(word processor parameters LM=8, RM=75, TM=2, BM=2) Taken from KeelyNet BBS (214) 324-3501 Sponsored by Vangard Sciences PO BOX 1031 Mesquite, TX 75150 There are ABSOLUTELY NO RESTRICTIONS on duplicating, publishing or distributing the files on KeelyNet except where noted! October 27, 1992 PEROTBUS.ASC -------------------------------------------------------------------- This file was laboriously transcribed at KeelyNet from the Perot video entitled, "How to Build a Business & Create Jobs" Perot is such an inspiration to all thinking Americans that this info should be in print for easier reference, study and contemplation. Enjoy! All those who study the alternative sciences are ACUTELY aware of what research efforts in these areas WOULD LEAD TO if properly funded. Since our studies in blocking gravity or building over-unity energy generators require somewhat extensive electronics/mechanical labs, we are trying to get a research facility together. We at KeelyNet believe we have the keys/contacts to unlock one or both of these areas in addition to other interesting product possibilities. An 85,000 square foot building has been located and we are seeking funding for $10 million to span a five year period as support and backing for several researchers to be involved in several projects. The primary thrust of the VANGARD SCIENCES RESEARCH CENTER is to function as an Inventors' Co-Op to create new technologies and devices that will be marketed or contracted for manufacturing. This center will also provide for conferences, educational programs, a major computer network, study center and other profit centers to help sustain and grow this center as a revolutionary new business. Ross Perot is an outstanding leader and inspiration for everyone to try their hand at business. He started out on $1000 with a radical new idea. We are looking into several approaches to achieving our own goal of establishing this research center. -------------------------------------------------------------------- Tips from Ross Perot's Business Experience in Perot's own words Small business right now is being starved for two things, CREDIT and CAPITAL. Industries of the future, Biotech, Microelectronics, Commercial Aircraft, Robotics, Software, Computers, so on and so forth. -------------------------------------------------------------------- Page 1 How does a person prepare for starting his own business? My advice to the person who is considering starting a small business is : Serve an apprenticeship in an industry you are really excited about. Let's assume you have a Masters Degree in Business from Harvard, go to work 2nd and 3rd shift on the factory floor, learn it from the bottom up, (get to) really know that business, work there a few years, INSIST on doing EVERY job and one of these days, a light is going on in your head and you're going to have a REALLY unorthodox idea, an UNMET NEED. The way you find it, is by burying yourself in an industry YOU ADORE. That's the way you identify the unmet need and THEN you have the GERM OF THE IDEA to START YOUR OWN COMPANY! -------------------------------------------------------------------- What are the most important characteristics of a business founder? Here is a profile, they're not the brightest people you ever met and certainly I put myself in that category. They KNOW their strengths and weaknesses. They surround themselves with people MORE talented than they are BECAUSE they know THEIR strengths and weaknesses, and each person in the organization PLAYS to his or her STRENGTHS. There is a second characteristic, these people DON'T UNDERSTAND FAILURE, they don't KNOW when they've lost. If you wrote a book about any of them, again and again and again, they were beaten but just never recognized it and went on to build a great company. So, they have a level of perseverance and stick-to-it've ness that is really unique. Now, they are people that others will respect and trust. They are very simple people as a group. They do what they say they will do, therefore they EARN the trust and respect of people around them. And the ones who build the great companies, live with their customers. Sam Walton, standing on the floor of Wal-Mart, the richest man in America, day after day after day. He didn't have to hire consultants to tell him what his customers thought, they were talking to Sam. There is a lesson here, the President of the United States needs to be out there listening to the people also and not taking polls. All these big corporations have financial reports and consultant studies. Sam was out there, he had their finger tip feel, nothing will ever replace it. Those are the characteristics. -------------------------------------------------------------------- What if nobody likes that new business idea though? Well there is good news and bad news folks, for example, my idea was considered so bad, that I was stuck with the whole thing, now that was painful in the early years, but that was pretty nice when it worked. You can make it work, I had no financial support, nobody would buy my stock, nobody would loan me any money, and here's the good news, if you have to bootstrap it, it is cold rolled stainless steel when you finish it because you have developed a pump. You make a little money and you invest it back in the company, you make a little more and you invest it back in the company and pretty Page 2 soon it looks like an oil well in the Middle East just pumping money. Whereas, if you go the other way, see, you had too much money around. Now that my businesses are very successful, we keep money as a very scarce commodity. Now if people don't listen to anything else I say tonite, please listen to this, brains, wits, creative talents of a small high