cc  >> Jeanan Yasiri:  Entrepreneurialism  in Society is a course that's  offered to the University  of Wisconsin  School of Human Ecology.  As we begin today, I'd like to  extend thanks to our partners in  supporting this course, the UW  Office of Corporate Relations,  the UW College of Engineering  for their technical support, and  financial support from the Ewing  Marion Kauffman Foundation,  which is committed to advancing  academic education in  Entrepreneurialism.  Additionally, we thank our media  partners, Wisconsin Public  Television, and their University  Place crew, for taping today's  lecture.  Today, I am very pleased to  introduce our guest, Michael  Levin.  Michael is chairman of New View  Technologies.  He founded e-Steel corporation,  now known as New View, in 1998.  And prior to that, Michael was  president and CEO of the Titan  Industrial Corporation for over  15 years.  Michael is also a member of the  World Economic Forum, and the  Council on Foreign Relations,  as well as the Pacific Council  on International Policy.  Michael is an  entrepreneur-in-residence with  the Kauffman Foundation.  He was named by B2B Magazine as  one of the top 25 champions  behind the e-commerce  revolution, and one of the top  100 most important people to  watch. 

 So what a treat for us today.  I've asked Michael to share his  thoughts on the successful  entrepreneur, and why it  matters.  So please join me in welcoming  Michael Levin.  (applause)  >> Michael Levin: Well, hello.  Can everyone hear me?  What the plan is, that I'd like  to talk on and give you some  prepared remarks for about 15 or  20 minutes.  Then, hopefully, get into a  debate on how to be a successful  entrepreneur and things that are  on your mind.  So, if you'll bear with me, I'll  give you the prepared part  first.  Thirty-seven years ago was the  last time that I was in a  classroom in Madison.  A lot has changed, besides my  hair length and hair color.  However, I recall that in 1972,  I was optimistic, determined,  self-confident, and generally  upbeat about my prospects. 

 Strangely, and symmetrically  perhaps, I feel essentially the  same way today.  I don't know if that is an  insight into the personality of  an entrepreneur, or a view into  an image through a mind set.  But there it is.  I also recall and old saw that  alums return with either  something to sell or something  to buy.  I have neither intention.  Only about 20 minutes of my  speaking to you.  Then hopefully, an aggressive  question and answer period.  And I like hard questions.  You've all probably heard the  George Bernard Shaw quote, "The  reasonable man adapts himself  the world.  The unreasonable one persists  in trying to adapt the world  to himself. 

 Therefore, all progress depends  on the unreasonable man."  I think that should be a  comfortable thought, if you want  to be an entrepreneur.  My abbreviated personal story is  pretty straightforward.  I grew up near New York City,  graduated from the University of  Wisconsin in Madison, then  Harvard, then entered the steel  business, then bought the steel  business, then started a tech  company, and grew it to a paper  value of $3 billion.  I took an assignment for a  PE firm, involved myself in  foreign policy, had a lot of  adventures throughout, served on  a variety of boards, have acted  as entrepreneur-in-residence  at the Ewing Marion Kauffman  Foundation for the last three  years.  So what can I say about being  an entrepreneur?  First, let me introduce  Kauffman, especially as Madison  is a Kauffman campus.  The Foundation was endowed with  $700 million in 1993 from  Mr. Kauffman's estate.  In the ensuing years, we've made  almost $1.5 billion in grants.  And the corpus sits just below  $2 billion today.  Kauffman believes in the words  of Nobel Laureate Mohammed  Yunis, that everyone is an  entrepreneur, but only the lucky  come to know it.  Kauffman encourages this career  choice, and they provide people  with the knowledge, skills and  networks they need, such that  starting a business becomes a  less risky enterprise. 

  I was asked to speak about  successful entrepreneurship,  which is especially daunting  today, when a local appliance  store is offering a free bank  with every toaster, and the  difference between an investment  banker and a pigeon is that a  pigeon can still make a deposit  on a Ferrari.  Amidst this climate of  disasters, with which our  economy and the world is  flirting, survival appears  to be the predominant goal, and  fear the paralyzing motif, not  innovation and success.  It seems everyone I know is  suddenly in the wealth  dissipation business.  But new fortunes will be, and  actually are being made.  In 2000, a Latin American  economist, Hernando DeSoto,  declared, "The hour of  capitalism's greatest triumph  is its hour of crisis."  He was referring to the end  of more than a century of  ideological competition between  Communism and capitalism.  Today, I would rephrase and  invert that statement, and argue  that the hour of capitalism's  greatest crisis will become its  hour of triumph.  Recent events are testing the  political and economic  institutions of the world.  And unfortunately, even with all  the interventions we have  witnessed, that testing  environment many months longer,  and this recovery will carry  into years.  Nonetheless, capitalism will  prove to be alive and well.  The Malaysian prime minister  said to the New York Times,  "For much of the world, the  marketplace extolled by the west  in the afterglow of victory in  Cold War, has been supplanted by  the cruelty of markets, wariness  toward capitalism, and dangers  of instability."  Yet, while the forecast dangers  are all too visible, it is also  ultimately true, as DeSoto  pointed out, that capital is the  force that raises the  productivity of labor, and  creates the wealth of nations. 

 It's the lifeblood of the  capitalistic system, the  foundation of progress.  And entrepreneurship is the  critical driver of economic  growth.  In the last 25 years, virtually  all net job creation in the  United States has been in firms  less than five years old.  Just as importantly, many of  these young firms become  high-growth businesses, bringing  forth new products and services,  enhancing productivity,  providing employment, and  improving standards of living.  For decades, American workers  and managers have sat in  complacent reverence for Wall  Street's masters of the  universe, those highly  compensated executives,  tolerating their hubristic  declarations about the economic  world being under their control.  Freshly shed of these illusions,  we have the Zen-like freedom to  put our own best plans forward  in this very uncertain  environment, which has created a  fertile climate for innovators  and entrepreneurs.  My colleagues at the Kauffman  Foundation of Kansas City,  economists Carl Schramm and Bob  Litan, have written extensively  about the growth opportunities  in America, as we move from big  firm capitalism to an era of  entrepreneurial capitalism.  In the two-and-a-half decades  after World War II, the United  States enjoyed extraordinary  economic growth.  The central players in this  growth were large companies and  government.  This model, however, broke down  in the 1970s, amidst rising  inflation and slowing growth. 

 Big firm capitalism had  succumbed to bureaucracy.  Yet, at the very moment that big  firm capitalism was faltering,  the seeds of the reinvention of  the American economy were  already being sewn.  Intel, Target and Walmart were  all born in the 1960s, and  enjoyed enormous growth in the  1980s.  Apple, Home Depot and Microsoft  appeared in the 1970s, and later  became high-growth companies.  Deregulation in select  industries, lowering income tax  rates, emerging technologies and  tens of thousands of new  business starts remade the  United States, and stoked  productivity and strong growth.  This resurrection nearly didn't  happen.  At the zenith of big firm  capitalism's bureaucratic  crisis, enumerable proposals  were floated for government  action.  Government should regulate more.  Government should guide  corporate investment.  Government should invest itself  in certain sectors of the  economy. 

