Monthly Archives: April 2006

Michael Dell Speech at University of Texas Austin

This Tuesday Michael Dell gave a speech at the University of Texas which I attended.

I had met Michael Dell before, and from what I understand, he doesn’t particularly like public speaking. The “speech” was actually a moderated conference with a UT professor, then was opened up for Q&A.

The moderated part was not as engaging as I had hoped, because the large audience was simply watching two people talk to each other. I had more hope for the Question & Answer session, but it turned out to be rather disappointing, not from Michael Dell’s responses, but the quality of the questions being asked.

Some of the interesting points I picked up from the event were:

  • “Try not to be the smartest person in the room. If you are, find another room.”
  • He wakes up at 6am every morning and works out (A very common theme I’m seeing).
  • He did not use investors to grow Dell. I started clapping when he said this.
  • Said managed services may be Dell’s next big thing. For example: If Boeing doesn’t want to do all their own printing, IT support etc…Dell will take care of it all.
  • The way you order pretty much anything in China is: 1.) You place an order online or on the phone. 2.) You receive two numbers, an order confirmation number and a Bank of China transaction number. 3.) You take your money (Often literally a sack of money) to the Bank of China, and they transfer it to Dell.

I generally go after speeches and try to talk to the person and get a picture, but he literally DARTED out of the place when the event was finished. Oh well, I still have my previous Michael Dell Picture!

Karen Katz – Neiman Marcus and Randal Pinkett

Last Thursday was a very busy day, but I had the opportunity to see two very interesting people. I got to attend a speech given by Karen Katz, the current CEO of Neiman Marcus. I haven’t seen many women CEO’s speak, so it was nice to hear….however I don’t recall her once mentioning or complaining about being a woman in the business world, and she’s done great.

She started working at Neimans in 1985 then worked her way up to CEO in 2000. She’s a UT alum and then went to graduate school at Harvard. During her speech you could tell she knew everything about retail from the ground up.

Some things I found the most interesting about the speech:

  • When she first applied with Neimans, she did not get the job.
  • The web-based store at NeimanMarcus.com does $600+ million in sales a year! (I love how NeimanMarcus, Nordstroms and other large retailers setup their websites…I want to find out what they use and copy them).
  • Her favorite brand is Target….says she spends massive amounts of money at Target (Interesting….)
  • “A brand is not saying what it is, it’s what the customer THINKS it is.”
  • Average Neimans shopper has a household income of $200,000+
  • “Selling is a skill to master. You will ALWAYS be selling no matter what you do.

It turned out to be a good speech, and I got a picture with her afterwards:

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The same day, I attended the Austin Big Idea event which helps people start and grow small businesses. The main headliners were Gary Hoover (who I met the day before) and Dr. Randal Pinkett, the Donald Trump-selected Apprentice.

Dr. Randal is actually a really amazing person (and basketball-player-tall). He’s a Rhodes Scholar, graduated with five degrees, owns a multi-million dollar company, and was selected as The Apprentice.

He gave a speech talking about the importance of small businesses, and his experience starting one himself. One main point he drove home was to create a lasting entity….A company that can sustain itself if the founder was suddenly taken away. He got lots of reaction out of the audience, and he actually turned out to be a GREAT speaker!

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Action Plan after the speeches:

1.) Research what NeimanMarcus, Nordstroms, Macy’s use for their online web stores. They all look very similar and have super-simple shopping carts. I like.

2.) Begin process of making small businesses much larger, and delegate some of the work.

Gary Hoover Speech

An event was held by BoostrapStudent which featured Gary Hoover as the speaker.

I had done my research prior to the event and read about Gary, and found out he was the guy behind BookStop book stores which was later bought by Barnes & Noble, and the founder of Hoovers.com.

BookStop was the first big-box book retailer to use the “Lots of selection + very low prices” method which Gary actually modeled after Toys R’ Us, and Hoovers is now one of the leading corporate information websites on the net. I was delighted to find that Gary was an extremely enthusiastic speaker, and showed the typical “craziness” that’s seen in a large amount of very successful business founders.

He actually lives in Austin, and I will get a chance to meet with him once again at another event being held this week. I took three pages of notes because he had tons of very interesting and useful information.

BREIF HISTORY

  • He grew up in Indiana, and started reading Fortune Magazine at around 12 years old, and was fascinated by business. He became obsessed with understanding how enterprises worked, starting with his hometown General Motors plant.
  • He founded BookStop in 1982 which had a great amount of success. He loved reading books and he saw the potential of the Toys R’ Us styled business (which was very revolutionary back then), so he put the two together.
  • In 1989 he sold BookStop for $41 million cash. The Barnes & Noble Superstores division which was modeled after BookStop is now worth over $2.5 billion.
  • in 1990 Gary started a business information service, now Hoovers.com which eventually went public.
  • Like every successful person, his big failure was TravelFest which started in 1993 and ended in 1999 when airlines cut commissions to travel agents.

