In 1988, three young guys in New York City — an acting student, a magazine researcher, and a software producer — were so happy to see the end of the 1980s, they held a funeral for the decade. They painted their faces blue and led a procession through Central Park; they burned a Rambo doll and a piece of the Berlin Wall. Although they couldn’t have known it, Chris Wink, Phil Stanton, and Matt Goldman had launched what would grow into an entertainment juggernaut. Since opening in New York City’s Astor Place Theatre in 1991, the Blue Man Group has played in 12 cities across the globe. More than 17 million people have seen its shows, and today, tickets go for $43 to $132. Goldman, the onetime computer geek turned impresario, tells the Blue Man Group’s unlikely story.

The Blue Man character is about universal human truths. When we got bald and blue for the first time, we knew instantly that we were on to something really special. It’s not like we sat down and came up with a business plan and followed it from Point A to Point B to Point C.

We played P.S. 122, La MaMa, all these hip, arty venues before we opened at the Astor Place Theatre. So some in the downtown art crowd thought we were selling out. But the work didn’t change. In the beginning, the house was half empty, and we were undercapitalized. We’d show up at the theater expecting a padlock on the door. I set up my office — a telephone, pen, and pad — directly opposite the box office. When I saw someone leave the box office without a ticket, I’d run out and start chatting him or her up. I wasn’t going to let him or her walk away without buying a ticket.

We made all the props ourselves. We found PVC pipe on Canal Street and turned it into musical instruments. But the Jell-O in the show cost $880 a show to make. So our producers said, “Lose the Jell-O.” Phil and Chris were working at the time for Jean-Claude Nédélec, who co-owns Glorious Food, the catering company. We told him our sad story, and he said, “We’ll make the Jell-O.” For three years, Chris and I would take a cab to the Upper East Side to pick up giant Jell-O molds and never paid a cent for it.

We went from six to eight shows a week and did 1,285 consecutive shows. We were sold out eight weeks in advance, but our producer got panicky at the thought of one of us getting sick, so we had one understudy. We never canceled a show. But then Phil cut his hand, and Chris Bowen, our extra, got bald and blue for the first time. It was fine. He’s now our senior performing director.

We realized that if we wanted to grow, we’d have to replicate ourselves. We cast three Blue Men, opened in Boston, and assumed it would go well. But there was no script, no musical score. It was a case study of the wrong way to grow. We realized we had to articulate our vision, so we locked ourselves in a room and spent several days writing the Blue Man manual.

The Blue Man is part innocent, hero, scientist, shaman, group member, and trickster. He doesn’t speak, but he communicates with vaudevillian slapstick humor. He drums and catches gumballs in his mouth that are filled with paint, which he spits onto a canvas to make art. It’s interactive, with music, lights, and lots of colorful liquids that get sprayed on the stage and into the audience.

The whole show is about connecting with the audience — to get to that heightened gestalt when someone scores a goal at a soccer game. That “AHHH!” There’s no intellect involved at all, just chemical secretions through one’s brain and body.

Three is the smallest unit where you can have an outsider; two guys win the third over, or the third guy wins the two guys in. It can go either way, and that tension makes for good theater. It also makes for good business partners — it takes the ego out of it. To this day, we’ve never made a decision based on the majority. All decisions are consensus. It takes longer, but we find if you keep talking things through, you reach a better choice.

We decided to open in Chicago. Before the show, we realized we had no idea how much money we needed. We called the general manager of the Boston show, who is now our CFO, and she did the numbers. To make payroll, we had to open three days early and do two shows a day. We figured, no one is going to know that the whole set could fall apart. They’ll just think, Oh, the Blue Men; they’re crazy. From Chicago we moved on to Las Vegas and later Orlando.

Vegas was a gamble. The theater had twelve hundred seats. We did 10 shows a week, but for the first six months, the theater was half empty. Lots of companies had come to us, wanting to do Blue Man ads. We turned them all down. But when Intel asked for the fourth time, we said, “Let’s talk.”

They said, “We want to get across that Intel is innovative, intelligent, and fun.” We liked that but said, “The ad agency is going to do lame storyboards.” So they gave us signing-off approval. Then we said, “The music is going to be really bad,” and they said, “You can make the music!”

That was in 2000. It was one of the biggest ad buys at the time: The ads were shown at the Grammy Awards, the basketball playoffs, the World Series. Every month, a new one aired. We went from 10 shows a week at 50 percent capacity to 14 shows at 100 percent.

Then we went international. Germany is the second-biggest entertainment market in the world for theater, so we started there. It felt appropriate, because when we did the funeral for the ’80s, we burned the Berlin Wall, and then it actually came down. So we felt personally responsible. We’ve had shows in Amsterdam and London. Today, we’re in Stuttgart and Tokyo.

We have about 70 Blue Men on the payroll. They’re hard to find. A lot of them trained in theater or are good drummers. We have a casting director and hold national auditions. Our Blue Men train in New York before we ship them out to our shows in other cities.

If you invent your own instrument, you’re automatically one of the top three musicians in the world on that instrument. We have made up more than 30 instruments, like the tubulum, the drumulum, and the piano smasher. I can barely hold my own musically, and yet I get to be a rock star. We made several albums; one was nominated for a Grammy.

We created a school in New York with an arts-based curriculum. It’s called the Blue Man Creativity Center. We have 2-, 3-, and 4-year-olds. Next year is our first kindergarten. We’re growing a grade a year. This year, we had 200 applications for 30 spaces.

Some people think that when we get bald and blue that we’re just hiding behind a mask. But we think it’s the opposite. When you get blue, you’re left with just the purest, most vulnerable humanity. And so, about halfway through the show, people start to go, “Whoa, I’m the Blue Man.” And once you get there, you wonder, Are there actually three different characters, or is it three aspects of one personality, so together they’re one character? Those are exactly the questions we want people to be asking.

[via Inc Magainze] by Matt Goldman

George Foreman has three fundamentals of business success: selling, integrity, and “the shotgun tactic.” Over a lifetime, Foreman has created the kind of well-rounded success that most people dream of. He is a profitable businessman, a community leader, a husband and a father. His life is full, but more importantly to Foreman, his life is meaningful.

With nearly 100 million George Foreman Grills sold since 1995, Foreman has had enormous influence in the wellness industry. He is also one of the highest-paid and most recognized celebrity endorsers in the world.

In 1999, Foreman signed a $137.5 million deal with Salton Inc. (recently merged with Applica Incorporated), entitling the grill manufacturer to global, unrestricted use of Foreman’s name in marketing the Lean, Mean, Fat-Reducing Grilling Machine and related products. The deal made Michael Jordan’s $40 million deal with Nike look small by comparison.

Before his endorsement of the grills, Foreman made business deals based primarily on a desire for income. “I was so successful,” he says. “All the ads I had done for sausages, you name it, [I was] mainly thinking about money. But then I went into the grill business.” He took the grills all over the country, making personal appearances and boosting sales. “I was meeting people who would say, ‘The doctor told me to get a George!’ I’m like, what are they talking about? Get a George?” He realized his product was making a difference in people’s health, and his perspective changed. “From that point on, you know, I can never go back to what I used to do where I just sell and sell,” he says. “Now everything I do has to be connected to something healthy.”

