What Jeremy Lin Says About U.S. Competitiveness

When Yao Ming retired from the National Basketball Assn. last July, followers of Chinese basketball lamented that none of his countrymen were ready to take his place. Yao’s retirement, according to the New York Times, triggered “frustration over why no one in China, which has tens of millions of basketball players, appears capable of replacing him as an N.B.A. star.” By grooming players based almost solely on their height, China’s state-run sports system had developed a small army of Yao clones—fundamentally sound giants who could grab rebounds and clog the paint—but no one who could get them the ball.

Bob Donewald Jr., the American-born coach of the Shanghai Sharks, succinctly summed up China’s problem: “What’s amazing is that in a country of 1.3 billion, I can’t find a point guard.”

What Chinese basketball needs, in other words, is Jeremy Lin. It’s no surprise that, as Evan Osnos reports, Lin is the most-searched term on Baidu, China’s biggest search engine. Lin is a sensation in China largely because of his ethnicity (although his parents are immigrants from Taiwan, not mainland China). But also because he plays the game with a flowing, creative dynamism instantly recognizable to NBA fans, but which you rarely see exhibited by members of the Chinese Olympic team. Put simply, Lin plays like an American. And that may say something about what China—well on its way to passing the U.S. as the world’s biggest economy—can still learn from America.

For all the hand-wringing among pundits about American decline, the U.S. retains key advantages over such emerging powers as China. It has a more open economy, a more favorable environment for venture capital investment, and a stronger culture of innovation. Grass-roots genius can flourish far more easily in the American system than in a top-down society like China’s. As Michael Beckley writes in the current issue of International Security, when it comes to patent applications—an indicator of high-level scientific innovation—the U.S. accounts for 43 percent of the world’s patent applications in nanotechnology, 41.5 percent in biotechnology, and 20 percent to 25 percent in renewable energy technologies. (In the last category, China accounts for just 1 percent to 4 percent.) According to the Organisation for Economic Co-operation & Development (OECD), the U.S.’s lead over the rest of the world in producing “knowledge and technology-intensive industries” has actually increased since 1996.

What does any of this have to do with Jeremy Lin? Much has been made of how Lin’s talents were consistently underestimated and ignored by college recruiters, professional scouts, just about every NBA general manager, and even the Knicks’ coaching staff. That reflects lingering cultural biases against Asian-American athletes. But it’s inconceivable that a player of Lin’s caliber would never have a chance to shine. The rise of Jeremy Lin shows that American meritocracy, for all its shortcomings, still works. That alone isn’t enough to prevent China from surpassing the U.S. in raw economic strength. But it can help keep America in the game.

Ratnesar is deputy editor of Bloomberg Businessweek.

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Where the U.S. Solar Industry Is Shining

(Corrects the size of the Bank of America loan in the third to last paragraph.)

There’s at least one bright spot in the troubled U.S. solar industry. After a plunge in prices sent panel manufacturers reeling, consumer demand for the alternative energy is soaring. That’s a boon for California companies such as SunRun, SolarCity, and Sungevity. These startups are buying panels at depressed prices and leasing them to homeowners at little or no up-front cost.

By teaming up with lenders such as Bank of America (BAC) and U.S. Bancorp (USB) and taking advantage of a federal tax credit for renewable energy, installers can bring down the costs of panels, which for a home typically run between $30,000 to $40,000, and help consumers and businesses reduce the use of fossil fuels. Their success is helping revive the solar industry, which gained notoriety last year from the collapse of panel maker Solyndra. “The price of solar is coming down even faster than anyone expected, so who benefits? The consumer benefits,” says Steve Vassallo, a general partner at Foundation Capital, which is an investor in SunRun.

The residential market for solar is still nascent, with less than 0.1 percent of U.S. homes outfitted with panels. That number could climb to 2.4 percent by 2020, estimates Bloomberg New Energy Finance. Prices for solar cells fell 51 percent in 2011, to 88? a watt, according to data compiled by Bloomberg.

