get a decent education."

In the U.S., the closest comparison to Germany’s no-frills, low-cost higher education is probably state and community colleges. President Obama has proposed making two years of community college tuition-free for students who keep their grades up, but Republican leaders in Congress have plans to stall that plan.

"It’s a very big commitment,” says Sandy Baum, a higher education economist with the Urban Institute. “People want it to be free, but they don’t really mean they want to pay higher taxes to make it free."

Baum says Americans also don't want to give up the residential college experience, with all its bells and whistles. But, she says, the U.S. needs more affordable choices.

"In many European universities, you go and you listen to a lecture and that is what is involved in the university,” Baum says. “It’s a lot cheaper to do that than the many things that people are asking for on college campuses here. And people are voting with their feet, and we need to have multiple options."

Baum says those options should include more online learning and apprenticeships.

Willing to pay, despite free tuition

Still, there are German families who, despite the promise of free college, are willing to pay for the elite American experience.

Jane Park and two of her three children in their home in Essen, Germany. 

Photo by Mallory Noe-Payne/WGBH

Johannes Kim and Jane Park live in Essen, a neighboring city 50 miles north of Cologne. In the kitchen one recent evening, as Park prepares dinner, their three small children were listening to an opera lesson on tape.

Kim graduated from the University of Heidelberg and he thinks the opportunity to build relationships with professors is something you really can't put a price tag on. He wants their kids to attend schools with strong brand recognition.

"The American college experience is something that instills some sort of emotional bond to your university. That is something that is completely missing from the German system,” Kim says. “Although I went to the oldest university in Germany, there is not the feeling that I'm a proud alumni or graduate of that school."

Park, who is Korean-American, finds Germany's tuition-free model appealing, though she's conflicted about the American system.

"I like to think that I have a strong sense of social justice and great education is almost reserved for the elite despite scholarship opportunities and financial aid,” Park says. “That, I find disturbing and in some ways I am squaring, 'OK, do I want to feed my children into that sort of system?’”

Their kids are young, so it will be a while before they go to college. And by that time, there's no guarantee that Germany will still be committed to the idea of free college education.

German states are on a five-year deadline to balance their budgets, meaning states, and taxpayers, will be taking a close look at what they can afford.

This is part one in a WGHB series that examines higher education in Germany, and compares it to the challenges we face here in the U.S

Amazon Dash and the internet of things thing

7 hours 24 min ago
On Tuesday, Amazon announced Amazon Dash for Amazon Prime members.

Introducing Amazon Dash Button. Press it to get it. http://t.co/oMGn2m0gLO #DashButton pic.twitter.com/6lxIccZPzJ

— Amazon (@amazon) March 31, 2015

They're tiny little sticker things with a button on it that come branded with various household products ... Tide detergent, for instance, or Gatorade.

The idea is that you put 'em in your pantry, or your laundry room, they connect through your wifi network at home, and if you need a re-supply, you just push the button and presto, order made.

I get the whole "internet of things" thing but ... I just don't know.

Lifting sanctions is not always easy

7 hours 32 min ago

Whatever the outcome of attempts this week to reach a tentative nuclear agreement between six world powers and Iran, experts say the process of lifting sanctions against the country will likely be slow and incremental, with many hurdles.

Iran is under sanctions from many entities, including the United States, the United Nations and the European Union, for refusing to halt activities that could result in the production of nuclear weapons. The sanctions have hammered its economy, throttled its oil exports and choked off investment there. Iran wants the sanctions lifted as soon as any deal goes into place.

“It’s unrealistic to expect that the sanctions will be lifted immediately,” says Elizabeth Rosenberg, director of the Energy, Economics and Security program at the Center for New American Security. 

The six world powers negotiating with Iran are the U.S., Britain, France, Germany, Russia and China. Rosenberg says even if they hash out a deal with Iran by the final deadline of June 30th, there will be yet more steps to easing sanctions. She notes that the European Union, for example, will have to get consensus from all 28 member states.

“And that's been a challenge in the past when it comes to Iran, is getting everyone on the same page,” she says.

Rosenberg says it's even more complicated in the U.S., which has some of the most powerful sanctions in place limiting commerce with Iranian individuals and institutions. There are also sharp disagreements here between President Barack Obama and Congress over whether to ease sanctions.