talent team will beat massive capital spending 10 times out of 10. So I use money like you use water going across Death Valley, you conserve it and you use the brains and wits of your people. I could tell you a thousand stories. -------------------------------------------------------------------- Then that is your philosophy about spending money in a new company? In a new company or a big company, see, use the talent, brains and wits of your people and don't just throw money at every problem that comes by. -------------------------------------------------------------------- What is the most important trait that the founder must possess in the early days? Well, he has to have several, but one is, he just has to do this...see the Wright Brothers HAD to fly. Two bicycle repairmen, they had no business trying but they had to fly. Thomas Edison HAD to invent the electric light. I think he tried every way in the world and finally got down to his last option when he GOT IT, but he HAD to do it. That's a common characteristic, then beyond that is this point I made earlier, know your strengths and weaknesses, surround yourself with talented people. In summary, this very critical factor here is recognizing that you can only do so much and getting the MULTIPLIER of the talented team. Then you can grow, otherwise you're a one man genius operation. Only a handful of people in our great country can create jobs, but thousands of honest, decent people, many brighter than you who created the company are willing to work at those jobs but they are totally dependent on you to keep an environment that protects their jobs and creates thousands of new jobs each year. Now the quality that got you going, the fact that you persevered, the fact that you didn't quit, the fact that you didn't recognize failure, the fact that you didn't know you had failed is the most important quality you can have when you have a worldwide operation and tens of thousands of people all over the world. Just always focus on what you have to do AND DO IT! -------------------------------------------------------------------- What is the single most important objective that the creator of a new business must have? If you don't listen to anything else I say tonite, it's got to be the best in the world. The best in the world, you say, now wait a minute, how about the best in Idaho. Sorry, best in Texas, NO, best in the US, NO. We live in a tiny little world, we're stuck with it and your theme song ought to be nobody does it better, nobody does Page 3 it half as well as you and your team. Then you'll have people all over the world coming around with bright notebooks trying to copy you. Now that's where I'd like to see all of you. -------------------------------------------------------------------- What are some important other objectives? Service to your customer. The Customer is KING, if you just make the customer king, everything will work out, see, if the customer is king, then you've got to have the best people to make the best products to serve your customer. In order to attract and keep the best people you've got to have an environment where their goals and dreams materialize too. So, it all just sort of fits together. -------------------------------------------------------------------- Is it important to write down what your company is going to be before you start it? It's the most important thing you'll do. I did it on a yellow pad, before I started my first company. All my hopes and all my goals and philosophies were there, I wouldn't consider starting a business without doing it, very simply and very straight-forwardly and have everybody in your company know what their philosophies are, that's the easy part. Then you as the founder have to live them day in and day out. People don't care what you preach, their interested in what you practice. The worst thing you can do is have these lofty goals and objectives and then not practice them. Live them, have everybody in your company committed to them. On the interview of new employees, discuss them with them and they should be so specific that people are really excited about them or do not want to be a part of your company, but at least they know what they are getting into and they know you live it. As you build your company, a lot of your satisfaction will come, if you run your business in the center of the field of ethical behavior and not along the sidelines. Unfortunately, in the 80's in business, a lot of companies got cute, the question was, is it legal or illegal, never ask yourself that. You're only question is, is it right or wrong? Live in the center of the field. Your customers will appreciate that, the people that work with you will appreciate that and once you go public, believe me, your stockholders will appreciate that. -------------------------------------------------------------------- How does the founder of a new company decide who to hire? It's the most important decision you'll make. You want very, very talented people. Over the years I used to talk to our recruiters and I said look, I don't care who you are, I don't care where you come from, I don't care where you went to school, I don't care if you went to school, I don't care what race you are, I don't care what color you are, I don't care what religion you are. Finally one of the recruiters, since we are in a high tech business would say well Ross do you care about anything? I said you bet, I care about what you can do and I care about what you've done lately. Then we'd have a little talk on that because lately is everything, you run into a lot of talented people who want to kick the ball through the goal once and then walk around and display their Page 4 clippings. Once you kick the