While rising demand is boosting the installation business, the more notable story last year was the crash of Fremont (Calif.)-based Solyndra, which got a $535 million U.S. government loan. Solyndra was one of three U.S. panel makers pushed into bankruptcy in 2011, in part because lower-cost Chinese manufacturers ramped up production. Other U.S. companies that, like Solyndra, bet on thin-film technologies—which use cadmium telluride or a combination of copper, indium, gallium, and selenide, as opposed to silicon—are also struggling. Nanosolar, SoloPower, and Abound Solar, which have raised about $1.5 billion combined in government loan guarantees and venture funding, couldn’t bring down their costs enough to keep up with the plunge in panel prices. “I don’t think most of the companies that are in later stage are going to succeed,” says Mark Pinto, executive vice-president of the energy and environmental unit of Applied Materials (AMAT), which sells manufacturing gear to the solar industry.

While competition from China threatens to drive more U.S. thin-film companies out of business, it has spurred adoption of solar stateside. Developers in the U.S. added 449.2 megawatts of solar-generating capacity in the third quarter of 2011, the latest data available, up 140 percent from the same quarter a year earlier.

Demand for clean power is also driven by government incentives. In 2009 the Treasury Dept. instituted a 30 percent tax credit for construction projects using renewable energy. The subsidy, which will remain in place until 2016, has helped five solar leasing companies raise more than $1 billion in venture capital combined, according to a Dec. 27 report from Lux Research analyst Matthew Feinstein.

SunRun is backed by $85 million in venture capital. The San Francisco company also has raised $750 million in project financing from U.S. Bancorp and utility PG&E (PCG), a sum which co-founder Lynn Jurich says is enough to outfit about 20,000 homes with solar. Installing and financing panels is a more sustainable business than manufacturing, she says: “Participating downstream, we thought we’d be the beneficiary of the process of making solar cheaper.”

SunRun hires local companies in 10 states to install solar arrays on customers’ roofs. The company charges clients for the electricity they generate— at monthly rates as much as 15 percent below those of regular utilities. Jurich says she expects SunRun to have a presence in 15 to 20 states within five years.

SolarCity, headquartered in San Mateo, Calif., operates on a similar basis, except that the company employs its own installers. SolarCity counts Google (GOOG) among its backers: The search giant contributed $280 million to a financing round that closed in June. The company also secured a loan for as much as $350 million from Bank of America in November for a $1 billion project to install panels in military homes and offices in as many as 33 states.

SolarCity, which is chaired by Elon Musk, chief executive officer of electric carmaker Tesla Motors, will file for an initial public offering as early as next month, according to three people with knowledge of the matter who are not allowed to speak on the record. The IPO may value the company at more than $1.5 billion, one of them said. SolarCity spokesman Jonathan Bass declined to comment.

Sungevity has raised more than $175 million for residential solar projects. The Oakland (Calif.)-based company sold a minority stake last year to home improvement retailer Lowe’s (LOW), which has said it will eventually offer the company’s installation services through its stores.

Heather Smith, a partner at Greentech Capital Advisors, expects there to be consolidation in the market over the next 18 months. The winners will be those that have developed a profitable all-in-one package of delivery, installation, maintenance, and finance that works for homeowners. “The only way we’re going to deploy solar in the U.S. isn’t by the government telling people to put solar panels on your roof,” Smith says. “It’s by an economic model which makes sense to the consumer.”

The bottom line: Tax breaks have helped solar leasing companies raise more than $1 billion in venture capital financing.

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Android May Be Losing Ground in the App War

Google (GOOG) has turned Android into the most popular operating system for smartphones. Yet the platform may be losing ground to Apple’s iOS in a major area: new applications.

Relative to Apple (AAPL), fewer apps were created for Android in January than a year earlier, according to Flurry, a company that analyzes mobile-software data. Developers made roughly one new Android app for every three Apple apps, Flurry found. A year ago, they created two Android apps for every three Apple apps.

