What they forgot to teach you about business that you need to know

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What they forgot to teach you about businessthat
you need to know
Steve Kirsch Chairman Infoseek
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Why pick me?

• Was it because
• Ive started 3 successful companies?
• Ive 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, youll 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
• Im looking for 5 entrepreneurs for a very hot
  Internet startup that Im investing in contact
  me at stk_at_infoseek.com

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Nobodys 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
• Ive 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 dont always tell the whole truth

• My 4 yr old I didnt 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 didnt 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
• Surveyhow 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 isnt taught at MIT, but thats starting to
change

• Interpersonal skills

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How to precisely value Internet companies

• Finallyfor the first time...the secret formula
  revealed
• Say someone asks
• Is Yahoo overvalued?
• You say...
• Well If you have to ask, you just dont 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 Robertsons top secret business technique
for instant wealth

• If at first you dont succeed, try, try again
• It doesnt 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 doesnt 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 dont work

• Because Ive lost money in every proven, tested
  system Ive 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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(No Transcript)
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How to blow 100K in one nightStay in the
villas at the Bellagio
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So how about a house???

• Want to know how to buy real estate for no money
  down?

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Where are they today?

• President of Allen Club in Atlanta Jail
• Charles Givens dead
• Tom Vu 20/20
• Dave Del Dotto selling long distance cards
• William J. McCorkle, King of the Infomercials
  sentenced, along with his wife, to 24 years in
  prison on fraud and money laundering charges

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Some of my other really cool toys

• Panasonic digital phone system FLASH
  voicemail/attendant
• Dragon NaturallySpeaking Mobile
• Panja/Phast home control
• Covad DSL
• Tek 840/DP printer
• Runco rear projection TV
• Miele washer/dryer

• Vantage lighting control
• BlackoutBuster
• Mouse Systems optical mouse
• Dual Pentium NT system with 4 OSes
• SGI 1600SW flat panel
• Sony DCR PC-1
• Olympus C2000Z digital camera

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My best personal investment (it was 15,000 and
its more than paid for itself already)

• Kodak DCS-520 digital camera
• Check out the sample on my web page

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(No Transcript)
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So youve 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 intolerancepsoriasisrecedin
  g 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. Dont 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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