How I Turned $5,000 Into $2.6 Billion

Background Paul Orfila and Kinkos

• Paul Orfila is the founder of Kinkos.
• In 1997, he sold the company for approximately $1.5 billion.
• The company was later resold for $2.6 billion to FedEx.

“In 1997 I sold it to a firm in New York…They ended up selling for 2.6 billion dollars yeah the FedEx”

Making Money through Business and Investments

• Orfila’s wealth came primarily from Kinkos.
• He was also invested in stocks and real estate.
• Orfila believes that financial success can come from either doing well in school or being good with money.

“They had to be good in the school thing where they’re doctor lawyer or something with their education or they may be good with their money”

Growing Kinkos

• Kinkos was worth approximately $3 billion when Orfila left the company.
• Orfila grew Kinkos by focusing on making the company better every day and developing a system that would allow the company to run well without his direct involvement.
• Orfila believes that it is important to pay attention to the financial aspects of the business.

Copiers and business growth

• Opening a bunch of stores for your copiers can be a great way to make a fortune.
• Decision making is crucial when going into business; you need to decide whether to do everything yourself or to hire employees.
• Ambiguity plays a big role in decision making in business, which means that making hard decisions on a daily basis is important.
• A business should be an instrument to make you happy; it is something that you own, and it should not own you.
• Fostering a sense of risk-taking in a company is vital to its survival.

“You own it, it doesn’t own you”

Experimenting to find success

• Experiments are a great way to find out what works and what does not in business, but it is important not to overwhelm yourself.
• It’s important to constantly be wandering and looking for new ideas in every store.
• A discovery in San Diego led to the creation and sale of a profitable calendar, which was exploited throughout the country.
• A university program where professors could leave textbooks for students in-store became successful and eventually expanded to all 50 states.
• Not everyone can become a billionaire.

Turning $5,000 into $2.6 Billion

• Noah Kagan discusses his aversion to being flashy or overly boastful
• He believes that boasting can lead to envy and resentment from others
• This is especially true in cultures with a concept of the “evil eye,” such as Jewish and Arabic cultures
• Kagan prefers to avoid setting himself up for jealousy or envy
• He explains how he had a lot of financial debt prior to making 2.6 billion dollars
• His newfound liquidity made his life much easier and removed the burden of financial responsibility
• At the time, however, he was under so much pressure that he didn’t always appreciate the people around him who helped him succeed

Background and Early Life

• Noah Kagan talks about his early life and how he had to work hard to earn money to pay his bills.
• He mentions that he was very convivial to the managers and executives, which helped him get their approval.
• Noah states that his focus was to placate the managers and executives, and he could feel his fury a little bit.

“I think I had two choices in life. I could have been right here I am now or I would have been homeless. There’s no place in the middle for a guy like me”

• Noah mentions that he flunked second grade and had to go to school with eight kids in the class, two of whom were 18 years old.
• He also says that he couldn’t read very well, which made his third-grade experience difficult.
• Noah had to go to the eye doctor three days a week and finally learned how to read.
• He graduated from high school eighth from the bottom of his class of 1200.
• The United States draft is the reason he’s a college graduate.

“Maybe you’re better off just having a job, but you got to go to your rubber ducky in your bathtub and say do I really want this aggravation? It really is a lot of sleepless nights”

Starting out as an Entrepreneur and Dealing with Ambiguity

• Noah advises anyone who wants to be an entrepreneur to go to their soul and see if they really want it.
• He says that being an entrepreneur involves a lot of sleepless nights and uncertainty, and it may not be for everyone.
• Noah mentions that dealing with ambiguity is important in business.
• He learned to enjoy it, but he had no choice in the matter.

“Business is an art form. If Da Vinci came back and say wow man I think I could have done some more pink in that picture a little more blue, they’re artists. It’s always can be done better. Then you’re never done. It’s never perfect. It can always be improved”

First Job and Sales

• Noah talks about his first job as a door-to-door salesman when he was nine years old.
• He sold strawberries that he bought at the retail store.
• Noah says that he’s always been good at selling and that it just came easy to him.
• He sold newspapers and Christmas stamps for the Easter Seals while he was in grade school.
• Noah mentions that he likes door-to-door sales the best.

“I respect personally that’s my favorite. If anything, I like the best of sales” Santa Barbara

• The speaker mentions Santa Barbara.

Mindset for Success

• The speaker reflects on his past experiences and how he used to take himself too seriously.
• The publishing industry sued him, which made him realize not to take himself seriously.
• Whenever he took himself too seriously, things went wrong.
• He warns against taking oneself too seriously, especially when doing well.

“The next time you take yourself seriously, you better not.”

Lessons from Failure

• The speaker mentions how the publishing industry sued him the next day after making a lot of money.
• He learned a valuable lesson and realized that whenever he took himself too seriously, things went wrong.
• He warns against taking oneself too seriously, especially when doing well.