While the study tracked only developers who design apps using Flurry’s tools, the shift suggests that Google’s bid to overtake Apple’s industry-leading App Store may be losing some steam. Apple has more than 550,000 apps in its store, compared with over 400,000 for Google’s Android Market. Both companies count on the array of apps to make their phones more enticing and lock in consumers who are already using the devices.

“We saw a greater migration to iOS,” says Peter Farago, vice president of marketing at San Francisco-based Flurry.

Google has made quick gains on Apple since the first Android phones went on sale in 2008. In 2011, though, the growth in new apps for Android was about half that for Apple, according to the firm, which tracks more than 55,000 developers. The study measured more than 65,000 new software projects over the course of the year.

Other research firms are seeing a similar slowdown in Android. A survey of about 2,000 developers conducted by Appcelerator and IDC found that fewer programmers were “very interested” in developing for Android phones and tablets in November than in June, while their interest in iOS devices remained unchanged.

Christopher Katsaros, a spokesman at Google in Mountain View, Calif., declined to comment. Christine Monaghan at Cupertino (Calif.)-based Apple didn’t return a request for comment.

The reasons for the smaller interest in Android involve time and money. Apple apps can be quicker to develop and it’s easier to generate revenue from them, thanks in part to Apple’s iTunes system.

“Developers can make more money on iOS,” Farago says.

Take GameHouse, a maker of games such as Doodle Jump and NCIS the Game. It makes three to four times greater revenue on an iOS title than on an Android game, says Ken Murphy, a vice president at the company, which is part of RealNetworks (RNWK). GameHouse also has to spend an extra two months working on an Android game, vs. what’s needed for an iOS title. That lengthens the time it takes to get it to market by about 30 percent, he says.

“It’s nowhere near as simple as iOS,” Murphy says.

The sheer variety of Android devices is one complication. GameHouse has to tweak its games to account for variations in accelerometers and responsiveness in more than 550 different Android gadgets, Murphy says. Apple, by contrast, has just a few models.

Bill O’Donnell, general manager of mobile products at the travel site Kayak.com, says his company isn’t able to test its software on every variety of Android phone. There are just too many of them.

“It puts developers in a tough spot,” he says.

Sometimes individual models require many extra changes. With Amazon.com’s (AMZN) Kindle Fire tablet, two Kayak engineers had to spend a month and a half changing all the company’s apps to work with Bing Maps rather than Google Maps, O’Donnell said. Despite being an Android device, Kindle Fire didn’t come with Google apps preloaded.

“That was a huge pain,” he says.

Distributing Android software to multiple application stores takes more work as well, whereas developers merely have to submit iOS programs to Apple’s site.

“For Android, there are 90 app stores,” says Alex Caccia, president of Marmalade, whose software lets developers adapt apps to different devices. “And if you are serious about this market, you’ve got to do it.”

It’s also not as easy to charge Android users for apps as it is on Apple devices. With iPhones and iPads, owners’ credit-card accounts are already stored on iTunes, which makes app purchases simple. Android doesn’t have the same mechanism for all its users, Farago said.

“Consumers are more trained to get free things on Android,” he says.

While Android developers can make money off sales of in-game merchandise, such as virtual weapons and other digital items, many are still working out how to do that, Caccia says.

Even so, the slowdown in app development hasn’t stopped the spread of Android devices. In the fourth quarter, Android was running on 47.3 percent of U.S. smartphones, up from 44.8 percent in the previous three months, according to research firm ComScore (SCOR). And while Google’s Android Market has fewer apps than Apple’s store, the number of programs has almost tripled from a year ago.

Developers still see Android as a valuable source of revenue in the longer term, as Google irons out wrinkles. GameHouse is planning to hire additional staff to work on the software.

“In the short term, there’s a lot of money in iOS,” Murphy says. “In the long term, we are very bullish on Android.”

