$65.

61 Trillion







Let’s start with this, $65.61 trillion. Any guesses? Not a commonly used number I’d
imagine but believe it. That is the estimated 2007 Gross World Production number listed
in US$
1
. That is essentially the sum of all gross domestic production, country by country,
for all 181 nations that make the list- the total of all final goods and services produced
within the world in 2007. It is also the answer to the question (How much does the world
economic engine churn out each year?)

So why is this important?

My goal is to present and cover 3 topics as simply as possible. These topics I think
capture and educate you on the world of startups and the fundamental backbone to the
economic engine around us. They are the following:

The Stock Market
The Startup
& Your Future

I don’t presume to know your future of course, but I do think perhaps that you, like many
of your peers, are on a unique path in life. A path with great advantages, challenges and
amazing speed in almost all regards. A life filled with many options and diverse paths
leading to great outcomes. Paths that may include your own startups, a career working to
help drive innovation, and a life of challenges, balance, and meaning.

Herein lies a document filled with resources and key concepts I’ve accumulated over the
years, focusing on business, finance and inspirational stories that have helped shape my
perceptions and purpose. Much will relate to the business world, past, present and future,
but in the end it’s all about adding new information to your toolset as you grow and
change the world in your own unique way. So let’s see how you will help impact this
trillion $ economic engine in your lifetime, and the events that will shape the future of the
world you live in.







1
CIA World FactBook 2008: weblink: https://www.cia.gov/library/publications/the-world-factbook/geos/xx.html


The purpose of this document is to provide you with a toolset of information on the
world of big finance and the world of the startup. I want to take you through the
commercialization process and talk about what is happening today out in the real world.
I will do this by focusing on three different topics: the Stock Market, the Start-up, and the
Future.
In my opinion, the Stock Market presents the top level view of the financial
world. It can show you far more than simple stock prices. It’s a window into both the
present and the future and I will show you why this is the case. In fact I think it’s a great
place to search around for great ideas; it’s the playground of the giants. It is the story of
the companies who survived and grew to fabulous heights- shaping the world with their
visions and helping to advance human development in almost every field. Let’s make
this our entry into the world of business.

Following this, we will take a look at the world of the
Start-up. A world that saw over 450,000 new businesses
created each month in the US.
2
We will talk about a
world that drives people to create new ideas and new
businesses, and most importantly what it takes to make
those businesses successful. I will introduce to you some
great success stories and integrate some basic business
lessons throughout the material. I encourage you to
Google anything that you would like to learn more about,
companies, concepts, facts and I will show you some
great sites to look at as well as books to read.

Finally this will lead us into the last segment of my presentation, The Future, where I will
discuss future trends and what is happening today that will influence the world you will
grow up in. I will highlight some key areas that will affect the events and people around
you both in exciting and problematic ways. I shall talk about opportunities that you can
take hold of today and in your future to make a big difference addressing the needs of
tomorrow.

So let’s get going on a topic I find most interesting, the heart of the world economic
beast, the Stock Market.


2
Kauffman Foundation: Entrepreneurship April 2008, weblink: http://www.kauffman.org/items.cfm?itemID=1036
Movie: Wall St.
*All numbers are approximate values in 2006.
Take a look at the following which outlines the sum of world’s: Equity (Stocks- $50t), Bank deposits (Savings-
$83t), Government Debts- ($43t), and Private Debts ($21-t)*
Source: CIA worldbook Debt, McKinsey Global Institute & Researchrecap.com
sourc




What is it about the Stock Market that is really fascinating and why is it so crucial in this
world of start-ups and big business? Well it’s really simple, money!
Now before you go thinking I’m just like one of those pin-striped Wall St.
suits (I’ll reference Gordon Gecko played by Michael Douglas in that 1987 movie
called Wall Street.) I’ll say this; money is just an instrument, the lifeblood to
all businesses whether charitable or for-profit. I want to highlight a few
simple realities and facts so you to can get a good initial grasp on the
financial world (big picture view) and then we can take a more in-depth
look at the stocks themselves.

