Manny Ramirez: Baseball’s Most Innovative Player
September 8th, 2008 | Posted by innovManny Ramirez and his dreadlocks have a lock on L.A. Dodgers’ fans’ hearts and minds, and are a shoo-in for the Baseball Hall of Fame. But I’d like to nominate him for one more honor: Baseball’s MIP—Most Innovative Player.
No joke. I take quite seriously the meaning of innovation in its truest form—something that fundamentally changes the way people live, work, and play. For example, adding a button to a cell phone isn’t innovation. But if that button turns the cell phone into a camera and that camera changes the way people record their lives and communicate with each other, then that extra button becomes innovation.
So I’m not talking about Manny’s batting average or home run tally when I say he’s an innovator. It’s much deeper than that. What makes Manny Ramirez the most innovative player in baseball? His sense of play. Manny Ramirez has brought fun back to America’s pastime and by doing that, he’s changed Dodgers baseball, whether he meant to or not.
You see it in his trademark dreadlocks, now replicated on souvenir Dodgers caps. You see it in the reports of teammates grooving to Manny’s salsa in the locker room, despite the Dodgers’ ban on music in the club house. And in the way the Dodgers sold 20,000 extra tickets in a matter of hours when the fans heard that the slugger was on his way to Southern California.
You can never underestimate how important fun is to innovation. I definitely do my best creative thinking while mountain biking or surfing, and we all know that Ben Franklin discovered the source of lightning by flying a kite. If it weren’t for Steve Jobs taking a calligraphy class decades ago—right after dropping out of college—we probably wouldn’t have a choice of fonts on our personal computers today. Likewise, when a couple of University of Southern California students first conceived a way to connect with their favorite bands, for fun, little did they know their notion would turn into MySpace, attract a quarter of a billion users and redefine how the Internet is used to connect people with each other.
In most workplaces, it can be easy to dismiss the element of fun because we’re focused on serious stuff. But in 1948, Swiss mountaineer George de Mestral hit the trail and noticed the burrs stuck to his dog’s coat. He looked at the burrs under a microscope, and that’s when his idea struck. People laughed and thought it was silly. But he ignored the skeptics and invented a new two-sided fastener, Velcro.
But in business, we focus on profits and losses. In school these days, we emphasize scores more than creative activities. Before Manny, it was all about the Dodgers’ mediocre statistics this season. Inject a little “Manny being Manny” and it’s a whole new ball game, even if L.A. doesn’t win the World Series.
Behind any great innovation, there’s an irritant. For better or worse, Manny does that well, too. He rejects authority and breaks the rules, like turning Joe Torre’s haircut order into a playful negotiation. Of course, trying to get Manny to cut off his dreads is like telling Steve Jobs that the iPhone needs to have a keypad. It’s precisely because innovators break the rules that their innovations lead to big leaps for society.
The key for corporate America is to embrace the irritant, while the challenge for innovators is to turn irritation into inspiration.
The Boston Red Sox traded Manny because they couldn’t take his shenanigans anymore. Manny has said that he wanted to leave Boston because he was looking for “peace.” Jeopardizing a $20 million annual paycheck just to find a little peace? How many of us would have taken that risk? Only the true innovators would dare, because innovators play fearlessly, as if they have nothing to lose.
But as it turns out, the risk has turned into reward for the player. Los Angeles is the perfect place for Manny. L.A. is fun-loving, quirky, and appreciative of the spirit of play. After all, this is the city that’s fully embraced innovations from skateboarding to margaritas.
It’s too early to tell Manny’s long-term impact on Dodgers baseball. Certainly we can expect him to test everyone’s patience from time to time. But so far he’s helping unite this diverse and eclectic city behind a sports team in a way that we haven’t been united in years.
And so, Manny, I toast your arrival in Los Angeles—with a margarita, of course.
September 5th, 2008 | Posted by innovAn asteroid hurtles toward a distant planet. Smacking the surface, the rock sends a blush of glowing red ash into the air. In the steaming gloop left behind, a soup of new life, countless amoebas begin vying for evolutionary supremacy. It’s the beginning of the world as they know it—and I feel fine.