 Corporatist state-guided  capitalism, the next logical  step, was within sight.  And these views may be taking  root again, today.  Just as individuals often make  life changing decisions  following traumatic events, such  as divorce or a death in the  family, governments  instinctively respond to trauma  with gigantic programs.  Alternative "what if" history is  never easy.  But imagine for a moment, had we  taken that state guided route  all those years ago.  A challenge we are facing down  again today due to impulsive  intervention.  Massive government control of  the economy is not the solution.  Good regulations need to be  narrow, balanced, and aimed at  controlling excess, at the same  time they support innovation and  reward taxpayers for their risk.  And government investments  should have a sunset date.  We're also reading about an  indictment of our system, a  criticism of an unhealthy  toxicity built into the system  itself. 

 But capitalism is alive and well  dispersed.  More and more, we live in a  world that encourages perpetual  innovation, an ecosystem of  sorts, where young dreamers are  free to turn their ideas into  major improvements for all of  society.  Why am I talking about dreams  and ideas here today?  Your answer is in the headlines.  Recent financial failures and  market meltdowns have left many  of us stunned and searching for  answers.  I'm here to tell you that  entrepreneurship and innovation  are the engines that will drive  economic recovery and growth  from this point forward.  In the words of Carl Schramm,  the CEO of the Kauffman  Foundation, and a Wisconsin  graduate, "The major issues of  today, from global warming to  affordable healthcare, to our  scandalously bad public school  system, to the decay of our  cities and more, are all  problems that should like  opportunities to entrepreneurs."  Entrepreneurs turn ideas into  disruptive breakthroughs.  Like the George Bernard Shaw  quotation, "True entrepreneurs  have no stake in the status  quo," so they have no problem  flipping it upside down to  introduce new products,  processes, services.  Left to your own devices in dorm  rooms and garages, young  innovators will exercise the  power to change things for the  better.  Your ideas often revolutionize  the way we live, and increase  wealth in all its measures,  finance, health, happiness,  opportunity, productivity.  And who are today's young  innovators?  You may first think of Internet  rock stars like Facebook founder  Mark Zuckerburg, or other  fashionable names. 

 But tech stars make up only a  small part of the picture.  Not long ago, a college student  in California told two friends  about her grandmother's struggle  with bulky, restrictive oxygen  tanks.  The trio of 20-somethings put  their heads together and devised  an idea for a portable oxygen  concentrator that would mean  unprecedented freedom and  mobility for patients  everywhere.  They turned their idea into a  business plan, and their  business plan into Inogen, a  company that now generates in  excess of $100 million per year  in revenue.  These young people, and  thousands like them exemplify  what's possible when you pursue  your dreams.  Perhaps they were the  inspiration for magazine mogul,  Steve Forbes, when he stated,  "The real source of wealth and  capital in this new era is not  material things.  It is the human mind, the human  spirit, the human imagination,  and our faith in the future."  More than once, faith and ideas  and innovation has rescued  families and entire nations from  the grips of poverty.  Take Rwanda for example.  Following the genocide in 1994,  with their country in political  and humanitarian shambles,  officials needed a plan to  bolster economic recovery.  Policymakers introduced major  reforms, like making it quicker  and easier for citizens to start  new businesses. 

 They cut corporate tax rates and  developed resources to support  private sector development.  Simply, they put their faith in  the hands of entrepreneurs.  They created an environment that  encouraged citizens to take  chances and start new  businesses.  As a result, they helped raise  the gross national product  almost 59%.  Entrepreneurs have the power to  advance human dignity.  Across the globe, countries that  embrace entrepreneurship see  measurable improvements in  education, sanitation, food  production and gender equality.  Just ask Julian Omalla.  As a young woman, she started as  a food trader in her Ugandan  village, operating out of a  single wheelbarrow.  With persistence and a strong  belief in herself, she jumped  through a litany of hoops to  launch what has become the  country's largest juice  processing factory, now with 450  employees.  Julian serves in the Uganda  women entrepreneur's network,  where she helps connect other  ambitious women to the  information and the resources  they need to create their own  success stories. 

 Fortunately, more and more young  people like Julian are banding  together in the interest of  entrepreneurship.  So striking out on your own no  longer means going it alone.  From social networks to  communication tools like Skype,  innovations pioneered by past  entrepreneurs have made  collaboration among your new  generation of pioneers much  easier.  Bright young minds from the most  far flung locations can share  stories, connect with experts  and find outlets for your ideas.  Entrepreneurs, employees, and  investors, from Jordan to Japan,  can now join forces.  This is precisely the big idea  behind Global Entrepreneurship  Week.  Millions of aspiring young  entrepreneurs from more than 75  countries are connecting and  realizing how they can turn  their dreams into reality.  Founded by the Kauffman  Foundation in the United States,  and the Make Your Mark campaign  in the UK, the first of its  kind initiative is engaging  young innovators in an array of  activities and challenges for a  week in November, over the next  three years.  Our goal?  To use the intense activity of  Global Entrepreneurship Week as  fuel to engage a new community  of entrepreneurial and  innovative talent.  In essence, with Global  Entrepreneurship Week, we are  engineering an idea movement. 

 Like other great mass movements,  our ongoing work should inspire  each generation of revolutionary  thinkers to chase their dreams  and realize their potential.  Of course, we know that devoting  a week each November to  entrepreneurship will not  sufficiently alter the  environment.  It can raise awareness.  It can build excitement and  spark new relationships.  But real change demands  sustained cooperation from  stakeholders at a much higher  level, including academia,  policymakers, associations and  large businesses.  University environments are  natural breeding grounds for  creativity, the exchange of  ideas, and new ways of looking  at studying things.  That's why you are natural  players in the future of  entrepreneurship.  Already, colleges and  universities are making  entrepreneurship the fastest  growing field of study on  campus.  In some cases, we're seeing the  emergence of an entirely new  academic field, devoted to the  pursuit of ideas about e-ship  and growth with courses like  this one.  It's imperative that  universities continue to explore  ways of becoming more  entrepreneurially focused, not  only in what they teach, and how  they teach it, but in how the  university operates. 

 How can university discoveries  and intellectual capital set off  a chain reaction of innovative  thinking and marketable  advancements?  We can take our cue from highly  entrepreneurial universities,  like the University of Wisconsin  in Madison, and Arizona State.  What do they have in common?  Their faculty members are  encouraged, not dissuaded, to  have extensive contacts with  private industry.  This means professors can bring  real world insights, like  practical value creation, into  the classroom to more  effectively inspire and engage  their students.  Entrepreneurship affects the  very DNA of the institution,  from challenging abuses in  tenure to creating  interdisciplinary  concentrations, bringing the  notion of velocity into  everything, from departmental  meetings to the creation of new  degree grants.  Or consider WARF, which is a  model for the world.  From a government perspective,  I mentioned earlier how  officials in Rwanda sparked  economic growth by reforming  policies.  You'll find similar examples in  the economic turnarounds of  Ireland, Israel, India,  Singapore, Brazil, Korea, China  and the United States.  Mountains of evidence prove that  policies designed to encourage  entrepreneurial innovation lead  to economic growth.  And there are signs that the  Obama administration is  increasingly hearing that  message.  When I mentioned that large,  mature businesses also play a  role in supporting young  entrepreneurs, and innovative  new firms, I get varied  reactions. 

