Friday, November 13, 2009
Bill Gates, Buffett On What Industry(s) Will Produce The Next Bill Gates (CNBC, Keeping America Great Transcript)
http://www.distressedvolatility.com/2009/11/bill-gates-buffett-on-what-industrys.html
These are quotes from the CNBC Town Hall event, Warren Buffett and Bill Gates: Keeping America Great, taped Thursday, November 12, 2009 at Columbia University in New York City. The full transcript is here. I found this question interesting:
Selected quotes from CNBC.com
"QUESTION: Hi. My name is Katrina Gankena, and I was born in Russia. And I'm a second-year student at Columbia Business School. My question is for Mr. Gates. What industry do you think is going to produce the next Bill Gates? Because that's the industry I want to get a job in. [LAUGHTER] [APPLAUSE]
GATES: Industries do have different paces of innovation. So the IT industry, driven by the magic of software, the magic of the optic fiber, magic of the chip which doubles in power every couple of years, it's been the industry that has not only been the most exciting, it's also changed the rules for many other industries. The idea of information being available, what the online world is like, that's incredible. I'll tell you, there are a few other industries that will compete for being exciting in the decades ahead. The energy business, some approach will provide cheaper energy that's environmentally friendly. And there's a lot of science, a lot of business. That's a global thing. There will be some great careers there. Medicine, you know. We haven't solved Parkinson's or Alzheimer's or about 20 diseases of these poor countries, and yet we can be sure that we're on track to do that. And so those three industries I think you would do great in. There's many others, but those are the ones that have the strongest appeal to me.
BUFFETT: Find what turns you on. Find what you have a passion for. If somebody said to me when I was getting out of Columbia, you know, that Bill's business was going to be the one that would be exciting, you know, I don't think I'd have done so well. [LAUGHTER] But I knew what turned me on. I had a professor, Ben Graham, I offered to go to work for him for nothing. He said, "You're overpriced." Nonetheless, I went into the business. [APPLAUSE] I will guarantee, you will do well at whatever turns you on. There's no question about that. Don't let anybody else tell you what to do. You figure out what you are doing. [APPLAUSE]"
Showing posts with label Business Cycle. Show all posts
Showing posts with label Business Cycle. Show all posts
9 January 2010
Businesses that did well in the Great Depression
Businesses that did well in the Great Depression
http://wiki.answers.com/Q/What_businesses_thrived_during_the_Great_Depression
At the very height of the Great Depression (1930-33) hardly any businesses did really well, and success was relative.
As usual in such circumstances it was the 'new' industries that tended to do best, in particular:
•Movies. Almost every town of any size saw the opening of new and bigger cinemas. 'Talkies' added to the popularity of the cinema.
•Radio. In the 1930s radio became widely available to better paid workers.
•Mass produced automobiles. (Not really a new industry, but a 'young' industry).
•Electrical industries. During the 1930s most houses that weren't yet on mains electricity were connected. A huge range of companies did well as a result - ranging from the manufacturers of cables and light switches to those producing electric carpet sweepers and so on.
•At the luxury end of the market, air travel did well - but it was still generally expensive and only for the few.
•The very low interest rates encouraged house building, especially when it was clear that prices had stopped falling.
•In Europe, Germany and then Britain spent huge sum on rearmament from about 1934 onwards.
http://wiki.answers.com/Q/What_businesses_thrived_during_the_Great_Depression
At the very height of the Great Depression (1930-33) hardly any businesses did really well, and success was relative.
As usual in such circumstances it was the 'new' industries that tended to do best, in particular:
•Movies. Almost every town of any size saw the opening of new and bigger cinemas. 'Talkies' added to the popularity of the cinema.
•Radio. In the 1930s radio became widely available to better paid workers.
•Mass produced automobiles. (Not really a new industry, but a 'young' industry).
•Electrical industries. During the 1930s most houses that weren't yet on mains electricity were connected. A huge range of companies did well as a result - ranging from the manufacturers of cables and light switches to those producing electric carpet sweepers and so on.
•At the luxury end of the market, air travel did well - but it was still generally expensive and only for the few.
•The very low interest rates encouraged house building, especially when it was clear that prices had stopped falling.
•In Europe, Germany and then Britain spent huge sum on rearmament from about 1934 onwards.
8 January 2010
Why Great Companies Get Started in the Downturns
Why Great Companies Get Started in the Downturns
http://www.vcconfidential.com/2009/02/why-great-companies-get-started-in-the-downturns.html
I have always been amazed by how many of our success tech stories, as well as Fortune 500 companies, started during drastic down turns. Innovation does not take a holiday, and in fact, thrives during difficult times when pain & need are greatest. While the current downturn is historic, it pails in comparison to the 22 year depression the US experienced from 1873 to 1895, triggered by the Vienna stock market crash. During this extended drought, a large number of Fortune 500's & major corporations started including Eli Lilly, IBM, Merck, Hershey's, Gillette, Alcoa, J&J, Chevron, GE, AT&T, Abbott, Lilly, Coors, Johnson Controls, Bristol-Myers and PPG to name a few.
During the great depression (1929-1939), Texas Instruments, HP, 20th Century Fox and United Technologies all launched. Since much of the Valley's legacy came out of HP, the seeds for the current Silicon Valley were planted while the stock market was crashing nearly 90% and unemployment approached 30%.