Suzanne Maloney, a senior fellow at the Center for Middle East Policy at the Brookings Institution, says the president has some ability to waive sanctions but only on a temporary basis.

“The president will in most cases have no more than 180-day waiver authority, and in some cases even less,” she says.

Maloney says some members of Congress want to limit the president’s powers even further. She says with that much uncertainty in the air, American businesses will likely be very cautious about any investment in Iran for the foreseeable future.

Why a rising dollar (sometimes) means cheaper oil

7 hours 39 min ago

Oil prices took another dip today on Monday, a barrel of U.S. crude was back down under $48 as of Monday afternoon. 

There are all sorts of reasons why the price of oil is falling. There's the fact that global demand is low; there's the worry that Iran may start pumping its oil into the market; there's the fact that we may be running out of room to put all the oil we have in the market right now.

And then there's the strong dollar.

This may sound a bit counterintuitive. Why would a strong dollar put pressure on oil prices? Surely a strong dollar gives American companies more purchasing power, which, given the size of the U.S. economy would mean more activity, which would translate to more demand, which would lead to an increase in the price of oil. I mean ... surely!

Yes. But...

The oil business does business in dollars. Which means everyone who wants to buy (or sell) oil has to do it in dollars. Why dollars? Because they're readily available, anywhere in the world, and it makes life easy to do business in just one currency when you're dealing in such an important global commodity.

The problem is, in order to do business in dollars you have to buy dollars. And right now, dollars are expensive. In January, a barrel of Brent crude would have cost me about $50. It would have cost my cousin Brendan, in Ireland, about 40 euro. In March, a barrel of Brent crude will cost me ... about $50, but Brendan, because he has to buy dollars with his euro before he can buy the oil, ends up paying about 45 euro for that barrel.  Now, 5 euro doesn't sound like much, but the people who by oil by the barrel usually buy hundreds of thousands of barrels at a time, and pretty soon that adds up to real money.

In other words, the price of oil may not be rising in dollars, but it's certainly rising in euro and rubles and yen. And the higher it rises, the less the Europeans and Russians and Japanese are willing to buy. So demand falls. And as demand falls, producers find they have a surplus. And to reduce that surplus, they cut the price.

Ad that's why, if the dollar continues to rise, the price of oil could continue to fall.

Do higher home prices mean the market is rebounding?

10 hours 5 min ago

The Case-Shiller 20-city housing price index for the month of January came out Tuesday morning—Home prices increased 4.6 percent percent over last year.

So, does that mean the housing market is on the rebound?

The answer is complicated, due in part to that basic economic rule: supply and demand. On the supply side, people anticipate interest rates going up, says Craig Lazzara, of the S&P Dow Jones Indices. So they think, “If I can borrow at 3 percent, that’s better than borrowing at 6, so I’m going to borrow today at 3,” he says.

Another thing driving demand: there’s not that much out there for sale, especially in the $200,000 range, which is the median right now.

Danielle Hale of the National Association of Realtors says a lot of people want to buy right now, especially millennials.  As for supply, she says for one thing, smaller construction firms are running up against stricter borrowing regulations, “which is keeping that inventory lower than the market is calling for right now.”

So are housing prices going up because of a) an improving economy b) pent up demand or c) limited supply?

The answer: d) all of the above.

PODCAST: The changing middle class in Silicon Valley

13 hours 5 min ago

What's going to happen if Iran starts exporting oil to the global market. Plus, Jay Z launches his own music streaming service for audiophiles. And more on the changing landscape of the Silicon Valley middle class. 

Left behind in Silicon Valley

14 hours 5 min ago

Christine Holst teaches geometry and pre-calculus at Pioneer High School in San Jose, CA. Lately, she has been worried about one of her students. Holst says he asked for advice because he’s overworked and stressed. 

“I just want my students to do the best that they can and make the best decisions for them and not comparing each other,” says Holst. “But then we live in this area where, how do we not compare? How do we not look at the house next to us compared to our own?”

You get the sense just being in Holst’s classroom that she has the ability to make pre-calculus fun. The walls are covered in homemade posters that are part inside joke, part math lesson.

“This is where I want to serve the community and what’s sad to me is I can’t serve my community and feel like I can live in my community. I feel like it has to be one or the other,” says Holst.

She and her husband, a sound engineer, have a young daughter; they make between seven and eight thousand dollars a month, but that’s not nearly enough to buy a home here.

