Are right left over content some of the most important lessons I have to teach you are part of this.
This last class and I want to thank you for your time your dedication this course.
And I want to congratulate you that we are actually in the home stretch right now.
OK so you are here.
You've made it to the end of the Course.
Congratulations.
Thank you.
OK.
So we'll talk about leftover content stuff that I haven't covered before that I think is very important
to cover.
The first thing we're and talk about is making a term sheet now you're going to have a lawyer do all
of your legal documents.
But what happens is before you deal with an equity investors can invest in your company.
They're going to give you what's called a term sheet and a term she is a non-binding 10 page document
that lists the basic terms and you have to agree to it and your investors do as well.
And then once you both agree then the lawyers create all the paperwork for the investment and so you
can actually create your own sheet for free.
And there's an amazing resource on the Internet and there's a great law firm here in the Bay Area that
a lot of venture capital firms and startups deal with and big companies called Wilson Sonsini and you
can just do a search on the web on Wilson Sonsini term sheening or W-S G.R. terms.
And basically what happens is there's 47 different screens that you can walk through.
Right which will help you create a term sheet.
So in this example we'll use the Xion Karlo Who's that member of the guy from Miami that Kreep a baseball
player is the best athlete his John Carlos Stanton's Payment Systems Company his POS from her point
of sale.
And we're going to set it up in this example here.
Please look at the screen as the Delaware Delaware corporation because that's cheaper and more beneficial
tax perspective to do so.
Then we click on the next screen and eventually it'll ask you will what round is this.
Well it's the A-rabs OK.
And then eventually after 47 screens a PBF is created and it lists all the terms in this hypothetical
example.
Everything you need to know so you can create this whole term process and deal with all the complicated
structures of setting up securities are they preferred or common or convert's or all that stuff.
And what happens as you walk through this with wizard driven technology the 14:7 steps.
The amazing thing about this term she creator which is free is that if you don't understand what a term
means you click on it and you'll explain it to you in layman's terms.
It's an awesome resource OK.
Let's move on to the most important investment you will ever make in your life and that investment is
you.
Please don't ever be cheap when it comes to education.
Invest in yourself.
I'm a voracious reader or audio book user.
You always have time to read and if you don't have time to sit down and physically read a book you can
join audible dot com and it's an amazing service it's 15 bucks a month.
It's Amazon service a basically you can listen to one awesome audio book.
And so I love listening to inspirational audio books.
Rags to riches stories of incredible entrepreneurs.
I love their stories.
I recently listened to Richard Branson's latest book.
I love how optimistic he is and it really drives me.
My dad told me when I was a kid Don't ever take advice from anybody that's not successful as a result.
In addition to taking advice from him he's very successful he's my idol my hero.
I also get advice from these incredible entrepreneurs through biographies.
I lost a lot of biographies.
I listen to podcasts as well.
Very successful people.
I take night courses every now and then.
You know if you're going to go back to school and do an MBA and if you want to get into an MBA program
there's a course I made on on how to get into business school.
To tell you the easy way to get in if you need it you don't need it.
Though in all cases you only need it if you want to change careers.
To be honest.
But don't be cheap.
If you want to get that advanced degree.
Find a way to make it out.
Don't be cheap.
Don't be cheap when it comes to investing in yourself.
You know the most important investment you'll ever make.
And the Dalai Lama had this incredible quote which really resonated with me.
He wrote this great book called The Art of Happiness which I love and it talks about how people in Western
society.
They focus so much on making money that they sacrifice their health for their entire life to make money.
And then at the end of their life they sacrifice all their money to maintain their health.
And then they look back upon their life and realize they've never really left.
And so invest in yourself when it comes to sleep seven or eight hours a night exercise exercise every
day.
You do have time.
So what I do every day is when I exercise on the elliptical trainer afterwork I read my iPod if I have
to read or do e-mails after work I'm going to do it at the gym.
So that's an investment in myself as well.
So the most important investment you'll ever make is you ok.
Next up we got a company is only as good as its customer service and I really believe this.
If you look at Amazon which is one of the best companies in the world Amazon has got the best customer
service ever.
If you order a product and it arrives late you can complain or it never arrives.
You just tell them never question you half actually they'll just send you another product immediately
in the mail.