 Aren't they natural mortal  enemies?  Or, how can you lock the lamb in  with the lion?  In reality, entrepreneurs and  large firms have much to gain  from the symbiotic relationship.  For starters, mature businesses  often become customers of  innovative ones, using the  breakthrough technologies to  enhance their own products and  processes.  Large firms also outsource R&D  to start-ups, offsetting some of  the effort and risk involved  with arriving at the next big  thing.  My own venture-backed firm,  eSteel, had its first large sale  to the Ford Motor Company when  we were six months old.  And that contract persists  today, ten years later.  Intel has taken this a step  further.  They cultivate their own market  by investing in start-ups that  will develop new systems and  products, all of which will use  Intel chips.  They've invested in more than  1,000 such firms to date.  When all of these key players  get on the same page and work  together at the structural  level, the environment exists  for exciting things to happen.  But I'm missing the most  important part of this equation,  you all, the young entrepreneurs  yourselves. 

 For all of the dreamers and  would-be innovators here today,  I share with you these thoughts.  Moving an idea from concept to  disruptive breakthrough requires  you to tackle your fears,  particularly your fears of risk  and failure.  Greatness is born from risk and  challenge.  Like American playwright Neil  Simon once said, "If no one ever  took risks, Michelangelo  would've would've painted  the Sistine floor."  I urge you to stand on the  shoulders of the giants who came  before you.  Thomas Edison conducted more  than 10,000 failed experiments  before turning on the first  incandescent light bulb.  The eternal optimist, Edison  actually referred to this  process as successfully  discovering 10,000 ways not to  invent a light bulb.  Find your own authentic project.  Be persistent.  Expect unexpected consequences.  Fight against the obstacles that  are put in your path. 

 Choose a mentor.  But keep working at it.  Milton Hershey experienced three  unsuccessful starts before  satisfying America's sweet  tooth.  Even Steven Jobs was fired from  Apple before he came back to  transform the marketplace with  the iPod and the iPhone.  Investors often see failure as  an asset on your record, not a  liability.  To them, failure can suggest the  tolerance for risk, a  perseverance to succeed, and  most important, a passion to  push the envelope.  So don't give up.  We need to teach new  entrepreneurs to learn from  every mistake.  And at each step, seek out and  capitalize on the resources  available of the monetary and  human variety.  We can use the question and  answer period if you like to  address specific success  variables in being an  entrepreneur. 

 But it is our imperative to  support the new generation of  entrepreneurs and keep the  pipeline of innovative ideas  full and flowing.  Young entrepreneurs are the  world's greatest natural  resource.  As questions continue to mount  about our collective economic  future, we must redefine the  notions of risk and opportunity.  We must embrace the beautiful  chaos of entrepreneurship and  innovation as a pathway to a  brighter future.  After all, in today's economic  climate, a secure position is a  relative term.  Our global economy needs massive  infusions of disruptive scalable  ideas, and entrepreneurs with  the discipline and courage to  give them heft and impact.  Young innovators and those who  inspire, connect and mentor  them, who lead the way out of  this economic danger toward  greater prosperity for all  society.  When it comes to thought  leadership on innovation and  entrepreneurship, many start  with the Kauffman Foundation Web  site.  In addition, Ewing Kauffman, the  founder of Marion Labs, the  Kansas City Royals, and endless  other programs, liked to say two  things that still resonate with  me.  One, he would always say that he  was a common man who lived an  uncommon life. 

 And two, he encouraged everyone  in the foundation to make the  entrepreneurship journey more  frequent and more accessible.  I hope I'm doing that today.  The stakes could not be higher,  but I believe Mr. Kauffman  and most innovators would  conclude that entrepreneurship  is the right approach to these  challenges.  And in the process, you may just  discover, as I did, that  commitment leads to contentment,  not the other way around.  Thank you.  (applause)  >> Yasiri: Would you like to  open it up for questions, or do  you have some questions that you  wanted to pose to the group?  >> Levin: I'm happy to answer  questions.  I know sometimes it's hard to  get started, to be the first  one.  So if there are hand in the air,  just interrupt me.  But after having given talks  like this a number of times.  I find there are topics that  students and I often disagree  about. 

 So, I've kept some notes on  those topics.  One of the most popular is  business plans.  All students seem to think that  business plans are sort of the  -- for life.  I don't know how you all feel  about that.  Does anybody in the room think  that business plans are  necessary to entrepreneurial  success?  You want to take the other side  of that, or ask questions about  it?  No?  No interest in business plans?  Well, you can interrupt me, as  you like.  I'll start talking.  But I think that when people ask  about these business plans.  I was a judge at the MIT  Business Plan Competition for a  while, so I looked a lot of  business plans.  I had to look at a lot of  business plans sent to me by  budding entrepreneurs.  And I don't have much use for  business plans. 

 I think you have to learn to not  become preoccupied with them.  I think a business plan is  important, because it puts your  ideas on paper, and it gets your  thinking started in the right  direction.  But if you think you're going to  go to a venture capital firm,  and they're going to look  through a deck of 17 slides, of  which they've seen 10,000 in the  last two years, and really pay  much attention to your business  plan, you're out of your mind.  What they're going to be looking  at is you, how well you  understand the business that  you're going to go into, how  well you diagnosed the problem  you're going to solve, how fast  your company is going to grow.  These are things that they want  to see you stand up and be able  to address.  The old saying about, do you bet  on the horse or do you bet on  the jockey.  Venture firms bet on the jockey.  And that's not in the business  plan.  That's a selling job you have to  make.  Any disagreement about that?  >> Yasiri: I was going to say,  you had your hand up, did you  want to comment on that?  >> Well, I was just going to say  in an argument about the  business plan, don't you think  it's important to kind of have  your mission or your ideas on  paper, so a year later you can  pull it out of the file cabinet  and say, hey, this is what I  wanted to do a year ago, and  maybe I'm kind of straying away  from that path there, anything  like that?  >> Levin: No, why?  I mean, let me ask you that  question. 

 Why is it important for you to  pull something out of your file  cabinet and say I've strayed  from that?  Either the new path that you're  taking is constructive and  productive in getting you where  you want to go, or you have to  revisit that new strategy and  say, there's a fork in the road  coming, where am I going to go  next?  It could be back to where you  started, that's in the file  cabinet.  It could be somewhere else.  I'm not sure going back to where  you were has any empirical  value?  I mean, can you think of any?  >> I was just trying to take the  other side of the table on one  point.  That's all.  >> Levin: Now, knowing where  you've been doesn't necessarily  help, or where you promised to  be.  For example, when I started this  company called eSteel, we were  going to be a marketplace.  And it became apparent in early  2000 that these marketplaces,  whether they were in paper, oil,  steel, you know, anything, were  not going to work.  And we needed to change.  And the investors, particularly  Kleiner Perkins, said whoa,  whoa, whoa, I don't like this  idea.  You know, we don't want to do  one-off engineering assignments,  because we did a couple of those  for cash. 

