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AMERICA’S BEST BUSINESS SCHOOLS • SILICON ALLEY’S FIRST BILLIONAIRE -PRENE U ER P 5O BE ST S NIE PA THE STARTUP SECRETS SMALL CAPS TO BUY NOW REVENGE OF WEB 1.0 RS SU OCTOBER 28 • 2013 EDITION O SMALL C M TWITTER CEO DICK COSTOLO “BROADCASTERS HAVE COME TO UNDERSTAND THAT WE ARE A FORCE MULTIPLIER.” HOW TWITTER WILL SAVE TV (AND TV WILL SAVE TWITTER) THE HYPED IPO LACKS A REAL BUSINESS MODEL THE TELEVISION NETWORKS BLEED VIEWERS INSIDE THEIR PLAN TO MAKE BILLIONS TOGETHER What are you thinking about? We’re thinking about your security Your business pulls you in a lot of directions Our job is to think about your business’s security, no matter where you are With Tyco Integrated Security’s Mobile Security Management, you can remotely manage your security system at any time, from anywhere, on your smart phone, tablet or laptop It’s just one reason why we help secure more businesses – of any size – than any other company We’re your Tyco Team And we put security in the palm of your hand For a free Mobile Security demo, visit TycoIS.com/mobile 1.800.2.TYCO.IS / Safer Smarter Tyco.™ License information available at www.tycois.com © 2013 Tyco All rights reserved Tyco is a registered trademark Unauthorized use is strictly prohibited â2013 John Paul Mitchell Systemsđ “Growing up, we didn’t have a lot of money, but my mother always grew her own vegetables Now we’re bringing generations together helping thousands of families help themselves with Grow Appalachia’s community gardens.” John Paul DeJoria, CEO and Co-founder THE BEST IN PROFESSIONAL SALON HAIR CARE PRODUCTS Guaranteed only in salons and Paul Mitchell Schools paulmitchell.com contents — octoBeR 28, 2013 VoLUMe 192 nUMBeR 70 | king of The Second Screen It’s prime time for Twitter CEO Dick Costolo 108 | STarTuP School An M.B.A program for budding entrepreneurs, not I-bankers 15 | FACT & COmmEnT by STeve forbeS Senators: Don’t be easy on the next Fed head LEADERBOARD 20 | THE STATE OF BAnkinG Pay is the only thing that grows in good times and bad 23 | SCORECARD Zuckerberg wins again; Hayne unravels 26 | CASH AnD CARRIE Less blood is better for Stephen King movies Plus: FORBES Makeover 28 | EvERyTHinG’S JUST FinE Banks rationalize their bad behavior Plus: Up-and-Comers 32 | ACTivE COnvERSATiOn Bad-boy billionaire Stewart Rahr and the 399 other members of The Forbes 400 cover PhoTograPh by eric MilleTTe for forbeS | FORBES OCTOBER 28, 2013 RE:INVEST YOUR CASH WITH A STRONG ONE-TWO PUNCH Turn everyday purchases into investing opportunities FREE ATM ACCESS 2% CASH BACK ON EVERY PURCHASE with the Fidelityă Cash Management debit card1 with the Fidelity American Expressă Card • Get automatically reimbursed for all ATM fees • Rewards automatically deposited into your Fidelity retirement, brokerage, or college savings account2 • Free checkwriting and online bill pay • Free mobile check deposit See how we can help your cash work harder for your Personal Economy • No limits on rewards3 ««««« Fidelity.com/Cash 800.FIDELITY Keep in mind that investing involves risk The value of your investment will fluctuate over time and you may gain or lose money The Fidelity® Cash Management Account (the “Account”) is a brokerage account designed for spending and short-term investing ATM fees are waived, and reimbursement is provided for all ATM fees charged by other institutions when you use your Fidelity® Visa® Gold Check Card at any ATM displaying the Visa,® Plus,® or Star® logos A 1% foreign transaction fee is not waived and will be included in amounts debited from your Account The Fidelity® Visa® Gold Check Card is issued by PNC Bank, N.A., and administered by BNY Mellon Investment Servicing Trust Company For information about rates, fees, other costs, and benefits associated with the use of the credit card, or to apply, call the number or visit the Web site above and refer to the disclosures accompanying the online credit application Customers earn points for each $1 in net retail purchases Once you reach 5,000 points, they can be redeemed automatically or on demand for cash at a 1% exchange rate into an eligible Fidelity account (i.e., 5,000 points = $50 deposit) The ability to contribute to an IRA or 529 college savings plan account is subject to IRS rules and specific program policies, including those on eligibility and annual and maximum contribution limits Additional