The company is only as good as its customer services and you know I look other great companies like
Google and how transparent they are in sales force as well and how great they are with customer service
and transparency.
And I really admire those companies because transparency builds trust is an ethical issue.
So sales force actually has a Web site up which tells you in real time which one of their servers are
down.
OK it's a trust Web site.
Google has a Web site and Google has a lot of self-driving cars here in the Bay Area.
There's real people behind the wheel just in case.
But they actually report on a monthly basis.
Just google this.
They report on a monthly basis all the access they've had if any.
So transparency is really important.
A customer service perspective but but again a company is only as good as its customer service.
And the poster child of this certainly is James.
Next up you have to be long term greedy.
When I worked at Goldman Sachs years ago and you know they didn't hire the smartest people at Goldman
Sachs which is how I got the job that they actually hired people that got along really well with each
other and people that were kind of long term focused and they taught me a goal and to be long term greedy.
And I never really understood this until until recently.
And you know I've read a lot about how Warren Buffett Invests And you know he always said that the longer
the view the wise and the intention.
And so you need to be long term focused.
You want to add as much value as you can't to your customers.
The customer is always right.
And in the long run you'll win more business if you have that that belief another reason you want to
be long term focused because when you invest in companies you want to think like the entrepreneur like
the and founders are very long term focused.
Right.
The best founders don't care about quarterly numbers.
Jeff Bezos couldn't give a damn about quarterly numbers.
He cares about long term market share and long term dominance or the ability to disrupt different markets
so started thinking like a founder.
When you invest in these companies don't think short term the long term.
Very very very important.
And you also have a long term gap analysis of your life from professional person.
You want to kind of pick 10 years from now and where you think you should be professionally at that
point.
That's a long term target.
And don't set your to set your goals conservatively set them high and then set them higher.
Right.
And then what you do is you try to fill that gap.
It's called the gap analysis.
How do we get there and how do we get there and you'll start achieving your dreams.
But I think longer term and I love talking to very successful people.
Every time I meet a successful person I ask them why they're successful.
And I wrote a book about this called the 101 crucial lessons they don't teach a business school and
basically one of the cool lessons I got from from one conversation I had with a successful person is
that they loved getting criticized successful people because when you become successful and you think
very long term people are going to criticize because they're jealous.
And I love this quote.
Check this out.
Unjustified criticism is a disguised confidence so bring on the doubters.
Bring it on.
The long term focused Next up wealth equals health plus gratitude and happiness.
I've met a lot of people that are children of billionaire parents.
And for the most part a lot of them are absolutely miss.
You don't ever want to make money your idol.
You want to focus on wealthy people being healthy people you know being grateful and being happy.
And so as you can see by the graphic here some people are so poor all they have is money don't make
money your idol don't do that.
Don't do that and never never go into business or or or or start a career because of money you'll be
miserable man.
It's just not worth it.
Life's too short.
Do you love doing right to left here.
No Steve Jobs.
He dropped out of recall.
He didn't have a degree nearer to Bill Gate.
Neither did Mark Zuckerberg.
Degrees are not too important they dropped a lot of doors for you which is cool whatever from a networking
perspective.
But the most successful people I've ever met love what they do.
They're so passionate about what they do and it's never about the money.
It never is it never is.
And if it becomes about money then the only thing that satisfying those people is giving it away.
Wealth equals health plus gratitude plus happiness.
Turnarounds don't work in technology.
We talked about this quite.
That's when a company goes in a secular decline especially in technology.
The odds of the company turning around is basically one one turnaround.
Tech works per decade.
And I mentioned before that IBM was a successful turnaround in the 90s and you can read the book I mentioned.
Bye bye bye.
Lugers who says elephants can't dance.
How we did it.
And of course Apple had a great turnaround last decade only because the founder came back but when a
technology company goes into secular decline don't chase that investments right.
Cut your losses immediately.
If it's a publicly traded company sell it right.
You decide that that company is going to be less relevant in five years than it is today.
Sell the company.
If you think more people are going to search using Yahoo.
In five years the Google then you know what to do with that stock.
Otherwise do the opposite turnarounds don't work in technology.
Success equals Apple's simplicity.
Plus Intel's paranoia.
I love this.
Apple is incredibly successful because of the simplicity of its products.
You remember the old days when we were using appears we used to hit the one key for help.
