Category Archives: success

Five leadership lessons from Arsene Wenger

By Kier Wiater-Carnihan Monday, 29 October 2012

Arsene Wenger has managed Arsenal for fourteen years straight. Indeed, Sir Alex Ferguson is the only manager to have spent longer at his current club. So how can you emulate the staying power of the man they call ‘Le Professor’?

1. Make your name synonymous with your brand

‘Who?’

That was the headline in the Evening Standard when Arsène Wenger arrived in London in 1996 following two years in the managerial wilderness at Japanese side Nagoya Grampus 8. Tony Adams, Arsenal’s then captain, recalls thinking, ‘What does this Frenchman know about football? He wears glasses and looks more like a schoolteacher’. An inspirational leader on the pitch but a hopeless alcoholic off it, Adams defined a club thirsty for both success and the strong stuff, riddled with epic drinking sessions, out of control gambling, eating competitions and cocaine abuse (and that was just Paul Merson’s pre-match warm up).

Now it is Wenger who defines Arsenal. He immediately replaced the card schools and liquid lunches with dieticians and acupuncturists, bringing a continental outlook to the club and developing a free-flowing, attacking style of play. Fans under twenty-years-old haven’t known the club without him, and his association with the Arsenal brand is so strong that even a distinct lack of recent success hasn’t threatened to sever it. If you can achieve that level of personal identification with a brand – think Sir Stuart Rose and M&S, O’Leary with Ryanair – your position will be similarly unshakeable.

2. A beautiful game is less important than a beautiful balance sheet

For the last seven seasons, Arsenal have come about as close to winning trophies as the government has to implementing successful economic policy but the board remains absolutely delighted with Wenger’s work. When American real estate billionaire and sports mogul ‘Silent’ Stan Kroenke took a controlling stake in the club four years ago, some suggested he might want to bring in his own man. From a financial point of view, he’d have been mad to do so. An investor looking to profitably navigate the sheik ‘n’ oligarch dominated, regulation-light ‘Wild West’ of British football couldn’t choose a better steward than Wenger. An economics graduate in an environment where possessing anything beyond a GCSE is a rarity, his attention to fiscal detail is unwavering.
Most importantly for the balance sheet, he’s also taken Arsenal into the lucrative Champions League every season since he arrived. At last week’s AGM, an increasingly fractious affair, he reiterated his belief that qualification for the competition is more important than winning a domestic trophy. Driving home the fact that Arsenal FC now plays second fiddle to Arsenal Holdings PLC, chairman Peter Hill-Wood later insisted that it had been ‘an extremely good year’ for the club, a statement that was met with derision by many fans.

And as long as Wenger continues to get the team into the Champions League, he’ll be richly rewarded. With an estimated annual salary of €9m, ‘Le Boss’ currently takes home a higher salary than Sir Alex Ferguson (€8.5m). The latter, it’s worth pointing out, has won four league titles, three league cups and a Champions League since Arsenal’s FA Cup victory on penalties against Manchester United in 2005. It goes to show that shareholders are generally less worried about competitors’ successes if their own bank balance is firmly in the black.

3. Invest in youth, but don’t expect loyalty

Nicolas Anelka, Patrick Vieira, Kolo Toure, Cesc Fabregas, Robin van Persie; all signed by Arsenal at a young age as virtual unknowns (Fabregas had never even played first-team football) but all sold for many times their initial fees. Along with players like Thierry Henry, they owe a large part of their careers to Wenger’s confidence and nurturing, while he in turn has benefited from the policy of targeting younger players – identifying a talent early is much more cost-effective than trying to compete for the biggest names, especially when your rivals can out-spend you.

However, while the top players Wenger develops frequently talk up his significant influence on their careers, many still seem to end up taking said careers elsewhere. Every close season seems to bring a transfer saga more tedious and predictable than even the most protracted of Eastenders storylines, inevitably ending with another high-profile exit. The club may make a huge return on these players, but fans would argue that £20m-worth of profit on van Persie might not be as valuable as, you know, actually having van Persie. Sadly, while harnessing young talent and launching fledgling careers is satisfying and can be profitable, you must be hard-nosed and recognise that team members will move on.

