What they forgot to teach you about business that you need to know
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Transcript of What they forgot to teach you about business that you need to know
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What they forgot to teach you about business
that you need to know
Steve Kirsch
Chairman
Infoseek
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Why pick me?
Was it because:
• I’ve started 3 successful companies?
• I’ve donated over $50M to charity?
• Dr. Evil was unavailable
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No time for lawyer/VC jokes
• Ryan Leaf
• The Padres
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If you leave early, you’ll miss the 10 minute instructional video
• “How to make megabucks on the Internet”
• Stars Gates, Diller, Geffen, Spielberg, …
• Shows techniques Robertson used in mp3.com
• Why do you think the mayor is here?!?!
NOT AVAILABLE IN STORES
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3 stages to any business
• Starting it
• Growing it
• Selling it
What do all these stages have in common?
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The 3 things every entrepreneur needs to know about MONEY
How to …
make it
grow it
lose it
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HOW TO MAKE IT
(and tips for starting a company)
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Do you have what it takes to start a company??
Q: Why are most startup companies started by mediocre people?
A: The really smart ones know better!
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How to recruit really good people
• Take your time
• Network
• Advertise in places where great people NOT looking for jobs would be
• Example: – I’m looking for 5 entrepreneurs for a very hot
Internet startup that I’m investing in …contact me at [email protected]
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Nobody’s Perfect
• No perfect CEOs
• No perfect engineers
• …
• The whole trick is getting people to work effectively together to complement each other
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Know your strengths and weaknesses
• Focusing all your time on your strengths is a trap (e.g., technology, product)
• Spend at least as much time in filling your weaknesses (e.g., marketing)
• People tend to keep making the same mistakes over and over again (e.g., under hiring)
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When recruiting remember: Skills are easy to acquire but simple behavioral change is
nearly impossible• Example:
– The “toilet seat down” problem
• Solution:– Learn how to compensate
• I’ve known excellent management consultants who consult for years before they realize this
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The single biggest mistake you can make when starting or
running a company and how to avoid it
Hiring the wrong CEO
(like yourself)
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People don’t always tell the whole truth
• My 4 yr old… “I didn’t do it!”
• Our President …
• Bill Gates ...
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Can you imagine Bill saying…?
• “I switched to Linux on my desktop because I wasted too much time rebooting NT.”
• “Yeah, bundling IE into the OS was a brilliant afterthought.”
• “We could have easily complied with the Sun Java contract.”
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How I personally made over $200 million in a year
1) Infoseek went from 5 to 100 in little over a year
2) Having 6M shares didn’t hurt either
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How I made $10 million for my second startup company as a
result of attending a 4 hour free course taught at a hotel
Negotiation skills
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Two courses everyone should take after they graduate from
college
• Presentation skills
• Negotiation skills
• Survey…how many have taken these?
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How to sell $30 worth of lemonade in only 20 minutes on the Stanford campus and how it
relates to commerce on the Internet
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The most important skill for success in the real world isn’t
taught at MIT, but that’s starting to change
Interpersonal skills
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How to precisely value Internet companies
• Finally…for the first time...the secret formula revealed…
• Say someone asks:
“Is Yahoo overvalued?”• You say...
Well… If you have to ask, you just don’t get it, do you?
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How AOL makes big money...
The 2 step TOP SECRET strategy revealed here for the first time….
• Make it really EASY to sign up
• Make it really HARD to cancel
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My two biggest mistakes
• Refusing to acquire Yahoo for $20M in 1994 because I thought it was overvalued
• Telling Michael Robertson to “pound sand” when he wanted me to buy his company for $20M
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Michael Robertson’s top secret business technique for instant
wealth
• “If at first you don’t succeed, try, try again”
• “It doesn’t hurt to be:– in the right place– at the right time – with the right product”
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HOW TO GROW IT
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How to legally avoid paying capital gains taxes forever
Always sell at a loss
Donate the stock
Die
A complicated technique...
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How to consistently get a 60% average annual return in the stock
market
Buy and hold
10 stocks max
Microsoft, Cisco, Dell, EMC,
AOL, Sun, Intel, Worldcom, Nokia
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What your stockbroker doesn’t want you to know: why trading
stocks may be riskier than gambling in Las Vegas
•Spreads
+
•Stocks are completely unpredictable over the short term
= YOU LOSE
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Company announces great earnings (above expectations) but
its stock tanks. Why?