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Alcatel-Lucent Leads in Wireless-Capacity Race

(Bloomberg) — Sprint Nextel Corp. is in talks to use new Alcatel-Lucent telecommunications gear designed to help wireless networks handle more calls. The discussions reflect the industry’s race to avert a capacity crunch for mobile service.

Alcatel-Lucent’s lightRadio, introduced a year ago, is a Rubik’s Cube-sized device that contains radios and antennae and can be mounted on rooftops, phone poles and bus shelters to expand a network’s capacity in a given spot. LightRadio is one of several new technologies created to help the mobile-phone industry cope with the rising tide of calling and data that’s putting a strain on mobile networks just as the wireless airwaves—or spectrum—used to carry traffic grow scarce.

As consumers do more Web surfing and application downloading on devices such as Apple Inc.’s iPhone and tablets using Google Inc. Android software, mobile-data traffic will surge 26-fold in the five years through 2015, Cisco Systems Inc. estimates. And with limited spectrum available, mobile-service providers are looking for ways to squeeze more from existing capacity. That has Alcatel-Lucent and other gear makers racing for part of the $36 billion that Ovum predicts U.S. phone companies will devote to capital spending in 2012.

“We use technologies to mine spectrum as much as possible,” Bob Azzi, senior vice president of network at Overland Park, Kansas-based Sprint, said in an interview. “That can give us some wiggle room along the way.”

Multiple U.S. carriers are testing lightRadio and may begin deploying it this year, Marcus Weldon, chief technology officer at Paris-based Alcatel-Lucent, said in an interview. He declined to identify the carriers. Representatives of Dallas-based AT&T Inc. and Verizon Communications Inc., based in New York, declined to comment.

“We are in a spectrum crunch,” Weldon said.

For the past two decades, the U.S. government has helped carriers meet increased demand by auctioning off large blocks of airwaves, used to carry calls and data. Freeing new spectrum has emerged as a “crucial challenge,” Federal Communications Commission Chairman Julius Genachowski said in a speech last year. Even after new auctions happen, it would take several more years for the buyers to deploy the spectrum.

As a result, U.S. carriers may grow more dependent on new technologies to keep up with escalating user demand.

“The No. 1 issue for us as we move forward, and for the industry, I believe, continues to be spectrum,” AT&T Chief Executive Officer Randall Stephenson said during a January earnings call. “This growth cannot continue without more spectrum being cleared and brought to market. And despite all the speeches from the FCC, we’re all still waiting.”

Qualcomm Inc., the biggest maker of mobile-phone chips, has developed its own software and chips for small cells—these the size of a cigarette pack—designed to boost network capacity.

New capacity-boosting cells augur an overhaul of the design of wireless networks, which now rely on placement of large, expensive cell towers that transmit signals between handsets and the vast underground fiber-optic cable networks that send calls instantly across the globe.

“It’s going to change the way that networks get deployed, and we’re going to get the data rates through the devices up pretty dramatically by using that,” Paul Jacobs, CEO of San Diego-based Qualcomm, said during a November conference call with investors.

A recent survey by Informa Telecoms & Media showed that 60 percent of carriers say small cells of various types will be more important than traditional cells in advanced wireless networks.

Revamping networks won’t come cheap. Each cell has to be attached to existing equipment. The market for outdoor cells like those from Alcatel-Lucent could rise to as high as $8 billion by 2016, according to ABI Research. U.S. wireless carriers will increase capital spending 10 percent to $36 billion this year, according to London-based Ovum. That’s double the rate of last year.

“There’s a real concern: Can we keep up with demand?” Alcatel’s Weldon said. “There’s only one solution, and it’s a difficult solution to afford. Carriers can’t afford to increase spending much. All this means, they’ll take longer to do it. Network congestion is always going to be a factor.”

Capacity constraints already interfere with call quality and download speeds in highly populated areas. According to J.D. Power & Associates, 13 percent of all calls made with smartphones experience some degradation.