“You need to earn about $140,000 a year to buy the median priced house. So homeownership is a real question in the future economy,” says Derecka Mehrens, executive director of Working Partnerships USA, a community labor organization just up the road from Pioneer High School. They recently issued a cost of living report on Silicon Valley. Data from the report showed that the vast majority of job growth was at the bottom.

“What we know is that for every tech job created there are four additional jobs in the regional economy created. What's unknown or not talked about is what the quality of those other four jobs are and who gets those jobs,” says Mehrens.

Christine Holst genuinely loves her job but her salary isn’t enough to have the traditional middle class life that she expected. “I am very grateful to live in this area. I think it has a lot to offer, but there’s not a lot of peace here. I love my students but it’s just the pressures of this area to do well and to succeed that I find challenging,” says Holst. “So if everywhere were like the Silicon Valley it would make me sad.”

That’s an especially harsh reality for Holst who grew up in the valley. Her family is from here, and she would like to stay.

Jay Z is Apple’s newest rival in streaming music

14 hours 5 min ago

The market for streaming music just got more competitive: rapper Jay Z  launched Tidal, his new service, this week. Tidal promises, “high fidelity sound quality, high definition music videos and expertly curated editorial,” as well as equity to musicians who decide to join Jay Z in owning the service.

Tidal will also not be offering any free content. Instead, it will offer two monthly subscriptions based on audio quality: $9.99 for standard compressed audio and $19.99 for higher quality files, such as CD.

“There are some of us audiophiles who believe that this higher quality audio is better but most people, including, for example, my mother-in-law just don't’ care,” says Ian Sherr, executive editor at CNET. “And Jay Z has got to convince us all that this is worth paying potentially more money.”

The only way Tidal can compete, Sherr adds, is if there are more “audiophiles” out there  who would be willing to pay higher prices for better quality.

“What we do know is that the landscape is littered with people who have failed at this,” says Sherr. “And  failed at streaming in general. It’s expensive.”  

Does Jay Z offer no advantage? He does, according to Sherr: “Him. He has the Jay Z brand behind him. He also has the Beyonce brand.”

So far that’s helped him successfully court musicians for exclusive access to their tracks, at least for a limited time.

“That could be compelling,” says Sherr. “People love to be the first to hear things. People love to be the first to see things.”

Jay Z might be late to the game, but that doesn’t mean the move won't work. There are other pitfalls, however.

Says Sherr, “What Jay Z has at stake is obviously money, but also if he isn’t able to pull this off, it’s going to raise questions about, does the music industry understand how to actually sell to consumers?”

 

Latvia's Russian minority not separatist

14 hours 5 min ago

Following the annexation of Crimea, Russian President Vladimir Putin said he would intervene to protect ethnic Russians from persecution wherever they may be. So how about Latvia? The tiny Baltic state has a large and disgruntled Russian-speaking minority, representing more than a third of the total population of 2 million. Are they eager for secession? Could Latvia be Putin’s next target?

Many of Latvia’s Russians — who arrived in the country when it was still a part of the Soviet Union — are certainly disaffected today .

“As Russian speakers we are not welcome, we are not wanted in this country,” claims Latvian lawyer and activist, Elizabete Krivcova. “I was born in this country. It’s my country. But I’m treated as a foreigner here," she says. Native Russian speakers face restrictions on using their language in business and public life. They cannot get citizenship unless they speak Latvian. 300,000 of them are non-citizens.

“As a country, this is our key problem,” says Simona Gurbo, a political scientist at Rīga Stradiņš University. “Many of these people are living in a kind of cultural bubble. They don’t speak Latvian. They get their news from Russian TV and so they sometimes have no idea what is going on in Latvian politics but they follow closely everything that’s going on in Russia.”

The message from Russian TV is increasingly hostile to the west, to NATO, and to the European Union. Latvia itself has been described as a “failed state” in Russian broadcasts.

But while they are bitter and disillusioned over the relegation of their language to second class status, most Russian speaking Latvians express no desire to separate from Latvia and join the Russian Federation.

“No, no, no. Absolutely no. I wouldn’t like it,” insists Josiph Korens, another Latvian Russian activist. Korens was speaking on the sidelines of a march through central Riga commemorating the Latvian soldiers that fought with Hitler’s army against the Soviet forces during the Second World War. Korens was staging what he called an “anti-fascist protest” against the march, wearing a mock bio-suit. “I want to make the point that we must disinfect Nazism,” he says.

