Company Acquisition Quotes

Here is an all-too-brief summary of Buffett’s approach: He looks for what he calls “franchise” companies with strong consumer brands, easily understandable businesses, robust financial health, and near-monopolies in their markets, like H & R Block, Gillette, and the Washington Post Co. Buffett likes to snap up a stock when a scandal, big loss, or other bad news passes over it like a storm cloud—as when he bought Coca-Cola soon after its disastrous rollout of “New Coke” and the market crash of 1987. He also wants to see managers who set and meet realistic goals; build their businesses from within rather than through acquisition; allocate capital wisely; and do not pay themselves hundred-million-dollar jackpots of stock options. Buffett insists on steady and sustainable growth in earnings, so the company will be worth more in the future than it is today.

I threw myself into the chaise that was to convey me away and indulged in the most melancholy reflections. I, who had ever been surrounded by amiable companions, continually engaged in endeavouring to bestow mutual pleasure—I was now alone. In the university whither I was going I must form my own friends and be my own protector. My life had hitherto been remarkably secluded and domestic, and this had given me invincible repugnance to new countenances. I loved my brothers, Elizabeth, and Clerval; these were "old familiar faces," but I believed myself totally unfitted for the company of strangers. Such were my reflections as I commenced my journey; but as I proceeded, my spirits and hopes rose. I ardently desired the acquisition of knowledge. I had often, when at home, thought it hard to remain during my youth cooped up in one place and had longed to enter the world and take my station among other human beings. Now my desires were complied with, and it would, indeed, have been folly to repent.

Companies should embrace data-driven decision-making because it enables them to make informed decisions based on concrete evidence rather than speculation, leading to more efficient operations, better strategies, and improved competitiveness in today's data-rich business environment.

So, you work with Marcy?” Wayne earned points for what appeared to be sincere interest. “Yes. She’s in public accounting and I’m in corporate, but we both work for the same company.” Wayne grinned. “Me, I’m in murders and executions.” “Wayne!” Marcy rolled her eyes. “He means—” “Mergers and acquisitions. I got it.

thought then that decent, intelligent, and experienced managers would automatically make rational business decisions. But I learned over time that isn’t so. Instead, rationality frequently wilts when the institutional imperative comes into play. For example: (1) As if governed by Newton’s First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated.

I often see teams that maniacally focus on their metrics around customer acquisition and retention. This usually works well for customer acquisition, but not so well for retention. Why? For many products, metrics often describe the customer acquisition goal in enough detail to provide sufficient management guidance. In contrast, the metrics for customer retention do not provide enough color to be a complete management tool. As a result, many young companies overemphasize retention metrics and do not spend enough time going deep enough on the actual user experience. This generally results in a frantic numbers chase that does not end in a great product.

Companies should consider merger and acquisition (M&A) opportunities carefully because these strategic moves can have a significant impact on their operations and financial health. Thorough evaluation helps mitigate risks, ensure alignment with business objectives, and maximize the potential benefits, ultimately leading to successful integration and growth.

yield to my simple demands. It’s what keeps the wheel greased and moving efficiently. We’re not a Fortune 500 company and one of the world’s most prestigious acquisition firms

The government regulates them, or chooses not to, approves or blocks their mergers and acquisitions, and sets their tax policies (often turning a blind eye to the billions parked in offshore tax havens). This is why tech companies, like the rest of corporate America, inundate Washington with lobbyists and quietly pour hundreds of millions of dollars in contributions into the political system. Now they’re gaining the wherewithal to fine-tune our political behavior—and with it the shape of American government—just by tweaking their algorithms.

In that way Vinteuil's phrase, like some theme, say, in Tristan, which represents to us also a certain acquisition of sentiment, has espoused our mortal state, had endued a vesture of humanity that was affecting enough. Its destiny was linked, for the future, with that of the human soul, of which it was one of the special, the most distinctive ornaments. Perhaps it is not-being that is the true state, and all our dream of life is without existence; but, if so, we feel that it must be that these phrases of music, these conceptions which exist in relation to our dream, are nothing either. We shall perish, but we have for our hostages these divine captives who shall follow and share our fate. And death in their company is something less bitter, less inglorious, perhaps even less certain.

He devoured morning shows, daytime shows, late-night talk shows, soaps, situation comedies, Lifetime Movies, hospital dramas, police series, vampire and zombie serials, the dramas of housewives from Atlanta, New Jersey, Beverly Hills and New York, the romances and quarrels of hotel-fortune princesses and self-styled shahs, the cavortings of individuals made famous by happy nudities, the fifteen minutes of fame accorded to young persons with large social media followings on account of their plastic-surgery acquisition of a third breast or their post-rib-removal figures that mimicked the impossible shape of the Mattel company’s Barbie doll, or even, more simply, their ability to catch giant carp in picturesque settings while wearing only the tiniest of string bikinis; as well as singing competitions, cooking competitions, competitions for business propositions, competitions for business apprenticeships, competitions between remote-controlled monster vehicles, fashion competitions, competitions for the affections of both bachelors and bachelorettes, baseball games, basketball games, football games, wrestling bouts, kickboxing bouts, extreme sports programming and, of course, beauty contests.

Leaders of large businesses sometimes make huge bets in expensive mergers and acquisitions, acting on the mistaken belief that they can manage the assets of another company better than its current owners do.

The only virtue is vice, and the acquisition of power justifies all things. 11 Falkirk and company had left disarray behind them. In an hour and a half, the Coltranes, father and daughter, restored order to their little world.

Companies should maintain accurate and timely financial records because it serves as the foundation for informed decision-making, ensures compliance with regulatory requirements, and enhances transparency, ultimately bolstering trust among stakeholders and facilitating long-term financial stability and growth. Without good records, businesses may risk financial mismanagement and uncertainty, hindering their ability to thrive in a competitive market.

The startup’s goal is to find a profitable customer acquisition strategy by spending small amounts of money in a lot of them, measuring results, and then narrowing down the best channels, while performing PDCA for continuous improvement.

Yeah, take it from me. He may try to sell himself to you along with the company. And then there is Roberto, the CEO of our acquisition target. He also seems to be a bit of a flirt. Those two are like moths around a light bulb with you. Any idea how you would react if they both came after you?

Using Hollerith’s tabulators, the 1890 census was completed in one year rather than eight. It was the first major use of electrical circuits to process information, and the company that Hollerith founded became in 1924, after a series of mergers and acquisitions, the International Business Machines Corporation, or IBM.

Partnering, however, provides a way for companies to secure needed capabilities fast and effectively while dropping their cost structure. It allows a company to leverage other companies’ expertise and economies of scale. Partnering includes closing gaps in capabilities through making small acquisitions when doing so is faster and cheaper, providing access to needed expertise that has already been mastered.

Be optimistic around the opportunity but tremendously concerned about the risks involved. This will allow you to see the opportunity as it is. Most tire-kickers spend the entire first meeting identifying why the business is a bad investment rather than identifying the opportunity as a whole. Where are the opportunities and where are the risks of this business? What would need to be true for you to grow this company to double its size? These are the questions you are asking yourself.

My reading has been lamentably desultory and immedthodical. Odd, out of the way, old English plays, and treatises, have supplied me with most of my notions, and ways of feeling. In everything that relates to science, I am a whole Encyclopaedia behind the rest of the world. I should have scarcely cut a figure among the franklins, or country gentlemen, in King John's days. I know less geography than a schoolboy of six weeks standing. To me a map of old Ortelius is as authentic as Arrowsmith. I do not know whereabout Africa merges into Asia, whether Ethiopia lie in one or other of those great divisions, nor can form the remotest, conjecture of the position of New South Wales, or Van Diemen's Land. Yet do I hold a correspondence with a very dear friend in the first named of these two Terrae Incognitae. I have no astronomy. I do not know where to look for the Bear or Charles' Wain, the place of any star, or the name of any of them at sight. I guess at Venus only by her brightness - and if the sun on some portentous morn were to make his first appearance in the west, I verily believe, that, while all the world were grasping in apprehension about me, I alone should stand unterrified, from sheer incuriosity and want of observation. Of history and chronology I possess some vague points, such as one cannot help picking up in the course of miscellaneous study, but I never deliberately sat down to a chronicle, even of my own country. I have most dim apprehensions of the four great monarchies, and sometimes the Assyrian, sometimes the Persian, floats as first in my fancy. I make the widest conjectures concerning Egypt, and her shepherd kings. My friend M., with great pains taking, got me to think I understood the first proposition in Euclid, but gave me over in despair at the second. I am entirely unacquainted with the modern languages, and, like a better man than myself, have 'small Latin and less Greek'. I am a stranger to the shapes and texture of the commonest trees, herbs, flowers - not from the circumstance of my being town-born - for I should have brought the same inobservant spirit into the world with me, had I first seen it, 'on Devon's leafy shores' - and am no less at a loss among purely town objects, tool, engines, mechanic processes. Not that I affect ignorance - but my head has not many mansions, nor spacious, and I have been obliged to fill it with such cabinet curiosities as it can hold without aching. I sometimes wonder how I have passed my probation with so little discredit in the world, as I have done, upon so meagre a stock. But the fact is, a man may do very well with a very little knowledge, and scarce be found out, in mixed company; everybody is so much more ready to produce his own, than to call for a display of your acquisitions. But in a tete-a-tete there is no shuffling. The truth will out. There is nothing which I dread so much, as the being left alone for a quarter of an hour with a sensible, well-informed man that does not know me.