4. It’s great to have a philosophy, but don’t stick to it too rigidly

There’s no denying that Wenger’s Arsenal has produced some fine football over the years. Yet Wenger’s preferred formula of favouring technical superiority over tactical pragmatism seems to fail increasingly frequently. Partly this is because Arsenal doesn’t possess the same level of collective technical ability as they once did, but it’s also because other teams have learnt how to stifle and frustrate them. Yet Wenger continues to send his team out in the same formation, playing the same tactics, in virtually every game. It’s like going out every day in a crisp pair of suede shoes regardless of the weather forecast – sure you’ll look fantastic most of the time, but when it starts raining you’ll look like a berk.

You can’t assume that a certain strategy which brings rewards for a while will remain effective forever. Arsenal’s consistent financial prudence is different – their spending power has been hampered by the huge expense of building the Emirates Stadium, thanks to a few less-than-lucrative commercial deals. It is also partially an attempt to future-proof the club against Uefa’s planned Financial Fair Play directive, under which clubs will face strict penalties if they fail to control their debts. If FFP were to be brought in tomorrow, Arsenal would pass with ease while their rivals would struggle to hide the liabilities loading down their ledgers. Sadly there’s no guarantee that said rivals wouldn’t find a loophole to worm their way through, but if the FFP arrives bearing teeth then Arsenal’s financial strategy will look very smart indeed.

Wenger’s work to get the club into that position is why he’s one of the only football managers you’d trust to run an actual business. Few of his peers could’ve kept a team so near the top of the Premier League while financing a huge new stadium, and for that he deserves credit. However, just as some Gunners have misgivings about their football club being run like a business, you’d generally be wise to avoid running your business like a football club. No one wants a Glasgow Rangers on their hands after all.

5. Delegation is not a sign of weakness

In 2006, Wenger hired former Arsenal defender Martin Keown on a temporary basis to help out the coaching staff. That year, despite their defence being heavily depleted through injury, Arsenal embarked on a record-breaking run of ten consecutive Champions League matches without conceding a goal, leading to a début appearance in the season’s show-piece finale. Keown was widely perceived as being pivotal in tightening a previously leaky defence, yet his services were not retained the following season. Arsenal have not been close to a Champions League final since.

Pat Rice’s replacement as assistant manager, Steve Bould, had partnered Keown in a mean central defence as a player, and received similarly praise for shoring up Arsenal’s defence at the beginning of this season, with the team conceding just three goals in their opening six matches. However, this newly found steel seems to have dissolved of late. Former player Stewart Robson has suggested the sudden loss of form stems from a rumoured rift between Bould and Wenger. ‘I hoped that [Bould] would do more with the defence,’ Robson admitted, ‘but I’m not sure whether he’s being allowed to do that by Arsène Wenger’.

Wenger is sometimes painted as an inflexible control freak and perhaps a part of it is simply an effort to keep his job secure – the more he does himself, the harder it is for one man to replace him. Other staff being credited for on-field triumphs could also be viewed as a threat. Still, MT would advise against autocracy. ‘Always employ people who are smarter than you,’ goes the old adage. Not only does this strategy reap greater rewards in the long run, but AGMs will be a whole lot less volatile too…

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Steve Jobs said

1. Steve Jobs said: “Innovation distinguishes between a leader and a follower.”
Innovation has no limits. The only limit is your imagination. It’s time for you to begin thinking out of the box. If you are involved in a growing industry, think of ways to become more efficient; more customer friendly; and easier to do business with. If you are involved in a shrinking industry – get out of it quick and change before you become obsolete; out of work; or out of business. And remember that procrastination is not an option here. Start innovating now!

2. Steve Jobs said: “Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.”
There is no shortcut to excellence. You will have to make the commitment to make excellence your priority. Use your talents, abilities, and skills in the best way possible and get ahead of others by giving that little extra. Live by a higher standard and pay attention to the details that really do make the difference. Excellence is not difficult – simply decide right now to give it your best shot – and you will be amazed with what life gives you back.