GARY HOOVER WISDOM:

  • He constantly focuses on the customer at the very end of the chain. He says despite what a company does, it always relates down to individual customers and people.
  • Like so many other very successful business people….he is a voracious reader. Says he religiously reads at least the front page of the Wall Street Journal daily, and he goes through many books a week. He claims his house looks more like a library than a home.
  • He is an avid studier of history. I was particularly interested to notice that he was a big fan of business history. I once did a post about bubbles in history as I used to study these….after his speech, I realized just how important studying these things are.
  • “You can only go as far forward as you can backwards”
  • He firmly believes a liberal arts education is the best, but that it doesn’t necessarily mean formal schooling.
  • “You never know where the answers come from.” He gave an example of a 6 year old who told him it was stupid to put children’s books in BookStop so far away from his mom who was browsing in the cooking section.
  • Randomly stumbling upon information is vital.
  • It’s important to differentiate yourself if you want to create something great. He gave a good example: If you walk into a grocery store blindfolded, you wouldn’t be able to tell if you’re in an Alberton’s, Krogers or Randall’s….however you WILL know if you walk into Whole Foods.

PRIMARY THEMES OF SPEECH:

  • Many of the same mistakes are repeated throughout history because people ignore what happened in the past. That’s why he loves history. I completely agree.
  • He said the most powerful advantage an entrepreneur has is to know where you are, where you are going and where you are coming from.
  • Everyone is always buried in little details, the real winners are the one’s who take time to look at the big picture. He gave the example of Bill Gates taking two weeks off every year for his own private “Think Week” where he simply reads the entire time.
  • He had a “3rd Grade Rule” about business plans: If a 3rd grader can’t understand it, it’s no good. He also said “Present it to your grandmother”

Other Random Observations:

  • He drank his bottled water with a straw (ha!)
  • It seems he has more racing through his mind than he can push out.
  • He openly gave out his email address and encouraged people to send him emails and business plans.
  • He carries around a little black book full of ideas.

A group of people enthusiastically spoke with him for over an hour after the speech, where I took possibly the worst photo ever:

Something interesting was during the Q&A session someone asked: “How do you protect your good ideas from being stolen when presenting them.” He right away said, “I don’t believe in that. I believe in telling everyone about all my ideas.”

He then went on to explain that ideas are a dime a dozen, the trick is having the knowledge, resources and dedication to start on the idea. He even said he often won’t sign NDA (Non-Disclosure Agreements) anymore. He obviously enjoyed sharing his ideas, and actually had a couple of neat “Blankets” which were basically a portable, visual business plan. He liked printing these things out on blankets (Or tablecloths…I’m not quite sure), because he could simply crumple them up in his bag:

Overall he was a great speaker and very knowledgeable person. Hopefully I will hear more from this fellow Austinite in the future! He also ended his speech by saying Austin is still one of the greatest cities to be an entrepreneur.

Utilizing YouTube, Dell

I’ve been been running House Of Rave as a part time income for around 5 years now, and by FAR the most trafficked portion of the site is the rave videos section. When I first started the website, I was forced off every hosting plan I had due to high bandwidth usage. I’ve always burned through about 400 to 700 gigs of videos per month….several years ago that was a big deal and a large expense.

I am getting more traffic than ever on House Of Rave, but I’m concerned about the videos.

It was only recently that YouTube.com and Google Video showed up….but they have very quickly established themselves as THE place to go for all types of videos. So if people want videos of club/rave stuff, then YouTube will eventually steal much of my traffic. To counter this, I will instead fully utilize these two free services to my advantage.

I am in the process of revamping the video section to allow users to comment on the videos and view them directly from the site using YouTube. I’ve also started uploading all the good videos to YouTube and Google video, so House Of Rave still gets exposure when people search for club/rave videos on those websites.

I’ve even started using YouTube for individual product videos on HoR, and so far people seem to like them. Sales of certain products definitely increased when visitors could watch the product in action. My first test trial was for the High Intensity Glowsticks, and that worked pretty well.

Instead of fighting a losing battle against these dominating video services, I can get MORE traffic by joining them.

Now I need to translate these changes into results. House Of Rave is around the $2,000/month range, I need to step it up.

Steady Monthly Income - Much Work = Good.

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Due to several confounding factors I could not perform my homeless experiment this week. I was planning on being homeless for about 3 days to see what I could learn. This is not the end of the experiment, simply a temporary delay.

I stopped shaving in preparation for the experiment, and it was a surprise to see I grew this in only 6 days:

!!!

