Oil, Theft, And Extortion: How ISIS Earns $3M/Day; Richest Terrorist Group In World History

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Originally posted on Fortuna's Corner:

Oil, Theft, And Extortion: How ISIS Earns $3M A Day And Is The Richest Terrorist Group In World History

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The Associated Press’s Ken Dilanian, in an article out this afternoon, writes that the Islamic State, once largely dependent on wealthy Gulf donors…”have become a self-sustaining, financial juggernaut — earning more than $3M per day from oil smuggling, human trafficking, theft and extortion,” according to U.S. intelligence officials and private experts.”

The extremist group’s resources exceed that “of any other terrorist group in history,” said a U.S. intelligence official who, like others interviewed [by the AP], spoke on the condition of anonymity to discuss classified documents. Mr. Dilanian writes that “the Islamic State has taken over large sections of Syria and Iraq, and controls as many as 11 oil fields in both countries,” analysts say. “It is selling oil and other through generations-old smuggling networks under the noses of some…

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Defeating ISIS And Their Complex Way Of War

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Originally posted on Fortuna's Corner:

Defeating ISIS and Their Complex Way of War

by Aaron Bazin

Journal Article | September 15, 2014 – 7:06am

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Defeating ISIS and Their Complex Way of War

Aaron Bazin

The Islamic State in Iraq and Syria (ISIS) has succeeded in gaining an incredible amount of ground at a pace that caught the world off guard. Even though they face opponents with overmatch in technology and firepower, ISIS has proven more than capable. One way to understand ISIS is to seek to understand it as a complex adaptive system. Arguably, ISIS’s lack of central control, rapid tempo, and unpredictable behavior suggest that it is a complex adaptive system, and a dangerous one at that. The question this article will address is if ISIS displays the characteristics of a complex adaptive system, how should the international community address this threat?

Is ISIS a Complex Adaptive System?

In the 1950s…

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Airbus A380 Seven Years Later

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“The global economy will take care of you.”

So says Tim Clark, the president of Emirates airline. His, “what me worry?” words of confidence were for Airbus, the aircraft manufacturer responsible for the A380.

Seven years ago, the A380 was big news. Media gleefully reported on the plane’s immense proportions, with 6,000 square feet of deck space, a full bar, seating for 500 passengers, and a wingspan the length of a football field. Dwarfing even the biggest jumbo jets, the plane is a technological marvel, able to bring it’s 550-ton weight to cruising altitude in just over ten minutes. Passenger reviews are very positive, too – it’s ascent and descent are smoother than that of the average-sized plane.

The problem is, nobody is buying it.

Emirates is one of only 11 airlines that have placed orders for the mega plane, and they’ve ordered nearly half of them (138 of 318 total orders). Making the planes the luxurious centerpiece of Emirates’ fleet, Tim Clark says he would buy more if Airbus could make them faster.

Maybe Mr Clark is so happy because he is getting the planes at a bargain price. Originally listed at $400m, the A380 can now be purchased as low as $200m.

Obviously some of this struggle can be attributed to the sheer timing of the plane’s release. A super-large commuter jet hasn’t been such a hot investment for struggling airlines serving a public that is just now starting to feel more confidence in the economy. And the A380 isn’t so dainty with fuel, either.

One wonders though if a larger mistake was made. What would you prefer for your flight? A massive luxurious plane between two major airports as the main portion of your trip? Or a small craft that might be able to land at an airport closer to your final destination?

Either way, Airbus is looking now to just break even. It goes to show that advances in technology are not everything – you have to make sure you’re building something that people want. Or at least have a Tim Clark in your organization, whose checkbook is as enthusiastic as he is.

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Vacation for the Central Executive

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It’s hard to vacation. Yes, I realize that this is a ‘first-world problem’ (laughably so), but I was struck on a recent vacation myself how it can be difficult to truly disconnect from work in a real way.

While we’re having fun with family, friends, and maybe even the occasional exotic locale, there can be a creeping sense of guilt for missing work. Emails are piling up. Clients are calling. Colleagues need me.

The overwhelmed brain can take a while to wind down.

Here’s the terrible truth about our minds: they’re limited. When it comes to attention, there are two ‘networks’ at play. The task-positive network (referred to as the Central Executive by neuroscientists) is your active engagement with a task. The task-negative network takes over when your mind wanders or is creative. When one of these two networks is active, the other is not.

Both the task-positive and the task-negative networks are very important to us humans. While we need that focused attention to accomplish tasks, the inspiration and ideas come from the daydreaming. It’s a two-part attention system, and it’s easy to abuse at work. Sometimes we force the employment of the task-positive network in order to be extra productive. Sometimes we vacillate back and forth too quickly, like when we allow social media to interrupt work.

Vacations can be enormously restorative, but not if we use our minds in the same way as we do when we’re working. Checking email, thinking about work, or using your Central Executive while on vacation means your mind doesn’t get that break.

So as you manage to eke out a couple days for yourself and your family this month, make sure you do your brain a favor and let it wander. Let your creative mind flow. When you need to concentrate on something, take your time.