“Who the hell knows?”
• Market explanations are always done AFTER the fact
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Why mechanical trading systems don’t work
Because I’ve lost money in every proven, tested system I’ve tried
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HOW TO SPEND IT
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Best “thumbs up” investment
• EV1
• Up to 170 mi range; 6 hr recharge; zero maintenance
• Faster than my NSX
• 180 mph (in first gear)
• More effective than donating money to clean up our environment
• You get to drive in the HOV lanes too!
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Best personal vanity purchase
• Propecia
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How to automate your house
• My house was written up in Newsweek, LA Times, PC World, …
• See the video on my web site:
www.skirsch.com
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My best personal investment (it was $15,000 and it’s more than
paid for itself already)
Kodak DCS-520 digital camera
Check out the sample on my web page
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So you’ve now got all the toys
• House• Car• Vacations• Subscription to Fortune• Gateway PCs• Panja home control system• Private jet• Assets for guaranteed income for rest of your life
Now what?
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“Where do you want your estate to go tomorrow?”
CHOOSE ANY TWO:Family
Taxes
Philanthropy
Who gets to spend your dough?
You? Or the government?
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Giving it away is the best way to spend it
• We have a $50M fund at our local CF
• We DO give to make a positive difference in our own lives and the lives of people we care about.
• We DO NOT give not out of a sense of obligation or payback or civic duty or because it is “the right thing to do” or “to create a legacy”
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Why it is better to donate to charity sooner than later
• No tax advantages to giving after you are dead
• No personal satisfaction to giving after you are dead
• Giving can ultimately benefit you or your family
deviated septumpresbyopiahair losssnoringlactose intolerancepsoriasisreceding gumsnear sightedtorn ACLtype I diabetesmacular degenerationringing in my ears
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Example
• Ten years from now, you might be diagnosed with:– Heart disease/stroke
– Cancer
– Macular degeneration
• At that time, starting a giving plan will be too late to have an impact on your health
• In hindsight, was keeping your assets sitting in stocks the right move?
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Easiest way to donate
• Gift appreciated stock to a donor advised fund at local Community Foundation (typically $5K minimum)
• E-mail* them whenever you want to make a grant
* For any progressive community foundation
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Charitable fund advantages
• You can add stock (and liquidate) even if your stock is locked up
• Can donate to fund when stock peaks; decide on recipient later
• Gift to charities at anytime from the fund
• Less hassle (no personal recordkeeping, no periodic stock transfers, e-mail donations)
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Advantages of charitable fund
• Endowment compounds tax free forever
• You get to give away an infinite amount of OPM and your annual grants will typically increase each year
• All this from a ONE-TIME donation!
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Giving may actually save you money!
Example: – You donate to a CRT when your stock is locked up
at $50– Trust can short other shares to lock in the gain– Trust pays you back your donation over time
Result:– You can actually end up with more money in your
pocket than if you sold that stock at $25 in a selling window
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How to give intelligently
• Figure out the areas important to you
• Create your own criteria (I have 20)
• Make a long term commitment
• Realize that results are often hard to quantify
• See my website for details:
www.skirsch.com
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How we give
• Saving the world (NEOS, Ploughshares)
• Encouraging philanthropy (talks, website)
• Environment (we own two EVs, AB71, NRDC, EV tax credits, solar vehicle)
• Fixing what is broken (knee surgery advice, stem cell ban, selling body parts, etc.)
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How we give
• Medical research projects (diabetes, bridge funding gaps)
• Medical sponsorships (3 yr; $540K grants)
• Local (Tech Museum, AMTSJ, library, …)
• Education (MIT, people skills)
• Misc (Mars Society, Buzz Aldrin, …)
• Socially responsible investing (Targesome)
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Giving strategy
Make periodic small donations as your stock rises
Many notable philanthropists regret not having taken advantage of this strategy.
Don’t make the same mistake.
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Questions?
Next up:
“How to make megabucks using the Internet”
(10 minute video)
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