restrictions apply Full details appear in the Program Guidelines new card customers receive with their card The credit card program is issued and administered by FIA Card Services, N.A American Express is a federally registered service mark of American Express and is used by the issuer pursuant to a license Investment Rewards is a registered trademark of FIA Card Services, N.A Certain restrictions apply to each benefit Details accompany new account materials *SmartMoney magazine, June 2010, 2011, and 2012 Industry review ranking leading discount brokers based on ratings in the following categories: commissions and fees, mutual funds and investment products, banking services, trading tools, research, and customer service Fidelity is not a bank and brokerage accounts are not FDIC insured Fidelity Brokerage Services LLC, Member NYSE, SIPC © 2013 FMR LLC All rights reserved 646076.1.0 contents — octoBeR 28, 2013 THOUGHT LEADERS 82 | SurvivorS—and ThriverS Three distant memories from the 1990s bubble light up our list of America’s Best Small Companies 34 | CURREnT EvEnTS by Paul johnSon Obama versus Putin: Can Obama muster the right stuf? 36 | CApiTAL FLOwS by naThan leWiS A stable dollar delivers economic stimulus 40 | innOvATiOn RULES by rich karlgaard Tara’s lesson: Smart leaders copy STRATEGiES 42 | DETROiT’S HAppy HOmE wRECkER The Pulte family made billions building homes Now Bill Pulte is tearing them down by joann Muller 46 | THE ApOTHECARy Three key questions for ObamaCare’s rollout by avik roy 98 | Who needS The iPhone? Even without Apple, InvenSense’s gyroscope business is pointing straight up TECHnOLOGy 48 | A piCTURE’S wORTH A BiLLiOn DOLLARS Jon Oringer turned a side project into a $2.5 billion photo phenomenon by STeven berToni 54 | CHinA’S BLACk BOx The Chinese answer to Apple TV is full of pirated content by SiMon MonTlake 56 | OnE ADDRESS BOOk TO RULE THEm ALL Privacy experts are a little freaked out about a startup’s self-updating contact book 92 | Say cheeSe Annie’s has the right ingredients for organic growth by adaM Tanner 42 | deMoliTion Man A home builder turns to the wrecking ball 26 | Murder doeSn’T Pay The Stephen King Rule: fewer bodies, more money invESTinG 60 | DAy TRADinG GABELLi ETFs may soon be emerging from their index fund ghetto by ari i Weinberg 64 | pORTFOLiO STRATEGy by ken fiSher Betting against Bernanke 66 | SmALL STOCkS by jiM oberWeiS America’s best small stocks 68 | yEAR-EnD CHECkUp by WilliaM baldWin A Roth conversion formula | FORBES OCTOBER 28, 2013 FORBES BEST BUSINESS SCHOOLS — HUMAN CAPITAL TAKEOVER UNIVERSITY A wildly popular class at Stanford encourages M.B.A.s to take control of a real business H alfway through business school, Rob Cherun thought he was destined to work at McKinsey & Co The elite consulting frm spent thousands to underwrite his tuition at Stanford a few years ago, certain that the wavy-haired Canadian would join right after graduation But Cherun changed his mind Even though a consulting career seemed safe and prestigious, he declared: “I wanted more volatility in my life.” Today Cherun is holed up in a gritty industrial suburb of Toronto, running UCIT Online Security It’s a small but fast-growing construction-surveillance company that Cherun bought soon after earning his M.B.A If McKinsey stopped by, its consultants might snicker at the peeling paint in UCIT’s ofces, the industrial-grade Coke machine in the hallway or the mud-splattered GMC Terrain in the parking lot Cherun has jettisoned his old espresso-sipping habits, his Prada shoes and his convertible BMW He’s 116 | FORBES OctOBER 28, 2013 now a salt-of-the-earth operator who Rob Cherun (right) and favors Timberland boots, denim and Erik Mikkelsen became a two-man KKR on the a round of beers with the guys But outskirts of Toronto UCIT is growing fast If its 32-yearold boss stays on track, his stake in the company could be worth $5 million or more in a few years—a target that young consultants can’t reach Cherun’s inspiration was a little-known but increasingly popular course at Stanford called “Strategy 543: Entrepreneurial Acquisition.” This second-year elective is a fast-paced, two-week primer on how to become a oneperson version of KKR or Blackstone Group, carrying out your own tiny takeover and installing yourself as chief executive ofcer This is the business-school equivalent of Teach for America: a daring way to parachute into high-authority jobs in unpredictable locales TFA is for idealists, S-543 for capitalists Every year second-year Stanford students like Che- GEoRGE SiMhoni foR foRbES By george anders Do your workers understand health care reform? More than 7-10 U.S workers agree that health care reform is too complicated to understand.