The Importance of Selling
Of course, Foreman’s business success started with his success as an athlete. Born in 1949 in Marshall, Texas, Foreman, nicknamed “Big George,” was one of seven children in a struggling home. By the time he was 15, he was a street thug and mugger in Houston’s dangerous 5th Ward. His life changed when he left for California to join the Job Corps and was introduced to the discipline of boxing. In 1968, Foreman won the Olympic Gold medal in Mexico City, in only his 25th amateur fight. A world champion was born.

Within a few years of turning professional, Foreman’s record was 37 wins—most by knockout—and no losses. In 1973, he defeated Joe Frazier to become heavyweight champion of the world. Despite his fame, he maintained a cold distance from the public, and his surly demeanor earned him occasional boos in the ring. He defended his title twice before losing it to Muhammad Ali in the “Rumble in the Jungle” in 1974.

A few years later, Foreman announced what he thought was his retirement. A religious awakening led him to pursue a life in the church. He didn’t know at the time that the seeds of his business success lay in these days of personal transformation.

“It started because I left boxing in 1977 and worked in evangelism at a church in Marshall,” he says. Foreman had made a fortune in boxing, but now turned his attention fully to his faith. “I spent all my time preaching with lots of money. Lots of money.” But he didn’t preach like a rich man. He spent countless nights out on the streets of Houston, in all weather. Just as in his boxing career, he was relentless.

He also made good on a personal pledge to help at-risk youth, just as he had been helped during his early days as a teenage thug. After he joined the Job Corps, a counselor saw young George’s potential and got him involved in boxing, possibly saving him from a life of crime or jail or worse. Foreman wanted to provide the same kind of opportunities for young people and in 1984 founded The George Foreman Youth & Community Center, which offers scholastic and athletic activities including, of course, boxing.

But 10 years after he left boxing, he says he looked up and was on the verge of bankruptcy. “I had to go back into boxing for our survival, to feed my family.” Fortunately, his years spent preaching on the streets of Houston had taught him valuable lessons that would carry him into a second career as a businessman. “What I found was the 10 years I was out of boxing, I was preaching on the street corner and I’d make people stop. They didn’t know me,” he says, “the old George with an afro and all that. So I realized I could stop these people, who are always headed somewhere, for a second and sell my message. That’s what I learned to do on the street corner.”

He tried applying his newfound skills in the boxing world. “So I went back to boxing trying to sell the old George Foreman heavyweight champion of the world,” he says. “Nobody wanted to buy it, though.” Foreman was 38 when he returned to the ring, a tough sell for any athletic comeback. But the man in front of the camera this time wasn’t cool or removed. He had a gentleness about him that contrasted his toughness in the ring, and that appealed to the public.

“In time, I learned the importance of selling,” he says. Foreman realized he had power outside the ring to influence how people viewed him. In 1994, at the age of 44, Foreman reclaimed the heavyweight title. “That’s when people started to say, ‘This guy can sell himself. Let’s let him sell Doritos or Kentucky Fried or McDonald’s.’ ” And sell, he did. In addition to promoting these companies, Foreman became the spokesman for Meineke Car Care Centers. The boxer and preacher was now an advertiser’s dream come true.

But he says his athletic ability was less a factor in his business success than his selling skills. “If you learn to sell, it’s worth more than a degree,” he says.” It’s worth more than the heavyweight championship of the world. It’s even more important than having a million dollars in the bank. Learn to sell and you’ll never starve.”

Integrity: His Greatest Asset
“The greatest asset, even in this country, is not oil and gas,” Foreman says. “It’s integrity. Everyone is searching for it, asking, ‘Who can I do business with that I can trust?’ ”

By 1994, Foreman’s life was again on the upswing. When he took the opportunity to endorse what is now the George Foreman Lean, Mean, Fat-Reducing Grilling Machine, he found a new drive to help people improve their lives by improving their health. Now he won’t settle for anything less when it comes to endorsements. “One of the biggest things is to fight,” he says. “Just don’t go absolutely for the buck.”

Foreman learned after his fi rst retirement that to go back into boxing he had to protect the brand of George Foreman. “So now I understand you must preserve the quality of your name, your integrity,” he says. “You don’t want to lie about anything. And it’s something that people will be happy about once they get to know you. Because people count on you. You know, a contract you can easily break. I’ve found in business, everyone signs a contract to make a business deal, and they always leave a loophole so they can break them.

Foreman says people with integrity are in high demand. “There are a lot of guys who are successful, they make a lot of big money, I mean millions overnight with a contract, and they don’t understand the evaporation. It evaporates. You’re always back to square one. I found that out, so integrity is how I do business. That’s my main asset.”

This attitude is one he intends to impart to his kids. He has 10 children—five with his current wife, Mary “Joan” Martelly. George III, nicknamed “Monk,” is Foreman’s business manager. “Your children are looking at exactly what you do,” he says. “You’ve got to believe in something. And you’ve got a line that you can’t cross. I point this out.

“I’ll give you an example. I had the opportunity to go into the restaurant business. A chain of restaurants, the George Foreman restaurants. And it was an opportunity right out to make lots of money.” But Foreman is opposed to selling liquor in his establishments, in accordance with his religious beliefs. “And they said, ‘Well, this is what will make more profi ts. You can just donate them to charity.’ I said, ‘No, I can’t do that.’ And my sons, who were in business with me, watching me put this deal together, they could not understand it. They just couldn’t understand. Not to say that they have to have the same feelings I have about things. But at least have something you believe in and you cannot be talked out of by dollars and cents. And that’s what I try to pass on.”

The Old Shotgun Tactic
Foreman is approached by hundreds of potential business partners every year. He reviews offers daily with George III, and asks for input from his wife and children before he signs a deal. So how does he choose from all the opportunities he sees? “I call it the old shotgun tactic,” he says. “My grandfather used to go out hunting during the days of the Depression. The good shooters, the marksmen, shot with one shell.” But during the Great Depression, you couldn’t put all your bets on one bullet because those bullets were expensive. “If you missed the squirrel, so to speak, you don’t have anything but an excuse on the table,” Foreman says. “But if you buy these cheap shots, which are buckshots, they scatter. You come back in with a squirrel. Although you got a lot of buckshot in it, you got a decent meal on the table.

“So now I use the same thing, although you’ve got to be selective because you have a name to protect.” Foreman believes that one of the many opportunities he investigates will hit it big. “You know you put out a lot of buckshot, you’re going to strike one,” he says. “You’ve got to start out early in the morning and look at hundreds, literally hundreds of things, looking for that quality. And it may take a year, it may take three or four years, but you’re going to hit something so you have something to put on the table for your family.”

Foreman’s company, George Foreman Enterprises, consistently strikes new deals for products and services that meet Foreman’s requirements of being high-quality and beneficial to the consumer. He has lent his name to a line of clothing for big and t a l l men sold by Casual Male and endorsed a new brand of shoes for diabetics by InStride as well as a health-food restaurant chain called UFood Grill.

“And then we have the green cleaning products, which I’ve been working on for a couple years,” he says. “We finally got it absolutely, totally biodegradable.” He hopes that using biodegradable products, like George Foreman’s Knock-Out Household Cleaning System, will help preserve the land for his grandchildren. His other hope is that the established cleaning-product manufacturers will follow suit. “This is going to be so good it’s going to make the big companies jealous, and they’re going to outdo me. And I still win,” he says. “I still win. Because it makes the planet much better.”