Remember that $65.61 trillion is the sum of all the goods and services
produced in the world in 2007. But it is not the sum of all of the world’s “money” or
better said the currency for funding these activities. For this we have several financial
instruments, mainly debt and equity. Debt is that which is owed, or the means of using
future purchasing power in the present for a fixed cost today (interest to the borrower).
As you can see in the chart below– debt makes up the majority of the way we finance our
world’s business, personal, and political activities – far more that equity. Now equity or
(stock) is slightly different in that it is the capital raised by a corporation through the
issuance of shares. Each holder has a specific right to a piece of the company and that
value of the company’s issued shares is its market capitalization. Market Cap is simply
the stock price times the number of shares outstanding. That is why General Electric
(NYSE-GE) at $26.50 is worth more than Google (NASDAQ- GOOG) at $520, because
GE has 10 billion shares outstanding and Google only has 318 million shares; (GE- $265
Billion vs. Google @ $165 Billion)

There are about 40,000 companies listed on the world’s stock exchanges. The two largest
exchanges are the New York Stock Exchange (NYSE- USA often called the Big Board’s) at
about $16 trillion and Tokyo (TSE- Japan) at about $4.5 trillion. In the US we also have
the Nasdaq (known mainly for its technology listed companies) at about $4 trillion. Europe has its
Euronext exchange $3.9t and London $3.8t. Canada’s main exchange, Toronto’s TSX
Group at about $1.8 Trillion, is the 5
th
largest, close in size to the Hong Kong Exchange,
Shanghai, and Deutsche Borse.

Now take a look at one of the more interesting companies: Apple Inc. (Nasdaq-
AAPL) listed on the Nasdaq under the symbol AAPL. I like to use Yahoo
Finance for my stock info (see below screen shot). Here I can see that Apple has a
Market Cap of about $146 Billion- not bad! But when I search Microsoft Inc.
(Nasdaq- MSFT) I get a Market Cap if $258 billion, almost twice the size.
(Well if you tract the trends Apple is quickly growing & Microsoft is slowly declining in size)

Another measure often used in valuing a stock is its P/E ratio; which is its Price to
Earnings multiple. This is the market value per share divided by the earnings per share.
For Apple its forward P/E ratio is about 26 (see under Key Statistics tab in Yahoo Finance (dated
June 26
th
2008) because analysts expect Apple to earn $6.35 per share over the next year.
You can see on the below screen it is 34.15P/E based on the previous year’s earnings and
26.03PE on forward earnings- that is because the company is
growing its
earnings. All
investors really
care about is
future value,
because they
invest their
money with the
understanding
this company
will grow its
earnings. For
example, when investors think that Apple will earn more than
$6.35 its predicted earnings because the iPhone will sell 10’s of
millions, they buy more shares and drive the price of the stock up.
And when investors think the value is fully reflective of the
company’s future potential they begin to sell their shares.

You can now begin to understand that every public company has
these pressures on it - to grow, to beat the competition, to beat
analyst and investors’ expectations and to pay dividends to
shareholders. (However, it depends on the company. Some pay dividends
because they are stable cash flows like oil companies others like Apple re-invest
their money into the company and acquisitions).


B2B: Business to Business
B2C: Business to Consumer
But all stocks constantly trade with these buy and sell pressures from investors. The
more valuable the company, the more wealth it creates for its shareholders.
So let’s return to the:
Vs. Debate



Over the past 2-years there has been a dramatic shift taking place in the world of software
and hardware. Apple has experienced tremendous sales & exposure through their iPod
revolution; growth in online music downloads (iTunes now the 3
rd
largest US music
retailer); and the sales of Apples flagship product the Mac computer (now 24-years old)
in the world PC market. All in all, Apple and Microsoft are two different companies with
some competing products but totally different market focuses in others. We can see,
however, that an investor in Apple 2-years ago would have been rewarded a return on
investment of over to 270% vs. Microsoft’s return of a meager 23%.


In the competitive business world you can see how
different strategies can produce dramatically different results. Microsoft’s focus on the
B2B market & the B2C with strategic relationships early on in its company’s life
ultimately shut out Apple in the race to dominate the PC software industry. However,
strong arguments today can be made that Apple is on course to outgrow Microsoft within
the next 5-years, if they can maintain their current revenue growth rate and new cutting
edge produce launching into new huge areas like the mobile space.
Both Microsoft and Apple have seen healthy revenue growth in the last 5 years.
Microsoft’s revenues have grown approximately 60% from just under $30B in 2002 to
over $44B in 2006. However, while Microsoft has grown linearly for this period, Apple
has accelerated with revenues of just under $6B in 2002 growing to just under $21B in
2006 an impressive 250% revenue growth! In other words, Apple has been growing much
faster than Microsoft.