The game I am playing is the long-awaited Spore, to be released Sept. 7 by Electronic Arts (ERTS). Spore, of course, is the brain child of Will Wright, the creator of the best-selling Sims series and the closest thing the gaming industry has to its own Einstein—a super-genius with the chutzpah to attempt to devise a unifying theory of everything. Or, in this case, a game that simulates everything from life’s first steps to the clash of advanced, space-faring civilizations. Spore is billed as a “universe in a box,” and after three years of delays and mounting anticipation, that’s exactly what the game makers have delivered.
Spore lets players design and guide a species through various stages of evolution, from Single Cell to Space Age. As players’ characters become more advanced, the gameplay also changes drastically. The first stages are like a graphically rich Pac-Man whereas the most sophisticated space-faring stages include elements of strategy and role-playing games. The emphasis is on creativity, apparent in the object and creature editors that allow players to morph their characters. (In later stages, players can use these tools to design buildings or vehicles, too.)
Spore’s chief innovation is a heavy reliance on user-generated content. By piping in creatures and worlds designed by other gamers who have connected their copies of the game to the Internet, players can explore a nearly infinite assortment of virtual universes. Gamers interact with copies of others’ creations, not with other gamers per se. (The game’s designers have also prepackaged the game with a zoo’s worth of quirky creatures.) All this content can be browsed via the game’s so-called Sporepedia, a library of all the creatures being created by other players that’s useful and easy to navigate.
Experiencing a Whole New Universe
The result? An openness and variety that imbue the game with a palpable sense of discovery. In just a few weeks of prerelease testing, the variety of creatures flourished impressively as other journalists and testers’ creations were uploaded. Given the creative potential, I wouldn’t be surprised if players are still delving into Spore’s mysteries a decade from now.
Spore’s designers have also baked in a sense of wit and humor, something sorely lacking in many games. Initiating a mating sequence in the Creature level, for example, the characters launch into a kitsch dance to a tongue-in-cheek bossa nova soundtrack. In Civilization, as creatures begin to become more sophisticated, a short sequence parodies Stanley Kubrick’s famous simian scene in 2001: A Space Odyssey. This kind of whimsy makes the game not only accessible to children and adults, but also charming to play.
Spore isn’t an unqualified success, however. Designers have adopted a cartoon-like style that will likely age well, but on the basis of early demonstrations of the game, I was hoping for more sophisticated graphics. I also found myself rushing through the game’s comparatively simple early stages to get to the more advanced later gameplay, which made it hard to appreciate the subtleties of the earlier levels. And, most important, Spore is less a game than it is sophisticated software. This is not so much about gameplay as spending time in another universe. The experience takes time to fully appreciate.
Still, on balance Spore delivers on its ambitious promises. Anticipating its release, eager fans cavalierly referred to it as the “God Game” or “Sim Everything.” Will Wright & Co. really have created just that.
Stocks Plummet, But Don’t Get Rattled
September 4th, 2008 | Posted by stockThe Dow Jones Industrial Average just closed down almost 350 points, and the Dow and S&P 500 both lost 3% today.
Panicking? There are plenty of reasons to worry, surely. But don’t overdo it.
Many predicted the stock market would get more volatile post-Labor Day, as more buyers and sellers returned to the market from summer breaks. Apparently they were right.
(Though some market experts also told me investors might seize the end of summer as a time to look ahead to a jump in 2009 earnings and start buying stocks. They’re wrong, so far at least.)
It’s true that recently the stock market has been acting very strangely. Though we journalists come up with reasons for what the stock market does day to day, fundamental factors can’t fully account for these wild swings.
However, this will pass.
Roger Nusbaum offers his words of wisdom:
In all likelihood you will quickly forget this bit of turmoil quickly enough. On April 12, 2003 iShares MSCI Emerging Market Fund (EEM) closed at $20.20, adjusted for splits. On May 17 [2003] it closed at $15.88. That works out to 21% in 36 calendar days. Does anyone remember what happened? I do not but how much fear do you think there was then? How many segments on TV or written commentary proclaiming the end of emerging markets do you think there were?