Korens denied an allegation by the police that he’d been paid by the Russian Federation to stage the protest as a way of embarrassing and weakening the Latvian state. “I am loyal to Latvia,” he says. “Russian speakers here are not trying to separate.”

A leading economist in Latvia agrees. Morton Hansen of the Stockholm School of Economics in Riga detects no real separatist sentiment among the country’s Russians.

“They have incomes that are, in most cases, better than in Russia,” he says. "And therefore there are not really that many reasons for wishing that you had something from Russia here.”

Changing times fuel drug company deals

14 hours 5 min ago

The $12.8 billion merger between health insurer UnitedHealth Group and drug benefits manager Catamaran Corp. is the latest of a spate of deals in the pharmaceutical industry.

"Certainly it's been a trend that's been happening between manufacturers and supply chain partners," says Charles Rhyee, an analyst with Cowen and Co. "There's a lot going on in terms of jockeying for purchasing power."

Both drug buyers and sellers want to scale up to get more leverage as drug prices rise, says Rhyee. UnitedHealth and Catamaran, a pharmacy benefits manager, will control up to a fifth of the industry's business.

Mergers are also being driven by short supplies of certain generic drugs.

"There are companies out there acquiring manufacturing capacity for sterile injectibles, ophthalmology drugs, and topical drugs," says Donald Ellis of Avondale Partners.

Those particular types of drugs are hard to manufacturer and have few suppliers, says Ellis. And shortages could grow now that some foreign firms have left the U.S. market.

At the same time, George Hill of Deutsche Bank says the Affordable Care Act has meant more patients and more prescriptions, "which makes more companies comfortable that future revenue and earnings trends are sustainable."

Which means that mergers are likely to continue, analysts say.

The one with all the Facebook friends

15 hours 5 min ago
$140,000

That's the amount required per year to buy a median priced house in Silicon Valley. Those outside of the top income bracket in the area have struggled to keep up with the rising cost of living. It's forcing people like high school teacher Christine Holst of San Jose to reconsider the traditional middle-class lifestyle

$1

The going price for some Uber usernames and passwords in some corners of the web, Motherboard reported. The site interviewed a couple anonymous sellers and verified that at least some of the credentials were real, though Uber itself says they've found no evidence of a hack.

200,000

The number of images the Artline Group gives hotel proprietors to choose from when decorating their businesses. They can be printed on a variety of materials and even custom designed in some cases, given hoteliers near-infinite options. You've always wondered where hotels got their art, so we looked into it this week.

$7.50

The minimum wage in Arkansas, which got a $.25 raise earlier effective first of this year. The Washington Post spoke to one minimum wage worker at a Days Inn about how the increase would affect her life. But now the worker claims she was fired for speaking to a reporter. Her manager disputes the story. No matter what happened, the original story is worth reading.

1.3 billion

The total number of active users – though there could well be some overlap – between Facebook messenger and WhatsApp, the messaging app Facebook acquired for more than $20 billion late last fall. Now the company is expanding Messenger, modeling it after the lightweight messaging platforms that are hugely popular in Asia. With such a huge user base, Quartz reported, Facebook could be very well-suited for the next step in mobile social networking.

132 million

The total annual volumes Guinness World Records says they've sold in the past 60 years. As more people turn to the web for the kind of eye-catching stories that used to be Guinness' stock and trade, the company has built up a "business to business" arm, which helps brands organize and legitimize a world-record attempt and get the resulting publicity. But getting paid to organize and codify brands' records means Guinness is walking a tricky but lucrative line, Slate reported.

Rhodes Trust plans global scholarship expansion

Mon, 2015-03-30 11:12
In China, if you go abroad to study you are called an "overseas turtle" — because you swam away to college.

"They call local people who have never been educated overseas 'local turtles,'" says Bei Bei Bao, an analyst with the economic research firm Rhodium Group.

What kind of turtle you are, and where you swim, can have a lot of impact in China. And the Rhodes Trust knows it. For the first time, it's offering students on mainland China the the chance to apply for a prestigious Rhodes scholarship to study at Oxford University. Educators, parents and students are taking note.

In China, Bao notes, education is seen as a sign of social status. And a new market has sprung up — offering classes to help students apply for elite education abroad.