3. Steve Jobs said: “The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it.”
I’ve got it down to four words: “Do what you love.” Seek out an occupation that gives you a sense of meaning, direction and satisfaction in life. Having a sense of purpose and striving towards goals gives life meaning, direction and satisfaction. It not only contributes to health and longevity, but also makes you feel better in difficult times. Do you jump out of bed on Monday mornings and look forward to the work week? If the answer is ‘no’ keep looking, you’ll know when you find it.

4. Steve Jobs said: “You know, we don’t grow most of the food we eat. We wear clothes other people make. We speak a language that other people developed. We use a mathematics that other people evolved… I mean, we’re constantly taking things. It’s a wonderful, ecstatic feeling to create something that puts it back in the pool of human experience and knowledge.”
Live in a way that is ethically responsible. Try to make a difference in this world and contribute to the higher good. You’ll find it gives more meaning to your life and it’s a great antidote to boredom. There is always so much to be done. And talk to others about what you are doing. Don’t preach or be self-righteous, or fanatical about it, that just puts people off, but at the same time, don’t be shy about setting an example, and use opportunities that arise to let others know what you are doing.

5. Steve Jobs said: “Be entrepreneurial.”
Look for the next big thing. Find a set of ideas that need to be quickly and decisively acted upon and jump through that window. Sometimes the first step is the hardest one. Just take it! Have the courage to follow your heart and intuition.

6. Steve Jobs said: “Do your best.”
Do your best at every job. No sleep! Success generates more success. So be hungry for it.

7. Steve Jobs said: “I’m the only person I know that’s lost a quarter of a billion dollars in one year…. It’s very character-building.”
Don’t equate making mistakes with being a mistake. There is no such thing as a successful person who has not failed or made mistakes, there are successful people who made mistakes and changed their lives or performance in response to them, and so got it right the next time. They viewed mistakes as warnings rather than signs of hopeless inadequacy. Never making a mistake means never living life to the full.

8. Steve Jobs said: “Ask for feedback.”
Ask for feedback from people with diverse backgrounds. Each one will tell you one useful thing. If you’re at the top of the chain, sometimes people won’t give you honest feedback because they’re afraid. In this case, disguise yourself, or get feedback from other sources. Focus on those who will use your product – listen to your customers first.

9. Steve Jobs said: “We’re here to put a dent in the universe. Otherwise why else even be here?”
Strive to be a market leader. Own and control the primary technology in everything you do. If there’s a better technology available, use it no matter if anyone else is not using it. Be the first, and make it an industry standard.

10. Steve Jobs said: “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”
Are you tired of living someone else’s dream? No doubt, its your life and you have every right to spend it in your own individual way without any hurdles or barriers from others. Give yourself a chance to nurture your creative qualities in a fear-free and pressure-free climate. Live a life that YOU choose and be your own boss.
Each lesson might be difficult to integrate into your life at first, but if you ease your way into each lesson, one at a time, you’ll notice an immediate improvement in your overall performance. So go ahead, give them a try.

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Inamori: ‘Hebzucht oorzaak van crisis’

| 22 mrt 2011 | Peter Boerman |

De onbegrensde menselijke hebzucht is de belangrijkste oorzaak van de financiële crisis. Dat zegt Kazuo Inamori, de bekendste Japanse ondernemer ooit, oprichter van Kyocera en KDDI, en nu, op 77-jarige leeftijd, onbezoldigd ceo van de noodlijdende vliegtuigmaatschappij JAL.

Volgens Inamori zouden bedrijven niet op hun eigen winst moeten focussen, maar op wat goed is voor de samenleving als geheel. Hij gelooft in de principes van ‘genoeg is genoeg’ en dat de hebzucht aan banden moet worden gelegd. Volgens hem is altruïsme een veel betere winstgenerator op lange termijn dan hebzucht: bescheidenheid levert meer op dan arrogantie. ‘De correcte manier om een bedrijf te leiden is een stevige financiële onderbouwing, die in staat is ook zware economische tijden te doorstaan’, zei hij recent tegen USA Today.