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I already met Michael Dell once, and I get to see him again in Austin. He is giving a speech at UT:
When: Tuesday April 25th 2006 – 7:00pm
Where: Texas Union Ballroom @ University of Texas Austin

I found this upcoming speech surprising, because Michael Dell is notoriously shy in front of crowds. When I saw him, his wife and Lance Armstrong did all the talking…he didn’t speak a word in front of the crowd!

Chicago, Kevin Rollins, Experiment

I’m back from Chicaaago, and had a great time in a great city.

Fortunately I stayed with friends, so didn’t have to pay for housing. The whole trip was pretty cheap considering I stayed for 5 nights and was constantly out & about.

$300 plane flight
$350 spending.
5 days Total = $650

This was actually way under budget, yet I didn’t hold back on any expenses while there.
Now I must meet my goals for the next few months, and I’ll take another trip.

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Some Random Observations:

  • Flying with ear plugs makes plane flights so much more pleasant.
  • I give Chicago two thumbs up.
  • My Treo 700w actually came in handy.
  • Favorite picture during the trip:

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On Tuesday I saw/met Kevin Rollins the CEO of Dell at a speech he gave at UT. He was brought in to speak about ethics by a Mormon organization. He’s Mormon himself, so he also talked about how his upbringing has helped him bring strong business ethics into the company.

He originally started out as a consultant for Dell in 1993, but then soon was escalated to regional manager, then overseer of North American operations, then CEO. His speech was mainly geared towards how ethics is a strong virtue at Dell. Of course I’ve never heard a CEO say otherwise about their company!

His last words of advice were:
–Work hard now, because you can’t redo it later.
Don’t have regrets.
–Dream Big.

Pretty standard stuff, but important nonetheless.

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I just finished my taxes, and I filed independently for the first time. I used TurboTax, and it was relatively painless. For 2006 I’ve been keeping excellent financial records, so next tax season should be a cinch…I’m actually looking forward to it!

Also, I’ve had experience with the homeless before in my bottled water experiment, but next week I’m doing a “homeless experiment” where I’ll actually be homeless for a few days to see what I can learn. I’m not sure how it’ll go, but that’s why I’m doing it!

Traveling once every quarter.

I’ve decided if I meet certain goals every month, I will take a small vacation every quarter. These little trips may be just a long weekend type thing to visit friends in various parts of the country, or just to get lost in a new city.

So at least 4 times a year I will pack up for a few days and get out. While these trips will be mainly for fun, I’ll always be keeping my eyes open for new trends, ideas etc..

First destination is Chicago, I leave on Thursday.

I’ll only use the funds in my Spending 1 and 2 accounts for the trips. Therefore if I don’t meet certain monetary goals every month, I simply won’t have enough money to go. 10% of my income goes to the spending 1 account, and 10% goes to the spending 2 account.

I’ve already bought a ticket which cost me $300 roundtrip.

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Income and Expenses for the month of March 2006 were as follows:
Income:
Exceeded $5,000
Expenses: $2,317

C u r r e n t B a l a n c e s :
-General Account: $2,370
-Spending Account 1: $413
-Spending Account 2: $590
-Investment Account: $2,130
-Bills Accounts: $1,517
-Permanent Savings: $5,215
-Charity Account: $338

-Stock: $10,715
-Roth IRA: $6,705
-Emigrant Direct: $1,007

T o t a l: $ 3 1 , 0 0 0

-Credit Card: $0
-Business Holding: $9,818

T o t a l o n H a n d: $ 4 0 , 8 1 8

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House of Rave profit this March was $1,915. Looking back at my 2005 profits from HoR, I made $946 last March 2005. The income has more than doubled with very few actual changes to the website or increase in time spent on the site.

The first step to the increased profits was “Bob” shattering my complacency with making $700/month from HoR by asking, “Can you make more money with it?” I told him I could, and I even knew how……I just never thought about applying those changes until he asked.

I attest the increased profits to a few very small changes. A small change with a BIG result was using Outlook instead of webmail, and integrating HoR customer emails with my personal email. This way I am forced to see customer concerns or questions immediately….not simply whenever I feel like checking them. There were also other minor changes such as taking my own pictures of products. I am around the $2,000/month profit level with House Of Rave, now the next step will be adding another $1,000 to that every month.

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On Monday (4-3-2006) I met Max of HowToBePoor.com, who is thinking of moving to Austin, TX.. It was fun talking to him and his wife, and I forced him to write good stuff about me on his website.

He’s been experimenting with Adsense, ecommerce sites and advanced programming….things that may not be extremely profitable at the moment, but he is building a strong foundation. I like.

There are TONS of people out there with lots of great ideas, but they lack the know-how to implement them into a viable businesses. Max has the advantage of knowing computers and programming inside and out, meaning when he has a good idea, he can act on it immediately without hiring a programming team. It’s always fun to make new like-minded friends!