* How will you help them? Call your local Aflac ofce or download our Employer’s Guide: aflac.com/HCRGuide Z130889C *Source: 2013 Aflac WorkForces Report 9/13 FORBES BEST BUSINESS SCHOOLS — HUMAN CAPITAL run stampede into S-543 to learn the essentials of raising money, fnding an acquisition target and closing the deal Instructors Peter Kelly and David Dodson— two longtime entrepreneurs and investors themselves— take only 40 students per session, and that doesn’t come close to satisfying demand Months before this autumn’s class began, every slot was claimed, and another 26 students hovered on the waiting list Frustrated aspirants will get a second shot in the spring, thanks to a new scheduling expansion For 80% or more of enrollees, the notion of asking strangers across the continent, “Can I buy your An alum of Stanford business school, Abhijit Phanse honed his sales talents on the job as company?” ends up being CEo of data-center company United Layer too freaky for their tastes Some students treat the class as a means to surface gered much longer After three years investment targets, for others it’s Mansour barely recouped the original armchair tourism That’s fne, says money his investors had put in There Kelly The world that he and Dodweren’t any profts to speak of son describe is full of risks It’s not Mansour returns regularly to for the faint-hearted Every lecture Stanford to share his woes No matter or panel discussion is packed with how challenging a picture he paints, warnings about failed searches, hidsome students are undeterred “Peoeous operational snarls or companies ple say: ‘That’s not going to happen that go bust to me,’ ” he explains “They’re optiListen to Nick Mansour, who in mists Everyone has to be thinking the late 1990s thought he could get that they’re going to be successful rich by taking control of Clear Creek Otherwise, why would you this?” Environmental, a liquid-waste-serMansour keeps chasing acquisitions vicing company in Annapolis, Md and thinks his latest deal, taking over Determined to learn the business at a health-related trade school in Ariits most basic level, Mansour early zona, has great promise on decided to accompany a cleanAmong the new optimists is up crew on a day’s errands “We had Alex Stavros, a 2011 Stanford busia large truck, a bunch of hoses and ness school graduate who now runs some septic tanks to empty,” ManCALO, a teen treatment center in sour recalls “How hard could this be? Lake Ozark, Mo “It’s the middle of Well, I pushed a lever the wrong way nowhere,” Stavros cheerfully conI got a bath—all across my overalls.” cedes But he grew up as the son of He couldn’t change clothes until the missionaries in Peru and likes the end of the day The investment linidea of running a business with a big 118 | FORBES OctOBER 28, 2013 element of social service Besides, he fgures his general management skills can help the facility expand and be more efcient “You learn to hustle,” adds Abhijit Phanse, a 2008 Stanford business school graduate who now runs United Layer, a data-center company nestled into a onetime Macy’s warehouse on the edge of San Francisco Phanse came into the job with plenty of engineering and fnance expertise But he learned that he could add even more value to the company by mastering the art of sales, landing contracts with customers such as the city of San Francisco “They don’t teach that at business school,” he says Business schools’ own data show how good—or bad—the deal-hunters’ destinies can be Failure is common, according to an analysis of 150 alumni of Stanford and other leading M.B.A programs going back as far as 1983, well before S-543 began Slightly more than half the time, graduates either can’t fnd a deal or end up with a loss on what they acquire But a few dazzlingly successful deals—with 100-to-1 payofs or bigger—create not just overall proftability but also an average annual return of 34% Among the epic successes: Asurion, which provides lost-cellphone insurance to millions of customers, and ServiceSource, which handles so many software renewals for tech giants that it has become a publicly traded company in its own right For Cherun, the son of an Ottawa pharmacist, everything he heard in business school about the acquisition hunt sounded magical Unable to win one of the 40 ofcial spots in S-543 during the fall of 2010—his fnal year at Stanford business school—he implored class organizers to let him something useful, like arranging guest speaker luncheons Who could say no? Before long the interloper with the lunches had wiggled his way into a few sessions Raising money to pursue acquisi- Are Tax Free Municipal Bonds Right for You? 