But it doesn’t end there. Through Foreman’s Web site, visitors can purchase cookbooks, memoirs and autographed boxing gloves. His 10 books, three of which were published by Thomas Nelson in the last two years, offer inspirational insights into life, comebacks and fatherhood. And then there are the grills. The newest version, the 360 Grill, is selling well and is one of several George Foreman brand small kitchen appliances, including the Lean Mean Fryer for reduced-fat frying and the Grill & Roast for convection cooking.

He’s also become a star of the small screen; his reality series Family Foreman starring him and his family debuted in 2008 on the cable channel TV Land, and an ABC sitcom starring Foreman ran for nine episodes in 1993-94.

Foreman has succeeded in creating more than a brand. He has created a relationship with consumers based on integrity and a gift for making the sale. This relationship allows him to transfer his brand to a wide range of products and succeed in staying diversified. “The bottom line is, you make a decision you’ll be able to sleep with, wake up the next day, look in the mirror and feel good about yourself,” Foreman says.

“You want to leave something, you really do,” he says. “I mean, in the end, statues and all those things, that doesn’t mean anything. Leave something that we’re all going to benefit from. I think that’s what I’d like to do.

Apply Foreman’s philosophies for success in your life:

1. Belief: “You have to have something you believe in. It could be someone you believe in, too. But at least have something you believe in and you cannot be talked out of by dollars and cents.”
2. Integrity: “You must preserve the quality of your name, your integrity. You don’t want to lie about anything. And it’s something that people will be happy about once they get to know you. Because people count on you.”
3. Sales: “Learn to sell and you’ll never starve.”
4. Resilience: “You’re going to fail if you do enough business. But you can always come back because you’ve got some integrity, and people need that.”
5. Persistence: “It may take a year, it may take three or four years, but you’re going to hit something so you have something to put on the table for your family.”
6. Legacy: “You want to leave something, you really do. I mean, in the end, statues and all those things, they don’t mean anything. Leave something that we’re all going to benefit from.”

[via Sta.rtup.biz] by Amy Anderson

Tony Hawk is rich and chief executive of his own company, but that doesn’t mean he’s changed all that much from the skateboarding kid with a junk food diet. In fact, it’s something he says makes him a better C.E.O.

For Hawk, it’s always been about being true to one’s self, or at least his constituency—the skaters.

“You have to be approachable and identify with your audience,” Hawk said. “I never forgot where I came from. I still continue to skate with the kids and see what they’re up to. I still eat at McDonald’s.”

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Watch more interviews with Tony Hawk

Hawk has never lost touch with that audience and doesn’t want to. And that may be the key to the success of his Tony Hawk Inc., a privately held business with 30 employees working from an office park 40 miles north of San Diego.

“(I want to) actually experience it and not hire a marketing group to do it for you and then you’re out of touch and you’re relying on whatever their vision is,” Hawks said.

Hawk started skating at the age of nine and three years later he gained his first sponsor.

Two years later at 14, he turned professional and in the following two years, he was considered the best skateboarder in the world. Over the next 17 years, he won enough contests–enough to think he was set for life.

He launched a skateboarding company, Birdhouse Projects, but it struggled as pubic interest slumped. Hawk slumped, too, financially. But when skateboarding and extreme sports began to grab the spotlight, he seized the opportunity.

His defining moment could be deemed when he went to the 1999 X-Games in San Francisco and completed the first “900″ in skateboarding competition. (A 900 is a jump of two-and-one-half rotations, 360 degrees + 360 degrees + 180 degrees = 900).

“I didn’t really anticipate making (the 900) that night,” Hawk said. “I told myself that night that I was going to make that trick or get taken to the hospital.”

That kind of determination served Hawk in business, too.

“I go with my gut feeling,” Hawk said. “Is this is something that is truly connected with what I do.”

He trusts his instinct because “I do live in this world. I didn’t learn about it through videos or books. I actually did it and struggled with it.”As a businessman, Hawk now has racked up unusual success.

His video game series with Activision has sold more than 30 million copies and the newest releases are frequently among the top 10 sellers in the business. He’s done a direct-to-DVD movie, a clothing brand that’s sold at Kohl’s and last year, the Tony Hawk Big Spin roller coasters made their debut at Six Flags’ Amusement Parks.

That’s all in addition to his skateboarding business and an extreme sports tour called Tony Hawk’s Boom Boom HuckJam, which he started in 2002.

Hawk also founded the Tony Hawk Foundation, which is designed to promote and help finance public skate parks in low-income areas.

The foundation has distributed more than $2.3 million to non-profit groups building skate parks everywhere from Homer, Alaska to Needles, Calif., to Greencastle, Ind., to Livermore Falls, Maine.

[via Conde Nast Portfolio] by Phillip Lee

Twelve years ago, Jeff Koeze surprised his wife, his parents, and himself by agreeing to give up a comfortable life teaching law to take over the then-86-year-old family business. At 36, the professor was going to become a nut man.

His father, Scott Koeze (pronounced KOO-zee), was sick of running Koeze Co., which was doing about $7 million a year, mostly in mail order, primarily in cashews. That worried Jeff enough that he insisted that his father not stick around any longer than two years. If the elder Koeze ended up refusing to leave, Jeff had a golden parachute: two years of salary. Moving from the University of North Carolina at Chapel Hill, Jeff and his wife, Kate, even chose a house in Grand Rapids, Michigan, where Koeze Co. is based, that they figured would be easy to resell. “I wanted a risk-free out if it didn’t work,” Jeff says.

Instead, a few months after Jeff showed up, his father went on vacation and didn’t come back. Didn’t return phone calls, either. “I know your dad — he’s retired,” a longtime worker told Jeff.

Koeze was in disbelief. “That just can’t be,” he replied. But it was.

Thus began the education of an educated CEO, a lawyer and tenured professor steeped in book learning but lacking any business experience; given to endless research, at a company that had been built and run by his shoot-from-the-hip father; accustomed to debating with colleagues and letting the best argument prevail, at a company where workers had no expectation of knowing why a decision had been made.

In his early years at the company, Koeze despaired — not about going bankrupt but over the fear that he would never turn the place into anything resembling his view of himself: intellectually curious, blunt and transparent in speech, and able to shift rapidly from one challenging task to another.

He didn’t want to be a smart guy running a dumb business, even if it did make money. And, anyway, he suspected profits wouldn’t last long unless the whole place got smarter.

It did. Here’s how, one lesson at a time.

IT DOESN’T MATTER HOW YOU LEARN — JUST LEARN

Before leaving, Koeze’s father managed to throw him this piece of advice: “You can’t learn to run a business by reading a book.”

But the younger Koeze, so unlike his intuitive and impetuous father, had always turned to books for guidance. Besides, the old man wasn’t around to show him the ropes. Workers at Koeze weren’t going to be much help; they knew only the old ways, and that wasn’t at all what Jeff Koeze had in mind. “I attacked it like I attack every problem,” he says, “with a stack of books 18 feet high.” (For a sampling of Koeze’s influences, see “The Well-Read Entrepreneur“.)

Among the workers he inherited, he says, he saw “intellectual passivity.” People weren’t interested in learning new skills. “My employees were extremely good in the narrow base they’d built up over time. But that narrow base gets outdated pretty fast.”

Koeze’s wide smile often turns down, into a faint grimace. And his eyes widen and his brows lift frequently to suggest a shared secret. But his voice is steady in volume and pace, almost never excited. “I am neither a firer nor a screamer,” he told himself. “If I can’t get better at this, I am going to have to sell this company.”