"Parents are willing to spend whatever those programs are charging to help their kids get an edge," Bao says.

Tim Katzman, director of summer and extended programs and China outreach for Francis Parker, a private day-school in San Diego that helps prep Chinese students for foreign programs, just returned from China yesterday. He says the Chinese appetite for Western academic training is growing.

"Any leg up or advantage that they feel — or their parents or school administrators feel — they can capture by coming to the U.S. for an abbreviated summer program, a midterm program or for an entire year, is extraordinarily attractive to students and their parents in China,” Katzman says. For Western prep schools, he continues, the interest from China is a gold rush.

Expanding to China may be attractive financially to the Rhodes Trust too, says Anthony Carnevale, director of Georgetown’s center on education and the workforce.

“If the Rhodes people want to extend, they’re going to have to reach out to other parts of the world and include them — both in funding and in finding the scholars themselves,” he says.

The Rhodes Trust says it is eager to expand. And as it begins that process among China's population of 1.3 billion, it's possible it may find itself in receipt of a few new applications.
Rhodes Scholars you might not have known about

Franchising pies without losing the secret ingredient

Mon, 2015-03-30 11:08

The economy was in iffy shape at best four years ago, and that might not seem like a great time to open a pie shop. But Lindsay Heffner, her husband Matt, and their friend Sean Brennan did it despite the recession.

"We really thought the perfect anecdote was comfort food." Brennan says.

The idea for The Pie Hole was a long time in the making. It traces back to Lindsay Heffner's mother-in-law, Becky, who had always dreamed of opening a pie shop. The idea got legs one Thanksgiving.

"I said with a mouth full of her lemon meringue, we should open a — expletive — pie shop. She doesn't love the way I said it, but she does love that I said it" says Heffner.

Four years later, The Pie Hole is doing well. The pies they serve are sometimes familiar, like the Apple Crumble or the Steak & Ale. Others are more unique, like an Earl Grey pie, the Mexican Hot Chocolate and the Maple Custard.

They've grown from the original downtown LA location to a spot in Pasadena, and another at the Los Angeles International Airport. The next expansion could be much bigger. Heffner and Brennan are thinking franchises.

"Franchising has such a bad connotation to it" Lindsay Heffner says. "People hear that and they think everything is going to go away, all of the mom-and-pop touch is going to go away and we have been tirelessly trying to assure them that that is not our intention."

They've been exploring different models for spreading Pie Holes around the world in a way that still feels authentic to the original shop.

"We would not feel the same way if all of a sudden we're dealing with a monolith of pie," Brennan says.

"You have to take that opportunity if it comes to you," Lindsay Heffner says. "You're crazy not to."

But at the same time, the Pie Hole still has to answer to mom.

"This is my mother-in-law, Becky, this is her dream." Lindsay Heffner says. "And we have to answer to her because we have somebody's dreams in our hands."

Pie-making tips from the Pie Hole's executive chef, Jeffrey Froehlich:

  1. Water, Fat (i.e. butter or shortening) and Flour should be mixed in ice cold.
  2. Don't over-mix your dough!
  3. Par bake your pie shell to avoid a soggy bottom.
  4. Bake seasonally; never use frozen fruit
  5. Mom always said pie is messy, and that's OK! Don't expect it to plate perfectly. It's really the taste that counts, right?

When foreclosure cases drag on for years

Mon, 2015-03-30 11:02

There was a story in The New York Times today that made you just stop and say, wait... what?

There are, apparently, tens of thousands of homeowners in this country who — thanks to the mortgage meltdown and the ensuing foreclosure crisis — haven't made a mortgage payment in more than five years.

"People in states like Florida, New York and New Jersey — where lenders have to sue to evict you from your house if you’re delinquent on your mortgage — many of these cases, thousands of them, have gone on for so long that they’re up against the statute of limitations," says Michael Corkery the the Times.

Moreover, they still are living in their houses and might never have to leave, or pay another dime. 

"If you’re up against the statute of limitations and the case gets dismissed — and these cases get dismissed for all sorts of reasons," Corkery says. "The lender can’t refile the case and you’re basically home free."

NBC announces 'The Wiz' as its next musical

Mon, 2015-03-30 09:15

For those of you who loved Carrie Underwood in NBC's live broadcast of "The Sound of Music," or Allison Williams in "Peter Pan," or who just loved to watch Twitter as they were airing, big news: NBC announced today its next spectacular will be ... drumroll please ... "The Wiz."