One of the greatest small business books I have read is a book by Gary Erickson called Raising
the Bar. He founded Clif Bar™ which has grown to a $100-million-a-year business delivering
several lines of all-natural energy products, carving out a niche in the marketplace and doing it
with great passion and commitment to community like very few companies. Gary’s vision and
support have successfully created a sustainable business structure that is truly a model for all
startups. His approach to business is what he calls a white-road journey or first ascent and it
has lead him to create a culture that I believe is the cornerstone to his success.

So what is a white-road journey? It’s about taking the road less traveled, often more difficult
but more rewarding in pursuing the core values it represents to each individual. It’s about
creating a culture of questioning, coaching people on how to ask questions rather than stake out
a turf. Creating an environment where you need to take a leap of faith, trust your gut, be
creative and most importantly it needs employees to have a desire for adventure.

Check out the Clif Bar Story: www.clifbar.com under our Story







“Everyone should carefully observe which way his heart draws him, and then choose that
way with all his strength”. – Opening quote in Guy Kawasaki’s (The Art of the Start)

So let’s talk about the Art of Starting. It’s really an Art: with so many artists out there in
the world (we call them entrepreneurs) with great visions and technologies, most all with
different stories of failures and triumphs. What is it that drives them and separates them
in glory and failure? It is not an easy question to answer, but I will put forth this
principle: The greatest entrepreneurs are the ones that never give up, that present an
attitude of creativity and pursuit of meaning. The truth is that no one really knows if
he/she is an entrepreneur until they become one- and sometimes not even then. The
reality in this is there is only one question you should ask yourself before starting a new
venture:
Do I want to make meaning?

Meaning! Not money, power or prestige or a fun place to work with your friends. It’s
about making an impact:
• Making the world a better place.
• Increasing the quality of life
• Right a terrible wrong
• Or prevent the end of something good

These are the foundations on which great companies are built. The motivation that will
drive you over the road bumps on the path of the startup and even then they will not
ensure your success.


Step #1: Outline your startup story. And here is what we are looking for:
Meaning! Outline your purpose and clear goals as an organization. Then make a
Mantra! Close your eyes and think how you will serve your customers. Then build
a simple Mantra around it: (Nike) Authentic athletic performance; (Starbucks)
Rewarding everyday moments, remember this is not a tag line, Mantras are for your
employees; it’s a guideline for what they do in their jobs. A tagline is for your
customers (Nike’s Tag) “Just do it.”

Step #2: Research! Find out as much as you can about what, where, who, & why you do
not know! Get out and meet people, read Keith Ferrazzi’s book, “ never eat alone”,
(you’ll get the picture). Think about all angles, and get your homework done. In
the end it’s the people you know & you can get to help support you that will drive
your startup from idea into reality.

Step #3: Define your Business Model! Question; who has your money in their pockets?
And; how are you going to get it into your pocket? The first question focuses on
getting you to define your customer and the pain that he feels. The second centers
around creating a sales mechanism to ensure that your revenue exceeds your costs.
● Be Specific, ● Keep it Simple ● Just copy somebody.
The more precisely you can define your customer (list of customers and why they
would buy from you) the better Story you can make. Keeping it Simple is about
getting it right, outlining the model and how you plan to make it happen. In the
end, there are lots of businesses out there with lots of clever people who have
already invented every business model possible. Proven is good.

Step #4 Weave a MAT (Milestones, Assumptions, and Tasks). Every great motivational
speaker (Napoleon Hill & Tony Robbins, checks them out) outlines the power of putting
your thoughts onto paper and revisiting them often. It’s the fundamental principle
to the science of personal achievement as it is for great business achievements.