Koeze, 48, went to remarkable lengths — hauling in consultants, a shrink, a philosophy professor; reading a library full of organizational behavior books; trotting off to pricey seminars — to challenge both the workers and himself to adapt to one another and perhaps forge a better way of working together.

Is selling nuts really so complicated? Koeze packages them as business gifts in fancy glass jars, priced to compete with a nice necktie. Send out a million catalogs. Roast and pack. Take orders and ship. But extreme seasonality, with 96.5 percent of sales coming in the fourth quarter, requires rapid expansion and sudden shrinkage. It’s jarring. Year-round employment of about 40 swells to some 130 before Christmas. Koeze needed to launch new products and sell through new channels to expand. And doing a good job at even mundane stuff — buying packaging, running retail outlets, hiring people — seemed to a business newcomer to invite endless reading and research.

Koeze’s eventual success — he has boosted sales to $12 million, improved profit margins, introduced new products, and modernized manufacturing and order taking, and many workers have ultimately embraced the boss’s rigorous data-driven decision making — isn’t an argument for or against business by book learning. Rather, it’s an argument for learning, by whatever means an entrepreneur and his or her company can manage it.

Koeze is now a seasoned entrepreneur, with lessons also learned on the shop floor. But still, his first reference in discussing business is almost always a book. Why, I ask him, is his desk organized so meticulously — 80-some file folders, labeled and displayed in an amphitheater of to-dos?

“David Allen’s Getting Things Done,” he replies and gives a faithful and succinct synopsis of the book. Having laid out the concept, he then talks about how he applies it to Koeze Co. He operates with a calendar of meetings but no to-do list. A quick scan of his desk, however, can remind him what’s hot on his agenda.

EVEN IF YOU’RE GREEN, TRUST YOUR INSTINCTS

Jeff Koeze’s first full year in charge, 1997, Koeze Co. ended the holiday season with $600,000 in unsold merchandise. A lot of it was mixed nuts.

Koeze had to heavily discount the stuff. “A one-time, half-million-dollar working capital reduction” was the result, he says.

Should he have been worried? The company was still profitable. Many of his workers didn’t seem surprised or troubled. The financial statements — they made no distinction between finished and unfinished inventory and thus gave no clue about unsold nuts in prior years — were no help. Still, it didn’t seem right to Koeze to have missed the sales plan by such a wide margin. “I was certainly shocked,” he says.

The old method was to estimate the coming year’s sales — essentially tweaking last year’s results — and schedule the plant in long, uninterrupted runs to produce the necessary inventory: cashews, mixed nuts, candies. Even if orders came in that didn’t match expectations. It was convenient for production workers but ultimately costly to the company.

Koeze got the production, sales, and shipping people together and told them to fix the problem. “A huge improvement came by just saying this really matters,” he says. In 1998, unsold merchandise was $200,000. “A number I can live with,” he says. Also a glimmer of hope that his workers, if asked to, could actually help solve a problem. Radical change, including twice-daily meetings to adjust production to sales results as the holiday season heats up, has now brought unsold merchandise down to less than $150,000, even as sales have almost doubled.

IF YOU’RE NOT CAREFUL, YOUR BUSINESS’S HISTORY WILL BE YOUR DESTINY

Scott Koeze had been forced at age 28 to take over the business when his father died suddenly, and he had had a love-hate relationship with Koeze Co. ever since. He had always made sure Jeff felt absolute freedom in choosing a career. Though the two were vastly different in temperament, they sought each other’s company. When he was a kid, Jeff recalls, his father left for work at 5:45 most mornings. “But if I could hold him up until 6, Looney Tunes would come on, and he would watch with me for an hour.”

As a youth, Jeff sometimes went to the plant with his father, shoveling peanut skins away from the roaster and into burlap bags, and wedging his slender body into tight spots to inspect for rodent droppings. But Jeff never saw himself running Koeze Co.

And it was peculiarly his father’s company. Scott Koeze had made some smart moves. He had sold his biggest product line, private-label peanut butter (a $10 million operation), when he realized the business was about to get squeezed by supermarket consolidation. He had built a business selling Koeze’s nuts and candies through community groups doing fundraising. And he had built up the catalog business to spread sales nationally.

But he had a touch of the crazy boss in him. Weeks after being hired as Scott Koeze’s assistant 26 years ago, Deborah Owsinski introduced her new boss to her husband. ” ‘I’m so happy to meet you. I love your wife,’ ” she recalls Scott saying. “And he turned and planted a big wet kiss on my mouth. That sort of set the tone. He was hilarious. I loved working for Scott. He was not predictable.”

Not everyone was laughing. Tom Lakos, who runs Koeze’s two retail outlets, both in Grand Rapids, recalls Scott Koeze sneaking up on him “just to catch me not working.” More than once, the boss yelled at Lakos so thoroughly, over a variety of matters, that a co-worker dissolved into tears.

Inconsistency led to dysfunction. Scott Koeze was known for asking employees to look into his latest whim. Then he would forget about it and express surprise or lack of interest when workers reported back to him with proposals. So people began ignoring his requests.

Jeff Koeze, unaware of this little drama, was perplexed when, as the new boss, “I’d ask people to do stuff — and they wouldn’t do it.” He only later found out why. “As it turns out, it was entirely logical behavior,” he says.

Indeed, it took Jeff some time to realize he was having a personality clash — not with any individual but with the established rituals at Koeze Co. It’s a problem that blindsides many who enter a new business at the top. Hyperrational, by his own description, and accustomed to university colleagues who were also wired that way, Jeff expected workers at Koeze Co. to behave similarly.

But they had learned from Scott Koeze. “I never had a plan,” Scott says. “I got up in the morning, and I ran like hell.” It’s easy to believe him. These days, he dresses like a cowboy, a lanky man in hat, boots, and a snap shirt. And he can’t seem to sit still in his own house, which perches on a hill overlooking Lake Michigan on the Leelanau Peninsula. When I visit, he drags me out for a buggy ride behind a duo of big Frisian horses across his sprawling property.

Coaxing the horses at every turn, he pleads guilty to micro-managing. “I’d say, ‘Move aside and let me do it,’ ” he says. When he discovered that his workers had compiled a guide to handling customer complaints, he told them, “Burn that file. I want to handle every complaint.

“I had people problems, and I knew it,” Scott Koeze says. “And I could not take my business one step further. I’d had a bellyful of that business.”

Jeff Koeze initially bought a minority stake from his father, financed over 10 years. About five years into running the company, convinced he wanted to stay on, he persuaded his father to sell his voting control. “You know as well as I do, people have done odd things as they get older,” he explained to his father. The note for that part of the sale has five more years to run. Jeff now owns two-thirds of the company, and his parents own the remainder.

PEOPLE RESIST CHANGE

If something sounds like a smart idea to Jeff Koeze, he will generally try it. He has always been that way. He opted to switch high schools his junior year, moving to Cranbrook, a private boarding school in the Detroit suburbs, where he knew he would get more challenging studies. He wasn’t afraid of being the new kid. “It’s every high schooler’s dream, right?” he says. “You get to start over.”