Iwant to be abundantly clear: the goal should be to charge as much money for your products or services as humanly possible. I'm talking heinous amounts of money. That being said, anyone can raise their prices, but only a select few can charge these rates and get people to say yes. From this point forward, you must abandon any notion you have about “what's fair.” Every enormous company in the world charges you money for things that cost them nothing. It costs pennies for the phone company to add an additional user, except they don’t mind charging you hundreds per month for access.

The thing many people don’t realize about corporate lawyers is that they are nothing like what you see on TV shows. Sherry, Aldridge, and I will never step foot in a courtroom. We’ll never argue a case. We do deals; we’re not litigators. We prepare documents and review every piece of paperwork for a merger or an acquisition. Or to take a company public. On Suits, Harvey does both paperwork and crushes it in court. In reality, the lawyers at our firm who argue cases don’t have a clue what we do in these conference rooms. Most of them haven’t prepared a document in a decade. People think our form of corporate law is the less ambitious of the two, and while in many ways it’s less glamorous—no closing arguments, no media interviews—nothing compares to the power of the paper. At the end of the day, law comes down to what is written, and we do the writing. I love the order of deal making, the clarity of language—how there is little room for interpretation and none for error. I love the black-and-white terms. I love that in the final stages of closing a deal—particularly those of the magnitude Wachtell takes on—seemingly insurmountable obstacles arise. Apocalyptic scenarios, disagreements, and details that threaten to topple it all. It seems impossible we’ll ever get both parties on the same page, but somehow we do. Somehow, contracts get agreed upon and signed. Somehow, deals get done. And when it finally happens, it’s exhilarating. Better than any day in court. It’s written. Binding. Anyone can bend a judge’s or jury’s will with bravado, but to do it on paper—in black and white—that takes a particular kind of artistry. It’s truth in poetry. I

Beyond streamlining operations and introducing cost innovations, a second lever companies can pull to meet their target cost is partnering. In bringing a new product or service to market, many companies mistakenly try to carry out all the production and distribution activities themselves. Sometimes that’s because they see the product or service as a platform for developing new capabilities. Other times it is simply a matter of not considering other outside options. Partnering, however, provides a way for companies to secure needed capabilities fast and effectively while dropping their cost structure. It allows a company to leverage other companies’ expertise and economies of scale. Partnering includes closing gaps in capabilities through making small acquisitions when doing so is faster and cheaper, providing access to needed expertise that has already been mastered. A

The intellectual life may be kept clean and healthful if man will live the life of nature and not import into his mind difficulties which are none of his. No man need be perplexed in his speculations. Not less conspicuous is the preponderance of nature over will in all practical life. There is less intention in history than we ascribe to it. We impute deep-laid far-sighted plans to Cæsar and Napoleon; but the best of their power was in nature, not in them. Our life might be much easier and simpler than we make it; that the world might be a happier place than it is; that there is no need of struggle, convulsions, and despairs, of the wringing of the hands and the gnashing of the teeth; that we miscreate our own evil. A little consideration of what takes place around us every day would show us that a higher law than that of our will regulates events; that our painful labors are unnecessary and fruitless; that only in our easy, simple, spontaneous action are we strong, and by contenting ourselves with obedience we become divine. No man can learn what he has not preparation for learning, however near to his eyes is the object. Not in nature but in man is all the beauty and worth he sees. The world is very empty, and is indebted to this gilding, exalting soul for all its pride. He may see what he maketh. Our dreams are the sequel of our waking knowledge. The visions of the night bear some proportion to the visions of the day. Hideous dreams are exaggerations of the sins of the day. We see our evil affections embodied in bad physiognomies. The same reality pervades all teaching. The man may teach by doing, and not otherwise. If he can communicate himself he can teach, but not you words. He teaches who gives, and he learns who receives. There is no teaching until the pupil is brought into the same state or principle in which you are; a transfusion takes place; he is you and you are he; then is a teaching, and by no unfriendly chance or bad company can he never quite lose the benefit. The effect of every action is measured by the depth of the sentiment from which it proceeds. The great man knew not that he was great. It look a century or two for that fact to appear. What he did, he did because he must; it was the most natural thing in the world, and grew out of the circumstances of the moment. But now, every thing he did, even to the lifting of his finger or the eating of bread, looks large, all-related, and is called an institution. We are full of these superstitions of sense, the worship of magnitude. We call the poet inactive, because he is not a president, a merchant, or a porter. We adore an institution, and do not see that it is founded on a thought which we have. But real action is in silent moments. The epochs of our life are not in the visible facts of our choice of a calling, our marriage, our acquisition of an office, and the like, but in a silent thought by the wayside as we walk; in a thought which revises our entire manner of life and says,—‘Thus hast thou done, but it were better thus.

Perhaps we shall lose them, perhaps they will be obliterated, if we return to nothing in the dust. But so long as we are alive, we can no more bring ourselves to a state in which we shall not have known them than we can with regard to any material object, than we can, for example, doubt the luminosity of a lamp that has just been lighted, in view of the changed aspect of everything in the room, from which has vanished even the memory of the darkness. In that way Vinteuil's phrase, like some theme, say, in Tristan, which represents to us also a certain acquisition of sentiment, has espoused our mortal state, had endued a vesture of humanity that was affecting enough. Its destiny was linked, for the future, with that of the human soul, of which it was one of the special, the most distinctive ornaments. Perhaps it is not-being that is the true state, and all our dream of life is without existence; but, if so, we feel that it must be that these phrases of music, these conceptions which exist in relation to our dream, are nothing either. We shall perish, but we have for our hostages these divine captives who shall follow and share our fate. And death in their company is something less bitter, less inglorious, perhaps even less certain.

the present grandeur and prospective pre-eminence of that glorious American Republic, in which Europe enviously seeks its model and tremblingly foresees its doom. Selecting for an example of the social life of the United States that city in which progress advances at the fastest rate, I indulged in an animated description of the moral habits of New York. Mortified to see, by the faces of my listeners, that I did not make the favourable impression I had anticipated, I elevated my theme; dwelling on the excellence of democratic institutions, their promotion of tranquil happiness by the government of party, and the mode in which they diffused such happiness throughout the community by preferring, for the exercise of power and the acquisition of honours, the lowliest citizens in point of property, education, and character. Fortunately recollecting the peroration of a speech, on the purifying influences of American democracy and their destined spread over the world, made by a certain eloquent senator (for whose vote in the Senate a Railway Company, to which my two brothers belonged, had just paid 20,000 dollars), I wound up by repeating its glowing predictions of the magnificent future that smiled upon mankind—when the flag of freedom should float over an entire continent, and two hundred millions of intelligent citizens, accustomed from infancy to the daily use of revolvers, should apply to a cowering universe the doctrine of the Patriot Monroe.

Even when he was not thinking of the little phrase, it existed, latent, in his mind, in the same way as certain other conceptions without material equivalent, such as our notions of light, of sound, of perspective, of bodily desire, the rich possessions wherewith our inner temple is diversified and adorned. Perhaps we shall lose them, perhaps they will be obliterated, if we return to nothing in the dust. But so long as we are alive, we can no more bring ourselves to a state in which we shall not have known them than we can with regard to any material object, than we can, for example, doubt the luminosity of a lamp that has just been lighted, in view of the changed aspect of everything in the room, from which has vanished even the memory of the darkness. In that way Vinteuil’s phrase, like some theme, say, in Tristan, which represents to us also a certain acquisition of sentiment, has espoused our mortal state, had endued a vesture of humanity that was affecting enough. Its destiny was linked, for the future, with that of the human soul, of which it was one of the special, the most distinctive ornaments. Perhaps it is not-being that is the true state, and all our dream of life is without existence; but, if so, we feel that it must be that these phrases of music, these conceptions which exist in relation to our dream, are nothing either. We shall perish, but we have for our hostages these divine captives who shall follow and share our fate. And death in their company is something less bitter, less inglorious, perhaps even less certain.

The power of the big fish in general to regroup is hardly restricted to banking. When Standard Oil was broken up in 1911, the immediate effect was to replace a national monopoly with a number of regional monopolies controlled by many of the same Wall Street interests. Ultimately, the regional monopolies regrouped: In 1999 Exxon (formerly Standard Oil Company of New Jersey) and Mobil (formerly Standard Oil Company of New York) reconvened in one of the largest mergers in US history. In 1961 Kyso (formerly Standard Oil of Kentucky) was purchased by Chevron (formerly Standard Oil of California); and in the 1960s and 1970s Sohio (formerly Standard Oil of Ohio) was bought by British Petroleum (BP), which then, in 1998, merged with Amoco (formerly Standard Oil of Indiana). The tale of AT&T is similar. As the result of an antitrust settlement with the government, on January 1, 1984, AT&T spun off its local operations so as to create seven so-called Baby Bells. But the Baby Bells quickly began to merge and regroup. By 2006 four of the Baby Bells were reunited with their parent company AT&T, and two others (Bell Atlantic and NYNEX) merged to form Verizon. So the hope that you can make a banking breakup stick (even if it were to be achieved) flies in the face of some pretty daunting experience. Also, note carefully a major political fact: The time when traditional reformers had enough power to make tough banking regulation really work was the time when progressive politics still had the powerful institutional backing of strong labor unions. But as we have seen, that time is long ago and far away.