Other periods: during the Oil shock & market crash (1973-1976) Microsoft, Genentech & Apple started. The biotech and PC revolutions emerged when the market was down nearly 50% and inflation was racing into double digits. In the crisis of the early 80's (1980-1982) with mortgage rates peaking at nearly 21%, Amgen, Sun, E*Trade, Autodesk, Adobe, BMC, EA and Symantec were created. The question is why does this happen?
Dogs Will Try New Dog Food
When everything is going well, few people or companies want to change behavior, process or vendors. They have little incentive to do so and risk upsetting the apple cart. However, when their hair is on fire, customers & business partners are willing to try new or different approaches to address the pain. So, while some would say that sales cycles stretch out significantly during downturns, I would argue that for new technologies that solve real problems, they compress considerably.
Take Care of Darwin
Leading entrepreneurs have a maniacal focus on efficient use of capital and on fulfilling customer needs (versus nice to have's). During troubled times, these entrepreneurs are even more focused on these. Cash is spent only when absolutely necessary and no to few features are built that aren't demanded by the customer. Those less disciplined will find themselves victim to Darwinian realities. Companies "forged in hell" have a much more durable and advantaged DNA coming out.
Power of an Equity Culture
In these times, firms either bootstrap or fund themselves from modest equity rounds. Credit, other than credit cards and such, is not readily available. Furthermore, the start-up world is an equity culture versus the credit/debt culture of buyouts. So, they are able to survive when banks won't lend and credit lines are non-existent. Equity can be a beautiful thing.
Weak Gazelles are pruned
During boom times, sectors get overfunded and weaker competitors destroy the economics for everyone involved. They create significant noise in the market place, create skeptical customers by overpromising and underdelivering and have undisciplined pricing policies. In hard times, there are many fewer competitors which allow companies to scale quietly during the trough and take significant market share when conditions improve. Furthermore, these firms enjoy rational pricing, higher profitability/margins and lower cost structures given their DNA.
So, yes it is ugly out there and about to get even harder but start-ups are used to hard times and are well suited, if managed properly, to thrive in the downturn and accelerate during the recovery. The trick is to stay alive one day longer than your competitors...
http://www.vcconfidential.com/2009/02/why-great-companies-get-started-in-the-downturns.html
I have always been amazed by how many of our success tech stories, as well as Fortune 500 companies, started during drastic down turns. Innovation does not take a holiday, and in fact, thrives during difficult times when pain & need are greatest. While the current downturn is historic, it pails in comparison to the 22 year depression the US experienced from 1873 to 1895, triggered by the Vienna stock market crash. During this extended drought, a large number of Fortune 500's & major corporations started including Eli Lilly, IBM, Merck, Hershey's, Gillette, Alcoa, J&J, Chevron, GE, AT&T, Abbott, Lilly, Coors, Johnson Controls, Bristol-Myers and PPG to name a few.
During the great depression (1929-1939), Texas Instruments, HP, 20th Century Fox and United Technologies all launched. Since much of the Valley's legacy came out of HP, the seeds for the current Silicon Valley were planted while the stock market was crashing nearly 90% and unemployment approached 30%.
Other periods: during the Oil shock & market crash (1973-1976) Microsoft, Genentech & Apple started. The biotech and PC revolutions emerged when the market was down nearly 50% and inflation was racing into double digits. In the crisis of the early 80's (1980-1982) with mortgage rates peaking at nearly 21%, Amgen, Sun, E*Trade, Autodesk, Adobe, BMC, EA and Symantec were created. The question is why does this happen?
Dogs Will Try New Dog Food
When everything is going well, few people or companies want to change behavior, process or vendors. They have little incentive to do so and risk upsetting the apple cart. However, when their hair is on fire, customers & business partners are willing to try new or different approaches to address the pain. So, while some would say that sales cycles stretch out significantly during downturns, I would argue that for new technologies that solve real problems, they compress considerably.
Take Care of Darwin
Leading entrepreneurs have a maniacal focus on efficient use of capital and on fulfilling customer needs (versus nice to have's). During troubled times, these entrepreneurs are even more focused on these. Cash is spent only when absolutely necessary and no to few features are built that aren't demanded by the customer. Those less disciplined will find themselves victim to Darwinian realities. Companies "forged in hell" have a much more durable and advantaged DNA coming out.
Power of an Equity Culture
In these times, firms either bootstrap or fund themselves from modest equity rounds. Credit, other than credit cards and such, is not readily available. Furthermore, the start-up world is an equity culture versus the credit/debt culture of buyouts. So, they are able to survive when banks won't lend and credit lines are non-existent. Equity can be a beautiful thing.
Weak Gazelles are pruned
During boom times, sectors get overfunded and weaker competitors destroy the economics for everyone involved. They create significant noise in the market place, create skeptical customers by overpromising and underdelivering and have undisciplined pricing policies. In hard times, there are many fewer competitors which allow companies to scale quietly during the trough and take significant market share when conditions improve. Furthermore, these firms enjoy rational pricing, higher profitability/margins and lower cost structures given their DNA.
So, yes it is ugly out there and about to get even harder but start-ups are used to hard times and are well suited, if managed properly, to thrive in the downturn and accelerate during the recovery. The trick is to stay alive one day longer than your competitors...
Subscribe to:
Posts (Atom)