Shown the wisdom of change, surely Koeze Co. workers would embrace it. Koeze needed the company to be a place where criticism was shared and accepted. He brought in a North Carolina colleague, organizational psychologist Roger Schwarz, who now runs his own consulting firm. Schwarz advocates a particularly open form of communication between businesspeople. No hidden agendas. No sneak attacks in meetings. His theories can be particularly annoying to powerful people, because he argues that leaders, by communicating poorly (sandwiching criticism between dollops of insincere praise or asking questions about a touchy subject without first explaining why), often cause the very behavior in underlings (failure to hear criticism, refusal to volunteer bad news) that most irks them.

When Schwarz asked Koeze’s managers to write up accounts of conflicts they had had with one another, an exercise in dissecting unproductive speech habits, some resisted. They viewed Schwarz’s methods as BS and weren’t wild about opening old wounds. One refused to participate. Koeze didn’t see what the big deal was. “The only risk was someone would start to cry,” he says.

And though Schwarz regards Jeff Koeze as one of his clients most devoted to the methods — “Jeff is easily a nine or a 10″ on a 10-point scale — Koeze to this day feels his crew tiptoes around difficult topics. “Notwithstanding all of our training,” Koeze wrote as part of a case study for one of Schwarz’s handbooks, “I recently described the avoidance of delivering negative information concerning the performance of others as a core feature of Koeze’s culture.” Without a freewheeling discussion, how could he get the staff to embrace different ways of doing business?

Koeze brought in a local philosophy professor, Michael De-Wilde, who uses literature to get varied groups, including prisoners, to discuss their situations. At Koeze, DeWilde assigned Steinbeck’s Of Mice and Men. The workers were soon comparing one another to its characters. “You’re like Lennie” (the mentally dim worker who doesn’t know his own strength), one Koeze employee bluntly told another. DeWilde says the exercise helped two workers realize they wanted to leave Koeze, and that eased problems in the production shop.

In 2004, DeWilde helped Koeze face up to a service problem at his retail stores. Workers were too passive in service — they camped behind the counter rather than prowling the store to engage indecisive customers. And they were too aggressive when it came to handling complaints; they were reluctant to simply give an unhappy customer a new jar of nuts. Neither problem was huge, but Koeze knew any failure to resolve a complaint in the customer’s favor would risk losing that person for good. And sales weren’t going to rise on their own — his retail workers needed to sell.

Koeze asked DeWilde to fix the service problem, and in a way that would keep him from being surprised by problems a second time. For 10 months, the retail workers met every other week — in two-hour sessions, fully paid — and shared their ideas and frustrations. Marcia Huber, who has worked nearly a decade at Koeze stores, says her initial training was “next to nothing.” She knew whom to call with a problem but hadn’t been told how to solve problems. The occasional upset customer, then, was a source of great worry for her and others.

With DeWilde’s help, the salespeople decided that it’s OK, when a customer knocks on the door after closing time, to let him or her in; customers could sample anything in the store; and if a customer was unhappy with something, staff should replace it free of charge and without question. “That did take a lot of anxiety out of seeing someone walk through the door with a Koeze bag,” Huber says.

Upon meeting DeWilde, she says, “At first we were intimidated by his education.” But over time, she adds, “I felt very pleased that the company would put forth that much effort. It built our confidence.”

Still, change was often coming too slowly to suit Jeff Koeze.

SOMETIMES, THE BOSS NEEDS TO CHANGE

By his sixth or seventh year at Koeze Co., Jeff says, he felt “a great deal of personal frustration.” Being a boss, he realized, often meant delegating to people with skills inferior to your own. It also meant much of your own company is hidden to you, because workers don’t share a lot of what they know. Those problems, of course, no boss can fix. He wondered if he should sell.

“I was not well suited to this or any business,” Koeze remembers thinking. “There were things that had to be fixed about me. I was probably rational to a fault.” As an undergrad at North Carolina, he had flourished at Chi Psi, the school’s nerdiest fraternity. For his blunt debating style, his brothers voted him “most obnoxious Yankee” seven semesters in a row.

“He relished earning that distinction,” says Donald Beeson, a Chi Psi brother. “He was very direct.”

As a professor, among colleagues, Koeze operated under the assumption that the best argument wins any given point. “Formal authority is rarely used,” he says. Inherent in that approach is the belief that people shouldn’t be told what to do. Rather, they should be taught to decide what to do.

But the approach was foreign to the workers at Koeze Co. It took the help of Schwarz, DeWilde, and others, but Koeze eventually came to see “how unlikely it was that I was going to be able to argue people into doing things my way. The other piece of it is my own reluctance to use authority.”

Indeed, he sometimes had to simply give orders. He had to stop researching and just make a decision. “He’ll get so anal on numbers, he’ll overanalyze it,” says Paul Bernhard, an accountant who advised Scott and Jeff Koeze on succession issues.

So, Koeze did change. He took some of the Roger Schwarz medicine he had been prescribing for others: He began to share his thoughts, and that put people at ease. At DeWilde’s urging, he also became more patient. And Koeze listened to and changed his own speech. He realized he confused people by verbally debating with himself the very issue on which he was about to give an order. “It’s made worse by a habit I have of thinking out loud,” he says. “Somewhere in here, there’s an order. That’s all they’re listening for. ‘When are you going to tell me what to do?’ ”

And Koeze stopped yearning for workers he couldn’t afford and instead invested in the ones he had. “We can’t afford to hire fancy folks,” he says. “But we need them.” He learned to spot traits in his existing workers — compulsiveness, curiosity — that translate into business skills. His dissatisfaction, he decided, “was mainly just me getting snippy with people.”

HOW YOU RUN YOUR LIFE AFFECTS HOW YOU RUN YOUR BUSINESS

As he settled into Koeze Co., Jeff Koeze got heavily involved in outside activities, some that too closely resembled running a business. He was serving on the board of an antitobacco group, and he was on his church’s vestry. His creative director, Martin Andree, convinced Koeze he was overextending himself. “People’s livelihoods and families are depending on you,” Andree told him. “You’ve got to take care of yourself.”

Mike Redman, a former Steelcase executive who met Koeze on the church vestry and then came to work at Koeze Co., also warned his new boss, “If you want to grow this thing, you’re going to have to give up some of these outside things.”

Koeze listened. He relinquished his board seat with the antitobacco group in 2002 and scaled back other commitments. He took up mind-clearing hobbies such as skeet shooting and beekeeping (still allowing himself a stack of books on such topics). The change gave him more energy to tackle projects that had seemed too difficult. He relaunched the peanut butter business, but as a premium brand, Cream-Nut, sold at high-end retailers. He finally got a strategic plan written, in 2007.

APPLIED OVER TIME, CRITICAL THINKING SKILLS SUCCEED

As he became more patient, he realized that some workers had in fact grown. Debbie Stokes, a longtime employee, remembers wondering, upon Jeff’s arrival, “Who’s the geek with the bow tie?” But as the years went by, she saw a kindred spirit, and she understood that her own compulsive urges to organize could now be unleashed at the office. “It was fun to set up all these new processes,” she says.

Koeze Co. became smarter. A lot of running a business is project-based stuff few entrepreneurs do frequently enough to truly master. Reading up helped Koeze and his employees pull off a series of big improvements.

The mail-order catalog, 30 to 40 items on 12 pages when Jeff arrived, is up to 100 items this year, on 28 pages. The million copies are sent out bearing about 70 key codes, which allow the company to track sales by cover art, days the catalogs are mailed, and which rented mailing list was used.

