CMC Silicon Valley Trip: Friday

Applied Materials
  • Everyone knows Moore's Law, that semiprocessor power doubles every 18 months. I asked if there was a similar law for solar panel efficiency. George Davis said no, mainly because his product is dependent on outside conditions like the weather. Solar panels are more effective in California than in Germany.
  • Some speakers are very good and know how to be interesting. They will take whatever question you ask and run with it. With these speakers, you want to ask a general question and let them run with it. These types of speakers are also good at ignoring the question you asked and answering the question you probably should have asked, or the question they want to answer.
  • Other speakers will stick to generalities, like "We worked hard and we had a lot of success." Faced with this type of speaker it's best to get very specific about what you want to hear about. "Could you tell us about the single biggest mistake you've made during your time here?" George Roberts, while brilliant, falls into the second category of speaker.
  • The BusinessWeek article about their plan to emulate Berkshire Hathaway was based off of one comment they made; while it would be great to be Berkshire, that's not really their plan.
  • KKR is going public because the only way to grow their business is through growing the amount of assets they control. They can get more money if they go public. They've tried to go public four different times but failed; if your idea makes sense, be persistent.
  • One of their biggest mistakes was not changing management quickly enough. It's hard to fire someone.
  • I asked Mr. Roberts if it was true that he used to spend lots of time proposing acquisitions while he was in school. He said yes; he would look up companies in an industry magazine and then write proposals. If the company didn't write him back, it only cost a postage stamp. That's a great attitude. Now it's even cheaper, because of email. While striking a deal or getting someone important to write back is low, the cost of sending email or a letter is lower.
  • Another student asked his opinion on the financial crisis. Roberts in turn asked the student what he thought. The student said he didn't know, so Roberts asked him what his gut told him. I thought that was interesting, because a lot of times your gut reaction is misleading. Consider most people's gut reaction to a minimum wage, to a bubble or to free trade.
  • Roberts told us to go work for a company that sells a product, so that we can learn how businesses work. You can't really learn about that on Wall Street.
  • I asked Roberts how he negotiates. He said most of all people do business with people that they like and trust. And that you need to be able to listen to what other people want. Good advice, I guess.
Chair Rankings It's important to have good chairs. Without further ado: 1. KKR 2. Microsoft 3. Applied Materials 4. EMC 5. Meebo (excellent chairs, but lose points for only having six) 6. Atlassian 7. Google/Youtube 8. Lockheed Martin 9. EA

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