Blackbeard the pirate was actually Edward Teach sometimes known as Edward Thatch, who lived from 1680 until his death on November 22, 1718. Blackbeard was a notorious English pirate who sailed around the eastern coast of North America. Although little is known about his childhood he may have worked as an apprentice on an English ship, during the second phase in a series of wars between the French and the English from 1754 and ended in 1778 as part of the American Revolutionary War. The war had different names depending on where it was fought. In the American colonies the war was known as the French and Indian War. During the time it was fought during the reign of Anne, Queen of Great Britain, it was called Queen Anne's War and in Europe it was known as the War of the Spanish Succession. During the earlier period of hostilities between France and England, some English ships were granted permission to raid French colonies and French ships and were considered privateers. Captain Benjamin Hornigold, whose crew Teach joined around 1716 operated from the Bahamian island of New Providence. Captain Hornigold placed Teach in command of a sloop that he had captured and during this time he was given the name Blackbeard. Horngold and Blackbeard sailing out of New Providence engaged in numerous acts of piracy. Their numbers were boosted by the addition of other captured ships. Blackbeard captured a French slave ship known as La Concorde and renamed her Queen Anne's Revenge. He renamed it “Queen Anne's Revenge” referring to Anne, Queen of England and Scotland returning to the throne of Great Britain. He equipped his new acquisition with 40 guns, and a crew of over 300 men. Becoming a world renowned pirate, most people feared him. In a failed attempt to run a blockade in place and refusing the governors pardon, he ran “Queen Anne's Revenge” aground on a sandbar near Beaufort, North Carolina and settled in North Carolina where he then accepted a royal pardon. The wreck of “Queen Anne's Revenge” was found in 1996 by private salvagers, Intersal Inc., a salvage company based in Palm Bay, Florida Not knowing when enough, he returned to plundering at sea. Alexander Spotswood, the Governor of Virginia formed a garrison of soldiers and sailors to protect the colony and if possible capture Blackbeard. On November 22, 1718 following a ferocious battle, Blackbeard and several of his crew were killed by a small force of sailors led by Lieutenant Robert Maynard. After his death, Blackbeard became a martyr and an inspiration for a number of fictitious books.

The Ten Ways to Evaluate a Market provide a back-of-the-napkin method you can use to identify the attractiveness of any potential market. Rate each of the ten factors below on a scale of 0 to 10, where 0 is terrible and 10 fantastic. When in doubt, be conservative in your estimate: Urgency. How badly do people want or need this right now? (Renting an old movie is low urgency; seeing the first showing of a new movie on opening night is high urgency, since it only happens once.) Market Size. How many people are purchasing things like this? (The market for underwater basket-weaving courses is very small; the market for cancer cures is massive.) Pricing Potential. What is the highest price a typical purchaser would be willing to spend for a solution? (Lollipops sell for $0.05; aircraft carriers sell for billions.) Cost of Customer Acquisition. How easy is it to acquire a new customer? On average, how much will it cost to generate a sale, in both money and effort? (Restaurants built on high-traffic interstate highways spend little to bring in new customers. Government contractors can spend millions landing major procurement deals.) Cost of Value Delivery. How much will it cost to create and deliver the value offered, in both money and effort? (Delivering files via the internet is almost free; inventing a product and building a factory costs millions.) Uniqueness of Offer. How unique is your offer versus competing offerings in the market, and how easy is it for potential competitors to copy you? (There are many hair salons but very few companies that offer private space travel.) Speed to Market. How soon can you create something to sell? (You can offer to mow a neighbor’s lawn in minutes; opening a bank can take years.) Up-front Investment. How much will you have to invest before you’re ready to sell? (To be a housekeeper, all you need is a set of inexpensive cleaning products. To mine for gold, you need millions to purchase land and excavating equipment.) Upsell Potential. Are there related secondary offers that you could also present to purchasing customers? (Customers who purchase razors need shaving cream and extra blades as well; buy a Frisbee and you won’t need another unless you lose it.) Evergreen Potential. Once the initial offer has been created, how much additional work will you have to put in in order to continue selling? (Business consulting requires ongoing work to get paid; a book can be produced once and then sold over and over as is.) When you’re done with your assessment, add up the score. If the score is 50 or below, move on to another idea—there are better places to invest your energy and resources. If the score is 75 or above, you have a very promising idea—full speed ahead. Anything between 50 and 75 has the potential to pay the bills but won’t be a home run without a huge investment of energy and resources.

Halo Effect Cisco, the Silicon Valley firm, was once a darling of the new economy. Business journalists gushed about its success in every discipline: its wonderful customer service, perfect strategy, skilful acquisitions, unique corporate culture and charismatic CEO. In March 2000, it was the most valuable company in the world. When Cisco’s stock plummeted 80% the following year, the journalists changed their tune. Suddenly the company’s competitive advantages were reframed as destructive shortcomings: poor customer service, a woolly strategy, clumsy acquisitions, a lame corporate culture and an insipid CEO. All this – and yet neither the strategy nor the CEO had changed. What had changed, in the wake of the dot-com crash, was demand for Cisco’s product – and that was through no fault of the firm. The halo effect occurs when a single aspect dazzles us and affects how we see the full picture. In the case of Cisco, its halo shone particularly bright. Journalists were astounded by its stock prices and assumed the entire business was just as brilliant – without making closer investigation. The halo effect always works the same way: we take a simple-to-obtain or remarkable fact or detail, such as a company’s financial situation, and extrapolate conclusions from there that are harder to nail down, such as the merit of its management or the feasibility of its strategy. We often ascribe success and superiority where little is due, such as when we favour products from a manufacturer simply because of its good reputation. Another example of the halo effect: we believe that CEOs who are successful in one industry will thrive in any sector – and furthermore that they are heroes in their private lives, too.

2. Earned Triggers Earned triggers are free in that they can not be bought directly, but they often require investment in the form of time spent on public and media relations. Favorable press mentions, hot viral videos, and featured App Store placements are all effective ways to gain attention. Companies may be lulled into thinking that related downloads or sales spikes signal long-term success, yet awareness generated by earned triggers can be short-lived. For earned triggers to drive ongoing user acquisition, companies must keep their products in the limelight — a difficult and unpredictable task.

Peter Drucker once observed that the drive for mergers and acquisitions comes less from sound reasoning and more from the fact that doing deals is a much more exciting way to spend your day than doing actual work.35

Nir elaborates in this post: TriggerThe trigger is the actuator of a behavior — the spark plug in the engine. Triggers come in two types: external and internal. Habit-forming technologies start by alerting users with external triggers like an email, a link on a web site, or the app icon on a phone. ActionAfter the trigger comes the intended action. Here, companies leverage two pulleys of human behavior – motivation and ability. This phase of the Hook draws upon the art and science of usability design to ensure that the user acts the way the designer intends. Variable RewardVariable schedules of reward are one of the most powerful tools that companies use to hook users. Research shows that levels of dopamine surge when the brain is expecting a reward. Introducing variability multiplies the effect, creating a frenzied hunting state, activating the parts associated with wanting and desire. Although classic examples include slot machines and lotteries, variable rewards are prevalent in habit-forming technologies as well. InvestmentThe last phase of the Hook is where the user is asked to do bit of work. The investment implies an action that improves the service for the next go-around. Inviting friends, stating preferences, building virtual assets, and learning to use new features are all commitments that improve the service for the user. These investments can be leveraged to make the trigger more engaging, the action easier, and the reward more exciting with every pass through the Hook. We’ve found this model (and the accompanying book) to be a great starting point for a customer acquisition and retention strategy.

CEOs will gladly overpay for a company if the acquisition enables them to keep their jobs.

FOCUSING TOO MUCH ON THE NUMBERS In the second example, I managed the team to a set of numbers that did not fully capture what I wanted. I wanted a great product that customers would love with high quality and on time—in that order. Unfortunately, the metrics that I set did not capture those priorities. At a basic level, metrics are incentives. By measuring quality, features, and schedule and discussing them at every staff meeting, my people focused intensely on those metrics to the exclusion of other goals. The metrics did not describe the real goals and I distracted the team as a result. Interestingly, I see this same problem play out in many consumer Internet startups. I often see teams that maniacally focus on their metrics around customer acquisition and retention. This usually works well for customer acquisition, but not so well for retention. Why? For many products, metrics often describe the customer acquisition goal in enough detail to provide sufficient management guidance. In contrast, the metrics for customer retention do not provide enough color to be a complete management tool. As a result, many young companies overemphasize retention metrics and do not spend enough time going deep enough on the actual user experience. This generally results in a frantic numbers chase that does not end in a great product. It’s important to supplement a great product vision with a strong discipline around the metrics, but if you substitute metrics for product vision, you will not get what you want.