 And we don't want to change the  business model.  Then I said, guys, I want to see  positive cash flow.  You know, you guys can, if you  want, you can have the business  that you invested in, and here,  take it back.  But you're never going to get a  return on anything.  But if we adjust and move with  the market, and take the base  set of skills that we have and  just morph it a little bit, I  think we have a winner here.  So we changed.  And I think in that sense, we  survived.  Yes?  >> Hi, I'm Jessica.  I'm curious, how did you go from  Harvard to the steel industry?  >> Levin: Most of my friends say  foolishly.  Everybody wanted to be a  consultant or an investment  banker in those days. 

 I wanted a little more  adventure.  What happened was, people who  owned the steel company felt  that they wanted to expand more  internationally.  They felt that I was trained,  basically, business school in  those days trained you to be a  consultant, or a banker, or work  for a big company.  One of the big three.  And they felt that I could bring  some consulting type thinking to  the company.  And they could sort of dry the  moisture behind my ears and give  me some experience.  That was going to be  the quid pro quo.  And I accepted that.  And I started traveling  overseas, and I found that I  liked emerging markets.  But very often, we used to meet,  the guys that I graduated with,  we'd get together for a beer in  New York. 

 And you know, this guy was  working in at Goldman, and the  other guy was working at Kinsey.  And I was selling steel in  Ghana.  It was a pretty shabby  comparison.  But anyway, it was interesting.  Was that responsive to your  question?  >> Yes.  >> Levin: It wasn't that I  particularly thought the steel  industry was a winner.  I thought the chance to grow and  learn in that industry was very  important.  However, I will say one  analytical thing.  You didn't ask this question,  but I'll throw it in, was that  Michael Porter, you know, the  celebrity professor, one of his  studies shows that the variation  in profitability between  companies in an industry is much  greater than the average  profitability between  industries.  You know, you say the  pharmaceutical industry is more  profitable than the steel  industry. 

 That's probably true.  But the gap, the delta between  the most profitable steel  company and the least profitable  steel company is greater than  that prior difference.  So even if you pick a bad  industry, you can be a good  company and out-perform the  average of a good industry.  So there's nothing wrong with  steel, if anybody wants to go  into the steel business.  >> Yasiri: I will continue to  walk around and look for hands.  I want to share with you,  Michael, that last week, we  heard from a young man, 26 years  old, a recent graduate of the  university.  He actually came to us as an  entrepreneur in two different  areas, one of which I don't  think that he would've ever  imagined that he would be in.  It ended up being that he had  designed a clinical device that  has taken off.  He didn't have any clinical  background whatsoever.  He actually told the class that  he really didn't have any  interest in this, but his mentor  kept putting it in front of him. 

 And I think a lesson we took  away from that was the  willingness to see and seize  opportunities, regardless of  whether or not we have a  background in that.  I'm wondering if you could  comment on that.  >> Levin: Yeah, I think that  you're on a very good point.  My personal view is if you look  at somebody like Bill Gates.  Bill Gates is not a  technologist.  Bill Gates is a ruthless  marketer.  And it's not the specific  knowledge of that.  Michael Dell is a ruthless  businessman.  He's not a technologist.  I think that most businesses,  once you get past the initial  idea, are driven by conventional  business skills. 

 The channels of distribution,  pricing, finance, strategy, best  tactics, that are not unique to  a particular product.  I've been involved in a lot of  different businesses, for profit  and not for profit ventures.  I've done some stuff for the  government.  And most of these are areas--  I was chairman of the board  of a dance company.  I don't know much about dance.  I was recently in Iraq as a  guest of General Patraeus, and I  looked at some of our strategies  there, and in fact, pointed out  to one of the generals that I  felt that there was an illogic.  It had to do with the Somali  pirates and our strategy off the  coast of Somalia.  I pointed out that they were  making a mistake.  And there was silence in the  room.  And the general said, "You're  my next head of planning."  I don't know anything about the  military, but there was a  mistake in their logic that they  admitted to. 

 So I think fundamentals, you  know, good education, being  clear in your thinking, being  focused, not letting obstacles  get in your way.  In fact, that's my definition of  business, is removing obstacles.  Regardless of whether it's high  tech or low tech, it's removing  obstacles.  There are always going to be  obstacles put in your path.  So, I do think if that's what  that young fellow said before,  it's not the specific knowledge,  it's a greater knowledge.  And in fact, we were discussing  it earlier today with some of  the other faculty members and  some of the graduate students  here.  I'm not even sure that there is  an e-ship.  I shouldn't be saying this.  But you know, an e-ship body of  knowledge.  I've been to some of these new  business schools, like Active,  I don't know if you guys have  heard of that one. 

 It's in Texas.  And there are some others in  Detroit.  They're sort of a new model,  they think.  But in fact, there is no secret  sauce.  They're teaching the same stuff.  What's different is the  opportunities that the people  who learn it find themselves.  I was saying to one of the  professors here today, take for  example a company that has only  sales on the east coast of the  United States.  And they decide that they want  to have sales on the west coast  of the United States, and  international accounts, just for  the sake of this argument.  Is the salesperson that you want  to hire to take over that west  coast sales function going to be  the same person, with the same  set of skills, as on the east  coast?  On the east coast, you have a  market share.  You have known accounts. 

 You have a reputation.  It's a question of resale.  You know, it's a known entity.  Whereas, the other is all new.  So maybe you need an  entrepreneurial, in our  language, type mentality, to  develop that sales force on the  west coast.  But it still could be one  Fortune 100 company.  So maybe we're starting to make  distinctions that aren't really  meaningful in the end.  Yeah?  >> Hi, my name is Bill.  You mentioned previously that  the failures of like Hershey and  Steve Jobs.  I was just wondering if you'd be  willing to go in depth on your  biggest failure on your path to  success?  >> Levin: My biggest failure is  really awful. 

 I was reminded of one the other  day.  I wake up at nights on this one.  I'm involved with the Council on  Foreign Relations.  It's a great institution.  You should all check out the Web  site.  It's very interesting.  It's the best Web site to go to,  I think, to find out what's  happening in the world.  But besides that, it's a think  tank in New York.  Anyway, I went to a meeting  there in, it was probably some  time between 1988 and 1990.  Gorbachev came to New York. 

 And I was so impressed with what  Gorbachev had to say about  pere-stroyka, and new opening to  the west, that when he left, I  wrote him a letter.  And he answered and said, thank  you very much.  I remember you from that  meeting, and I'd like you to  come to Moscow, because there  are a lot of things we could do  together.  And I didn't go to Moscow.  That was a big mistake.  I got busy doing something else.  But that's a world class  mistake.  Anyway, I've made a lot of  others.  It's not a question of--  The trick in life, I used to do  a lot of sailboat racing.  I don't know if anybody sails  here. 