ball through the goal, that's yesterday's news. What are you going to do tomorrow? That's the way business (works), the faster you run, the faster you have to run. Particularly true in a global economy. The other thing is, look for people who have a history of success. You say, don't you want a cookie cutter, MBA, 3.6 grade average, etc. No, none of that means anything. Look for people who have a history of success since childhood. Look for people who have a pattern of being the best. Look for people who love to win because you're going to be in brutal competition. You don't have to watch sports in this country anymore to satisfy your competitive instincts, because all of us are playing in a worldwide superbowl all day every day for our jobs. So look for people who love to compete and love to win. And I stressed this so hard one day, one of the fellows said, well what if we run out of people who love to win, I said, well just get people who can't stand to lose. Because if you have people who have that motivation, on their own they have all this initiative and creativity and you've got to set your people free. A lot of these big companies keep people reigned in, I have a bust of John Paul Jones right outside my office, he became a great Naval hero because one enlisted man, acting on his own initiative and not under John Paul Jones orders saved the day and made John Paul Jones a hero. Everybody who works with me, when they walk past that, they smile because they know that means, if there is something that needs to be done, figure out what to do and use your head, don't wait for me to tell you what to do, and in 9 cases out of 9, they'll come up with a better idea than I had anyhow. Now that's the way you get THE MULTIPLIER. A few other thumbrules, if you have a corporate politician, fire him, if you find somebody who is stealing, cheating or taking advantage of other people, in my companies that will get you a free trip halfway around the world. Only I fire those people, now that gets the word out that you don't do that, that you work together in good faith and your ethical standards are very high. These are little things, but these are the difference between good and great. Create a professional work environment where people are having fun while they build the finest products. That is so important and most people don't ever talk about it, but as long as you're going to work hard, as long as you're going to be the best, it's pretty important to look forward to it every morning and walk out the door every night grinning. Now we have another ground rule in my companies that I would encourage you to adopt. Never go home at night mad, if you're upset about something, go into whoever you need to talk to, get it off your chest, get it worked out, come back in in the morning grinning. -------------------------------------------------------------------- How important is the customer to all of this? It's all important, ALL IMPORTANT, unfortunately in our country we tend to forget the customer in many cases and as soon as you do, you Page 5 lose touch with the customer, your business will deteriorate. It'll take awhile, but anytime you think about that, go back to my story about Mr. Walton, make sure that as you build your company, that you know what your customers are thinking. That you are really, really close to your customer. I'll sum it up, LIsten to your customer very carefully, get a Miracle Ear if you need it, then listen, listen, listen to your front line people who work with the customer and you will know what to do, you won't have to guess and you won't have to hire consultants, you will know what to do. -------------------------------------------------------------------- Should the company have clearly stated philosophies about the selection and treatment of the people in the company? Absolutely, and my advice is very simple here, all you have to do in figuring out how to treat your people is say how do you want to be treated? That's fascinating. You just wonder if some of these big companies ever thought of that. Just treat people the way you would like to be treated, is it wiser for you to have me work for you or with you? The answer is obvious. Is it wiser for you to treat me like dirt? Or to treat me as an equal, and with dignity and respect. The answer is obvious. Now, there is something in all of us, I'm third shift, high school dropout, working on the loading dock, minimum wage and you're CEO. Right in here, there is something inside me that says I'm unique, I'm special. There's only one person in the world like me, I am a human being, I've got a name, I don't want to be any of these three. Just call me Ross, do you follow me? Now, if you will treat me with dignity and respect, and treat me as a human being, and here's one unsolicited piece of advice, to all you fellows running companies, make sure that the folks that I just described, your entry level people, have the same benefits you have, they need them and that sends a message to the troops. A parable is the old military message, First feed the troops in combat, then you feed the officers. Entry people need that health care, if you didn't have it, you could pay for it out of your pocket. Very basic stuff, but you can build an esprit and a team spirit that just makes it unfair for you to climb in the ring with your competitors, if you treat your people as equals, and you all team up together and take on the world and beat them 10 times out of 10. That's what the game is all about. -------------------------------------------------------------------- How do you handle the problems of fair treatment of women in the workplace? Well, women are so talented in my business, that the men are at a