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

1. What they forgot to teach you about businessthat you need to know Steve Kirsch Chairman Infoseek

2. Why pick me? Was it because: • I’ve started 3 successful companies? • I’ve donated over $50M to charity? • Dr. Evil was unavailable

3. No time for lawyer/VC jokes • Ryan Leaf • The Padres

4. 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

5. 3 stages to any business • Starting it • Growing it • Selling it What do all these stages have in common?

6. The 3 things every entrepreneur needs to know about MONEY How to … make it grow it lose it

7. HOW TO MAKE IT (and tips for starting a company)

8. 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!

9. 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 stk@infoseek.com

10. Nobody’s Perfect • No perfect CEOs • No perfect engineers • … • The whole trick is getting people to work effectively together to complement each other

11. 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)

12. 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

13. The single biggest mistake you can make when starting or running a company and how to avoid it Hiring the wrong CEO (like yourself)

14. People don’t always tell the whole truth • My 4 yr old… “I didn’t do it!” • Our President … • Bill Gates ...

15. 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.”

16. 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

17. 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

18. Two courses everyone should take after they graduate from college • Presentation skills • Negotiation skills • Survey…how many have taken these?

19. How to sell $30 worth of lemonade in only 20 minutes on the Stanford campus and how it relates to commerce on the Internet

20. The most important skill for success in the real world isn’t taught at MIT, but that’s starting to change Interpersonal skills

21. 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?

22. 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

23. 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

24. 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”

25. HOW TO GROW IT

26. How to legally avoid paying capital gains taxes forever Always sell at a loss Donate the stock Die A complicated technique...

27. 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

28. 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

29. Company announces great earnings (above expectations) but its stock tanks. Why? “Who the hell knows?” • Market explanations are always done AFTER the fact

30. Why mechanical trading systems don’t work Because I’ve lost money in every proven, tested system I’ve tried

31. HOW TO SPEND IT

32. 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!

33. Best personal vanity purchase • Propecia

34. 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

36. 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

38. 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?

39. “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?

40. 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”

41. 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 Why it is better to donate to charity sooner than later

42. 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?

43. 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

44. 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)

45. 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!

46. 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

47. 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

48. 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.)

49. 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)

50. 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.