Filantroop
Inamori, niet alleen een van de rijkste Japanners, maar ook een van de grootste filantropen van het land, waarschuwt voor verdere groei van het ongebreideld kapitalisme. ‘Het voedsel en de energie op deze planeet zijn beperkt. Het zou voor iedereen duidelijk moeten zijn dat een onbeperkte welvaart en comfortabele levensstijl onmogelijk is vol te houden, in het licht van de beperking van de bronnen van de aarde. De tijd is gekomen om fundamenteel te heroverwegen hoe de mens en de natuur kunnen samenleven binnen de beperkte ruimte van onze planeet.

Wie?
Ongetwijfeld de bekendste Japanse ondernemer, filantroop en Zen-boeddhistisch priester onder de naam Daiwa (‘grote harmonie’). In 1959, op 27-jarige leeftijd richtte hij Kyoto Ceramic Co op, de voorloper van het huidige hightechconglomeraat Kyocera, dat nu 66.000 mensen in dienst heeft. In 1984 volgde DDI, wat nu als KDDI Japans op één na grootste telecommunicatiebedrijf is. In 2009 werd Inamori door de Japanse overheid gevraagd om op 77-jarige leeftijd (!) ceo te worden van het noodlijdende Japan AirLines. Hij schreef vele boeken over zijn managementfilosofie, waarin de klant en het lot van de mensheid centraal staat, en won tal van Awards, met name in de Verenigde Staten. In 1984 richtte hij naast DDI ook de Inamori Foundation op, die sindsdien voor een belangrijk deel de Kyoto-prijzen betaalt en bepaalt. Die prijzen, ter grootte van zo’n 400.000 euro, zijn gaan gelden als een soort alternatieve Nobelprijs voor drie gebieden die die prijs niet bestrijkt: Geavanceerde Technologie, Elementaire Wetenschappen, en Schone kunsten en Filosofie.

Bekend van
Veel dingen: de naar hem genoemde Foundation, de oprichting en het jarenlange werk voor hightechconglomeraat Kyocera en in 1984 de oprichting van DDI. Maar vooral ook van zijn vele lezingen en boeken over zijn inzichten, zoals Amoeba Management, A Compass to Fulfillment, Life – The Most Important Thing as a Human, A Passion for Succes, Kazuo Inamori’s Pragmatic Studies: Management and Accounting en The Philosophy of Kazuo Inamori. Hij is ook voorzitter van Seiwajyuku, een privaat opleidingsinstituut voor business leaders, die doceert op 62 locaties,waarvan 9 buiten Japan. Sinds januari 2010 is daar een nieuwe rol bijgekomen, toen Japan Airlines zo goed als failliet ging en Inamori gevraagd werd het bedrijf door de herstructurering heen te loodsen. Inamori, sinds zijn pensionering officieel gewijd als Zen-priester, zei ja, zodat hij zich nu weer ceo mag noemen. Zonder salaris, want dat heeft hij geweigerd.

Theorie
Nog steeds is op elke Kyocera-website de missie van het bedrijf te lezen, zoals neergelegd door Inamori: “Onze hoogste roeping als mensen is om voor het grotere belang van de mensheid en de samenleving te werken.” Vooral zijn ideeën over ‘Amoebe management’ zijn bekend geworden. Het is een filosofie die veel wegheeft van die van onze eigen Eckart Wintzens celfilosofie. Inamori gelooft erin zijn bedrijven op te delen in kleine units, ‘amoebes’ genaamd. Die units worden geleid door mensen die vanuit het eigen bedrijf doorstromen, zodat er veel mensen managementervaring opdoen. In iedere amoebe kunnen leden hun kennis en kunde inbrengen om de eigen doelen te bereiken. Hierdoor ontstaat in Inamori’s woorden: ‘management by all’. Zeker ook omdat hij er een boekhoudmanier bij verzon, die echte transparantie van de amoebes afdwong, zodat iedereen de stand van zaken kan doorzien. Volgens Inamori moet de boekhouding eruit zien als het instrumentenpaneel van een piloot: alle informatie moet kloppen, omdat hierop gevlogen wordt naar de gewenste bestemming. Hij zegt zelf gelukkig te zijn dat hij nooit iets geleerd heeft van accounting: daardoor kon hij de vragen stellen die nodig waren om elke keer ‘het goede’ te doen.