If you have to read the instructions on any product or service then that's not a product or service
worth buying the best products are simple.
Less is more.
With Apple products.
Right.
And success is not just the combination of Apple simplicity but also Intel's paranoia.
What do we mean by that.
Well Andy Grove who was the CEO of Intel in just a heroic icon in Silicon Valley.
He wrote this amazing book.
It is a masterpiece you should read it.
It's called Only the Paranoid Survive.
Right.
And he talks about how he and his company at Intel were always very paranoid and the only reason that
they were successful is because they believed that other people were going to steal other companies
were going to take market share away from them and he dealt with paranoia beautifully.
You can read the book if you want more details on that.
It's called Only the Paranoid Survive.
But success equals Apple's simplicity.
Plus Intel's paranoia I the superb marketing beats great products OK and there's great Mohammed Ali
who is the best self-promoter in history.
Love that guy is.
You'll see a couple of icons on his hands.
They're of great companies that had amazing marketing campaigns Historically Microsoft had great marketing
campaigns before the founder left when Bill Gates was still.
And then you know Phil Knight at night had incredible marketing as well and the same can be said for
for Apple of course now.
And so the best companies are not the ones with the best products.
Right.
Usually it's the ones with the best market.
So I'll give you a great example.
So there is the head of sales and marketing at Microsoft.
Years ago a guy named Steve Ball who eventually became CEO and he worked for Bill Gates and Microsoft
and it's in between Harvard and Stanford Business School where he dropped out.
I think he worked at Procter Gamble and he was a product manager on the Duncan Hines cake mix box which
you can see in the picture from the.
And he basically took that product for number three and market share number one in the world market
just ducking out when he worked at Procter Gamble and the way he did it was used marketing tactics.
He made the box bigger than the competition.
And so if you buy Duncan Hines cake mix today you'll realize that half the box is empty.
Brian just mark and interestingly enough Microsoft Windows dominated in the 80s and 90s because they
had great marketing.
That was one of the reasons in fact if you look at the size of a Windows 1.0 box or Windows 3.1 Windows
95 Windows 98 Windows Millennium all those boxes were the same size as the documents box so superb marketing
beats great products and Nike kicked ass with marketing back in the 80s.
I don't know if they're the best products but they had superb marketing never the Bonos baseball Bonos
golf Bonos hockey campaign loved it.
Super marketing always beats great products.
Less is more in business.
We've covered this one over and over and over again.
But one of Abraham Lincoln's early speeches which you can see written by him on the wall was only a
couple hundred words.
And in business in this day and age Twitter is very successful because you can say a lot in as few words
as possible and so less is more in business.
Always try to think of it this way when you write an email to somebody or text try to pretend that each
word you write costs you a hundred bucks.
With that in mind you'll make sure that less is more when you.
Timing is crucial in business as well.
And this is the last time I promise I'll mention Wayne Gretzky who's the greatest athlete in history.
Greatest hockey player ever.
I'm Canadian of course.
I have to say that.
But we loved Wayne Gretzky growing up in I got to repeat a quote of his which I mentioned earlier on
this course which is when Gretzky was very successful because he didn't skate to where the puck is.
Rather he skated where the puck is going to be he had the foresight of knowing the right timing.
And so if you're a technology company for example and you turned the market wrong you can destroy a
lot of shareholder value.
You know Apple's a great company but they are way too early with the new couple of years to world and
them pump how it took off.
Another great example of this is YouTube.
You know when when when when Yahoo bought broadcast dot.com for Mark Cuban for about you know four or
five billion dollars whatever was in the late 90s.
That could have been YouTube for Yahoo.
But they were too early.
Yahoo also spent a lot of money on a company called juv cities at that same time.
That was a social networking site that could have been Facebook but their timing was off.
And so I've had the privilege an opportunity to have any back shine as a keynote speaker at a couple
of my venture capital events in Haiti for those you don't know of him is probably the most successful
entrepreneur in the history of Silicon Valley.
He was the first employee at some Microsystems.
He was one of the founders of Arista.
He was the founder of DSS the co-founder there.
Anyway the bottom line is he's never failed in his entire life at starting a company.
And I had the opportunity recently to at a Kleiner Perkins holiday party to ask him why he's successful
and he's very humble.
But he said that timing is the most important factor.
Timing is crucial.
This is.