Value – How to build a long term value

Ben Nunez – Value – How to build a long term value.

So right around the same time that my dad explained the whole spreadsheet and the time value of money, he made me get a job. Like I said I was about 11 or 12 years old and about the only job I can get at the time was a paper route. So I start delivering newspapers, getting up early and riding my bike and you know just delivering newspapers. It started to provide a paycheck and enabled me to take that money and go buy the things I wanted to buy but I also you know wanted to experience that time value of money that my father had explained to me, so I started to save the money as well.

By the time I was 14 I realized that a paper route wasn’t the most lucrative nor was it the best use of my time. So I started a small business with some friends in the neighborhood to clean decks , mow lawns, shovel driveways and do anything that we could do, sort of physically using our bodies as young kids to help around the neighborhood. That did really well, I sort of had a few guys that I did this with, you know as the ring leader I made the most money and they were sort of my first, I guess you can say, employees.

You know after that I went on and had other small businesses throughout college but my first real company was when I graduated college. I took three and a half years to graduate college and I took that last semester to start a company and it was in the Telecommunication space, it was very early in the Telecom days, in the mid 90’s or at least early in the sense of internet and data that was starting to come about and I learned that the best way to make money in that business was to be a middle man in between really big companies who need to procure Telecommunication services and the telecoms themselves.

So we became an agent and we help these big companies make decisions about which telecom provider to go with and then we would make money from the telecom provider on the backend by getting a piece of the monthly recurring revenue for the life of that contract.

Took advantage of this sort of compounding model and the annuity income stream that my dad taught me at a very early age and you know we did very well. We made a ton of money, I was twenty one years old at the time when I started the company; we did very well in the course of a few years but what I’ve learned the most was that we weren’t really building any real long term value. The only value we were building was the amount of money that was booked out on the contracts that we had. We didn’t have  any intellectual property, we had people and we had relationships and we had contracts and that was the limitation of the value of our company, so when we went to sell it that was what we were valued at. There wasn’t much of a multiply on our earnings, giving that there was no real intellectual property, we have not invented anything, we had not come up with anything that was tangible beyond our income strength. 

So fast forward to future companies that I’ve build; I’ve instead now focus on long term intellectual property value that we can build in a company. Today we are building a consumer photo app which has no monetization plan, at least not very early on, and we are focus much more on building users and technology and intellectual property that ultimately may be worth more than what any income stream might be worth today. 

So it’s interesting to see how my personal interests have change from, you know, just purely making money; I had no real interest in Telecommunications back then but I knew it was a great way to make money and I understood the compounding model and annuity income and everything associated with that.  Where as today I’m focus on something that, again we’re not exactly sure how we’re going to make money but we are focused on building values for millions of people.