“There are already isolated, but regularly occurring congestion issues in major cities,” Peter Rysavy, president of consulting firm Rysavy Research, said in an interview. “Over time, usage will increase, and it will constrain usefulness of the service.”

Carriers such as Sprint are coping in other ways, including shifting more traffic to local Wi-Fi networks, and using software to adjust mobile video so it takes less bandwidth during peak hours.

Sprint is also buying capacity from other network owners, such as Bellevue, Washington-based Clearwire Corp. As a result of the Clearwire arrangement, Sprint won’t face a spectrum crunch until 2016, Azzi said.

Clearwire is in discussions to provide airwaves to other carriers, Clearwire CEO Erik Prusch said in a recent interview.

“Spectrum deficiency really gets large in 2013-2014,” Prusch said. “We are talking to a lot of players, anybody who’s in need of it.” He declined to identify other carriers.

Another option is for carriers to raise consumer prices, discouraging network use. Tim Horan, an analyst at Oppenheimer & Co., expects U.S. service providers to raise prices on wireless contracts at a faster pace in the coming years.

“They are going to either charge for usage more or increase the minimum amount” paid for a data plan, Horan said in an interview. AT&T in January increased the cost of its cheapest smartphone data plan for new customers to $20 a month, from $15. Several carriers moved away from unlimited data plans to limited plans last year.

For some carriers, technological innovation may do most to avert the capacity crunch, said Reed Hundt, a former chairman of the Federal Communications Commission.

“God only made a certain amount of spectrum,” Hundt said in an interview. “To go beyond that you have to have a different architectural solution, and that’s where micro cells come in.”

With assistance from Ian King, Ari Levy and Tom Giles in San Francisco.

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Stupid Corporate Moves

Mistakes are one thing, but when you simply could have known better, let’s call it what it is—stupid. Many business problems today are not the result of software bugs or other factors outside our control. They are self-inflicted, the result of “mind-bugs” in the critical internal processes that occur in the space between our ears. The pervasiveness of mind-bugs in corporate decisions is the product of human nature—hard-wired and highly resistant to feedback. Mind-bugs can affect fact gathering, analysis, insights, judgments, and decisions—and, as you’ll see from the examples below, they increase risk accordingly. By the way, this is the short list. It doesn’t include now classic missteps such as Neflix reversing its decision to separate its DVD rental and streaming business; the subprime mortgage crisis; and the BP Gulf of Mexico oil spill, to cite just a few.

Shortcoming Denial at Toyota
Automaker Toyota’s slow awakening to an accelerator problem resulted in congressional hearings and incalculable damage to its once stellar reputation. It went from discounting early reports of problems to overconfidently announcing diagnoses and insufficient fixes. Akio Toyoda, the chief executive of Toyota, issued the following statement: “Quite frankly, I fear the pace at which we have grown may have been too quick … priorities became confused, and we were not able to stop, think, and make improvements as much as we were able to before.” It sounds like Toyota was infected with both data rejection and informed leader fallacy mind-bugs.

Hewlett-Packard: Were Palm and the TouchPad a Blind Investment?
After buying Palm for $1.2 billion in 2010 and announcing the TouchPad in early 2011, HP killed these products six months later. On an earnings call, the CFO said, “To make this investment a financial success would require significant investments over the next one to two years, creating risk without clear returns.” Shouldn’t HP have known this market would require an investment beyond six months? One mind-bug HP likely had is competency blindness. It seemed to believe unreasonably that it could pull off a win in six short months.

Amazon Assumes Your Books Can Be Removed
Amazon discovered that a third party put 1984 and Animal Farm for sale on Amazon.com without the rights. Amazon deleted the files from its website and from Kindle customer devices with a refund but without prior disclosure. Shouldn’t Amazon have known that people would get upset? CEO Jeff Bezos apologized by saying, “Our ‘solution’ to the problem was stupid, thoughtless, and painfully out of line with our principles.” Amazon employees failed to challenge their assumptions—a deadly mind-bug.