As the producer states gradually forced the major oil companies to share with them more of the profits from oil, increasing quantities of sterling and dollars flowed to the Middle East. To maintain the balance of payments and the viability of the international financial system, Britain and the United States needed a mechanism for these currency flows to be returned. [...] The purchase of most goods, whether consumable materials like food and clothing or more durable items such as cars or industrial machinery, sooner or later reaches a limit where, in practical terms, no more of the commodity can be used and further acquisition is impossible to justify. Given the enormous size of oil revenues, and the relatively small populations and widespread poverty of many of the countries beginning to accumulate them, ordinary goods could not be purchased at a rate that would go far to balance the flow of dollars (and many could be bought from third countries, like Germany and Japan – purchases that would not improve the dollar problem). Weapons, on the other hand, could be purchased to be stored up rather than used, and came with their own forms of justification. Under the appropriate doctrines of security, ever-larger acquisitions could be rationalised on the grounds that they would make the need to use them less likely. Certain weapons, such as US fighter aircraft, were becoming so technically complex by the 1960s that a single item might cost over $10 million, offering a particularly compact vehicle for recycling dollars. Arms, therefore, could be purchased in quantities unlimited by any practical need or capacity to consume. As petrodollars flowed increasingly to the Middle East, the sale of expensive weaponry provided a unique apparatus for recycling those dollars – one that could expand without any normal commercial constraint.

Land was one of the great sources of wealth in Virginia and soon after early commercial enterprise failed, was recognized as such. Its acquisition became a prime objective. Initially the Company had determined that no land would be assigned to planters, or adventurers, until the expiration of a seven year period. And this period was in actual practice delayed. The first real, or general, "division" was provided for in 1618 and this became effective in Virginia in 1619.

Emissions of carbon dioxide reasonable commercial For those who do not know each other with the phrase "carbon footprint" and its consequences or is questionable, which is headed "reasonable conversion" is a fast lens here. Statements are described by the British coal climatic believe. "..The GC installed (fuel emissions) The issue has directly or indirectly affected by a company or work activities, products," only in relation to the application, especially to introduce a special procedure for the efforts of B. fight against carbon crank function What is important? Carbon dioxide ", uh, (on screen), the main fuel emissions" and the main result of global warming, improve a process that determines the atmosphere in the air in the heat as greenhouse gases greenhouse, carbon dioxide is reduced by the environment, methane, nitrous oxide and chlorofluorocarbons (CFCs more typically classified as). The consequences are disastrous in the sense of life on the planet. The exchange is described at a reasonable price in Wikipedia as "...geared a social movement and market-based procedures, especially the objectives of the development of international guidelines and improve local sustainability." The activity is for the price "reasonable effort" as well as social and environmental criteria as part of the same in the direction of production. It focuses exclusively on exports under the auspices of the acquisition of the world's nations to coffee most international destinations, cocoa, sugar, tea, vegetables, wine, specially designed, refreshing fruits, bananas, chocolate and simple. In 2007 trade, the conversion of skilled gross sales serious enough alone suffered due the supermarket was in the direction of approximately US $ 3.62 billion to improve (2.39 million), rich environment and 47% within 12 months of the calendar year. Fair trade is often providing 1-20% of gross sales in their classification of medicines in Europe and North America, the United States. ..Properly Faith in the plan ... cursed interventions towards closing in failure "vice president Cato Industries, appointed to inquire into the meaning of fair trade Brink Lindsey 2003 '. "Sensible changes direction Lindsay inaccurate provides guidance to the market in a heart that continues to change a design style and price of the unit complies without success. It is based very difficult, and you must deliver or later although costs Rule implementation and reduces the cost if you have a little time in the mirror. You'll be able to afford the really wide range plan alternatives to products and expenditures price to pay here. With the efficient configuration package offered in the interpretation question fraction "which is a collaboration with the Carbon Fund worldwide, and acceptable substitute?" In the statement, which tend to be small, and more? They allow you to search for carbon dioxide transport and delivery. All vehicles are responsible dioxide pollution, but they are the worst offenders? Aviation. Quota of the EU said that the greenhouse gas jet fuel greenhouse on the basis of 87% since 1990 years Boeing Company, Boeing said more than 5 747 liters of fuel burns kilometer. Paul Charles, spokesman for Virgin Atlantic, said flight CO² gas burned in different periods of rule. For example: (. The United Kingdom) Jorge Chavez airport to fly only in the vast world of Peru to London Heathrow with British Family Islands 6.314 miles (10162 km) works with about 31,570 liters of kerosene, which produces changes in only 358 for the incredible carbon. Delivery. John Vidal, Environment Editor parents argue that research on the oil company BP and researchers from the Department of Physics and the environment in Germany Wising said that about once a year before the transport height of 600 to 800 million tons. This is simply nothing more than twice in Colombia and more than all African nations spend together.

Data on how such buyers affect the listed market are difficult to corral. But an InvestigateWest analysis of roughly 12,000 buyers who paid cash for listed homes in Multnomah County between 2006 and 2014 found more than 850 individuals or their corporate doppelgangers buying between two and nine homes. Those buyers were joined by the 26 institutional investors that captured hundreds more. Translation? Among the approximately 12,000 purchases, there were at least 2,750 flips, remodels, redevelopments and new rental acquisitions in place of new homeowners at the lowest price point of the market. Owing to the lack of transparency in real estate holdings — many homes were acquired by opaquely named corporations, and some buyers use several at a time — and to the tendency of equity groups to place houses in the names of their investors rather than of the investment company, that number is likely much higher.

according to one analysis, from 2000 to 2009, the largest media conglomerates together wrote down more than $200 billion in assets. And these companies’ poor stock performance relative to indexes such as the S&P predates the business destruction precipitated by the Internet. Media companies have a history of predominantly achieving growth through acquisition, but revenue growth has not necessarily translated into better stock performance and a certain kind of market power.40

Google’s acquisition of an R & D company closely linked to the military instigated a round of speculation. Many suggested that Google, having bought a military robotics firm, might become a weapons maker. Nothing could have been further from the truth. In his discussions with the technologists at the companies he was acquiring, Rubin sketched out a vision of robots that would safely complete tasks performed by delivery workers at UPS and FedEx.

businesses. We will not make unrelated acquisitions. We will not do unrelated joint ventures. If it doesn’t fit, we don’t do it. Period.

Each man’s place in the company hierarchy, perhaps painfully won over many years, became meaningless if his new super boss, the conglomerator, didn’t see things his way. Robert Metz told in The New York Times about an executive of an acquired company who observed that he and his colleagues had been given what he called the “mushroom treatment”: “Right after the acquisition, we were kept in the dark. Then they covered us with manure. Later they cultivated us. After that, they let us stew for a while. And, finally, they canned us.

There are more myths, misinformation, and misunderstandings about value than any other topic in the merger and acquisition field. It is difficult for people to truly grasp the concept that the value of an intangible company is whatever a buyer is willing to pay. Most people believe that companies have intrinsic value, that value falls within a narrow range, and that multiples of revenues are worthwhile. This is simply not true for intangible companies. The

The same year we also acquired Financial Network Services (FNS), an Australian company with a retail banking software package called Bancs24. We needed them because some of our competitors had begun to target that market segment with their own IP. Bancs24 was a very comprehensive package and we were able to successfully win the systems integration contract for the State Bank of India (SBI) Group for implementation of core banking. Since we had invested considerable effort in customizing and strengthening it we felt acquiring FNS would be strategic for our products business. During our initial dealings with FNS and its feisty owner Tony Ward we learned to our surprise that when the product was being developed in the early 1980s TCS had deputed its programmers to Sydney to work with Tony and his team to help develop the product. Since the acquisition we have been able to deploy the FNS software package, rechristened ‘Bancs’, extensively with a number of domestic clients. Today close to 50 per cent of the banking transactions in India are processed by Bancs, thereby justifying the acquisition we made.

This is a summary of the negotiated sale approach: 1. Package the company. Identify and describe the company’s strengths clearly and accurately, both in the descriptive memorandum and in phone calls, e-mails, and meetings. 2. Identify and contact all the potential buyers. Employ discipline and creativity in pursuing more than just the likely buyers. 3. Execute a disciplined process for following up and moving the buyers forward. 4. Negotiate by understanding the strategic implications of the acquisition for each buyer. 5. Endeavor to get multiple offers at the same point in time. Take the highest offer. Package

In general, when you are CEO you should actually make very few decisions. Product launches, acquisitions, public policy issues—these are all decisions that CEOs should make or heavily influence. But there are many other issues where it is OK to let other leaders in the company decide, and intervene only when you know they are making a very bad call. So a key skill to develop as the CEO or senior leader in a company is to know which decisions to make and which to let run their course without you.