Take the hyperventilating on TV with a grain of salt.
Looking for IPOs in a quiet market
September 3rd, 2008 | Posted by stockAs noted the other day, the IPO market has gotten as quiet as its been since the 2001 to 2003 post-bubble drought years. But that doesn’t mean it’s time for investors to look away. The good folks at Renaissance Capital have a report up this week on their newly redesigned web site looking at what’s in store for the rest of the year. When times are tough, the crop of potential IPOs may shrink but it also tends towards more solid and dependable companies as investors shun the the fly-by-night types. And instead of watching newly-priced IPOs head for the stratosphere, investors can sometimes pick up bargains after share prices drop.
There are currently 129 active IPO filings, excluding special purpose aquisition deals, according to Renaissance. In a look at a few dozen of the more interesting prospects, they provide plenty of fodder for further investigation. Topping the list, at least by revenue, are a pair of energy companies, a hospital operator and risk manager which all filed to go public in the last five weeks and didn’t draw much attention from vacationing investors.
McJunkin Redman, which will go public under the symbol “MRC,” is a leading pipe and valve distributor for the oil and gas industry. Built through a couple of Goldman Sachs leveraged buyouts, McJunkin reported trailing 12 month revenue of $4.2 billion in its IPO filing last month. Even if the price of oil sags a bit further, the race is on to develop more supply, which should benefit an outfit like McJunkin for years to come. Of course, there’s the inevitable and grating half a billion dollar special dividend paid to the LBO owners in May out of borrowed funds. But past deals have proven that even highly-leveraged reverse LBOs can be winners in hot industries.
A second energy play is Cloud Peak Energy, with the proposed symbol of “CLD.” It’s the second-largest US coal producer. Coal companies have been hit by a hammer of late thanks to falling spot prices and expectations of a slowing world economy. Shares are down an average of 33% over just the past three months, according to Morningstar. Analysts are debating whether coal prices have further to fall and the entire industry is exposed further if the global economic slowdown is worse than expected. But those kinds of negative background factors sometimes prompt underwriters to price an IPO at cheap levels, so this is one to add to your watch list.
In the healthcare sector, specialty hospital operator Select Medical Holdings plans to go public under the symbol “SLC.” The company had revenue of $1.1 billion in the first half of 2008, up from $973 million in the first half of 2007. Net income slid to $14 million from $32 million, thanks in part to higher interest costs. There’s certainly risk to hospital operators from the political world which has to be weighed against the positive demographics of the aging US population. I’m not sure I’d wade into a situation with so much uncertainty, but Renaissance says it’s worth following.
Finally, one that intrigued me, the risk management firm Verisk Analystics, with the proposed symbol “VRSK.” Recall that competitor Riskmetrics Group (Symbol:RMG) is one of the most successful IPOs of the year, up 28% since going public in January. Verisk is focused on the property and casualty insurance business while Riskmetrics works largely in the realm of investments and brokerage firms. It reported revenue of $802 million and net income of $150 million in 2007. The company is owned by some of the largest insurance companies who are planning to cash out in the IPO. Selling shareholders can be a red flag for IPOs, since the company doesn’t get any of the proceeds of the deal to fuel further growth. But the shares could be worth a look if they end up priced at the low end.
Worries Mounting Over Corporate Debt
September 2nd, 2008 | Posted by stockBy Emily Thornton
The pain from Corporate America’s debt binge over the last several years appears to be far from over, judging from a report put out today by Diane Vazza, a managing director of Standard & Poor’s. (Like BusinessWeek, Standard & Poor’s is a division of McGraw-Hill Companies.)
About 25% of American companies’ debt ratings are now at risk of being downgraded, according to Vazza’s report. That’s the highest ratio since 26% of companies had a negative outlook or were put on Credit Watch with negative implications in December 2003. “The proportion of issuers listed with a negative bias is currently at more elevated levels than ever recorded in this credit cycle,” Vazza writes. Companies are most vulnerable in the forest products and building materials, mortgage, automotive, and media industries.
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