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Police could be on the scene in four to ten minutes This, Cherun decided, was a business that passed all of Stanford’s 120 | FORBES OctOBER 28, 2013 tests It also sounded a lot more palatable than some of his predecessors’ picks As Cherun later put it: “Who really wants to be the septic king of Canada?” Best of all, UCIT’s founder and owner, Sidney Sommer, was ready for a change in control Sommer, 35 at the time, had been running UCIT for eight years He knew the business was ready to open more sales ofces across Canada But he had a wife and two toddlers, so his ability to travel was constricted “I couldn’t it all—and still have a “HE HEAdEd INTO fIRST clASS I HEAdEd INTO EcONOmY I cOUldN’T HElp bUT THINK: ‘THAT cOUld HAVE bEEN mE.’ ” successful marriage,” Sommer says The solution: Let Cherun, Mikkelsen and their investors buy about 90% of the company Sommer kept 10% of the business, ran the Torontoarea sales team and remained a director The seller and buyer found their rhythm early on and struck a deal Sommer later joked to the two young suitors that his frst thought upon meeting them was: “I see the real investors sent their children to see me.” Running a small company, Cherun says, is “so real!” The hands-on immediacy of his new job hit home early when he pointed to a burnt-out lightbulb in the ceiling and asked: “What are we going to about it?” The answer: If it bothered Cherun, he could drive to Home Depot, get a new bulb and install it himself So he did Some days he stays in the ofce until a.m., overseeing a team fxing a software bug that hurts monitor- ing-room performance Early on, Cherun’s daily duties included toting about $15,000 of customers’ checks to the bank Now a stafer shuttles the money—and peak days can reach $275,000 UCIT is on track this year to book a bit more than $10 million of revenue, double the company’s size when he and Mikkelsen took over A new ofce in Vancouver is humming after some early stumbles; a Calgary rollout has been under way for a year Proft margins have shrunk slightly as UCIT invests for growth, but software upgrades are boosting human operators’ ability to monitor many cameras at once, helping overall efciency Thrift has become a way of life Cherun cuts down on hotel costs when he travels, couch surfng at friends’ places instead Mikkelsen rents beat-up vans on his business trips for as little as $20 a day, avoiding costlier new cars “We think a lot about opportunity costs,” Mikkelsen says “If we don’t spend $300 on a trip, that’s $300 that can go into a nice dinner with customers or an extra bit of marketing at a trade show—all of which can win us new business And the value of that new business can be way more than $300.” Turning his back on the McKinsey job has carried a short-term cost for Cherun He had to repay his tuition subsidy within 90 days of graduation More recently he was about to board a fight in Vancouver when he noticed a former pal from his McKinsey days getting on the same plane “We walked through the entryway together,” Cherun recalls, “and then he headed left into frst class I headed right into economy It was hilarious! I couldn’t help but think: ‘That could have been me.’ ” Cherun’s obligations to UCIT may keep him fying coach for a bit longer But he knows that successful entrepreneurs eventually get to buy their own jets—or airlines That’s a leap that consultants rarely make F Wireless Computerless Paperless Introducing CLOUD SCANNER + DIGITAL FILING SYSTEM The all-new way to be neat Scan straight to the cloud Send items directly to NeatCloud®, and other cloud services ® No need for a computer Put NeatConnect anywhere and watch paper disappear Touchscreen interface Scan, review, and organize with the tap of a finger Order NeatConnect now & get FREE MONTHS of NeatCloud Call 855-589-0858 Visit www.neat.com/fbconnect FORBES LIFE PURSUITS TPG cofounder Bill Price has a plan: produce wine you can’t buy by RichaRd Nalley T here’s a great joy in creating a product outdoors in one of the most beautiful places in the world,” says Bill Price, a onetime private equity hawk turned stealth wine mogul “This morning I was out in a vineyard to see if we were ready to pick, and the fog was burning of and the sun was coming up and the birds were chirping Pretty great way to spend your workday.” Price, 57, one of the founding partners of private equity giant Texas Pacifc Group (TPG)—“I was the ‘Pacifc’ part,” he says— spent several careers’ worth of more conventional workdays before following his passion into the California wine business Today 122 | FORBES OctOBER 28, 2013 bill Price with the fruits of his current labor— Pinot Noir grapes from his top-notch durell Vineyard in Sonoma eric millette for forbes The Vineyard Collector he controls seven wine brands and fve vineyards, but for a player of his stature he is almost invisible to outsiders There is no William Price mega-winery on the Route 29 wine road or anywhere else And frankly, if you don’t already have a line on his best wines, like Kistler and Kosta Browne, you will have to go to some lengths just to taste them TPG, which Price left as partner emeritus in 2006, was an exciting ride and afforded him a fne life indeed: He splits his time between California and Hawaii; his 90foot ketch is docked in San Francisco Bay He shares ofce space these days with his family’s private museum of vintage Aston Martins, Maseratis and Ferraris His old company did famous deals: Continental Airlines, Ducati, J Crew, Petco, Del Monte But it was a midlevel score that actually changed Price’s life: the $350 million purchase, in 1996, of Napa Valley’s Beringer Wine Estates from Nestlé (In a package with some other winery purchases, TPG would in turn sell Beringer to Fosters in 2000 for a reported $1.5 billion.) Price’s exposure to the wine trade sparked a realization: “In the wine WHO CAN HELP BRING MEANING TO YOUR MONEY? The pursuit of a lasting legacy is something we pursuit u lasting somet ng ethin all share But if you want to leave your mark on e you ur ma rk share world, takes r k int ntions nten the world, it takes more than good intentions It someone e o takes someone who understands your values as your values assets n well as your assets Someone who can translate as your hard work into something greater That r g greater e work someone s m n ncial someone is a Morgan Stanley Financ Advisor Financial And n e you u And we’re ready to work for you morganstanley.com/wealth © 2013 Morgan Stanley Smith Barney LLC Member SIPC CRC6 60555 06/ 13 013 013 Morga Stanley Smith B arne LC Membe I PC RC6 60555 06/ 13 rga tanle mith rne LC g ta ey an ith t n C mb be IPC RC6 605 06 / P C 60555 /13 FORBES LIFE PURSUITS 124 | FORBES OctOBER 28, 2013 walks, drains, hose stations and, yes, the basketball hoop—is remarkable; the level of investment for a small brand, head-spinning And here’s the thing: Although the brand produces and sells 15,000 cases, very few new customers ever get the wine—it sells out mostly through the winery’s mailing list “It is kind of weird,” says winemaker Michael Browne “We spend hours showing people around, and they say, ‘Great, so where I buy some wine?’ And we say, ‘There isn’t any.’ And they a double take—‘Wait, what?’ ” “Yeah,” Price chimes in, in mock puzzlement, “how does this business model work?” Pretty well, apparently In a notoriously low-proft business, Price claims that several of his brands enjoy margins of 50% or higher Call it the Stardust Factor Labels like Kistler and Kosta Browne enjoy such an avid fan base (there is supposedly a 10,000-person waiting list just to get on Kosta Browne’s buyers’ list) that they can charge full retail price ($70-$90 in Kistler’s case) and cut out the wholesale tier almost entirely As a business model it is a balancing act Since nonlist drinkers only rarely bump into a bottle at a restaurant and those actually enscribed on the winery’s Sacred Scroll can’t taste before they buy, the model relies on word of mouth for fresh customers and repeated leaps of faith by the old It is an individualized, consumer-by-consumer process, and wine collectors can be notoriously fckle— hot brands come and go in California But Price, the old PE guy, is to all appearances in this for