The show is expected to air in December. 

Cirque du Soleil will help produce, but no cast announcements have been made yet.

Quiz: Don’t judge a school by its sticker price

Mon, 2015-03-30 09:09

College costs are rising, but 84 percent of undergrads received financial aid in 2011, according to the Department of Education.

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How do airlines compensate for a plane crash?

Mon, 2015-03-30 09:09

As the details of the Germanwings plane crash continue to be put together, one question yet to be determined is how the families or heirs of victims will be compensated.

Regardless of the circumstances that caused the crash — and remember, a prosecutor has said the co-pilot intentionally flew the plane into the ground — Lufthansa, the parent company of Germanwings, will probably not pay punitive damages.

Under an international agreement called the Montreal Convention, the families of victims probably will be entitled to 'unlimited compensation,' unless Lufthansa claims in court that it was not responsible for the crash in any way. That's a claim the company is highly unlikely to make.

Unlimited compensation means that courts will decide compensation for each victim according to fairly standard calculation. "Things like age, income, the earning capacity, marital status, education," says aviation attorney Mark Dombroff with the law firm McKenna Long and Aldridge.

Punitive damages, designed to punish a company in cases of willful negligence, do not apply under the treaty. "Let’s hypothecate that they did everything wrong, the fact is underneath the international agreement, you still can't get punitive damages," Dombroff says.

Still, some compensation cases may yet argue negligence on the part of Lufthansa. The fact that two pilots were not required to be in the cockpit will likely still come up in court.

"Did they know that that could have left them open to sabotage or pilot suicide?" asks Mary Schiavo, a former Inspector General of the U.S. Department of Transportation. "Of course I'd argue that and I will argue that if I'm involved in the case. And they should have known that. So, am I saying that there is no way they'll have additional liability? No.”

Schiavo estimates that total payments will reach into the hundreds of millions of dollars, which is well short of the $1.5 billion insurance policy that nearly all airlines carry per flight.

The risks of being an activist CEO

Mon, 2015-03-30 09:06

There is suddenly a slew of CEOs speaking out about one sensitive issue or another. Tim Cook of Apple wrote a piece in favor of gay rights in the Washington Post. “ 

Tim Cook: Pro-discrimination 'religious freedom' laws are dangerous

America’s business community recognized a long time ago that discrimination, in all its forms, is bad for business,” Cook wrote in the Post op-ed. The CEOs of Salesforce and Yelp made similar stands on the issue, also citing a controversial Indiana law. Not long ago, Starbucks CEO Howard Schultz used his coffee pulpit to spur discussion on race relations. Before that,  he waded into the issue of gun control.

Publicly held companies are, at the end of the day, about maximizing shareholder value. And CEOs are locked in a delicate balance of power between those shareholders, their own interests and their boards of directors (which are usually empowered to fire him or her).

So what explains these kinds of high-profile stances? After all, a controversial stand can alienate customers and weaken brand loyalty — or it can strengthen it — but why become embroiled at all?

“CEOs are people too, as surprising as that may sound,” says Steven Davidoff Solomon, professor of law at University of California, Berkeley. “Sometimes they have to speak, just like you do.”

And they usually ask permission first. 

“You don’t very often see a CEO of a public company taking a public stance on a controversial issue without the CEO going first to the board,” says Donna Dabney, executive director of the Conference Board’s Governance Center.

And boards of directors are apt to give the okay, she says. “CEOs and companies these days are feeling they should speak up on societal issues.”

In fact, says Dabney, CEOs are often criticized for not speaking out enough: “It used to be that you would find that heads of large public companies would take a leadership role in community and societal affairs and I think there’s kind of a change toward stepping up to that role again.”

Having the board on board doesn’t necessarily mean things will go well, of course.

“I’m afraid Starbucks found the experience of dealing candidly with race, even though a commendable effort, to have been something that went rather embarrassingly awkwardly for the company,” says John Coffee, professor of law at Columbia University’s school of law.  

A lot of what determines whether a CEO will take a stand boils down to corporate policy. “Every company does things differently,” says Coffee. Some have business-policy committees to control corporate image — and corporate mouths — extra tightly. Others will let a CEO live his or her life as long as they don’t reduce shareholder value.

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