Quote
‘Te veel mensen denken alleen aan eigen gewin. Maar businesskansen kloppen zelden op de deur van egocentrische mensen. Geen klant gaat ooit naar een winkel alleen om de winkelier een plezier te doen.’

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Pretty Polly Legs 11 – Behind The Scenes

Wow very creative that’s what’s all about in 2011- my compliments “A sneak peak behind the Scenes”

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Filed under Advertising, Branding, Entertainment, marketing, Mode, Positioning, success, Winner, Women, YouTube

Facebook Investor Peter Thiel: Palantir Is The Next Facebook Or Google

By Oliver Chiang

Feb. 28 2011

Palantir CEO Alex Karp
Who isn’t looking for the next big tech company?

For a FORBES magazine story I recently wrote on cyber-security software-maker Palantir Technologies, I spoke with billionaire Facebook investor Peter Thiel, who said that Palantir is “tracking like the really great tech companies, like Facebook or Google.” Thiel thinks the company is the “most undervalued company in Silicon Valley” and will be worth around tens of billions of dollars in a few years’ time. Of course, Thiel is Palantir’s largest stakeholder, and his venture capital firm The Founders Fund has bankrolled much of the startup’s initial costs. But beyond the hype is a company that has accidentally stepped into the middle of controversy, is attracting some of the brightest engineers from top schools, and is making more money than anyone suspects.

Let’s start with the controversy. Up until a few weeks ago, only “Lord of the Rings” nerds knew what a “palantir” was (a seeing stone the company is named after). But recently, Palantir has found itself in headlines for putting together a proposal, along with HBGary and Berico Technologies, to launch cyber-attacks and other “dirty tricks” against Wikileaks and its supporters, on behalf of Bank of America, and against website ThinkProgress on behalf of the U.S. Chamber of Commerce. Pro-Wikileaks hacker collective Anonymous found the proposal and emails by hacking into the account of HBGary’s chief executive.

Palantir responded by issuing an apology and severing ties with HBGary. It has also put the 27-year-old engineer Matthew Steckman — who may have been responsible for putting the offensive tactics on the proposal (according to the emails) — on leave and launched an internal investigation. Some have implied that Palantir’s senior staff must have known about the proposal, given the importance of the clients. But Palantir chief Alex Karp says that’s not how the company works: “The idea that a 27-year-old wouldn’t have the ability to make a decision about our proposal is very foreign to how we work. It would go further up the chain if it was a proposal, but it wasn’t.”

Indeed, the 330-person company is largely comprised of 27-year-old “forward deployed engineers” who are given a lot of free rein to make decisions. But in an industry like cyber-security, young engineers may not have the experience to make the best judgment calls. Even Karp concedes, “There was an oversight breakdown on the proposal phase of our work and we regret that.”

Palantir will need to do some PR clean-up, especially among its applicant pool. The company competes with the Googles and the Facebooks for top talent. Palantir’s Co-director of Engineering Bob McGrew, a third-year Stanford Ph.D. candidate in computational game theory, turned down a job at YouTube offered by co-founder Jawed Karim to go to Palantir. McGrew says the company’s save-the-world “mission” sets it apart. Stanford computer science student Jake Becker says Palantir’s exclusivity in hiring the best of the best makes the company an attractive employer. But Becker also says that the Wikileaks flap “is seriously damaging their reputation on campus.”

Meanwhile, competitors sniff and say that Palantir isn’t doing anything particularly new in the industry. “They are taking a different approach which is trying to bring the Silicon Valley-esque to the beltway,” says i2 CEO Bob Griffin. A primary competitor to Palantir, i2 is a 20-year-old company whose cyber-intelligence software is known as the Microsoft Word of the industry. “The reality is at the end of the day there is no different approach. It’s all the same: it is what is the tool that allows customers to do what they do best.”

Recently, i2 and Palantir settled a lawsuit, in which i2 accused its competitor of corporate espionage. Griffin says only that he was “very satisfied” with the settlement.