Given the specialized niche and deal size, there is scant competition in this acquisition market, enabling Essilor to purchase companies on attractive terms (such as six to seven times cash flow). This ability to systematically improve the operations of acquired businesses is rare but can create significant value.

Making a small acquisition can be an excellent strategy for an acquirer to gain a foothold in a niche market, gain new customers and new talent, acquire new capabilities and technologies, and serve as a platform to build upon. Small acquisitions are less expensive, easier to integrate, and often simpler to transact than large acquisitions. A

creating a company for acquisition or IPO is different from building a profitable enterprise; it’s about building a sellable enterprise. Startups are not trying to earn revenue (which is a liability); they are setting themselves up to win more capital. They are not part of the real economy or even the real world but part of the process through which working assets are converted into new stockpiles of dead ones. That’s all they have really accomplished with whatever digital fad they’ve foisted onto the market or sold to yesterday’s tech winners. They thought they were engineering a new technology, when they were actually engineering a reallocation of capital. That’s why digital entrepreneurs who do win often end up becoming the next generation of venture capitalists. Everyone from Marc Andreessen (Netscape) to Sean Parker (Napster) to Peter Thiel (PayPal) to Jack Dorsey (Twitter) now runs venture funds of his own. Facebook and Google, once startups themselves, now acquire more businesses than they incubate internally. With each new generation, firms and investors leverage the startup economy more deliberately, or even cynically. After all, a win is a win.

Market view analysis generally includes a series of components: ·      Market focus ·      Size of your market and its anticipated growth rate ·      Overview of your company’s current market position ·      Description of the market segments you serve ·      Matrix of your top competitors by market segment ·      More detailed breakdown of the competitors ·      Overview of your current position with a focus on possible market opportunities ·      Buy-versus-build opportunities ·      Possible acquisition candidates ·      List of risks and contingencies ·      Potential competitive movements ·      Deep dives into specific competitors

Reich would soon back a request from Angelo Mozilo, Countrywide’s white-haired, unnaturally tanned CEO. Mozilo wanted an exemption from the Section 23A rules that prevented Countrywide’s holding company from tapping the discount window through a savings institution it owned. Sheila and the FDIC were justifiably skeptical, as was Janet Yellen at the Federal Reserve Bank of San Francisco, in whose district Countrywide’s headquarters were located. Lending indirectly to Countrywide would be risky. It might well already be insolvent and unable to pay us back. The day after the discount rate cut, Don Kohn relayed word that Janet was recommending a swift rejection of Mozilo’s request for a 23A exemption. She believed, Don said, that Mozilo “is in denial about the prospects for his company and it needs to be sold.” Countrywide found its reprieve in the form of a confidence-boosting $2 billion equity investment from Bank of America on August 22—not quite the sale that Janet thought was needed, but the first step toward an eventual acquisition by Bank of America. Countrywide formally withdrew its request for a 23A exemption on Thursday August 30 as I was flying to Jackson Hole, Wyoming, to speak at the Kansas City Fed’s annual economic symposium. The theme of the conference, chosen long before, was “Housing, Housing Finance, and Monetary Policy.

Total Cost Analysis When the purchasing staff considers switching to a new supplier or consolidating its purchases with an existing one, it cannot evaluate the supplier based solely on its quoted price. Instead, it must also consider the total acquisition cost, which can in some cases exceed a product’s initial price. The total acquisition cost includes these items: • Material. The list price of the item being bought, less any rebates or discounts. • Freight. The cost of shipping from the supplier to the company. • Packaging. The company may specify special packaging, such as for quantities that differ from the supplier’s standards and for which the supplier charges an extra fee. • Tooling. If the supplier had to acquire special tooling in order to manufacture parts for the company, such as an injection mold, then it will charge through this cost, either as a lump sum or amortized over some predetermined unit volume. • Setup. If the setup for a production run is unusually lengthy or involves scrap, then the supplier may charge through the cost of the setup. • Warranty. If the product being purchased is to be retained by the company for a lengthy period of time, it may have to buy a warranty extension from the supplier. • Inventory. If there are long delays between when a company orders goods and when it receives them, then it must maintain a safety stock on hand to guard against stock-out conditions and support the cost of funds needed to maintain this stock. • Payment terms. If the supplier insists on rapid payment terms and the company’s own customers have longer payment terms, then the company must support the cost of funds for the period between when it pays the supplier and it is paid by its customers. • Currency used. If supplier payments are to be made in a different currency from the company’s home currency, then it must pay for a foreign exchange transaction and may also need to pay for a hedge, to guard against any unfavorable changes in the exchange rate prior to the scheduled payment date. These costs are only the ones directly associated with a product. In addition, there may be overhead costs related to dealing with a specific supplier (see “Sourcing Distance” later in the chapter), which can be allocated to all products purchased from that supplier.

I began shopping at the bankruptcy attorney’s office, or the courthouse steps. In these shopping places, a $75,000 house could sometimes be bought for $20,000 or less. For $2,000, which was loaned to me from a friend for 90 days for $200, I gave an attorney a cashier’s check as a down payment. While the acquisition was being processed, I ran an ad advertising a $75,000 house for only $60,000 and no money down. The phone rang hard and heavy. Prospective buyers were screened and once the property was legally mine, all the prospective buyers were allowed to look at the house. It was a feeding frenzy. The house sold in a few minutes. I asked for a $2,500 processing fee, which they gladly handed over, and the escrow and title company took over from there. I returned the $2,000 to my friend with an additional $200. He was happy, the home buyer was happy, the attorney was happy, and I was happy. I had sold a house for $60,000 that cost me $20,000. The $40,000 was created from money in my asset column in the form of a promissory note from the buyer. Total working time: five hours.

The Sun/Arthur Edwards With Rupert Murdoch in London, just before the announcement of our 21st Century Fox acquisition, December 2017.

WhatsApp had a freemium business model; the service was free for a year, after which it cost $1 per year. This low-friction model essentially eliminated the need for people working in functions like sales, marketing, and customer service, allowing WhatsApp to grow to five hundred million monthly active users by the time of its acquisition by Facebook, with a staff of just forty-three employees, a ratio of over ten million active users per employee!

Another famous and controversial tactic—often called “rank-and-yank”—forced managers to come up with an annual ranking of the performance of their workers. The bottom 10 percent would be put on notice, and if they didn’t improve, they were fired. The constant pressure from this kind of tactic only added to employee tension. Rank-and-yank worked well for GE’s acquisitions, providing a formula for trimming fat and squeezing profits out of the operations. But some managers didn’t see it as helpful, especially after it had been used for a few years and some competent employees were ending up in the bottom 10 percent. You can trim fat only for so long. Also, some thought that the policy made workers fight each other for survival and inhibited managers’ ability to bring their workers together to operate as a team for the good of the company. One manager tried to subvert the system by putting an employee who’d recently died in the bottom 10 percent of the ranking list in order to save another employee’s job.

Over the next six months, we discovered the company had been pursuing deals in an ad hoc, opportunistic way, struggling in four key areas: identifying which companies to acquire, performing due diligence on these companies, calculating their value, and integrating acquisitions into our business. Taking stock of our deficits led us to a powerful, four-step model for pursuing M&A,

To Build a Robust Pipeline . . . •​Don’t wait for bankers to knock on your door with potential deals. Instead, scour the market proactively. •​Seek out businesses that have great positions in good, high-growth industries. •​Look for bolt-on acquisitions as well as companies in good industries adjacent to yours. •​Not all perceived adjacencies are the same. If the adjacency is too far removed from your existing business, you will lose your shirt. •​Make identifying targets a day-to-day priority. •​Be patient. Nurture long-term relationships with potential acquisitions.

We created a corporate handbook that each business unit had to follow when performing due diligence on a potential acquisition.

In framing our new M&A process, we resolved to maintain a clear separation between our dealmakers and our deal-negotiators. After a business leader had cultivated a company for acquisition, he or she would turn the deal over to our corporate M&A department, which would negotiate the contract based on the results for the acquired company that our business unit would commit to delivering. Sometimes our business units disagreed with how our corporate people were handling a deal—our business leaders just wanted it done, and they had developed personal relationships with the sellers. Our corporate M&A team negotiated more dispassionately, assuring that we really didn’t overpay, even if it meant getting tough and walking away. In deal after deal, that made all the difference.

To Never Overpay . . . •​Develop a standardized valuation model of your own. •​Use your own estimates of sales and margins. •​Factor in anticipated cost savings, but not sales synergies. •​Value acquisitions conservatively and walk away if the deal becomes too rich. •​Don’t let the dealmakers negotiate the terms. •​Exercise final oversight, exploring the downsides and scuttling the deal if you risk overpaying. •​Maintain a great pipeline of potential deals so that no single deal seems like a must-have.

To Bring Acquisitions into the Fold . . . •​Put integration plans in place before the deal closes, covering management, metrics, and other relevant topics. •​Personally review and approve the plan. •​Tighten up the executional details. •​Put dedicated, full-time integration teams in place, and assemble these teams early. •​Make changes and communicate them immediately to shape the mind-set. •​Stay alert for processes in acquired companies that you like, and introduce them as innovations into your own company. •​Personally perform regular follow-up to ensure that the acquisition really is performing even better than predicted by the valuation model.