disadvantage. But, I came up with a very simple rule in the early days. I want to have an environment for the women in this company where every man in this company would be delighted to have his daughter work here. Now that cleans out everything in one phrase, I mean that goes for how you treat them, that goes to fair treatment in terms of recognition, promotions and so on and so forth, because DADS are very protective of their daughters. I want this to be a Page 6 place where you would be delighted to have your daughter work. In every single aspect and the rest took care of itself. -------------------------------------------------------------------- What about employee benefits? Tiered benefits send a message. If I am entry level and I have rotten benefits and you're a senior executive and you have great benefits, well I am obviously very different from you. Now I can understand that my salary would be different, but to realize that my child could get the same medical attention that your's could get from the benefits the company provides, sends a message. A lot of these big companies have multi-tiered retirement funds, no way. You check them, you'll find the executive fund is fully funded, you work your way on down, some of those are not fully funded. There should be one fund and then I'll guarantee you their fully funded. -------------------------------------------------------------------- What about incurring debt to build that new company? My advice for people starting new companies is try to avoid debt at all costs. If you have to, if it's capital intensive, you do it. I'd recommend that you sell shares in the company first, we're going to create enormous incentive for people to invest in small companies so that it's easy to get cash in that doesn't have to be paid back, you don't have that interest clock eating you alive. See, every small businessman understands my concern with the national debt. Cause his tiny little debt, that interest clock is chewing him everyday, when he looks at 4 trillion dollars, he passes out. But avoid it, it's like the measles, avoid it if you can, if you have to have a little debt, fine, but remember, everything you borrow, you gotta pay back. Brains and wits, brains and wits, keep the borrowed money down. -------------------------------------------------------------------- How do you gear up that new company so it will compete with the established companies? It's the easiest thing in the world. They will send in huge armies and these armies are bureaucratic. Send in tiny high talent teams, you'll beat them 10 times out of 10 and they will dismiss you as a loony for showing up and they will go into cardiac arrest when you win. -------------------------------------------------------------------- How important is the founder once that new company begins to grow? Well that's the interesting part, in my case at least, I just sort of sit there and enjoy the action because you have all these talented people. There is something I haven't said, you bring in all these talented people, you treat them with dignity, everything's going well but keep in mind and this is so important for every company builder, all of those people had dreams too. As the company grows, your dreams are being fulfilled, are these people stockholders? Do they have a fair piece of the ownership? Are you recognizing and rewarding their extraordinary contribution by making them part owners of the company? Now let's assume you're doing that. If you do everything all on compensation including salaries, bonus, stock options but you don't give people what I call Page 7 their psychic rewards, you're denying them a huge part of it. For example, when they do something great, recognize it that day, not six months later, that day. Recognize it while their still sweating from the effort. The final point here though, is you need to get out of the way and let them move up and run the company. The ultimate reward for one of your hot tigers is to give him your job. Well, you can be Chairman of the Board, you can just be on the board. If you're the founder and a big stockholder, you don't need a title. Keep titles in the background. Keep performance in the foreground. Don't have people making their career trying to be a Vice-President. Have them make their career trying to win every single competition. They'll probably wind up being President or King or whatever you want to make them. -------------------------------------------------------------------- If you could give company presidents just one piece of advice based on your experience, what would that be? It would be primarily to stay close to your customer. If I could have two, I'd say stay close to your front line troops and the customer and say three, once you bring all those talented people in keep a magic environment where they want to stay and others want to come in, then you can grow. -------------------------------------------------------------------- How do you tap the full potential of each person on your team? Well, each person is different, you need to understand, these are not like nuts and bolts, these are human beings, each one is different, you play to their strengths in order to tap their full potential, and you keep an environment where they are free to exercise their initiative and creativity. The worst thing you can do to talented people is to freeze them in a procedure-oriented environment where they are not able to think creatively and come up with unorthodox ideas that believe it or not are probably ten times better than mine, and very important, very, very important, leave a lot of room for the 22-23 year olds that are too young, too inexperienced to ever have a great idea, to come into your office, kick the