Day: December 15, 2004

I know a high school senior with 1600 on his SATs.  His parents were not sufficiently loving to change their last name to “Rodriguez” so he is not a shoo-in affirmative action candidate at America’s most elite colleges.  Nonetheless with his perfect SAT scores he ought to get into some pretty good schools.  The question is where should he apply and attend?

After observing the behavior of MIT and Harvard faculty compared to professors at small town liberal arts schools I’m beginning to wonder if the biggest name schools represent a good choice even for a kid with infinite money.  In the old days you had to worry about whether faculty at research universities would pay attention to undergrads amidst the distractions of applying for grants and supervising graduate students and postdocs to perform on those grants.  Nothing has changed there except that competition for grants has become ever more fierce, forcing the professors to spend a bit more time applying and writing up results.  For an undergrad who actually wants to see and do research it might make sense to choose a school like MIT where there are substantial opportunities for undergrads to get into labs.  The professors might ignore the undergrads in the classes that they teach but they won’t ignore the motivated undergrads helping with their funded research.

The big change compared to the 1960s and 1970s is the affordability of housing close to the campuses of some of the top research schools.  A Harvard or MIT professor who wants to live in a family-sized house will either need to spend two hours per day commuting from the exurbs or two days per week consulting to pay for the $1.5 million house in Cambridge.  In the old days a junior professor hurried from the classroom to the lab.  Today she hurries from the classroom to the lab and then tries to depart the campus by 4 pm to beat the traffic out to the exurbs.  She won’t spend the evening taking her students out for dinner; if she is socializing it will be with folks unrelated to the university who live near her house.

For personal attention from the faculty it would seem that one should restrict one’s college search to schools in areas where real estate is still cheap enough that professors live close to campus.  Brown would be good.  Harvard would be bad.  Some schools are near cheap housing but are still bad due to the fact that they are in crime-ridden ghettos (Yale and Penn?).  Amherst and Williams should be good.

What else should matter to the young male applicant?  How about girls?  The 17-year-old boy with 1600s on his SATs probably hasn’t had time to become captain of the football team and do the other things that appeal to high school babes.  Why then subject oneself to four more years of rejection and frustration by attending a college where girls are in short supply?  Fifty-seven percent of bachelor’s degrees are awarded to women in the U.S.  Why not choose a school where women are at least 57 percent of the students?  Remember that if 40 girls pair up with 40 boys that leaves 17 single girls for every 3 single guys!

Finally I guess we should tell the kid that if he and his parents don’t have infinite money he should go wherever is cheap.  A motivated student can learn at most of the better colleges in the U.S.  A friend of mine was a brilliant high school student.  She went to Tulane in New Orleans as an undergrad where they gave scholarships for smart kids and where she could have a good time.  She went to MIT and got a PhD in physical science.  People sometimes do ask where she did her PhD work.  No potential employer would care where she was an undergrad.  For any field in which a graduate degree will be required it doesn’t make sense to spend family $$ on a fancy undergrad degree that nobody will care about (not even the grad school; they always ask “was this your best student in the last 10 years?” and no honest teacher at a top school is going to be able to say “yes” because being smart is so cheap at a place such as Harvard or MIT).

So… where do we tell young John Q. Nerdly to apply?  He has the good test scores and public high school grades.  He is considering majoring in Biology (smart kid!).  He likes to climb rocks.  He hasn’t been doing that great with the ladies as far as I can tell (the best vehicle that he can generally muster is a dented 10-year-old Ford Taurus station wagon, which might explain some of this lack of success).  His parents could suck it up to pay for an Ivy League no-merit-scholarship cartel university but they’d rather not.

Okay… it looks as though the South Pacific (see earlier posting) isn’t going to happen until after April.  It seems that our winter is the wet/humid/typhoon season in Tahiti and Fiji.  So it is back to South America!  This time to Chile, a new country for me.  The plan is to fly into Santiago around Dec 25 and start working either north or south.  A friend of mine is an astronomer working in the observatory near La Serena in the north and that is pulling me in that direction.  The goal is to be reasonably warm, to see interesting places, and maybe to get in some bicycling (no swimming due to the frigid Humboldt current).  I was in Argentine Patagonia a year ago and am thinking that the south of Chile will be a bit similar and also maybe rather windy, rainy, and chilly.  I might try to hop over to Easter Island at the very end of this trip, on the theory that the tourist frenzy will abate to some extent by Jan 10.  Alternatively I will continue onward to Peru and Bolivia, gradually climbing up to La Paz’s nauseatingly high altitude and flying out from there.  Guidebooks say that it is tough/expensive to do one-way car rentals, however. 

Suggestions for places to go and people to see?  Anyone know private fixed wing or helicopter pilots down in Chile?

A friend of ours is living in Shanghai and has learned Mandarin, to read Chinese, and to manage young Chinese computer science graduates.  A bunch of us were kicking around ideas for starting businesses that would exploit this resource.  One of my suggestions was a tutoring service that would enable yuppie parents in the U.S. to hire a Chinese tutor/coach to work with their children via video conference, helping with math and keeping track of homework goals, etc.  A Silicon Valley friend, let’s call him UberNerd, heaped scorn on this idea.  “Where’s your intellectual property protection?  If you don’t have a patent you can’t make any money.”

Having flown out to California on JetBlue, which is profitable despite not being able to patent “being nice” and “free wireless Internet at the gates in JFK and Long Beach” (not in Logan, presumably thanks to Massport’s having handed out a monopoly to Comcast), and driving around in a car from Hertz, which is profitable despite not being able to patent “cars that aren’t decrepit”, my gut feeling was that he was wrong.  There were at least some companies that were profitable without extracting rents from intellectual property.  After more consideration I’m beginning to think that intellectual property is actually bad for long-term profitability.

Checking the top 10 out of the Fortune 500 companies, for example, we find Walmart right on top, followed by Exxon Mobil.  Except for IBM none of the companies feels like one based on intellectual property and even IBM these days gets most of its revenue from service.  Certainly it is tough to see how an insurance company such as AIG (#10) and a bank such as Citigroup (#8) are living large from patents.

Perhaps intellectual property for a corporation is like oil for a Third World nation.  The government of an Arab or African country need not worry about being efficient nor about the education of its subjects as long as it can just dig a hole and money comes out of the ground.  By analogy the management of a company such as Disney can rest assured that quite a bit of revenue will continue to flow from movies and characters developed many decades ago.  Disney’s management can concentrate on transferring money into their personal checking accounts while Walmart’s management has to worry every day about beating Target, Kmart, and Sears.

Drug companies would seem to be an exception.  Most of their profits indeed comes from a handful of blockbuster patented drugs. Yet perhaps they are not exceptional if we remember that the proposition includes “long-term profitability” and if we adjust for investment and risk.  Walmart has crawled to the top of the Fortune 500 without ever taking the kinds of risk that hit-or-miss businesses take.  And except for Walmart all of the Top 10 companies were very successful 70 or more years ago whereas drug companies tend to rise and fall.

Which gets us back to the question of… what kind of business should one start given that one already has a person on the ground in Shanghai?