But these controversies will likely wash over in time. Some investors have been betting big on Palantir. The company’s last round of funding of $90 million last June, led by an unnamed private equity firm, valued the six-year-old company at a whopping $735 million. Dave Kellogg, former CEO of business intelligence software maker MarkLogic, speculates in a blog post that “dumb money” might be involved here. “I think it means that… The company is trying to build and/or sustain a hype bubble and wants to be seen as hot. Most VC-backed companies do not disclose valuations,” he wrote. Kellogg also thinks Palantir is executing a “go big or go home” type strategy like PayPal did in its early days (Palantir was founded and backed by PayPal Mafia members), but he says he doesn’t see the same “landgrab market opportunity” here.

Other analysts and companies in the space agree, saying that Palantir’s revenues were probably around $25 million to $50 million last year. Gartner analyst John Pescatore says the market for “situational awareness tools” like Palantir’s is in the tens of millions of dollars, a fraction of the overall security intelligence services’ budgets, which are dominated by the likes of Raytheon, Boeing and Lockheed Martin.

But Karp says that he sees a “clear path” to $1 billion in revenue within the next five years. How close is he to that? Palantir’s 2010 revenue was “significantly north of $80 million”, said a highly reputable source familiar with the company who did not wish to be named. Karp says that Palantir’s revenues have been tripling every year since 2008 and that it became cash-flow positive in 2010.

Still $80 million or so is a long way from $1 billion. A lot will depend on how Palantir expands beyond its cyber-security niche. The signs could point either way here. It would not be a surprise if Bank of America did not end up using Palantir’s services anytime soon, given recent happenings. On the other hand, Palantir has already been able to line up a number of other top banks and hedge funds. One of these is JPMorgan Chase. Palantir signed a multi-year contract with the bank in December 2009 in the $5 million to $20 million range, and JPMorgan Chase Chief Information Officer Guy Chiarello gushes about the company, calling Palantir “the best bet I’ve made in quite a while.”

There’s no doubt that Palantir has a lot of bright young engineers working for them, but to really kick it up to the level of a Facebook or a Google, the company may need to start growing up.

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Five Billionaires Who Live Below Their Means

by Katie Adams
Thursday, April 1, 2010
provided by

At least once in your life – maybe even once a week or once a day for that matter – you have fantasized about coming into a lot of money. What would you do if you were worth millions or even billions? Believe it or not there are millionaires and billionaires among us who masquerade as relatively normal, run-of-the-mill people. Take a peek at some of the most frugal wealthy people in the world.

Warren Buffett
Millions of people read Buffett’s books and follow his firm, Berkshire Hathaway’s, every move. But the real secret to Buffett’s personal fortune may be his penchant for frugality. Buffett, who is worth an estimated $47 billion, eschews opulent homes and luxury items. He and his wife still live in their modest home in Omaha, Nebraska which they purchased for just $31,500 more than 50 years ago.

Although he’s dined in the best restaurants around the globe, given the choice he would opt for a good burger and fries accompanied by a cold cherry Coke. When asked why he doesn’t own a yacht he responded “Most toys are just a pain in the neck.” (Find out how he went from selling soft drinks to buying up companies and making billions of dollars.

Carlos Slim
While most of the world is very familiar with Bill Gates, the name Carlos Slim rarely rings a bell. But it’s a name worth knowing. Slim, who is a native of Mexico, was just named the world’s richest billionaire – that’s right, richer than the uber-famous Microsoft founder. Slim is worth more than $53 billion and while he could afford the world’s most extravagant luxuries he rarely indulges. He, like Buffett, doesn’t own a yacht or plane and he has lived in the same home for over 40 years.

Ingvar Kamprad
The founder of the Swedish furniture phenomenon Ikea struck success with affordable, assemble-it-yourself furniture. For Kamprad, figuring out how to save money isn’t just for his customers, it’s a high personal value. He’s been quoted as saying “Ikea people do not drive flashy cars or stay at luxury hotels.” That goes for the founder as well. He flies coach for business and when he needs to get around town locally he either takes the bus or will head out in his 15-year-old Volvo 240 GL.