 But I did lots of racing on a  world class level.  And one of the guys who's the  tactician on my boat one time  was a guy who'd won the  America's Cup a couple of times,  and he won an Olympic medal,  as well.  So he's a world class sailor.  We won this race, by not  minutes, we won it by hours,  something unheard of in a  one-design class.  And I said John, his name was  John Marshall, I said John, you  call great tactics.  And he said, you know what  Michael, can I come talk to you  a minute?  Come over here on the docks.  We walked on the dock.  He said, listen, you're not that  good at this yet.  He said, actually, I didn't call  a good race.  Let me go back and explain to  you the tact that we did early  in the race, that was wrong. 

 The so-and-so we did later in  the race, when I changed sails,  that was wrong.  He said, but what I didn't do is  quit.  I kept making decisions.  So, on balance, I made enough  right decisions to counteract  the bad decisions.  But I didn't really call a great  race.  And I think that there's a  lesson there.  I think that, you know, at the  end of the day, you've got to  stay in the game.  You can't sit down and cry and  say, I made a mistake.  I mean, even if it is a mistake,  you have to stay in the game.  So, I've made a lot of mistakes,  but I guess I've also made a  certain amount right. 

 So I don't count the mistakes,  I put them away somewhere.  >> Hi, I'm Marion.  Did you have any fears or  doubts while launching the  eSteel business?  And if you did, how did you  manage those fears?  >> Levin: In launching the tech  company, everybody told me not  to do it.  I mean, here I was, I was the  CEO and owner of an  international company that was  doing almost a billion dollars a  year in sales.  I had my life under control.  I was spending a lot of time  with my kids.  And everything was good.  Everybody said don't do this  thing.  So the first thing I did was I  had a meeting with my kids.  I have three sons. 

 And at that time, they were like  12, 11 and 8.  I spent a lot of time with them,  maybe too much.  So I said, guys, listen, I'm  thinking of starting this  company.  And there are going to be  outside investors in this  company, so I can't do all the  stuff I do now.  Every time there's a school  vacation, I can't go off on  vacation.  You know, I can't come to  mother's day and father's day,  and all this stuff all the time.  Anyway, they went in another  room and had a little meeting  among themselves.  They came back and said, dad, we  think it's a good idea that you  start this company.  You actually spend too much time  with us.  So it was sort of cute. 

 So, if I had doubts, it was  because everybody told me to  have them.  But I'm a bit contrarian by  nature.  The more everybody says it's  impossible, the more I thought  it was possible.  So, I just believed in it.  I think if you don't believe in  it at that level, you shouldn't  start a company.  Because it's back to that  unreasonable man scenario, you  know.  If it were obvious to do it, the  opportunity wouldn't exist.  So, it's not obvious.  And it's going to take a  tremendous commitment.  It also takes a toll on your  life, right?  Because there's another side  factor to all this. 

 In life, being cooperative,  being empathetic, and  cooperative is probably a key  success variable with your  partner in life, with your kids,  your friends.  If you're always egocentric and  telling everybody what to do,  it's probably not great for  personal relationships.  When you start a company, it's  essential.  You have to be selfish.  You have to be focused.  You have to have one mind.  You have to believe in it.  Because if everybody else  believed in it, they would've  built the company already.  So you're going against the  grain.  And unless you have the stomach  for that, and the belief in  yourself, I think you should  keep your day job. 

 Also, you know I tell people  when I go to the meetings and  give these kinds of talks, if  you do the math, if you sit down  and say to yourselves-- You guys  get out of college and you get a  job.  And you do the present value of  what you think your salaries are  going to be.  You can come to a pretty  accurate number, you know,  absent expenses, what the net  present value of your inflow is.  If you were to apply an  appropriate discount rate to the  risk of starting a new business,  and say to yourself, how much  money would this business have  to be worth in ten years at that  appropriate discount rate of  50%, or some crazy number like  that, which is appropriate, and  to equal the present value of  that stream of income, there's  no way you'd start that  business.  That business would have to be  worth $50 million.  And the probability that it'll  be that is nothing.  So you can't just do this on a  rational basis.  Because on a rational basis,  you'd take a job.  So you've got to believe in it  and you've got to fight with  everybody and believe in  yourself.  Is that responsive to your  question?  Okay. 

 Yes?  >> Hello, this is Martin.  I just want to know, some people  are saying that the first step  for being a successful  entrepreneur is going for  studies.  >> Levin: Is what?  >> Is going to university and  studying, because you can't do  that uneducated guess anymore.  So what do you think of that?  >> Levin: I'm not sure I  understand the question.  Let me repeat what I think the  question is.  You're asking, to be a  successful entrepreneur, should  you or should you not go to  college?  >> Yes, or get more educated on  what you want to do.  >> Levin: I think a funny thing  about that.  I think that it depends.  For example, I think there are  credential rich environments.  For example, if you want to be  at one of the top law firms in  New York, going to Harvard Law  School or Yale Law School have a  high premium attached to them. 

 Or if you want to go to a VC  Firm, you know, getting an  engineering degree at Stanford  or MIT has a lot of cache.  So, not only the education, but  the label of the education is  very important.  I think that there are areas  where just education, with or  without the label, like if  you're interested in biotech or  something like that, is  essential.  Because if you don't understand  the science, it's impossible to  make much of a judgment of  whether the business really has  a chance to succeed.  In other areas, I think it's  much less important, both the  credential, the name on the  credential, the label, and the  education.  So I think to answer your  question, you have to tell me  more about what it is you want  to do.  If you want to be a VC at  Kleiner Perkins, you know, I've  got some specific suggestions  for you.  If you want to be an investment  banker at Goldman, I've got some  specific suggestions.  If you want to start up your own  company, I think it's another  whole set of prerequisites.  Does that make sense?  >> More like, when you're more  educated, you know more about  the risks, and you're more  likely to...?  >> Yasiri: Can you repeat that,  Michael?  >> Levin: Yes, the question is,  I'll state it as a question,  you're asking, is it true that  if you have more education,  you're more aware of the risks  and less likely to make a  mistake. 

 I don't really know if that's  the case.  I believe in education.  And I believe in thinking.  I believe that using your mind  can solve problems.  Very often, I would use the  example, it's a silly example,  but I use it.  I feel very often like Captain  Kirk in the Star Trek episodes.  You know the guy is going to  live.  No matter how many weird shapes  from other planets are trying to  kill Captain Kirk, you know he's  going to be around next week.  I've been in a lot of situations  where the banks have pulled  their financing, customers have  walked away, law suits are  threatened.  You know, terrible things. 