Borders Books Rejects Data It Is Dying—and It Dies
For a decade, Borders’ market share had been almost static while Amazon experienced double-digit growth. Borders even outsourced its website to its competitor Amazon. Should Borders have recognized that a permanent 15 percent cut in revenue from store sales would greatly affect margins and operations? Yes, the evidence was there for a decade. There is no question that a disruptive technology is a hard thing to fight, but Borders fell victim to two mind-bugs: a) It rejected data that showed this outcome was possible; and b) it stuck to the status quo.

Did Cisco Lose Its Flippin’ Mind?
Cisco bought the Flip video camera maker in 2009 and shut it down two years later. Flip’s revenue was less than 1 percent of Cisco’s $40-plus billion in sales. Should Cisco have known that competing with existing camera makers and smartphone devices was going to require substantial, ongoing investment? Should it have chosen to spend money on an acquisition that was more strategically aligned? It is quite possible that Cisco had the conforming error mind-bug—subconsciously conforming to the thinking of the group. Somehow, it became enamored with Flip.

Larry J. Bloom is the author of The Cure for Corporate Stupidity: Avoid the Mind-Bugs that Cause Smart People to Make Bad Decisions, adviser to several business leaders, a board member, and an owner of a startup media and software company that promotes better thinking. For more information, please visit http://curecorporatestupidity.com/

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Slave Receipt, Caddy Lead $500 Million African American Museum

(For more Bloomberg Muse, click on MUSE .)

Feb. 21 (Bloomberg) -- An ordinary sales slip consigning a young woman to slavery is among the chilling items that will be displayed at the National Museum of African American History and Culture.

The $500 million branch of the Smithsonian in Washington breaks ground tomorrow for an opening in the autumn of 2015 that will add an ambiguous exclamation to the imposing line of culture palaces along the Mall.

A rendering of the museum’s design reveals it to be too polite to capture the tragic and redemptive African-American experience. Yet I can feel an exuberant Africanness struggling to escape the civic blandness imposed by fundraising, watchdog groups and design review that are part of building on America’s most sacred ground.

Athletically sloping columns hoist tiers of bronze metalwork above the National Mall. David Adjaye, the project’s chief designer, says those sprouting bronze metal bands derive from Yoruba motifs. The building captures a sensibility found in textiles and art throughout West Africa, where the chief slave- trading ports were.

London-based Adjaye is working with the insightful architect Philip Freelon, of Durham, North Carolina. (The team includes architecture firms Davis Brody Bond and SmithGroup.)

As you approach the museum, the apparently solid bronze surface is revealed as a delicate screen made from a high-tech composite of concrete and bronze that softens the building’s bulk. Its patterns energetically update the ornamental ironwork screens that veiled porches in 19th-century New Orleans, where many of the artisans were African-American.

On the Porch

The museum’s Mall-facing south side welcomes visitors with a broad veranda -- another image drawn from collective memory. Even the poorest could take refuge from the heat of summer on a porch where family life was carried on.

Fronted by a cooling pond, the veranda will beckon visitors trudging the walkways from the nearby Washington Monument. The location is extraordinary -- next to the Smithsonian National Museum of Natural History, where the mall opens to the broad green cross-axis that leads from the White House and flows around the monument to the picturesque tidal basin.

The ground floor is given over to a glass-wrapped public room, a convivial gathering and event space with a ceiling from which hangs a forest of wood boards; these conceal lighting and projection screens. The convex ceiling rises highest at the edges to call attention to views of the White House and the Lincoln Memorial. No other Washington museum takes in this extraordinary setting.

In the Basement

In basement galleries, museum director Lonnie Bunch links black experience to the full sweep of American events, from slavery to the election of Barack Obama. The museum will display a French Croix de Guerre earned by a World War I “Harlem Hellfighter,” who was permitted to fight for the U.S. only under the French.

You’ll walk through a comfortable rail car reserved for whites, swing open a pair of doors and find bare benches where blacks were segregated.