the long haul High on the list of mistakes he won’t make, he says, is trying to hook a wine label to the latest wave of consumer fashion “This is a very complicated business where understanding the grapes from a single piece of property and how a winemaker wants to use them is a long-term game,” he notes “If you don’t stay committed to your vision you are lost.” The passion for putting his own vision to the test still burns Price recently sought out a 27-year-old Santa Barbara winemaker named Gavin Chanin, whose Pinot Noirs knocked him out, ofering a balance of lower extract and alcohol with an intense clarity of flavor not quite like anything else in Price’s portfolio He and Chanin will launch their 50/50-partnership LUTUM label this month Just get your name on the list early F TRENDING What the 51 million Forbes.com users are talking about For a deeper dive go to FORbeS.cOM/ FORbeSliFe PERSON caRlOS GhOSN renault-Nissan chief made good on first electric autos; now commits to 2020 delivery of driverless cars IDEA hOllyWOOd PhONeS iT iN seven of 2013’s ten highest-grossing movies are sequels, spinoffs or franchise reboots can the next Police Academy be far behind? COMPANY TReNdnet flaw in security firm’s software enables hackers to peek in on your baby cam— or into your dressing room. DimAs ArDiAN / bloomberG business, everybody is passionate about his product In a private equity frm, people are in it because they like the challenge and want to make a lot of money But let’s face it, they are not passionate about spreadsheets.” His own spreadsheet continues to expand, thanks to deals like last year’s purchase (for a reported $100,000-plus an acre) of Sonoma’s 138-acre Gap’s Crown Vineyard Asked to estimate the worth of his wine holdings, Price will only say “in the hundreds of millions.” His portfolio appears to be something of a mixed bag at frst glance, a collection of small- to-medium-size labels and wineries and a patchwork of vineyards But you can see a unifying strategy—a kind of controlled carom shot—beginning to emerge Most of Price’s holdings are in Sonoma County, which has become one of the New World’s cutting-edge regions for planting Pinot Noir, that wilting belle of a red wine grape that made Burgundy famous And, states Price, “I am defnitely a Burgundy man.” He is also a businessman, something of a rare bird in the wine trade at his level of sophistication His Big Idea—really two ideas—is “to share my business expertise and fnancial resources with extraordinarily talented winemakers and together create the type of iconic brands that sell direct to the consumer.” The Price Idea is on full display when we drive up to leafy Sebastopol to visit Kosta Browne Two restaurant workers’ shoestring startup in 1997, Kosta Browne was plucked from obscurity by the raves of critics like the Wine Advocate’s Robert Parker Suddenly an outft that could barely aford barrels was beating back customers with a metaphorical bat In 2009 a company Price directed bought a stake valued at $40 million and gained controlling interest As we pull into the Barlow, a kind of ofce park for artisans that also hosts a baker, a distiller and a Tibetan art gallery, Price smiles “I always say that I’ll put money on the inside of a winery, not on the outside I made a little exception for Kosta Browne.” Kosta Browne’s “bay” in the Barlow has been converted into a VIP hospitality space worthy of a shelter magazine, with creamy leather chairs and a gleaming catering kitchen But the real eye-opener is through the rear door: the 25,000-square-foot winery The winery’s level of detail—the placement of cat- Paid Advertisement Is It the Fountain of Youth for Aging Minds? 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Simply call 1-800-695-5929 to have it rushed to you As most people found out during the bear market and the Great Recession, managing your investments is a lot more complicated than merely picking stocks or mutual funds The real secret is to avoid making disastrous mistakes that seriously erode the value of your portfolio and make it hard for you to recover, especially if you are approaching retirement or are already retired That’s why we urge you to request this must-read, free report, published by Ken Fisher, CEO and Co-Chief Investment Officer of Fisher Investments—especially if you have investable assets of $500,000 or more After all, the more you have, the more you have