Milestones Assumptions Tasks
● Prove your concept ● Product or Service performance
metrics
● Renting office space
● Complete design specs ● Market size ● Finding key vendors
● Finish a prototype ● Gross Margin ● Setting up Accounting
● Raise Capital ● Sales per salesperson ● Filing legal documents
● Ship 1
st
product ● length of Sales Cycle ● Purchase Insurance policies
● Achieve Breakeven ● Return on Investment




In the end be yourself (because people invest in people); make a solid story (reality is tough
to escape, so keep it realistic) and remember ideas are all around us, it’s the team that GETS
GOING that makes it happen!
Robert J. Laikin Robert J. Laikin Robert J. Laikin Robert J. Laikin (Chairman and CEO of Brightpoint Inc.)
1. Friends are far more valuable than money.
2. It takes years to build trust and only seconds to destroy it.
3. Buy low and sell high.
4. Learn to separate thought from action.
5. A person who is nice to you, but rude to a waiter, is not a nice person.
6. Being rich has nothing to do with money
7. You can get by on charm for about fifteen minutes. After that, you’d better know something
8. Focus on what you have, not what you have lost.
9. If you fail to plan, you are planning to fail.
10. By the time a man realizes his father was right, he has a son who thinks he’s wrong.

Ludwig van Beethoven Ludwig van Beethoven Ludwig van Beethoven Ludwig van Beethoven
I have never thought of writing for reputation and honour. What I have in my heart must come out; that is
the reason why I compose.

Napolean Bonaparte Napolean Bonaparte Napolean Bonaparte Napolean Bonaparte (Great Military Genius)
Imagination rules the world.
You become strong by defying defeat and by turning loss into gain and failure to success.









A great plan comes from a great pitch. If you get the pitch right you get the plan right. It
all comes together in ten points:


Investor Pitch (Also a great outline for the Business Plan)
Slide Context Comments (for presenting)
Title Organization name, your
name and position &
Contact info
Your audience can read the
slide so this is your chance
to tell them what you are all
about (Cut to the chase!)
Problem Describe the pain that
you’re alleviating. The goal
is to get everyone nodding
and “buying in.”
Avoid looking like a
solution searching for a
problem.
Solution Explain how you alleviate
this pain and the meaning
that you make. Here in lies
your Value Proposition
Focus on the Gist of the
solution here (not in
technical depth),
Business Model Explain how you make
money; who pays you, your
channels of distribution, and
Here you need to keep it
simple. Focus on describing
similar business models so
your gross margin
(profitability on each sale).
you capture the model.
Drop names of people with
whom you are working.
Underlying Magic Describe the technology,
secret sauce or magic
behind your product or
service. Why are you
different?
The less text and the more
diagrams, schematics, and
Flowcharts on this slide the
better. Proof of concepts
ext.
Marketing and Sales Explain how you are going
to reach your customer and
your marketing leverage
points.
Convince the audience that
you have an effective go-to-
market strategy that won’t
break the bank.
Competition Provide a complete view of
the competitive landscape.
Too much is better than too
little.
Never dismiss your
competition. Everyone-
customers, investors,
employees- wants to hear
why you’re good, not why
the competition is bad.
Management Team Describe the key players of
your management team,
board of directors, board of
advisors, as well as your
major investors.
Don’t be afraid to show up
with less than a perfect
team. All startups have
holes in their team- what’s
truly important is whether
you understand that there
are holes and are willing to
fix them.
Financial Projections and
Key Metrics
Provide a five-year forecast,
containing not only dollars
but also key metrics, such
as number of customers and
conversion rate.
Do a bottom-up forecast.
Take into account long sales
cycles and seasonality.
Making people understand
the underlying assumptions
of your model is as
important as the numbers
you’ve fabricated
Current Status,
Accomplishments to Date,
and Use of Funds
Explain the current status of
your product or service;
what the near future looks
like; and how you’ll use the
money you’re trying to raise
Share the details of your
positive momentum and
traction. Then use this slide
to close with a bias toward
action.