Don’t worry, the Central Executive has gotten enough exercise, and will still be healthy when you return.

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The Way of the Kurds

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As a Naval Officer, you learn early on the fine balance between your duties to protect your fellow Americans and the responsibilities you assume for the rest of the world’s safety. They do not always synch up in perfect harmony. In a recent editorial on BloombergView, Jeffrey Goldberg discusses the present state of affairs in Northern Iraq and the uncertain future of its Kurdish population. With the imperative, “Obama, Free Iraq’s Kurds”, Goldberg makes an appeal on behalf of the members of the largest stateless nation on the planet, a vulnerable, regional and ethnic minority population that exceeds six million.

In light of the recent activities by ISIS across Iraq, Goldberg advocates for military intervention by the U.S. to protect the Kurds from extremist threats and establish an independent state they can call home. Aside from the altruistic benefits of freeing an oppressed people, an independent Kurdish state would become a rare ally to the U.S. in a region rife with hostility, according to Goldberg. Though limited to Northern Iraq’s portion of Kurdistan, this hypothetical Kurdish state could embolden neighboring populations in Syria, Turkey, and Iran to seek their own independence and ally themselves with their new standard-bearer. With sufficient help from the U.S., Goldberg argues, the Kurds could finally find their ever-elusive place in the world, a dream deferred since the collapse of the Ottoman Empire.

The recent steps we’ve taken to provide limited airstrikes to support the Kurds from ISIS are a good start. It would behoove us to take the next steps towards supporting a more broadly independent Kurdish state.

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Don Mathis on VC Friends and Frenemies

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From time to time I check in on the latest from Harvard Business School Working Knowledge, an extremely insightful blog that features articles, research and commentary from the school’s faculty. If you haven’t yet visited the blog, I strongly recommend doing so. Whether you’re a newly-minted MBA or longtime executive, you can take more than a few worthwhile lessons from its generally fresh approach to market, policy, and management analysis.

Most recently, I read Carmen Nobel’s piece (“In Venture Capital, Birds of a Feather Lose Money Together”) on the disadvantages of friendship in venture capital investing and what can happen when otherwise affine VC investors fail in their joint endeavors. Based on the research and subsequent paper by HBS colleagues Paul Gompers, Yuhai Xuan and Vladimir Mukharlyamov, the article explores the perhaps-unexpected pitfalls of investing with others of similar socioeconomic backgrounds and vocational trajectories, especially when it concerns VCs who have known each other for many years.

To measure the performance of these investors, the team looked at a broad database of 3,510 VCs, along with the 12,000-plus investments conducted by these investors over a 30-year period, defining success by whether or not an investment in a private company led to an IPO down the road. Looking at the employment histories, educational backgrounds, ethnicities, and other fundamental criteria of these investors, the researchers found that success rates dropped by significant numbers when two VCs of similar backgrounds co-invested in companies. If co-investors previously worked at the same company, success rates dropped by 17 percent; alumni from the same undergraduate school, 19 percent; and those of the same ethnic minority, 20 percent.

The thrust of the article, more or less, seems to indicate that investors who bring different perspectives to a private business are more likely to challenge each other on key decisions, particularly in the early stages of the company’s development. Those challenges play crucial roles in everything from strategic management to the selection of board members and executive personnel. Food for thought!

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Boeing Breaks Into Tobacco

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When we hear about reducing carbon emissions and easing our dependence on petroleum based fuel, we often think of the airline industry. Commercial aviation uses roughly sixty billion gallons of fuel annually. The industry contributes 2% of man-made carbon dioxide emissions, according to the International Air Transport Assn, a trade group that represents nearly 250 airlines.

Boeing is looking to find a different way.

The aircraft manufacturing company announced a joint venture with South African Airways and SkyNRG to develop aviation fuel from a new hybrid tobacco plant.

The plant is called Solaris. It is less leafy than smoking tobacco, and has more seeds. Seeds contain the oil that is used to produce bio-fuel. Interestingly, Solaris is virtually nicotine-free.

This won’t the the first time Boeing has been involved with bio-fuel testing. They previosuly worked to produce jet fuel from timber waste and forest byproducts, which can be found en masse in the company’s backyard in the Pacific Northwest.

The issue with most successful tests is that there is not enough of it in the world. Tobacco, on the other hand, is a crop looking for an alternate use. Instead of growing tobacco for smoking, farmers could sell a slightly modified version of the plant to be sold for energy and fuel.

The price is expected to be competitive with fuel, and the decrease in pollution would be huge. A representative from Boeing remarked that there could be a 50% – 80% reduction in carbon emissions compared to petroleum.

While the solution seems do-able for Boeing, there would be many obstacles to creating enough bio-fuel for the world. Production would have to expand to many regions, and still most likely require major distribution to supply major airports.

South African Airways has plans to start blending bio-fiel into regular aviation fuel next year. They have an ulterior motive for the project, bolstering the rural economy in South Africa. They have already begun test farming there. Food & water supplies have been unharmed. The plan appears to be a sustainable supply chain for aviation biofuels.

Here’s to finding a new use for tobacco!

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