A little respect goes a long way, and the absence of it is often very costly. Over the next few years, as we made the major acquisitions that redefined and revitalized the company, this simple, seemingly trite idea was as important as all of the data-crunching in the world: If you approach and engage people with respect and empathy, the seemingly impossible can become real.

A company big enough to acquire startups will be big enough to be fairly conservative, and within the company the people in charge of acquisitions will be among the more conservative, because they are likely to be business school types who joined the company late. They would rather overpay for a safe choice.

grow double digits each year for decades. To scale any business you must first create a reliable system for all functions—manufacturing, sales, promotion, talent acquisition, innovation, even leadership from the CEO.

Optimism. One of the most important qualities of a good leader is optimism, a pragmatic enthusiasm for what can be achieved. Even in the face of difficult choices and less than ideal outcomes, an optimistic leader does not yield to pessimism. Simply put, people are not motivated or energized by pessimists. Courage. The foundation of risk-taking is courage, and in ever-changing, disrupted businesses, risk-taking is essential, innovation is vital, and true innovation occurs only when people have courage. This is true of acquisitions, investments, and capital allocations, and it particularly applies to creative decisions. Fear of failure destroys creativity. Focus. Allocating time, energy, and resources to the strategies, problems, and projects that are of highest importance and value is extremely important, and it’s imperative to communicate your priorities clearly and often. Decisiveness. All decisions, no matter how difficult, can and should be made in a timely way. Leaders must encourage a diversity of opinion balanced with the need to make and implement decisions. Chronic indecision is not only inefficient and counterproductive, but it is deeply corrosive to morale. Curiosity. A deep and abiding curiosity enables the discovery of new people, places, and ideas, as well as an awareness and an understanding of the marketplace and its changing dynamics. The path to innovation begins with curiosity. Fairness. Strong leadership embodies the fair and decent treatment of people. Empathy is essential, as is accessibility.

Michael went out of his way during those years to be solicitous with Roy and show him deference and respect. This wasn’t easy to do. Roy could be very difficult at times. He viewed himself as the keeper of the Disney legacy. He lived and breathed and bled Disney, operating as if any break from tradition was a violation of some sacred pact he’d made with Walt himself (who supposedly never showed his nephew much respect). Roy tended to revere the past instead of respecting it, and as a result he had a difficult time tolerating change of any sort. He hated Michael’s acquisition of Capital Cities/ABC, because it meant introducing non-Disney brands into the company’s bloodstream. On a lesser but maybe more illustrative note, he got very angry one Christmas season when we decided to sell pure white Mickey Mouse plush dolls in our Disney stores. “Mickey is only these colors, black and white and red and yellow, and that’s it!” Roy raged in emails to Michael and me. He wanted the “albino Mickeys,” as he called them, taken from the shelves, which we didn’t do, but it was a huge distraction.

By then the conglomerate boom had just about peaked. The problems with merger accounting were obvious, and many investors had realized that conglomerate profits were inflated. The end came in 1969, when the market plunged, making it hard for conglomerates to issue the debt or stocks they needed for new acquisitions. A conglomerateur who runs out of acquisitions is a very unhappy conglomerateur. He’s stuck managing the companies he has already bought, which are all too often third-rate companies in slow-growth industries. Winners buy; losers manage. Worse, the skills that make a successful conglomerateur—salesmanship, impatience with details, and a huge ego—are more or less the opposite of the skills needed to successfully manage a company.

Remember that a core tenet of growth hacking is experimentation all through the customer experience funnel: not just customer awareness and acquisition but also activation, retention, revenue, and referral.

There once lived, at a series of temporary addresses across the United States of America, a travelling man of Indian origin, advancing years and retreating mental powers, who, on account of his love for mindless television, had spent far too much of his life in the yellow light of tawdry motel rooms watching an excess of it, and had suffered a peculiar form of brain damage as a result. He devoured morning shows, daytime shows, late-night talk shows, soaps, situation comedies, Lifetime Movies, hospital dramas, police series, vampire and zombie serials, the dramas of housewives from Atlanta, New Jersey, Beverly Hills and New York, the romances and quarrels of hotel-fortune princesses and self-styled shahs, the cavortings of individuals made famous by happy nudities, the fifteen minutes of fame accorded to young persons with large social media followings on account of their plastic-surgery acquisition of a third breast or their post-rib-removal figures that mimicked the impossible shape of the Mattel company’s Barbie doll, or even, more simply, their ability to catch giant carp in picturesque settings while wearing only the tiniest of string bikinis; as well as singing competitions, cooking competitions, competitions for business propositions, competitions for business apprenticeships, competitions between remote-controlled monster vehicles, fashion competitions, competitions for the affections of both bachelors and bachelorettes, baseball games, basketball games, football games, wrestling bouts, kickboxing bouts, extreme sports programming and, of course, beauty contests.

about $50 to $60 million on a new season of GLOW or Godless. So how does Netflix justify its spending on a TV show or movie that it doesn’t “sell”? Again, let’s return to that portfolio effect. Regardless of whether a show is successful or not, investing in sharp new content helps Netflix to both (a) attract new subscribers and (b) extend the lifetime of its current subscribers. Those shows don’t go away! Together, they’re increasing the overall value of the portfolio. They are instrumental in driving down customer acquisition costs (as more subscribers sign up) and increasing subscriber lifetime value (as more subscribers stick around for longer). Netflix knows exactly how long it takes for a subscriber to flip from unprofitable to profitable. Spending tons of money on new shows means Netflix is happy to take a hit on the books in the short term in order to increase their profitability in the long run.

Jon Slade, chief commercial officer of Financial Times, told Digiday, “We dialed up our marketing on a real-time basis. We were looking at buying patterns, opportunities in social, and spending our marketing budgets in pretty aggressive ways in an attempt to try and dominate a story. We then made sure that didn’t conflict with the efforts of our audience engagement team, so there was constant dialogue between audience engagement and editorial, and between marketing and acquisition.” There is at least as much innovation and creativity happening in FT’s acquisition efforts as there is in its exceptional journalism. FT also has a simple but brilliant formula for gauging reader engagement. Borrowing from the retail sector, they score every one of their readers on the multiple of three factors: recency (when did they last visit?), frequency (how often do they visit?), and volume (how many articles have they read?). Low scores indicate churn risks that their promotions group can approach with discount offers.

Optimism. One of the most important qualities of a good leader is optimism, a pragmatic enthusiasm for what can be achieved. Even in the face of difficult choices and less than ideal outcomes, an optimistic leader does not yield to pessimism. Simply put, people are not motivated or energized by pessimists. Courage. The foundation of risk-taking is courage, and in ever-changing, disrupted businesses, risk-taking is essential, innovation is vital, and true innovation occurs only when people have courage. This is true of acquisitions, investments, and capital allocations, and it particularly applies to creative decisions. Fear of failure destroys creativity. Focus. Allocating time, energy, and resources to the strategies, problems, and projects that are of highest importance and value is extremely important, and it’s imperative to communicate your priorities clearly and often. Decisiveness. All decisions, no matter how difficult, can and should be made in a timely way. Leaders must encourage a diversity of opinion balanced with the need to make and implement decisions. Chronic indecision is not only inefficient and counterproductive, but it is deeply corrosive to morale. Curiosity. A deep and abiding curiosity enables the discovery of new people, places, and ideas, as well as an awareness and an understanding of the marketplace and its changing dynamics. The path to innovation begins with curiosity. Fairness. Strong leadership embodies the fair and decent treatment of people. Empathy is essential, as is accessibility. People committing honest mistakes deserve second chances, and judging people too harshly generates fear and anxiety, which discourage communication and innovation. Nothing is worse to an organization than a culture of fear. Thoughtfulness. Thoughtfulness is one of the most underrated elements of good leadership. It is the process of gaining knowledge, so an opinion rendered or decision made is more credible and more likely to be correct. It’s simply about taking the time to develop informed opinions. Authenticity. Be genuine. Be honest. Don’t fake anything. Truth and authenticity breed respect and trust. The Relentless Pursuit of Perfection. This doesn’t mean perfectionism at all costs, but it does mean a refusal to accept mediocrity or make excuses for something being “good enough.” If you believe that something can be made better, put in the effort to do it. If you’re in the business of making things, be in the business of making things great. Integrity. Nothing is more important than the quality and integrity of an organization’s people and its product. A company’s success depends on setting high ethical standards for all things, big and small. Another way of saying this is: The way you do anything is the way you do everything.

Looking back on the acquisitions of Pixar, Marvel, and Lucasfilm, the thread that runs through all of them (other than that, taken together, they transformed Disney) is that each deal depended on building trust with a single controlling entity. There were complicated issues to negotiate in all of the deals, and our respective teams spent long days and weeks reaching agreement on them. But the personal component of each of these deals was going to make or break them, and authenticity was crucial.