 And you just feel like you're  getting close to the end of the  episode, you know, the Klingon  is going to kill you.  And then you just say no, I know  if I think this through, I know  that there's a window of  opportunity here.  I just have to find it.  That is a question of exercising  willpower and thought processes.  If you can get those in  university, great.  Those are going to help you  analyze risk.  If you can get those from having  been in the military, that's  fine.  That's another way to learn  about analyzing risk and finding  solutions.  If you get it in your everyday  life, or you get it from reading  Shakespeare, that's another way  to do it.  I wouldn't put it down to, I  don't think attending a  four-year college, a university,  and getting a degree,  necessarily, or even close to  necessarily makes you better at  analyzing risk. 

 I think the people who are  better at analyzing risk end up  being more successful at  businesses.  But I don't think that going  through a typical program at a  college helps.  So it's not necessarily related  to education.  It's related to thinking and  sensitivity to risk.  Yes?  >> My name is Dan, and I  actually have two questions.  My first question is, how were  you able to get a contract with  an enormous company like Ford  only six months after you  started eSteel?  >> Levin: Okay, well, first of  all, those were wild times.  If you go back and read about  1998 onward.  But there are a couple things,  some academic, and also, I'm a  good salesman.  The academic part is, at that  period of time, due to the  incredibly favorable terms in  which a start-up could raise  money, believe it or not, our  cost of capital was lower than  Ford's.  You guys have studied cost of  capital I hope, or soon. 

 Anyway, it's the price that you  pay for money.  When you borrow money, and you  borrow from the bank and pay  eight percent, it's costing you  eight percent, right?  When you issue equity, depending  on the value they establish for  your company and the amount you  have to give away, you get  another percentage.  And that's generally, the cost  of capital.  I don't want to take over  Jeanan's role here.  But tell me if I'm getting any  of this wrong.  But usually the corporate cost  of capital is that blend between  debt and equity.  And any investment that you make  should be higher than the cost  of capital.  That's how you make money,  right?  So because they were setting  unprecedented values on this  company, my cost of capital was  approaching zero.  So it's actually lower than  Ford's.  So the agreement we made with  Ford was that we would build the  system, and they would pay for  it when they used it. 

 So on a financial level, it was  very attractive.  They had very little to lose.  That's one thing.  The other is that everybody  believed that these new dot-com  companies were going to be worth  fortunes.  So in addition to the contract,  Ford demanded, and I agreed to  giving them some warrants in the  company.  It was one of the great days in  my life.  I told this story about one of  the worst.  One great one was that day at  the Ford World Headquarters.  We were sitting there, and one  of the big shots at Ford kind of  snapped his fingers and said,  bring in so-and-so.  So they brought in their person  from Boston Consulting Group. 

 And the first chart that they  brought in, they put up on the  projector, was the value of  eSteel without Ford.  And they valued us at like  $2 billion.  I was already pretty happy.  I owned 80% of the company.  Then, they put up on their board  the next slide.  The value of eSteel with Ford.  It was $8 billion.  So I liked that one even better.  So that was their argument for  the increase in value they  brought to us by being a  customer.  So I gave them some warrants. 

 And the other thing was, we  raised $135 million.  So we had $135 million in the  bank.  We were backed by Kleiner  Perkins, Greylock, Bessemer,  Goldman Sachs, all the big steel  companies.  Our cost of capital was lower  than theirs was, and we had a  solution that worked.  Why not, right?  Why not take that risk?  What's the down side for Ford?  And they only paid on a  transaction basis.  So if we couldn't make the  system, they never paid.  They made a very good deal.  Was there a part two to your  question?  >> Yeah, my second question is,  how did you go from being in the  steel business to being on the  Council of Foreign Relations?  >> Levin: Okay, that one is  actually simple.  And I'll give you the personal  answer.  It's partially a personal  answer, but it's also partially  matter of fact. 

 In my job, initially, in the  steel business, was what's come  to be called emerging markets.  In those days, I think they were  LDCs, or just poor countries.  And my boss didn't like me very  much and sent me off to you  know, Senegal, Ivory Coast, to  Ghana and Nigeria.  And I loved those countries.  I loved the sense of energy.  We were doing something that was  important.  Selling steel to countries like  that, India, Pakistan were on my  list of places to visit, were  important decisions, right?  Especially in a place like  Ghana.  If they were going to allocate  resources to importing steel,  that was resources that weren't  going someplace else.  So, I got to meet central  bankers.  I got to start to understand the  developmental, development  economics in the emerging market  world. 

 When I came back to New York,  those were all topics that  started to become part of the  foreign policy toolbox.  All of a sudden, the state  department started to think  about what we can do.  You know, the first thing that  you start to do when you're  cultivating a country is, you  know, kind of free trade  agreement with the United  States, or you know, stuff like  that.  So, all of a sudden, economics  became a big part of foreign  policy.  And I was introduced with the  council.  I met a lot of people, and then  finally, they said, you know,  would you like to be a member.  So my steel experience was  actually relevant in the sense  that I understood the  development side of things.  Also, and I've been involved in  that council for a while, it  used to be topics of discussion  used to be, are the Russians  going to bomb us, are we going  to bomb the Russians, are we  going to have SALT II, SALT III?  You know, these missile  reduction agreements.  That was the a large portion of  what went on in foreign policy  and national security meetings.  Now, economics is a huge part of  it. 

 Population movements.  Relative economic growth.  You know, the general feeling,  sort of like the Big Mac theory,  that countries that have  McDonald's don't fight with each  other, which in fact is not  true.  There are countries that fight  with each other.  But I think the countries that  have a large growing middle  class, and are becoming  wealthier, don't want to fight  with each other.  So a big part of foreign policy,  in general, has moved toward  the economic sector.  Just think how many rock stars  Secretaries of the Treasury have  become.  You know guys like Ruben or  heads of the Federal Reserve.  These are guys that 20 years ago  weren't on the tip of the  tongue.  So that's a big part  of our foreign policy program. 

 Is that responsive?  >> Yes.  >> Levin: Yes?  >> There's this big argument now  whether entrepreneurs can be  born, or whether they can be  taught.  Which one do you agree with?  Or, is the teaching just for the  basic skills?  >> Levin: I'll give you sort of  an unfair answer, okay?  By not answering.  I think that it's a little bit  of both, okay?  And it's a little bit of both in  the following manner.  I think entrepreneurs are  largely born.  But the teaching part comes from  finding a way to throw out a net  that captures those budding  entrepreneurs and says to them,  here are the tools that you need  to complete the training.  It's a little bit like  apparently in Russia, during the  height of the Soviet Union, they  would take young kids who had an  interest in sports, and they'd  just line up all these kids.  And the experts, who understood  morphology, you know, understood  the way people were built, would  say, okay, you're a dancer,  you're a basketball player.  This is at six years old.  You're a gymnast. 

 You're a weightlifter.  And by their basic composition,  you know, they got put into  programs.  I don't know how successful that  was for the Soviet Union.  It seems to have worked a bit.  I think that that's true.  That's the answer to your  question.  I think we have to reach out to  society and find identifying  factors, people who just  dream about starting their own  business, or being independent,  people who are stubborn, who  don't like to do things the  conventional way, people who are  imaginative, people who are  showing all those signs.  And there are ways.  People who have what are called  high EQs, perhaps, instead of  high IQ, this emotional  quotient.  So we have to find tools to  identify those people. 