“I am not creating a building by, and about, and for African Americans,” said Bunch. “We’re helping people understand American ideas of freedom and resiliency.”

The history galleries culminate in a contemplative memorial room, where water spills down from a ground-level oculus above.

Two upper-level exhibition floors focus on black contributions in music, sports and fine arts. You’ll find Chuck Berry’s guitar and Cadillac.

Out the Window

Adjaye has cut angled windows into the mesh exterior. One aims at the domed pavilion that commemorates the slave-owning Thomas Jefferson. Another frames the Lincoln Memorial, where the Rev. Martin Luther King. Jr. delivered his famous “I Had a Dream” speech.

Visitors can truly comprehend the power of King’s oratory by imagining the vast space in front of Lincoln’s statue filled with thousands of listeners.

(James S. Russell writes on architecture for Muse, the arts and culture section of Bloomberg News. He is the author of “The Agile City.” The opinions expressed are his own.)

--Editors: Jeffrey Burke, Lili Rosboch.

To contact the writer of this column: James S. Russell in New York at jamesrussell@earthlink.net. web.me.com/jscanlonrussell

To contact the editor responsible for this column: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.

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How to Get a Permit for Your Driverless Car

About a year ago, Bruce Breslow, the newly appointed director of Nevada’s Department of Motor Vehicles, was invited to Mountain View, Calif., to test one of Google’s driverless cars. “I sat in the back seat first, looking at the laptop that shows what the vehicle is seeing,” he says. “My apprehension disappeared after about five seconds. Once I felt confident that the car could see better than I could, they allowed me to get behind the wheel.”

Now Nevada has become the first state to allow driverless cars to apply for their own drivers’ licenses. The rules, which go into effect March 1, will make it possible for companies such as Google (GOOG) (whose lobbyist arranged Breslow’s trip) and Mercedes-Benz (DAI) and maybe even General Motors (GM) to test their robot cars on Nevada’s 26,000 miles of road. “There are two ways to bring amazing technology to market: to seek forgiveness and to seek permission,” says Steve Jurvetson, managing director at Draper, Fisher & Jurvetson and another one of those who’ve been in Google’s autonomous vehicles. “This gives Google and everyone else permission. And Nevada is the state to go to when you want to do things on the edge.”

To his point: The Nevada legislature gave the DMV just nine months to come up with the requirements and put them into effect. Breslow expects at least one company, which he wouldn’t name but which isn’t hard to guess, to apply right away. The companies have to prove to the DMV that the cars have already driven 10,000 miles. That makes sense in terms of safety but also seems to favor Google, which has logged some 200,000 miles in California. Other than that, the cars have to do what every teenager applying for a learner’s permit can. To operate on a state highway, the vehicle has to be able to manage a 75-mile-per-hour speed limit while looking out for cows. On the Las Vegas strip, it has to be able to avoid pedestrians, construction, and debris of all kinds.

Just to be sure, two trained drivers have to be in every car, one of them in the front seat prepared to take back control. And the DMV requires the cars to have a separate data recorder to collect information in case of a crash. “If the car is programmed properly, it shouldn’t cause an accident,” says Breslow. “But it’s possible it could still get into one.”

An application costs only $100, but companies have to put up a cash bond of anywhere from $1 million to $3 million, depending on how many cars they want to put on the road. There will be no “Student Driver” banner to let others know no one’s behind the wheel. The big clue will be the license plate, which will be dark red. Instead of the Nevada sunset over a snow-covered mountain, the logo will be one Breslow designed himself.

Sometime in the future, which Breslow says could be as soon as three years from now, the cars could get full licenses. They would be green, a color that to Breslow indicates “the future is here.” Those in the car would be allowed to text or talk on the phone, but if they’re tipsy they still can’t get behind the wheel. “If you’re in the car, you need to be able to take over,” says Breslow. “For now, it’s a partnership between the person and the machine.”

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