When analyzing whether you should sell your company, a good basic rule of thumb is if (a) you are very early on in a very large market and (b) you have a good chance of being number one in that market, then you should remain stand-alone. The reason is that nobody will be able to afford to pay what you are worth, because nobody can give you that much forward credit. For an easy-to-understand example, consider Google. When they were very early, they reportedly received multiple acquisition offers for more than $1 billion. These were considered very rich offers at the time and they amounted to a gigantic multiple. However, given the size of the ultimate market, it did not make sense for Google to sell. In fact, it didn’t make sense for Google to sell to any suitor at any price that the buyer could have paid. Why? Because the market that Google was pursuing was actually bigger than the markets that all of the potential buyers owned and Google had built a nearly invincible product lead that enabled them to be number one.

Another result was that the pace at which these companies now had to grow in order to stay competitive challenged their organizational cultures. Companies growing via acquisition have significant cultural and integration challenges.

Size and growth rate aside, the companies did have certain characteristics in common. To begin with, they were all utterly determined to be the best at what they did. Most of them had been recognized for excellence by independent bodies inside and outside their industries. Not coincidentally, they had all had the opportunity to raise a lot of capital, grow very fast, do mergers and acquisitions, expand geographically, and generally follow the well-worn route of other successful companies. Yet they had chosen not to focus on revenue growth or geographical expansion, pursuing instead other goals that they considered more important than getting as big as possible, as fast as possible. To make those trade-offs, the companies had found it necessary to remain privately owned, with the majority of the stock in the hands of one person, or a small group of like-minded individuals, or—in a couple of cases—the employees.

Saginaw and Weinzweig had no interest in pursuing acquisitions or moving to another location, and they knew of no alternative growth strategies for small companies like theirs. So they did a lot of reading, thinking, and talking—meeting regularly to discuss their ideas at a picnic table next to the deli. They wrote vision statements and then rewrote them, soliciting input from people inside and outside the business. By 1994, the outlines of a grand design had emerged. It was called the Zingerman’s Community of Businesses, or ZCoB, for short. Weinzweig and Saginaw envisioned a company comprised of twelve to fifteen separate businesses by 2009. The new businesses would be small and located in the Ann Arbor area. Each would bear the Zingerman’s name but would have its own specialty and identity, and all would be designed to enhance the quality of food and service offered to Zingerman’s customers while improving the financial performance of ZCoB and its components. There was already a bakery, Zingerman’s Bakehouse, as well as the deli. There could also be a training company, a mail order business, a caterer, a creamery, a restaurant or two, a vegetable stand—you name it.

Looking back on the acquisitions of Pixar, Marvel, and Lucasfilm, the thread that runs through all of them (other than that, taken together, they transformed Disney) is that each deal depended on building trust with a single controlling entity.

Traditionally, companies restructure their businesses periodically to cut costs, primarily through mass layoffs and closures. Perpetual restructuring is a more gradual, moderate, and humbler approach. Instead of slashing costs dramatically all at once, keep your fixed costs steady while growing sales year over year. Operate more efficiently, doing just a bit more each year with roughly the same resources you used the previous year. To achieve those efficiency gains, deploy a variety of smaller restructuring programs that support ongoing process-improvement initiatives. Push to get a bit better—more efficient, more effective, more innovative—each year. Over time, as your business grows, deliver part of the added profits to investors, but set aside a portion to fund additional investments in R&D, geographic expansion, process improvement, sales coverage, and strategic portfolio management (acquisitions, mergers, and divestitures).

Before you can set about getting traction, you have to define what traction means for your company. You need to set a traction goal. At the earliest stages, this traction goal is usually to get enough traction to either raise funding or become profitable. In any case, you should figure out what this goal means in terms of hard numbers. How many customers do you need and at what growth rate? Your traction strategy should always be focused on moving the needle for your traction goal. By moving the needle, we mean focusing on marketing activities that result in a measurable, significant impact on your traction goal. It should be something that advances your user acquisition goal in a meaningful way, not something that would be just a blip even if it worked.

Factors that drive turnover for the S&P 500 and Wilshire 5000 stem from market-related events. When a company exits the S&P 500 through merger, acquisition, or bankruptcy, a committee-chosen replacement takes the departing company’s place. The Wilshire 5000 passively accepts the ebb and flow of company creation and elimination, making as-frequent-as-necessary adjustments to the composition of the index. Bankrupt companies disappear, cash merger deals require redeployment of proceeds, and stock-for-stock transactions lead to elimination of the line item of the acquired company. Public offerings of securities force full-replication Wilshire 5000 index-fund managers to raise cash to acquire newly issued shares, while spinoffs simply require adding another line to the list of security holdings. In somewhat different fashion, both the S&P 500 and the Wilshire 5000 produce extremely low, investor-friendly levels of portfolio turnover.

One of my favorite examples comes from the heady days of America Online (AOL). The company would routinely send out CDs in an attempt to get people to sign up for its product. One group within the company, responsible for acquisitions, was given financial incentives for hitting subscription goals. And so all tactics were designed to do just that: sign people up. There were offers of 100 free hours in the first month, which became 250 free hours, then even 700 hours. I remember when the offer got to 1,000 free hours, as long as they were used in the first 45 days (which left 1.7 hours of sleep per night for anyone who could take advantage of the promotion). It worked. Whatever tactics the acquisition group members developed were designed to do one thing and one thing only—maximize their bonus. The problem was there was another group responsible for retention; they had to find ways to get all the people who had canceled their subscriptions to come back. By creating a system in which each group was preoccupied with its own metrics without concern for anyone else’s or even what would serve the company best, the leaders of AOL had effectively incentivized their people to find ways to cost the company more money.

If I could redo college and choose any school, I’d choose Michigan again. Yes, the education was great. Yes, I made amazing friends. But the biggest reason for choosing Michigan again would be the aura of its collegiate football program. Auras naturally form around things like sports, religions, and political parties. But anything can have an aura. You should be looking for auras in every relationship you cultivate, every project you engage in, and every company you work for (or build). Different auras work for different people. You have to find one that works for you. While having an aura is a good thing, not having one is equally as bad. There are droves of companies with no aura. If you’re in one of these organizations, get out. I worked in a company with no aura for far too long. My department was the result of an acquisition that happened before I was hired, and the upper management never really knew what to do with our team. After two years of punching in and punching out, I quit. That’s when I started a company of my own, and I’m glad I took the risk. I found out recently that my department at the old company folded and, frankly, I’m not surprised. I don’t know exactly what happened, but I’m sure it had something to do with the aura, or lack thereof. When you’re part of an aura, you’re experiencing the essence of being alive. Caring. Believing. Feeling. Without it, you’re just showing up.

Here’s the point: You get out what you put in—to a degree. Your natural ability and strengths play a big role in determining the potential of your output. Don’t work on things that don’t play to your strengths and passions. Don’t work on things that provide opportunities that don’t interest you. It’s easy to get lost in the fight, and continuously bang your head against the wall when people tell you that you get out what you put in. That expression tells us to just keep working harder, regardless of the task. This isn’t always the answer. If you’re working hard and don’t feel like you’re getting out what you’re putting in, you probably need to stop banging your head against the wall and jump ship. There is also a time factor here, which is very important to consider. YouTube was acquired by Google for $1.65 billion in 2006, less than two years after its founding.[28] PopCap, a gaming company, was acquired by Electronic Arts for $750 million in 2011, eleven years after its founding.[29] If you founded or worked for either of these companies and loved every moment of it, the difference in time-to-acquisition is a non-factor. But, if you did not enjoy yourself and didn’t grow along the way, you better hope you were working at YouTube. Two years of stagnant personal growth is far less painful than eleven. The example above includes two companies that both sold for a bunch of money, which is great. But there’s more to life than money. There’s an opportunity cost to everything you do. If you’re hitting a wall for more than a year and you’re unhappy, I recommend jumping ship—even if there’s a potential pile of cash down the road. There are opportunities beyond whatever you’re currently working on. Forget how much time, effort, and money has already been invested and ignore whatever you might be giving up if you leave. Those are sunk costs and unknown outcomes. Instead, think about what you’re working on and who you’re working with right now. Then decide if that’s really how you want to be spending your days. That’s all that really matters.

Publicly traded companies die through acquisitions, mergers, and bankruptcies at the same rate regardless of how well established they are or what they actually do. The

Job Acquisition The entire job-acquisition process—considering job prospects, your personal and professional preparation, creating a resume, going on a job interview—depends for success upon possessing social skills and managing anxiety. How you adapt to the stress of this process can play a major role. As with other aspects of interaction, anxiety can often keep you from getting the jobs you really want and would be well suited for. If you allow your anxiety to control you, you may avoid applying for a new position because you fear rejection. Or you may let the fear of failure keep you from accepting a new challenge, no matter how badly you would like to take the job. But let’s look first at the job process and consider self-help techniques that will lead to a more rewarding, productive career. For people with social anxiety, low self-esteem is often a stumbling block to fulfillment in their careers: If you feel you are underqualified, you may hesitate to seek challenges, whether in a new company or within your current one. I have worked with several men who say their self-esteem is low because they are not the stereotype of success: They do not wear a suit, carry a briefcase, or drive the latest-model car. In their minds, this is the most important measure of success. But they themselves are not failures. One of the men I can think of is a successful plumber, another has a telephone sales job, and a third manages a large warehouse. Still, they have doubts about their appeal to women because of their career choices; increasing their self-esteem will help them to see themselves in a new way. Success need not be defined by media standards such as the right clothes or an expensive automobile. Everyone is different. Your personal success can only be measured by your own personal fulfillment and productivity.