 And then we have to then say to  those people, hey, here are some  programs that you're really  going to like.  They're kind of going to be the  icing on the cake.  We're going to take that natural  ability, and now we're going to  give you like these, you know,  like this incredible tennis  racket that's better than  anything anybody's ever seen  before, and now you're going to  take your natural ability and  take the tools we give you, and  you're really going to win.  So I think that it's both.  There are some people who just  aren't, you know, made to be  entrepreneurial.  And as I said before though, I  think we have to be careful not  to make a wrong distinction.  I mean, for example, take AIG,  or take CitiBank.  Well, AIG was more of an  entrepreneurial place.  But it's a huge financial, was a  huge financial institution.  CitiBank is and was a huge  financial institution. 

 Given the collapse, given the  threats to their very existence,  those people, like --, do you  think he's leaving the office at  three o'clock anymore?  I don't think so.  And I know people who work with  him.  And they call him on Saturdays.  They call him nights.  Is he having to adopt what you  might have called a sort of more  entrepreneurial mode a year ago  because of the situation he's  in?  I think the answer is yes.  So I think the challenge is to  find ways to enhance growth.  And if we can enhance growth in  big corporations by changing the  culture so that people who  exhibit some of these  entrepreneurial abilities can  fit within that system, without  sort of being killed by the  white blood cell culture of that  environment, like an outside  toxic antibody, then that's what  we need.  Or, if we need to have new  companies that have to be  started up with another set of  abilities, then we have to do  that.  But let's not just pretend that  entrepreneurship is you know, is  this new thing for people who  come from outer space, who have  to eat high-protein green Jell-O  and, you know, I don't know,  become different.  I don't think it's really  different. 

 I think it's a version of the  same.  Yeah?  >> Hi, I'm Elena.  You mentioned earlier having, or  maybe finding a mentor.  I was wondering if you had  somebody to help mentor you, or  help you along the way to keep  you going?  >> Levin: Yes, I was very lucky.  When I got out of business  school, the chairman and founder  of the steel company essentially  adopted me.  And he took an enormous interest  in me and my career, for a  variety of reasons.  And it made a big difference.  I mean, he was always asking me  questions, making me think  through issues.  He'd pass me in the hall and  say, what about this?  And I'd say, you know, that's  not the area I'm working in.  He'd say, have a memo on my desk  in 30 minutes. 

 So, he was very helpful.  And I think that your first  jobs, if you're thinking of  taking jobs, finding an  environment where you're going  to have that in the form of a  boss or a mentor is hugely  important.  If you look at, let's say, the  MIT mentoring program, which is  one of the oldest in the  country, and the most  successful.  I believe the University of  Wisconsin is starting a  mentoring program here, much on  that model.  If you can get involved in that  and you have an idea for a  business, it'll help your growth  and the probability of success  of your business.  >> Yasiri: I'm going to throw  out the next question, as I'm  looking for hands.  And I see one over here.  But talk with us a little bit.  It may have to do with  leadership.  It may have to do with other  things, but can you tell us what  the difference between a  successful CEO is and a  not-so-successful CEO?  >> Levin: Yes, well,  I can tell you that I had--  Well, I can tell you a story,  and then I'll add my own  feelings. 

 I had a mentor who was a CEO  of a Fortune 500 company.  And he came to me once and said,  you know, what do you think is  the difference in terms of  making correct decisions,  between a successful CEO and an  unsuccessful one?  And I said, oh, enormous.  And he said, no, it's not  enormous.  Think about it.  If you're, you know, let's say  you're really right all the  time.  You know, you're right 60% or  70% of the time.  Let's say you're really bad.  But if you're right 20% of the  time, your board fires you, and  you don't have the job anymore.  So you've got to be in the hunt  to even keep your job.  So let's say the best CEO is  right 70% of the time, and the  worst one is right 50% of the  time. 

 It's not a big enough gap to  explain the difference in their  success.  So he said, what do you think it  is?  I didn't understand it at that  point in time.  He said it's velocity.  The difference is that the CEO  who's going to make the greater  number of decisions is going to  be the one who's more valuable  and more successful.  Because the difference--  Is this being clear to all of  you?  The absolute difference of  saying I'm right two out of  three times, or I'm right three  out of five times, that  difference isn't big enough.  But if I'm right 60% of the  time, versus your 70% of the  time, and you make one  investment for $100 that year,    and get whatever return.  And I'm right only 60% of the  time, but I make 20 investments,  I'm still going to bring more  value to the shareholders than  the person is right only once.  So, velocity of decision making,  I think, is critical to success.  Then there's the whole social  side, okay.  There are some legendary CEOs  who seem to just be very good at  capturing the public  imagination. 

 I can't really comment on Steven  Jobs, or you know, Jack Welch  type people.  I don't know if they in fact  really are as good.  You know, Jack Welch is, a lot  of revisionist history going  around, especially given the  stock prices of General  Electric, and how important one  particular segment was to all  that.  So maybe history won't hold him  in as high regard as he holds  himself, or recent history were  to hold him.  But in principle, I think this  idea of making decisions is a  critical differentiator.  There's another side to all of  this though, that again, you're  in this entrepreneurial  environment, being CEO of a big  corporation is a lot of  politics.  It's like being president of a  university or somebody in  government.  So I think that again, it may  not be if the differentiator is  how do you get to be CEO of  General Electric, or how do you  get to be CEO of General Motors,  my first answer may not even be  relevant, because surviving in  one of those cultures may be a  whole other set of Darwinian  skills that are separate from  simply showing return for  shareholders.  I don't even want to comment on  that.  But if we're talking on the  rational level, what makes a  leader efficient, and what makes  a leader successful in the  business environment, I think  being willing to be reasonably  close, in the hunt, on being  accurate, but not being held  back by lack of velocity. 

 You've got to make decisions,  not just sit on your rear end.  Yes?  >> My name is Chris, and kind of  going back to what you said  before, you said entrepreneurs  are both made and born.  I was just wondering how much  you think entrepreneurship has  to do with timing, and like the  market?  >> Levin: I think it's a great  question.  There's a researcher at Kauffman  who's trying to put together a  model that extracts what he  calls luck, outliers from the  venture model, to see what are  real rates of return.  In other words, I'm not picking  this company because it's on his  list, I'm just picking the name  I'm going to say now, because it  comes to everybody's mind.  I wouldn't want to say they're  just lucky.  But let's say, take Facebook.  Is the important lesson to learn  from Facebook it's timing issue,  or is it its underlying value  proposition.  And is it the type of lesson  that you can study in business  school and say ah-ha, I see the  underlying value proposition  here.  There's something that's  replicable. 