Chuck Feeney
Growing up in the wake of The Depression as an Irish-American probably has something to do with Feeney’s frugality. With a personal motto of “I set out to work hard, not get rich,” the cofounder of Duty Free Shoppers has quietly become a billionaire but even more secretively given almost all of it away through his foundation, Atlantic Philanthropies. In addition to giving more than $600 million to his alma mater Cornell University, he has given billions to schools, research departments and hospitals.

Loath to spend if he doesn’t have to, Feeney beats both Buffett and Kamprad in the donation category, giving out less grants than only Ford and the Bill and Melinda Gates Foundations. A frequent user of public transportation, Mr. Feeney flies economy class, buys clothes from retail stores, and does not wast money on an extensive shoes closet, stating “you can only wear one pair of shoes at a time”. He raised his children in the same way; making them work the same normal summer jobs as most teens.

Frederik Meijer
If you live in the Midwest chances are good that you shop at Meijer’s chain of grocery stores. Meijer is worth more than $5 billion and nearly half of that was amassed when everyone else was watching their net worth drop in 2009. Like Buffett he buys reasonably-priced cars and drives them until they die, and like Kamprad he chooses affordable motels when on travel for work. Also, like Chuck Feeney, rather than carelessly spending his wealth Mr. Meijer is focused on the good that it can provide to the community.

The Bottom Line
The dirty little secret of some of the world’s wealthiest people is that they rarely act like it. Instead of over-the-top spending, they’re busy figuring out how to save and invest to have that much more in the future. It’s a habit you might want to consider in order to build up your own little storehouse of cash.

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The Top Ten Lies of Entrepreneurs

January 08, 2006
(Since I’ve antagonized the venture capital community with last week’s blog, I thought I would complete the picture and “out” entrepreneurs to begin this week. The hard part about writing this blog was narrowing down these lies to ten. Luckily, my partner, Bill Reichert, had already documented this list of the top ten lies of entrepreneurs.)

We get pitched dozens of times every year, and every pitch contains at least three or four of these lies. We provide them not because we believe we can increase the level of honesty of entrepreneurs as much as to help entrepreneurs come up with new lies. At least new lies indicate a modicum of creativity!

1.“Our projections are conservative.” An entrepreneur’s projections are never conservative. If they were, they would be $0. I have never seen an entrepreneur achieve even her most conservative projections. Generally, an entrepreneur has no idea what sales will be, so she guesses: “Too little will make my deal uninteresting; too big, and I’ll look hallucinogenic.” The result is that everyone’s projections are $50 million in year four. As a rule of thumb, when I see a projection, I add one year to delivery time and multiply by .1.

2.“(Big name research firm) says our market will be $50 billion in 2010.” Every entrepreneur has a few slides about how the market potential for his segment is tens of billions. It doesn’t matter if the product is bar mitzah planning software or 802.11 chip sets. Venture capitalists don’t believe this type of forecast because it’s the fifth one of this magnitude that they’ve heard that day. Entrepreneurs would do themselves a favor by simply removing any reference to market size estimates from consulting firms.

3.“(Big name company) is going to sign our purchase order next week.” This is the “I heard I have to show traction at a conference” lie of entrepreneurs. The funny thing is that next week, the purchase order still isn’t signed. Nor the week after. The decision maker gets laid off, the CEO gets fired, there’s a natural disaster, whatever. The only way to play this card if AFTER the purchase order is signed because no investor whose money you’d want will fall for this one.

4.“Key employees are set to join us as soon as we get funded.” More often than not when a venture capitalist calls these key employees who are VPs are Microsoft, Oracle, and Sun, he gets the following response, “Who said that? I recall meeting him at a Churchill Club meeting, but I certainly didn’t say I would leave my cush $250,000/year job at Adobe to join his startup.” If it’s true that key employees are ready to rock and roll, have them call the venture capitalist after the meeting and testify to this effect.