Procter & Gamble, America’s largest FMCG company, announced the acquisition of Gillette. Both companies had decades of success developing technologically advanced products and building enviable mindspace positions, yet these were no longer enough to guarantee their desired shelfspace. They realised the only way to compete with the retailers was to become big enough to matter to them.

Summary of Rule #3 Rules #1 and #2 laid the foundation for my new thinking on how people end up loving what they do. Rule #1 dismissed the passion hypothesis, which says that you have to first figure out your true calling and then find a job to match. Rule #2 replaced this idea with career capital theory, which argues that the traits that define great work are rare and valuable, and if you want these in your working life, you must first build up rare and valuable skills to offer in return. I call these skills “career capital,” and in Rule #2 I dived into the details of how to acquire it. The obvious next question is how to invest this capital once you have it. Rule #3 explored one answer to this question by arguing that gaining control over what you do and how you do it is incredibly important. This trait shows up so often in the lives of people who love what they do that I’ve taken to calling it the dream-job elixir. Investing your capital in control, however, turns out to be tricky. There are two traps that commonly snare people in their pursuit of this trait. The first control trap notes that it’s dangerous to try to gain more control without enough capital to back it up. The second control trap notes that once you have the capital to back up a bid for more control, you’re still not out of the woods. This capital makes you valuable enough to your employer that they will likely now fight to keep you on a more traditional path. They realize that gaining more control is good for you but not for their bottom line. The control traps put you in a difficult situation. Let’s say you have an idea for pursuing more control in your career and you’re encountering resistance. How can you tell if this resistance is useful (for example, it’s helping you avoid the first control trap) or something to ignore (for example, it’s the result of the second control trap)? To help navigate this control conundrum, I turned to Derek Sivers. Derek is a successful entrepreneur who has lived a life dedicated to control. I asked him his advice for sifting through potential control-boosting pursuits and he responded with a simple rule: “Do what people are willing to pay for.” This isn’t about making money (Derek, for example, is more or less indifferent to money, having given away to charity the millions he made from selling his first company). Instead, it’s about using money as a “neutral indicator of value”—a way of determining whether or not you have enough career capital to succeed with a pursuit. I called this the law of financial viability, and concluded that it’s a critical tool for navigating your own acquisition of control. This holds whether you are pondering an entrepreneurial venture or a new role within an established company. Unless people are willing to pay you, it’s not an idea you’re ready to go after.

I struck up a conversation with Larry Page, Google’s brilliant cofounder. “Larry, I still don’t get it. There are so many search companies. Web search, for free? Where does that get you?” My unimaginative blindness is solid evidence that predicting is hard, especially about the future, but in my defense this was before Google had ramped up its ad auction scheme to generate real income, long before YouTube or any other major acquisitions. I was not the only avid user of its search site who thought it would not last long. But Page’s reply has always stuck with me: “Oh, we’re really making an AI.

Groupon is a study of the hazards of pursuing scale and valuation at all costs. In 2010, Forbes called it the “fastest growing company ever” after its founders raised $135 million in funding, giving Groupon a valuation of more than $1 billion after just 17 months.5 The company turned down a $6 billion acquisition offer from Google and went public in 2011 with one of the biggest IPOs since Google’s in 2004.6 It was one of the original unicorns. However, the business model had serious problems. Groupon sometimes sold so many Daily Deals that participating businesses were overwhelmed . . . even crippled. Other businesses accused Groupon of strong-arming them to sign up for Daily Deals. Customers started to view the group discount (the company’s bread and butter) as a sign that a participating business was desperate. Businesses stopped signing up. Journalists suggested that Groupon was prioritizing customer acquisition over retention — growth over value — and that it had gone public before it had a solid, proven business model.7 Groupon is still a player, with just over $3 billion in annual revenue in 2015. But its stock has fallen from $26 a share to about $4 today, and it has withdrawn from many international markets. Also revealing is that the company is suing IBM for patent infringement, something that will not create customer value.8 Many promising startups have paid the price for rushing to scale. We can see clues to potential future failures in the recent “down rounds” (stock purchases priced at a lower valuation than those of previous investors) hitting companies like Foursquare, Gilt Group, Jet, Jawbone, and Technorati. In their rush to build scale, executives and founders search for shortcuts to sustainable, long-term revenue growth.

Peter Drucker once observed that the drive for mergers and acquisitions comes less from sound reasoning and more from the fact that doing deals is a much more exciting way to spend your day than doing actual work.

The Mergers and Acquisitions Framework You might use the mergers and acquisitions framework to address cases in which one company wants to acquire or merge with another company. It is best used to determine the conceptual “fit” between two companies: Does joining these two companies have a multiplicative effect, where the whole is more valuable than the sum of its parts?

using money as a “neutral indicator of value”—a way of determining whether or not you have enough career capital to succeed with a pursuit. I called this the law of financial viability, and concluded that it’s a critical tool for navigating your own acquisition of control. This holds whether you are pondering an entrepreneurial venture or a new role within an established company. Unless people are willing to pay you, it’s not an idea you’re ready to go after.

Some of the most noted angel investors are Alexis Ohanian (founder of Reddit), Marc Benioff (founder of Salesforce) and Max Levchin (founder of Paypal, Slide and Affirm) who on occasion invest in early stage and growth rounds as well. If the core product of the business begins to gain market share, and it seems the company has a lasting opportunity to scale and become an emerging leader, investors like First Round Capital and 500 Startups step in at the seed or Series A round. Growth equity firms like Stripes Group, General Atlantic and Insight Venture Partners typically come in at the Series C or D stage when the business becomes the number one or two player in the industry and is ripe for an IPO or strategic acquisition.

The Economics of Property-Casualty Insurance With the acquisition of General Re — and with GEICO’s business mushrooming — it becomes more important than ever that you understand how to evaluate an insurance company. The key determinants are: (1) the amount of float that the business generates; (2) its cost; and (3) most important of all, the long-term outlook for both of these factors. To begin with, float is money we hold but don't own. In an insurance operation, float arises because premiums are received before losses are paid, an interval that sometimes extends over many years. During that time, the insurer invests the money. Typically, this pleasant activity carries with it a downside: The premiums that an insurer takes in usually do not cover the losses and expenses it eventually must pay. That leaves it running an "underwriting loss," which is the cost of float. An insurance business has value if its cost of float over time is less than the cost the company would otherwise incur to obtain funds. But the business is a lemon if its cost of float is higher than market rates for money. A caution is appropriate here: Because loss costs must be estimated, insurers have enormous latitude in figuring their underwriting results, and that makes it very difficult for investors to calculate a company's true cost of float. Errors of estimation, usually innocent but sometimes not, can be huge. The consequences of these miscalculations flow directly into earnings. An experienced observer can usually detect large-scale errors in reserving, but the general public can typically do no more than accept what's presented, and at times I have been amazed by the numbers that big-name auditors have implicitly blessed. As for Berkshire, Charlie and I attempt to be conservative in presenting its underwriting results to you, because we have found that virtually all surprises in insurance are unpleasant ones. The table that follows shows the float generated by Berkshire’s insurance operations since we entered the business 32 years ago. The data are for every fifth year and also the last, which includes General Re’s huge float. For the table we have calculated our float — which we generate in large amounts relative to our premium volume — by adding net loss reserves, loss adjustment reserves, funds held under reinsurance assumed and unearned premium reserves, and then subtracting agents balances, prepaid acquisition costs, prepaid taxes and deferred charges applicable to assumed reinsurance. (Got that?)

Interestingly, I see this same problem play out in many consumer Internet startups. I often see teams that maniacally focus on their metrics around customer acquisition and retention. This usually works well for customer acquisition, but not so well for retention. Why? For many products, metrics often describe the customer acquisition goal in enough detail to provide sufficient management guidance. In contrast, the metrics for customer retention do not provide enough color to be a complete management tool. As a result, many young companies overemphasize retention metrics and do not spend enough time going deep enough on the actual user experience. This generally results in a frantic numbers chase that does not end in a great product. It’s important to supplement a great product vision with a strong discipline around the metrics, but if you substitute metrics for product vision, you will not get what you want.

Suite 1500, 13450 102 Ave Surrey, BC V3T 5X3 604-581-7001 cbettencourt@mcquarrie.com Chris works with individuals and firms to provide legal advice and expertise for their real estate and business needs. He can plan and draft agreements relating to a wide variety of business and corporate transactions such as securing debt and the incorporation of companies. Chris acts for purchasers of businesses, helping to ensure that they begin their new venture with adequate protection. Chris is also experienced in the acquisition, development, and sale of residential and commercial real estate.