A new phone system is being installed. Before the company signed a contract, Deborah Owsinski, now an executive, read up on the topic and then produced a 10-page request for proposal. It resembled something that a far larger company would issue, says Mike Borowka, director of business development at Quantum Leap Communications, the vendor that won the contract. “They had it all storyboarded out, this whole process. It’s a little intimidating,” Borowka says.

Koeze asked Owsinski to research incentive pay. She had done so several times for Scott Koeze, only to see her work ignored. But she read up again and became enamored of a book, Punished by Rewards, by Alfie Kohn, that argues against individual incentives for children, students, and workers. She persuaded Koeze to implement a profit-sharing plan without individual bonuses. It rewards collective performance. “I wouldn’t run an investment bank this way,” Koeze says. “But it works for us.”

Fixing the call center in 2007 may have been Jeff Koeze’s finest hour. A sample of orders taken showed that a disturbing 35 percent contained errors: the name Whithead typed in as Shithead; the gift greeting with our love rendered as with out love. Those were caught before they went out. Who knows what wasn’t caught?

Koeze Co. has a 550-page training manual for the dozens of temporary workers it hires every fall to staff the call center, and some get as much as seven weeks of paid training for their 10 weeks of productive work. But there was a history of bad blood between the auditors and supervisors who correct order mistakes and those who take the orders.

All the measuring in the world wasn’t going to fix that. So Jeff Koeze hired Marybeth Atwell, a clinical social worker with minimal business experience, to counsel the opposing groups. As Schwarz had, she examined speech patterns. Auditors and supervisors stood over the order takers, and she suggested sitting down next to them to discuss errors. The auditors and supervisors tended to command (“I need to talk to you”) rather than ask (“Do you have a minute?”). And they voiced exasperation (“You made the same mistake you made yesterday. What’s the deal here?”) instead of constructive suggestions (“I notice you made this mistake on a number of occasions. Can you go back and examine how you did this?”).

Order takers, many returning from previous years at Koeze, needed a fresh outlook, too. “If you start a dynamic in the group of hating the supervisor, then nobody benefits,” Atwell told them. “A lot of these people are unemployed and really wanting work,” she says. “So they bring a lot of their own frustrations.”

Order-taking errors declined to as low as 10 percent, and nearly all mistakes are caught before shipping.

A SMART BUSINESS IS MORE THAN JUST PROFITABLE

The cashew company, after a dozen years, bears a strong resemblance to its owner. Numbers-obsessed but compassionate. And smart. In long conversations, DeWilde, the philosophy professor, and Koeze, the cashew man, talked about Aristotle’s notion of friendship: surrounding yourself with people who challenge you to be your best. For Jeff Koeze, the business is that friend — or, in DeWilde’s words, “an avenue for him to be who he wants to be.” Koeze, he adds, “wants to go to work in the morning. That wasn’t always the case when I met him.”

And Koeze says he remembers his father’s advice — that you can’t learn to run a business by reading books. “I guess I’d say you can, by reading lots and lots of books, and then running it.”

[Via Inc. Magazine, December 2008] by: Jeff Bailey

The notorious urinal that served patrons of the famed New York rock club CBGB for 33 years now sits retired in a basement in Manhattan’s posh SoHo district.

Plucked from the graffiti-covered walls when the club closed in 2006, the urinal is among several CBGB artifacts — such as the gritty “CBGB & OMFUG” awning that hung over 315 Bowery and a phone booth covered with punk-rock band stickers — donated to the Rock and Roll Hall of Fame Annex NYC, which opened its doors last week.

The donation is just one step taken by entrepreneurial group CBGB Holdings LLC to revive the brand and transform it once more into a money-making business — without jeopardizing its counter-culture past.

Last month, the group struck a distribution deal with Bravado, a Universal Music Group company that markets rock-themed merchandise around the world, to help sell millions of CBGB T-shirts. Next summer, the Vans Warped Tour music festival will showcase an interactive CBGB exhibit.

These deals were crafted by two men who believe there’s life after death for the landmark venue: James Blueweiss, a marketer who began advising the club a year before it closed, and Robert Williams, a veteran of the retail music business who helped open HMV stores around the world. The two attracted capital from angel investors and paid $3.5 million for the rights to the CBGB brand in 2008. Their company, CBGB Holdings, owns all intellectual property, domestic and international trademarks, copyrights, video and audio libraries, ongoing apparel business, Web site and physical property of the original club.

Andy Warhol, second from right, and friends stand outside CBGB in 1976. (click for full image)

Hilly Kristal opened CBGB — Country, Bluegrass, Blues — in 1973 and intended it to be New York’s premier venue dedicated to the genre. But with too few acts to occupy its stage, CBGB soon attracted young musicians eager to showcase a new sound. Mr. Kristal added to his marquee “& OMFUG” — “Other Music For Uplifting Gormandizers.” In the years to follow, the Ramones, Television, Patti Smith, B-52′s, Talking Heads, Richard Hell, Debbie Harry of Blondie, Dave Matthews Band, Green Day, Pearl Jam and many others graced the CBGB stage.

“I took Hilly to lunch and said, ‘I’m a salesman. I’m a promoter. I really love your story and I want to help you,” Mr. Blueweiss said of his 2005 pitch to Mr. Kristal. “If you’ll allow me to represent you, I think I can cut some slick deals and give you your pay day after 33 years on the Bowery.’”

Mr. Kristal agreed to work with Mr. Blueweiss, but the club’s future was soon in jeopardy. A dispute arose between CBGB and the Bowery Residents’ Committee, which said the club owed more than $75,000 in back rent. Longtime patrons came to the aid of Mr. Kristal in a fight to save the club. Steven Van Zandt, an actor and E Street Band member organized a petition and a “Save CBGB” rally, but despite the efforts, the club was forced to shut its doors.

“I said, ‘Hilly, sell it to me,’” Mr. Blueweiss said. “I’m passionate about this.”

Mr. Kristal agreed to sell the CBGB to Mr. Blueweiss on the condition that he would remain chairman of the company for three years. The men did not know at the time that complications from lung cancer would keep Mr. Kristal from seeing his club reborn. When Mr. Kristal died in August 2007, just a few months after signing an agreement to sell CBGB, Mr. Blueweiss charged forward with the plan to keep the CBGB legacy alive.

But a new era of CBGB won’t be without challenges. Ownership of CBGB is being disputed by Mr. Kristal’s former wife, Karen. In a lawsuit filed last year in Surrogate’s Court in Manhattan, Mrs. Kristal, 83, claims that she is the rightful owner due to an agreement the Kristals made before they opened CBGB in 1973.

The suit, which names Mr. Kristal’s estate and CBGB Holdings, states that because of legal complications due to a bankruptcy of a previous business, Mr. Kristal listed his wife as the owner of record in order to obtain a liquor license, even though they were already divorced.

In a statement, lawyers for the estate called Mrs. Kristal’s claims on the trademark “specious….CBGB was, and is, synonymous with Hilly Kristal.” CBGB Holdings declined to comment about the suit.

While that dispute plays out in court, CBGB Holdings will be charged with the tough task of keeping the brand relevant to a new generation.

The CBGB exhibit at the Rock and Roll Hall of Fame Annex NYC (click for full image)

“Some amazing pieces of history went down there, and this place deserves to be part of the Rock and Roll Hall of Fame, but how do you take a brand that magically formed and find a way for it to live?” said Julia Beardwood, founder of brand consulting firm Beardwood and Co. “And, is it even right to bring it back from the grave? They have a brand that’s trying to make some money using the CBGB name, but they don’t want to devalue what it stands for.”