5.“No one is doing what we’re doing.” This is a bummer of a lie because there are only two logical conclusions. First, no one else is doing this because there is no market for it. Second, the entrepreneur is so clueless that he can’t even use Google to figure out he has competition. Suffice it to say that the lack of a market and cluelessness is not conducive to securing an investment. As a rule of thumb, if you have a good idea, five companies are going the same thing. If you have a great idea, fifteen companies are doing the same thing.

6.“No one can do what we’re doing.” If there’s anything worse than the lack of a market and cluelessness, it’s arrogance. No one else can do this until the first company does it, and ten others spring up in the next ninety days. Let’s see, no one else ran a sub four-minute mile after Roger Bannister. (It took only a month before John Landy did). The world is a big place. There are lots of smart people in it. Entrepreneurs are kidding themselves if they think they have any kind of monopoly on knowledge. And, sure as I’m a Macintosh user, on the same day that an entrepreneur tells this lie, the venture capitalist will have met with another company that’s doing the same thing.

7.“Hurry because several other venture capital firms are interested.” The good news: There are maybe one hundred entrepreneurs in the world who can make this claim. The bad news: The fact that you are reading a blog about venture capital means you’re not one of them. As my mother used to say, “Never play Russian roulette with an Uzi.” For the absolute cream of the crop, there is competition for a deal, and an entrepreneur can scare other investors to make a decision. For the rest of us, don’t think one can create a sense of scarcity when it’s not true. Re-read the previous blog about the lies of venture capitalists, to learn how entrepreneurs are hearing “maybe” when venture capitalists are saying “no.”

8.“Oracle is too big/dumb/slow to be a threat.” Larry Ellison has his own jet. He can keep the San Jose Airport open for his late night landings. His boat is so big that it can barely get under the Golden Gate Bridge. Meanwhile, entrepreneurs are flying on Southwest out of Oakland and stealing the free peanuts. There’s a reason why Larry is where he is, and entrepreneurs are where they are, and it’s not that he’s big, dumb, and slow. Competing with Oracle, Microsoft, and other large companies is a very difficult task. Entrepreneurs who utter this lie look at best naive. You think it’s bravado, but venture capitalists think it’s stupidity.

9.“We have a proven management team.” Says who? Because the founder worked at Morgan Stanley for a summer? Or McKinsey for two years? Or he made sure that John Sculley’s Macintosh could power on? Truly “proven” in a venture capitalist’s eyes is founder of a company that returned billions to its investors. But if the entrepreneur were that proven, that he (a) probably wouldn’t have to ask for money; (b) wouldn’t be claiming that he’s proven. (Do you think Wayne Gretzky went around saying, “I am a good hockey player”?) A better strategy is for the entrepreneur to state that (a) she has relevant industry experience; (b) she is going to do whatever it takes to succeed; (c) she is going to surround herself with directors and advisors who are proven; and (d) she’ll step aside whenever it becomes necessary. This is good enough for a venture capitalist that believes in what the entrepreneur is doing.

10.“Patents make our product defensible.” The optimal number of times to use the P word in a presentation is one. Just once, say, “We have filed patents for what we are doing.” Done. The second time you say it, venture capitalists begin to suspect that you are depending too much on patents for defensibility. The third time you say it, you are holding a sign above your head that says, “I am clueless.” Sure, you should patent what you’re doing–if for no other reason than to say it once in your presentation. But at the end of the patents are mostly good for impressing your parents. You won’t have the time or money to sue anyone with a pocket deep enough to be worth suing.

11.“All we have to do is get 1% of the market.” (Here’s a bonus since I still have battery power.) This lie is the flip side of “the market will be $50 billion.” There are two problems with this lie. First, no venture capitalist is interested in a company that is looking to get 1% or so of a market. Frankly, we want our companies to face the wrath of the anti-trust division of the Department of Justice. Second, it’s also not that easy to get 1% of any market, so you look silly pretending that it is. Generally, it’s much better for entrepreneurs to show a realistic appreciation of the difficulty of building a successful company.
PS: here is an interesting commentary on this blog by Jason Fried.
Written at: Vallco Shopping Center, Cupertino, California

Read more: Guy Kawasaki
PS: here is an interesting commentary on this blog by Jason Fried.

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