 So what they're trying to do at  Kauffman is take out the  outliers that are maybe being at  the right place at the right  time, versus some underlying  value proposition that's  replicable, which is an  interesting question.  So I think there certainly are,  there certainly is a lot of luck  that determines success in the  world.  Certainly, look at all the  people that left universities  in the late-'80s,  and went on to Wall Street.  I would say that, you know, from  '90 to 2000, or even 2004, those  salaries and bonuses were  absurdly, I believe,  disproportionate to the value  that those people made to those  companies.  You can't really convince me  that someone one year out of  business school should be  earning $600,000 or $800,000 a  year at Blackstone.  I can't believe there's really a  value proposition there.  But you know, that was the  market at the time.  So, those people were very  fortunate.  Now, there is something to be  said, or Proust, the French  writer said that luck is being  prepared for opportunities.  So there is a lot to be said for  preparing yourself so that you  are more inclined to be lucky. 

 My oldest son loves to fish, and  we go fishing.  He always catches the fish.  I used to call him lucky.  But I think after all these  years, I'm willing to concede  that he's just better at  fishing.  So there's some way to put  yourself in a position to be  lucky.  And in fact, I think one of the  critical skills of an  entrepreneur, and it connects to  this question about mentoring,  is knowing, sensing, when you're  in a situation that you're close  to being lucky.  You meet someone at a cocktail  party who says, wow, you know,  your business idea sounds very  intriguing, please call me.  And you actually take the card  and you actually make the call.  Or, what made you even at that  cocktail party, have the  temerity to even bring up your  business idea.  Why?  What little circuit was closed  in your brain that said, hmm,  maybe this person could help me?  So I think that is luck. 

 It is good fortune.  But there's something about it  that people who are sensitized  to being successful seem to know  when to do that stuff.  That is difficult to teach,  other than to say, you have to  be tuned in to your own life.  You know, be sensitive to when  somebody's around who can help.  Yes?  >> Hi, my name's Walker.  Kind of going along with the  mentor conversation, I've been  told that the two best friends  and the two worst enemies of the  entrepreneur are the lawyer and  the accountant.  Now, how important do you think  that role is?  Or would you say the mentor  should kind of pick up those  duties?  And at what stage of the  business do you think you should  seek the advice of those people?  >> Levin: I'm trying to  understand the quotation.  Your two best friends and your  two worst enemies?  So your accountant and your  lawyer are both your friend and  your enemy, is that the point?  >> Yeah.  >> Levin: Well, I don't hate  lawyers as much as most people.  But here's the deal the way I  see it. 

 I think, when you come up, you  know, there's an old joke in New  York about, at a restaurant, the  waiter comes by, and the person  sitting at the table says,  you know, says, what's good.  And you know, the waiter says,  I don't make recommendations,  I just take orders.  Your lawyer is not a waiter, but  your lawyer is not running your  business, nor is your  accountant.  You're running your business.  They're specialists to whom you  can go and ask questions.  But I don't think they're really  either your best friend or your  worst enemy.  I think at times, for example,  eSteel at its very early stages  was negotiating a very big deal  in China.  And China's law in intellectual  property is limited at best.  And we were having a big  discussion about who owned the  code, and how, and why, and  where it resided, all this  stuff.  And you know, it was very  important to understand that if  we were going to do the deal,  what was at risk. 

 The intellectual property  lawyers were very helpful in  explaining to me, what risk I  would be taking if I made a  deal.  They didn't say make a deal with  China.  They didn't say don't make a  deal with China.  So I think in that sense, it's  very important that you, if you  start a company, understand the  risks that you're taking.  In that sense, you know, these  advisors, or bankers, you can  put them on the same list, are  very helpful.  But I believe you should know at  the end.  It's like the pilot of an  airplane.  The pilot of an airplane can get  a call from the tower saying  visibility is down to two miles  at 2000 feet.  The tower doesn't say land or  don't land.  It just tells you. 

 You've got to decide.  You're the pilot, and they're  the tower.  I don't know if that helps.  Was there a second part to that  question?  (inaudible)  You're asking, given what I've  said about technical advice, how  does a mentor fit into that.  And I think that experience  counts.  So, for example, you know, I had  somebody call me the other day  who's not very involved in  international trade.  And he said listen, I'm involved  by accident.  He had a very good friend in  India.  I don't know anything about the  sugar business, but it turns  out, I believe, India is a big  importer of sugar.  It turns out that he had a  friend in Brazil, and they were  a big exporter of sugar. 

 And he had this opportunity to  do this deal.  And he explained to me the broad  outlines of it, and he wanted  some advice.  I knew nothing about that sugar  business.  But I know something about  international trade.  I asked him about the margins  that he was potentially going to  make, who these people were.  And I told him the deal wouldn't  work.  And he said, no, I love this  deal, make all this money.  And I said, okay, I'm just  telling you this deal isn't  going to work.  Because in my experience, the  margins were too big.  The volumes were too big. 

 It was too big for a newcomer to  be allowed into basically --  business, for any number of  experiential reasons,  irrespective of the specific  case, I knew that it couldn't  work.  So three weeks later, he called  me up very sheepishly and said,  you know, I just wasted three  weeks on that.  I said I knew that.  That's what you want in a  mentor, right?  Experience, you know that  saying, experience is the name  we give our mistakes.  So, I made a lot of mistakes.  And I think that if you get a  mentor who can shorten that  cycle for you, you don't have to  make every one of those  mistakes.  Yes?  (inaudible)  It's a good question.  All these things are a question  of balance.  I'll give you a perfect example  of that.  I was asked earlier if I did  have a mentor early in my  career. 

 I said I did, the chairman and  founder of the steel company  that I went to work for.  And he helped me enormously.  At the same time, he was one of  the most outspoken voices that I  not start eSteel, because it was  a total waste of money.  Now, you could argue that maybe  he was right, because it didn't  grow as big, it didn't persist  at that high level of value that  it achieved initially.  So maybe you could say he was  right.  I would say he was wrong.  I had a great experience.  I would do it again in a minute.  But that's the problem.  People, not everybody is going  to give you the right advice. 

 And people are expert about one  thing, and all of a sudden start  to become experts on who your  next girlfriend should be.  And maybe they know about steel,  and they don't know about that.  So you have to winnow through  this stuff.  This willingness to start a new  business, to go against the  grain, it's very, very difficult  to find someone who's going to  agree with you, except your  co-founder.  By nature, if you figure out a  new reason that the world needs  lemon flavored, artificial  sweetener that doesn't cause  cancer, and you are the only  ones in the world who have it,  you're going to find it hard to  get General Foods to go along  with you and say, yeah, we've  been meaning to make that for 20  years, and oops, we forgot to do  it.  All their market research is  going to show it's the wrong  thing to do, otherwise they  would've done it.  And this thing about finding  validation for your idea, it's  very hard.  Venture firms will give it to  you with the money, and their  80% share of your business.  But you know, it's hard to find  a mentor who will do that.  >> Yasiri: Is there one last  question for Michael?  >> Levin: Somebody?  >> Yasiri: Well, we have taken  more than an hour of your time. 

 And we certainly said that we'd  be with you an hour.  What a delight it has been to  dialogue with you.  Join me in thanking  Michael Levin.  (applause)  >> Levin: Thank you.