The most immediate plans for the CBGB business is an overhaul of the Web site that will include streaming music and videos, social networking components and a forum for fans to add their stories from nights spent at the original club. The site will also promote promising new bands, much like Mr. Kristal did for the Ramones.

Blueweiss said revenue from T-shirt sales is about $6 million a year in Japan alone, but declined to provide total revenue. He said the deal with Bravado should boost overall figures.

Ultimately, CBGB Holding’s dream is to reopen a club. Mr. Williams said discussions are ongoing with properties in New York and Las Vegas, but a new venue won’t be opened for at least 18 months.

“Live music is what CBGB is all about, and ultimately it will be back there, but it has to be done the right way,” Mr. Williams said.

Last week, E Street Band’s Mr. Van Zandt, who lobbied to save the original venue, strolled through the New York Rock and Roll Hall of Fame CBGB exhibit.

“It’s good to keep the history of the club alive,” Van Zandt said. “Hopefully, what they’re doing to help the brand will help do that. We tried to get the mayor and the governor to help save the place and it didn’t work. Rock is a massive part of our identity and it’s good to see people who want to preserve it.”

[via WSJ Small Business] by Ty McMahan

Don Tapscott is just another guy you NEED to know about. As one of the world’s leading authorities on business strategy, he opens discussion about the Net Generation, or NetGen. His main emphasis is on how information technology changes business, government and society. He is the author or co-author of 13 widely read books, including Wikinomics, which was the best selling management book in the United States in 2007 and is now translated into 22 languages. He is Chairman of nGenera Insight, a global business innovation company, headquartered in Austin, Texas with offices in the U.S., Canada, and the U.K. Don directs several of nGenera Insight’s research and education programs, which serve a marquee list of Global 2000 customers. Tapscott is also an adjunct Professor at the J.L. Rotman School of Business at the University of Toronto.

Phew. (Lots of props to Tapscott’s website for all this info: GrownUpDigital.com)

About The Book: Poised to transform every social institution, the Net Generation is reshaping the form and functions of school, work, and even democracy. Simply put, the wave of youth, aged 12-30, the first truly global generation, is impacting all institutions. Particularly, employers, instructors, parents, marketers and political leaders are finding it necessary to adapt to the changing social fabric due to this generation’s unique characteristics. Within its comprehensive examination of the Net Generation, and based on a 4.5 million dollar study, Don Tapscott’s Grown Up Digital offers valuable insight and concrete takeaways for leaders across all social institutions.

Grown Up Digital explores:

• How the Net Generation can be the most innovative, collaborative, and productive cohort, if given the proper working environment. From company ethic to leadership style, Grown Up Digital examines, in-depth, what this new organization will look like.
• The benefits of a shift from a traditional, broadcast model of education to one that is customized, collaborative and interactive
• How the Net Generation’s ability to scrutinize and investigate is forcing a new model of democracy that will have to be transparent, collaborative and engaging
• How parents, teachers, and elder influencers can engage in open and informative discussions to ensure technology is properly used
• How marketers no longer control their brands and how to cope with this power shift that affords the advantage to the consumer

Download The Introductory Chapter Here

Buy The Book

US NOW is a film project about the power of mass collaboration, government and the internet.

Learn More Here

He challenged the conventional teachings at business schools. He’s a 25 Top Visionary, one of the Top 24 Most Powerful Men In Business, and advises people to hang out with people who are better than you.

I wanted to add to the Warren Buffett story by sharing another valuable lesson from one of the world’s richest men: Never Back Down!

“You’re neither right nor wrong because other people agree with you,” says Buffett. “You’re right because your facts are right and your reasoning is right – and that’s the only thing that makes you right. And if your facts and reasoning are right, you don’t have to worry about anybody else.”

Buffett made a career out of taking the road less traveled. He is a value investor; he spends his time looking for securities whose selling prices are lower than their intrinsic value. He ignores the stock market, instead choosing to look at the overall potential of a company in the long term. Claiming that his favourite holding period is “forever”, Buffett’s conservative nature has distinguished himself from other investors.

Despite having many followers, value investing still has its critics. Taking this road less traveled was not always easy for Buffett, who has endured years of ridicule for his investment decisions, particularly during the dot-come frenzy. In 1999, Berkshire Hathaway stock grossly under-performed and analysts claimed that Buffett’s career was over because he had missed the technology boom. Wall Street thought he had committed the biggest mistake of his career and wrote him off. That is, until the dot-com bust in the early 2000s when his strategy proved infallible. “It was a mass hallucination, by far the biggest in my lifetime,” recalls Buffett.

Time after time, Buffett has listened to his gut instinct – and his vast research – to inform his business decisions. When others were acting and reacting to the stock market, Buffett was standing strong in his decisions. “You do things when the opportunities come along,” he says. “If I get an idea next week, I’ll do something. If not, I won’t do a damn thing…Much success can be attributed to inactivity.” His strategy is admittedly simpler than most investors feel comfortable with, claiming, “I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.” But, there is genius in its simplicity.

Having the confidence to follow his instincts, however, never meant that Buffett was willing to make an irrational decision. Buffett knew when he was in trouble and he knew when to walk away from something. “One’s objective should be to get it right, get it quick, get it out, and get it over…your problem won’t improve with age,” he says. “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”

Buffett knew that no matter what move he made he would always have his critics. He decided early on, however, that regardless of what anyone else said or did, he was not going to break his stride. “The important thing is to keep playing, to play against weak opponents and to play for big stakes,” he says.

By marching to his own beat, Buffett was able to surpass his competition. He wasn’t afraid to try something new. After all, “if past history was all there was to the game, the richest people would be librarians.”

Have you benefitted in your entrepreneurial career by never backing down? I’d love to hear your story!

[via YoungEntrepreneur] by Evan Carmichael

At 37, Andreessen is a legend in Silicon Valley. He created, with Eric Bina, the first graphical browser while at the University of Illinois, then co-founded Netscape Communications with überentrepreneur Jim Clark in the early 1990s. Netscape’s browser brought the internet to the masses, set off the dotcom boom, and so angered Microsoft at the time that Steve Ballmer, now the software giant’s C.E.O., led employees in “Kill Netscape!” chants. By bundling its Internet Explorer browser into Windows, Microsoft eventually drove Netscape into the arms of a suitor: AOL bought Netscape in 1999 for $4.2 billion.

Andreessen hasn’t had a success of that magnitude since. But he did create another billion-dollar company, Loudcloud, a tech-services outfit that later changed its name to Opsware and was sold to Hewlett-Packard for $1.6 billion. More recently, Andreessen started Ning, a website that lets anyone create a mini social network. Its most prominent customer: 50 Cent.

Andreessen joined Face­book’s board this year, invested in Twitter, and generally manages to show up on the front end of new technology trends. His blog, Blog.pmarca.com, has been a tech-industry must-read, in part because he’s willing to be brutally outspoken. In February, Andreessen ignited emotions when he blogged that he was starting a “New York Times Deathwatch.” ( Watch an exclusive video of Andreessen talking about the future of newspapers.)

Condé Nast Portfolio’s Kevin Maney interviewed Andreessen at a gathering of Silicon Valley’s Churchill Club in Palo Alto, California. The following is an edited transcript.