“Whenever I take myself seriously and I think I’m gonna get my escape, every time it’s too good to be true, I get my escape.”

Dealing with Failure

• The speaker talks about his experience buying real estate and how it didn’t go as planned.
• He bought a farm with a Farm avocado thing, but people came and stole all his avocados.
• He warns against getting into a business that you have no experience in.

“I cannot imagine a damn avocado orchard, and the people came in and stole all my avocados.”

Lessons from Failure

• The speaker talks about how he spent most of his time fixing the strategic weaknesses of his business.
• He reflects on being insecure and always paranoid about his competitors.
• He believes it’s important to understand your competition and to always be one step ahead.

“I knew every strategic weakness we had, that’s where I spent my time, fixing those weaknesses or removing just understanding them, fantasizing what a competitor would do to kick my ass.”

Outsmarting the Competition

• The speaker talks about how he outsmarted the competition in the copy business.
• He couldn’t compete with the government’s contract for the Xerox machine, so he had to think outside the box.
• He focused on longer hours, great customer service, and synergistic products like binding and stationery with copying.
• He reflects on how he grew up on Kinkos and how it was cool to be able to do it.

“So I had to outsmart the school, I would look down at longer hours, gave great customer service, had synergistic products like binding and stationery with the copying.”

Characteristics of a Good Store

• The speaker talks about what makes a good store.
• He believes a good store is manager-centric and that the morale of the manager is crucial.
• He reflects on how he could take a good manager and put them in a bad store and make it a good store.
• He could also take a bad manager and put them in a good store and make it a bad store.

“What made a good store was the manager. That morale of the manager, man, it was a manager-centric business.” Starting a Business

• Noah Kagan talks about how he had a lot of issues when starting his business.
• He mentions that he wanted to convert his business into a selling company that operated.
• Kagan describes how he started many businesses, including coffee shops and dry cleaners.
• He talks about his idea of creating 24-hour trip centers with businesses that are open 24/7.

“I wanted to convert us to a selling company that operated and uh that was part of my frustrations”

Life Decades

• Noah Kagan talks about how his mother advised him to “try everything” in his 20s, “figure out what you do best” in your 30s, and “make money for what you do best” in your 40s.
• He suggests to “try not to do too much” in your 50s.
• Kagan also mentions that in your 20s, you care about what people think about you, but when you reach your 40s, you stop caring about what people think about you.
• He quotes Bob Hope saying this idea.

“Honey in your 20s try everything in your 30s figure out what you do best and your 40s make money for what you do best and try not to do too much in your 50s”

Luck in Business

• Noah Kagan talks about how luck has a lot more to do with life than people might think.
• He gives examples of how he was lucky when he opened his first location in the main artery of the campus, when he lost the lawsuit with the Publishers but was able to stay in business, and when he dropped Coke bottles on a Sunday and an old lady walked by just in time to save her life.

“Luck has more to do with life than you might think” Building a successful business

• Success in business is not just about luck or divine intervention.
• There is an interesting balance between timing and effort that entrepreneurs must navigate.
• Building a business requires a lot of worry, wonder, and hard work.
• Many successful entrepreneurs have tried a lot of things that did not work before finding the one thing that did work exceptionally well.

“I see all these big shots, they think that they built the business. Their customers built your business. How well you could read a customer.”

The value of government partnerships in business

• Entrepreneurs should recognize the value of government partnerships in building a successful business.
• Governments provide education, infrastructure, and systems that can help businesses thrive.
• Recognizing the role of government in business can help entrepreneurs appreciate the resources and support available to them.

“Didn’t we provide good roads? Then we have a way for you to have systems of shipping things, and you think you built that business? It was government, a partner for you.”

Finding happiness and contentment

• The luxury of waking up every morning without worries is one of the best things about having financial success.
• However, having money does not necessarily bring happiness or contentment.
• Happiness and contentment come from within, and money cannot buy these things.

“Sooner or later, you’re going to wake up with yourself, figure it out. That comes from within.”

• Many movie stars and successful people are still miserable despite their wealth and success.
• Being contented with what you have and finding joy in simple things can be more fulfilling than trying to accumulate more wealth or possessions.
• Being a big shot can be expensive and may not bring the happiness or fulfillment that one seeks.

“Being a big shot just costs you a lot of money.”

Unwise investments and unnecessary expenses

• Being a big shot can lead to unwise investments and unnecessary expenses.
• Investing in equities and real estate developments may not be the best use of money.
• Contentment with good old stocks and bonds and income property can be a wiser choice.
• Expensive possessions like airplanes and police cars may not be necessary and can be costly to maintain.

“I started investing in equities, buying portions of companies I shouldn’t have been doing. I did a lot of real estate developments I shouldn’t have gotten into.”