to lose In this report, Ken identifies eight crucial mistakes that investors make In fact, many investors unknowingly make the same mistakes over and over again, costing them money and threatening their financial futures If this report saves you from making just one costly investment mistake, it can more than repay the modest cost of a few minutes of your time to request it Call now for your FREE report…and learn how to avoid investment problems before they threaten your future A PERSONAL MESSAGE FROM KEN FISHER Making investment mistakes can have serious, lifechanging consequences Not only can they cost you a lot of your hard-earned money, they can deny you peace of mind and a secure, worry-free retirement That’s why it is so important for you to get your hands on a copy of my FREE report It’s loaded with practical information you can use to help keep your investment goals on track, no matter what the market does Because the report is free and there is no obligation of any kind, it only makes sense to request your copy You have so much to gain if you can learn how to avoid the mistakes that nearly all individual investors and many investment “pros” make…and make again and again Please call today… for your sake and your family’s With all best regards, The #1 most serious retirement planning error you can make (Just this one nugget is worth requesting your free report alone.) How a common and simple “diversification” mistake can cost you a fortune Yours FREE! Why basing specific investment decisions on information in mass media and even expensive investment newsletters can hurt your returns Why you may be using investment strategies that on the surface appear reasonable, but are actually working against your best interests Why limiting yourself to US stocks dramatically reduces your returns…and probably increases your long-term risks The small investment mistake you make today that can hurt you badly in retirement… AND MUCH MORE Please hurry! This offer contains time-sensitive information Call today for your FREE report! 1-800-695-5929 Ext A129 ® Ken Fisher, CEO and Co-Chief Investment Officer, Fisher Investments Three reasons to call for your FREE report right now: REASON #1: It’s published by Ken Fisher, one of America’s most prominent investors and market forecasters Ken is best known for his 28-year running “Portfolio Strategy” column in Forbes, as well as his 10 investment books, including four New York Times bestsellers REASON #2: It comes from Fisher Investments Fisher Investments currently manages over $46 billion* in assets for successful individuals with portfolios $500,000 and greater as well as for large institutional investors The firm uses proprietary research to make its investment decisions for prudent investors who want their money to last REASON #3: Current market conditions and Wall Street’s latest crop of products make it more likely, not less, that individual investors can commit serious errors This report can help keep you from making harmful mistakes ©2013 Fisher Investments 5525 NW Fisher Creek Drive, Camas, WA 98607 Investments in securities involve the risk of loss Investments in foreign securities can involve additional risks such as losses related to other currencies and securities markets *As of 6/30/2013 OCTOBER 28, 2013 FOR MARKETPLACE ADVERTISING, CALL 212-206-5563 THOUGHTS FINAL THOUGHT Where are most of the millions of new jobs? An overwhelming percentage has been, and is being, created in companies with fewer than 100 employees —mALcOLm FOrbes ON eNTrepreNeUrs No one is born a CEO, but no one tells you that The magazine stories make it sound like Mark Zuckerberg woke up one day and wanted to redefne how the world communicates [by creating] a billion-dollar company He didn’t —dREw HOUSTON The essence of success is that it is never necessary to think of a new idea It is far better to wait until somebody else does it, and then to copy him in every detail except his mistakes —AUBREy MENEN There are 100 men seeking security to one able man who is willing to risk his fortune —J PAUl GETTy True leadership stems from individuality that is honestly and sometimes imperfectly expressed Leaders should strive for authenticity over perfection —SHERyl SANdBERG —FROM THE NOV 15, 1975 ISSUE OF FORBES OTHer THOUGHTs FrOm THAT IssUe: pOLITIcs OF AUsTerITY “There is a new political rhetoric blowing in the breeze, full of phrases like ‘drawing the line’ and ‘fscal responsibility.’ Conservatives wrote the speeches frst But now liberals, too, are mouthing the lines.” LOGO LOVers “Millions of young Americans—who love to parade as antibusiness snobs—are doing their parading dressed in Budweiser hats, Warner Bros T-shirts, Olympia beer bikinis—and even Jaws underwear The phenomenon is called the ‘logo tie-in.’ ” 128 | FORBES OctOBER 28, 2013 Running a company on market research is like driving while looking in the rear-view mirror —ANITA ROddIck Innovation is the specifc instrument of entrepreneurship, the act that endows resources with a new capacity to create wealth I spend 90% of my time with people who don’t report to me, which also allows for serendipity, since I’m walking around the ofce all the time You don’t have to schedule serendipity It just happens —PETER dRUckER —JAck dORSEy SOURCES: FORBES; GOODREADS.COM; THE LAST WORD ON MAKING MONEY; LEAN IN: WOMEN, WORK AND THE WILL TO LEAD; THE OXFORD DICTIONARY OF HUMOROUS QUOTATIONS; SIMPSON’S CONTEMPORARY QUOTATIONS BloomBerg; matt mcclain / the Washington Post / getty images There still is backing for really strong ideas, because people with capital need entrepreneurs and visionaries as badly as the entrepreneurs and visionaries need them How you think the Rockefellers stay as rich as they do? You get rich on today’s business, you stay rich on tomorrow’s HP helps UPS save energy before a truck even leaves the warehouse It’s time to build a better enterprise Together UPS does more with less thanks to HP Soon HP ProLiant Gen8 servers—the world’s most intelligent servers—will deliver more than twice the performance using 40% less energy Multiply that by more than a thousand UPS locations and they’ll save over million kilowatt hours of energy every year That will provide the same benefit to the environment as over 60,000 trees Getting more efficient at every turn, it matters hp.com/ups Make it matter Download the free Aurasma app Point your device at this ad Perform c Per orm ce an ene y avin claim based n HP an U nter rese rch Trees estima based o U E cal ulator onve sio of electricit to carbon eq ste ed tree eedlings grown Performance and energy savings claims based on HP and UPS internal rese rch Trees estimate based on US EPA calculator conversion of electricity to carbon sequestered by tree seedlings grown rma rm n avings ims vin e ed and UPS ern esea h re ernal ea earch stimate se m c ca lat a i e ctr city ctr ity t tri arb q qu ter er e edl ngs rown ng g www epa.gov U www.epa.gov UPS, the UPS brandmark, and the color brown are registered trademarks of United Parcel Service of America, Inc All rights reserved © 2013 Hewlett-Packard Development Company, L P ww.epa ww pa gov h U UPS andmark, an the co or row re re iste ed ademarks U ted Parcel Ser ic of m ri a, nc Al ght reserved 201 He ett-Packar evelopment ompany L.P ndmark ar r rk, h co own re e st e w t demar emar emar m United ed cel rvice e el rvice a c All hts ese ved 201 Hew t -Pa kard evelop nt m any L.P e 01 013 Pa rd v op Pac r opment ny, Breguet, the innovator Invention of the Tourbillon, 1801 With the Classique “ Grande Complication ” Tourbillon Messidor wristwatch, Breguet reinvents its most spectacular invention, the tourbillon, designed to compensate for the effects of gravity Held between two sapphire crystals, the tourbillon floats weightless inside its carriage, while the sapphire dial offers a transparent vision of the complex proprietary movement and its meticulous hand finishing History is still being written … B R E G U E T B O U T I Q U E S – N E W Y O R K F I F T H A V E N U E 6 - 6 – N E W Y O R K M A D I S O N A V E N U E 212 8 - 014 B E V E R L Y H I L L S 310 - 9 11 – B A L H A R B O U R 6 -10 – L A S V E G A S 73 - 74 – T O L L F R E E 7 - - 5 – W W W B R E G U E T C O M ... Trademark Ofce Printed in the U.S.A 12 | FORBES OCTOBER 28, 2013 SEPT 2013 Intelligent scrolling 40 streams MAY 2010 Forbes acquires True/Slant 2010 JAN 2013 FORBES magazine app launches JUNE 2012... stocks 68 | yEAR-EnD CHECkUp by WilliaM baldWin A Roth conversion formula | FORBES OCTOBER 28, 2013 contents — octoBeR 28, 2013 BEST SmALL COmpAniES 48 | caMera Man Oh, snap! Shutterstock’s Jon Oringer... billionaire Stewart Rahr and the 399 other members of The Forbes 400 cover PhoTograPh by eric MilleTTe for forbeS | FORBES OCTOBER 28, 2013 RE:INVEST YOUR CASH WITH A STRONG ONE-TWO PUNCH Turn