door open and say, well why don't we paint it purple? A radical, unorthodox new idea, most of my net worth today rests squarely on the really weird ideas of people too young and too inexperienced to have a great idea and all we did is listen, and 9 times out of 10, we'd take that young tiger and say OK, tough guy, if you're so in love with it, here's a small team, here's everything you need, just go do it and he'll walk out grinning and 3 months later, he or she will have done something that most big companies would take 5 years to do and spend hundreds of millions of dollars on research and they would come back with it. Now that's the way you get things done. -------------------------------------------------------------------- Ross, as you build a new company, what is the importance of the family? I think the most important thing I can say to people building businesses in this country today, how I started with nothing, wound Page 8 up on the other side of the economic spectrum and I can tell you that money is the most over-rated thing in the world. If you make money your god in building your company, you probably won't get there. If you make being the best your goal, you probably will get there and financial success will come as a by-product. But on all those special days when your children need you at the Little League ball field or at the Campfire Girl meetings or at the Girl Scouts meetings or at the PTA meetings and all those once-in-a-lifetime little opportunities when your children need you, if you're on the road and you're not there and you neglect them, you're going to pay a terrible price when their grown. So, keep your priorities straight. Keep an environment where your people can keep their priorities straight, and give a lot of attention to your family. Now I've had the interesting experience of knowing the wealthiest people in the worldand I can tell you that if you have all the marbles and your family is a mess and your children are a mess, you can be miserable and unhappy, even though you're surrounded by things. So, keep your priorities straight and from my own perspective, I can tell you that I never felt wealthy until my children were grown, til they were good citizens with a deep concern for other people and a willingness to do something about it. Keep that kind of environment, there is a very special time in your life when your children are growing up, don't neglect your family to build your company, if you do, you may wind up wealthy, but miserable. Here is one that you've got to listen to. Success makes you vulnerable, adversity builds strength. But success breeds arrogance and complacency. How do you avoid that? Every heavyweight boxer pays the price, gets there, becomes the champion of the world, then starts his arrogant phase and some young person nobody ever heard of knocks him off in the next fight. Relish competition. The more brutal, the better. The bigger, the better. The greater the odds against you, the better. That keeps your organization lean and hard, always look for the tough ones and go out to win every single point. -------------------------------------------------------------------- Summarizing, how important building new businesses, how important is that to the future of this country? It's everything, for example, if we had stayed where we were 50 years ago, we'd still probably be building buggies and making buggy whips and bridles and saddles. You have to keep moving forward. Our great country and God bless the people in Washington, their not villains, see, I don't understand brain surgery and they don't understand business, and business is our problem and they talk to economists. One of the candidates the other night on the debate was bragging about how many economists he had on his staff. I just sat their cringing, that's like having Faith Healers and Rain Makers. These guys got us in this mess we're in. Economists base everything on theory, what we need is people with practical experience about business that KNOW how to do this. We Page 9 practice 19th century capitalism because that was what used to work. Japan and Germany didn't get capitalism until 1945, so they created 1950 capitalism. We've got 1850 capitalism, their moving towards 21st century capitalism and we have one of the two political parties saying, Let's just keep things the way they are, while the other party says, Let's have a little change, but they don't know what they're talking about. The people that asked me to go on the ballot are saying, Let's just fix it and get ready for the 21st century, pass the American dream onto our children. That's what we're talking about. Maybe the best summary I could give you of the perserverance I'm talking about, is one of Churchill's famous speeches, it's his shortest speech and this is the entire speech, "Never give in, never give in, Never, Never, Never!" Thank you very much. -------------------------------------------------------------------- For more details on Perot's ideas for how to change our government and fix our problems, please read "United We Stand", available at all bookstores. -------------------------------------------------------------------- If you have comments or other information relating to such topics as this paper covers, please upload to KeelyNet or send to the Vangard Sciences address as listed on the first page. Thank you for your consideration, interest and support. Jerry W. Decker.........Ron Barker...........Chuck Henderson Vangard Sciences/KeelyNet -------------------------------------------------------------------- If we can be of service, you may contact Jerry at (214) 324-8741 or Ron at (214) 242-9346 -------------------------------------------------------------------- Page 10