How’s your relationship with Steve Ballmer now?
He’s my Facebook [makes air quotes with his fingers] friend. I’m going to stop there while I’m still ahead.

Do you carry around any bitterness?
I’m a big believer that it’s like in The Godfather—it’s business, not personal. Netscape was an unbelievable experience for me. We sold the company for a lot of money. After that, I’m on to the next one.

I have to ask the guy who created the browser: What do you think of Google’s Chrome browser, introduced in September?
It’s very meaningful. It’s going to force Firefox and Internet Explorer to accelerate their performance. Basically, the barriers to doing everything in the browser are falling fast. And that includes a whole range of things, like Google Docs, spreadsheets, presentation packages. The Chrome browser is going to really push forward the wave.

Does this open up possibilities for companies you’re working with?
I’ll give you one example: I just announced this company called Qik. It will turn every phone that contains a camera into a source of streaming video and audio [which works better in a faster browser like Chrome]. Anybody can watch live, and then it can all get recorded. It’s almost the reverse of George Orwell. In 1984, the government had cameras mounted everywhere. In a Qik-based world, it’s the exact opposite. Literally, everybody on the planet is going to be streaming video. Excellent reason to stay at home.

And blog in your underwear.
Exactly.

Qik raises some issues, like what if 10,000 people at a concert all broadcast the show live?
About a year ago, we went to see one of the major sports leagues—I won’t mention which one. We presented how they can have social networks and users can post videos shot at games and photos and all this stuff. And the main topic of conversation was how they could prevent people from recording video with their mobile phones and posting it online.

You won’t tell us which league?
I won’t. But, you know, it’s a whole new world. The presumption is that there’s going to be live video all the time.

You seem to have your fingers in a lot of Valley companies. Walk us through Marc Andreessen’s daily life now.
My third company, Ning, is my day job. The only corporate board I’m on is Facebook, which I think is a very important company. I’m doing angel investing with Ben Horowitz, my business partner from my previous company. We’ve invested in 15 companies or so in the past year and a half. Maybe one a month, give or take.

What’s your approach to investing in startups?
Have it be a small enough amount of money that if it fails, we can still talk to the founder without getting mad.

How much is that?
I usually put in $25,000 to $100,000 per company. So far, so good—which is to say, I haven’t gotten really mad at anybody.

You said Facebook is a very important company. That’s not always the opinion you get, right?
I’m on Facebook’s board because Face­book is a true, old-fashioned Silicon Valley company in the best sense of that term: super-technology-focused, super-product-focused, very innovative—much more than it gets credit for—and very determined to build out a service that’s going to reach a very large number of people.

Qik, Twitter, Facebook, and other social networks—who has time for all of it?
Consumers are freeing up an enormous amount of time that they were spending with stereotypical old media, and clearly, that time is going primarily two places: videogames and online.

If you were running the New York Times, what would you do?
Shut off the print edition right now. You’ve got to play offense. You’ve got to do what Intel did in ’85 when it was getting killed by the Japanese in memory chips, which was its dominant business. And it famously killed the business—shut it off and focused on its much smaller business, microprocessors, because that was going to be the market of the future. And the minute Intel got out of playing defense and into playing offense, its future was secure. The newspaper companies have to do exactly the same thing.

The financial markets have discounted forward to the terminal conclusion for newspapers, which is basically bankruptcy. So at this point, if you’re one of these major newspapers and you shut off the printing press, your stock price would probably go up, despite the fact that you would lose 90 percent of your revenue. Then you play offense. And guess what? You’re an internet company.

What’s your relationship like with Jim Clark after all these years?
I’ve had two critical mentors in my career. One was Clark. Another was Jim Barksdale, who was Netscape’s C.E.O. And it’s funny because they worked extremely well together, but they have almost polar opposite personalities.

Clark is intensely entrepreneurial, extremely passionate, extremely emotional, completely fearless, absolutely delighted to create a new business, loves if it causes a lot of controversy. Barksdale is a builder and an operator and a manager. Clark is off in Florida. He has largely opted out of the tech industry.

Yeah, we haven’t seen him in a long time. He is having a lot of fun. He is dating an Australian swimsuit model. Seriously. He’s been in the real estate business in Miami doing a bunch of different business things. He sails a tremendous amount. I’m pretty much the exact opposite. I don’t like to leave Palo Alto.

So you’re 37, and you’ve taken on this mentoring role to people like Facebook’s Mark Zuckerberg and other entrepreneurs.
There’s a new generation of entrepreneurs in the Valley who have arrived since 2000, after the dotcom bust. They’re completely fearless.

Does that create the danger of a new tech bubble?
If there’s been a crisis in a market, you don’t tend to have a new crisis in that market until the people who went through the last crisis aren’t in the system anymore. It was only eight years ago. So here we are in 2008, and there’s still no sign of a bubble in technology, which I can encapsulate in two words: no I.P.O.’s.

No tech I.P.O.’s—is that a good thing or a bad thing?
Well, a very important thing. Through the 1980s and ’90s, tech companies would basically get into their expansion stage and then go public. In part, it was to have access to capital, in part to have an M&A currency, in part as a branding and a credibility event, and in part because there was a base of investors who wanted to invest in high-growth technology companies. Those days are just over. It’s just frozen. Is it a crisis in terms of company formation? Not yet.

We haven’t talked at all about mobile internet.
There was mobile before this thing [holds up an iPhone], and then there’s mobile after. If you were trying to build software for mobile phones last year, you were in a world of pain, of incompatibility—you had probably seven different operating-system platforms you had to deal with. You didn’t have any way to do over-the-air distribution of software or content. The carriers, especially in the U.S., had a choke hold on distribution and would put up huge barriers. It was an absolute nightmare.

As of now, that hasn’t changed.
That hasn’t changed, unless you’re on an iPhone. The iPhone is going to be at 100 million units before you know it. This is going to force everybody else to raise their game.

Is Google the new Microsoft—the new big, scary, monster company in tech?
It is true that Google is doing a lot of different things, and some will compete with other Valley companies. But the pros outweigh any future competitive threat. Google does so much to make other startups possible. Google makes new internet efforts easy to find. Google runs a large advertising network that distributes money to people who run ads. It is training and educating a very large base of really sharp people, many straight out of college, many of whom are not going to spend their entire careers at Google. Google is fertilizing the base. So I think it’s been very, very positive.

How about all the fears that Google is too powerful?
I don’t see it yet—and a big part of why is Google C.E.O. Eric Schmidt. Eric literally does not want to run a company whose M.O. is to just gratuitously go around and stomp on people.

You’ve probably got a good 30 to 40 years left in the business. What do you ultimately want to accomplish?
I love what the Valley does. I love company building. I love startups. I love technology companies. I love new technology. I love this process of invention. Being able to participate in that as a founder and a product creator, or as an investor or a board member, I just find that hugely satisfying. And I think the outcome can be big and important and profound.

I hear you’re getting deeper into philanthropy—Stanford Hospital, Room to Read.
That is increasingly important to me, for a couple different reasons. Partly, it’s wanting to give back. And partly, my wife of almost two years teaches philanthropy at Stanford. So I am completely committed to philanthropy because if I’m not, I’m in a great deal of trouble. I can’t even tell you.

[via Conde Nast Portfolio] by Kevin Maney