These Ten provide the framework for your business plan as well as presentation. A good
executive summary is a concise and clear description of the problem you solve; how you
solve it; your business model; and the underlying magic of your product or service.
Remember: think big, think different, and make an impression for the right reasons.
Most investors will never get past your executive summary.
Other Great Resources to check out!

http://www.sierraclub.ca/

http://www.yesmagazine.org/

http://www.naturalstep.ca/

www.co2crc.com.au/ZETS/index.html






The world of sustainable practices and corporate leadership and governance
practices has much to owe to companies like Interface. With a Corporate Governance
Quotient
3
better than 83% of any other within its industry, Interface has set a high bar on
governance and environmental practices. The company undertook a dramatic shift when
CEO Ray Anderson received and read a book by Paul Hawken’s called, The Ecology of
Commerce. A few weeks later he began shifting his entire company towards infusing
sustainability into all corporate practices and has been at it ever since.
Interface now is a worldwide leader in design, production, and sale of modular
carpet and has build sustainable measures in all facets of the business- which is a tall
order for a billion dollar carpet company. It starts with the leadership team outlining and
supporting a strong corporate vision; setting a measurement system that
enables you to track and understand the impacts and changes on behaviors;
and empowering the people that work daily to support this vision.

Results:

45% reduction in energy usage per unit of carpet manufactured from 1996 levels
60% absolute reduction in greenhouse emissions against a baseline from 1996
16% of Interface’s global energy consumption comes from renewable sources
Saved over $330 million in cumulative costs due to its waste reduction program.

Check it out: http://www.interfacesustainability.com/


3
Corporate Governance Quotient (CGQ®), a corporate governance rating system provided by
Institutional Shareholder Services (ISS) on over 8,000 companies worldwide, source Yahoo Finance





The world we live in is amazing. Think about the way we live compared to just a few
generations or millennia’s ago. We live life better than all the kings, pharos and legends
of all the ages. We owe a lot to their ingenuity, collective geniuses, struggles and
triumphs. To borrow a phrase, “We stand on the shoulders of giants of the past,” is very
true in many ways.

I guess it’s just human nature to be a little fascinated by our history, as we reflect back to
see how different it really must have been. The ancient Egyptians worshiped the afterlife.
The Romans lusted after money and power, and the British Empire explored and
dominated the known world. All along the way there were entrepreneurs building the
pillars of support for these great nations, full of trade, new inventions, ambitious
development and lots of growth amid the turmoil and political events of the times. But
what will define our futures? Where are we going as a race at this point in time & what
will we likely be faced with in our time? These key areas, in my opinion, are what will
shape the future.

- The Rise of China
- Climate Change
- Aging North America
- Technology Revolution & Your Education (& how it’s going to be different from
your parents)









The odds are one in 50 that an idea becomes a business; one in 20 that a funded business
sees an initial public offering (IPO); finally, one in 20 that a public company achieves $1
billion in revenue. The odds of turning an idea into a billion-dollar business, then, are
one in 20,000! A long shot! Nevertheless, we chase this dream; quite often in fact it just
happens. In the end does education have anything to do with it? I’ll argue that yes it
really does. But maybe not the traditional education we think of here. That is, High
School Diplomas to University degrees to MBAs. No, not really what I had in mind. I
am sure of this: each entrepreneur who ended up building a billion dollar venture did it
because there was a driving passion for what he/she was doing. Each found out what
they were really good at and then went for it 100%. Some had large ambitions; others
had simple ones; most never reached the billion or even million dollar mark for that
matter, but they made an impact. They educated and helped provide support and security
for themselves and the people around them. Not everyone is an entrepreneur, but we are
all out there trying to be a part of something we believe in. So educate yourself in what
you find most interesting and see where that road takes you.

If you’re like me then you will probably appreciate the story of Steve Jobs (CEO of
Apple Computer’s) who delivered a speech to the Stanford graduating class of 2005.
(Google Video Search this: Steve Jobs Speech). In which he closes with this saying, Stay
Hungry-Stay Foolish because you never know what lessons life is giving you.



Check out these Video’s on Google Video :
Pirates of Silicon Valley (1hour 30min)
Steve Jobs Stanford Commencement Speech (15 min)


Finally the Startup
Bible, The Art of the
Start, and a great
networking book
Never Eat Alone
Great world green
consciences books:
1
st
2030 on the
climate in the future,
2
nd
on Natural
Capitalism
These are 2 great
business Books: 1
st

Jim Cramer’s Real
Money on the
Stock Market & 2
nd

Trump on the Art
of the Deal
Raising the Bar is a
Startup Story with a
fitness focus, great
read: 2
nd
is Lance
Armstong’s book Its
Not About the Bike –
great inspiration