• Being a big shot and having expensive possessions can be a waste of money and time.

“I bought this goddamn airplane to be a big shot, and that thing cost me more than the airplane because to be a big shot, I had to have projects around the country flying constantly, you know, justify big-shot airplane. No, that cost me a lot of money, more than the airplane, a lot more.” How a businessman takes advantage of accounting procedures

• The speaker shares a story about how he takes advantage of the accounting procedures of big companies to get better deals.
• He talks about how he used to go to Xerox and ask to buy machines in bulk, but in exchange, he would ask for a service contract extension for several years, which would give him free maintenance and parts for the machines for a long time.
• He also talks about how he applied this strategy to buy an airplane during a recession by asking for a few years of free service in exchange for buying the plane at full price.

“These big damn companies are stupid. If you know their accounting procedures, you can take big-time advantage of them.”

The benefits of owning an airplane

• The speaker talks about how he bought an airplane during a recession and used it for his chartering business.
• He shares how he got a great deal by paying full price for the plane but getting three or four years of free service in exchange.
• He talks about how expensive it is to own an airplane, but as a business owner, he was able to make good money out of it.
• He also shares that he used to travel a lot as a big shot but eventually got tired of it and decided to stay grounded.

“I blasted the hell out of [the airplane] 24 hours a day.”

Overcoming anxiety and ambition

• The speaker talks about how he used to have a lot of anxiety and ambition, which sometimes overwhelmed him and made him introspective and insecure.
• He shares that he was rejected a lot in school and had bad acne, which made him feel even more insecure.
• He talks about how as he got older, he learned to accept himself and work out his demons.
• He believes that everyone has internal demons, but as we get older, we learn to accept ourselves and put our 13-year-old selves in their place.

“You work out your demons as you get older… I think anxiety and ambition are the best of friends.” The Struggles of Being a Breadwinner

• Noah Kagan talks about how he felt pressure to be the breadwinner in his relationship.
• He says that he felt like he needed to go out and “kick some ass” to be seen as a provider.
• Kagan mentions that when he was in business, he didn’t necessarily feel nurtured.
• He believes that when things get really bad, your spouse may not necessarily be there for you.

“Your spouse isn’t necessarily there for you, and maybe that’s justifiable.”

Finding Support Beyond Your Spouse

• Kagan talks about the importance of having a supportive network outside of your spouse.
• He mentions that his parents, uncles, and aunts were always in his corner.
• Kagan’s mother had a saying: “A friend is somebody who’s happy when you’re happy.”
• He believes that it’s important to find people who are in your corner and who will share your joy when something good happens.

The Never-Ending Game of Business

• Kagan reflects on the idea of how much is enough when it comes to business success.
• He mentions that for some people, it’s never enough.

“It’s just a game, isn’t it?”

• Kagan compares business success to Tom Brady’s success in football and wonders when he will say he’s had enough.
• He believes that there is always a desire to expand and grow faster, even when there is money in the checkbook.

Kagan’s Best Memory of Selling Kinko’s

• Kagan’s best memory of his time at Kinko’s was the day he sold the business.
• He remembers feeling joyous and like he could breathe again.
• Kagan celebrated with a few cocktails and spoke to a friend.

“I could breathe again.” Publishing Program and Lawsuit

• Second Circuit Court of Appeals in New York City had jurisdiction over the publishing program lawsuit.
• The judge gave a verdict in favor of the publishers and issued an injunction.
• A man named Chimler saved the business.
• Jim Lair, a TV host, gave a plug for the business at a conference, which helped save it.
• Criminal sanctions were in place for future mistakes.

“I was at the White House getting a word for being a lousy student. Jim Lair was there waiting to see the president. I went up to him I said you know I really liked your TV show about the your heart attack and the pastrami sandwiches. And he said you know that’s of all the things I’ve done on TV that’s the one people remember the most. So years later I got the publishing. The Publishers sued me and they invited me to be given address to all the textbook manufacturers and Jim Lair was there the night before given the Keynote and he gave a plug for us and that’s what I think saved my business.”

Textbook copying

• The company would copy parts of textbooks and sell them as anthologies.
• They claimed that one-third of a book by Doris Kearns Goodwin was fair use, but they lost in court.

“We were taking, you know let’s say I teach you on a little bit of this book this book this book it was called anthologies or they wanted to teach you or like in the case of New York we try to argue that one-third of Doris Kearns Goodwin book was fair use which was like that is legitimate taking of a book a copyright well we we obviously lost that.”

Wealth and charity

• Wealthy people are often asked for charity and business opportunities.
• The speaker has his own pet causes, such as equalizing funding for public schools and an orthodontist program for children in need.

“They ask you for charity or buggy a lot. My favorite is do you care about the poor people the starving people Ethiopia like what are you going to say no I don’t care about them or I care I don’t have the money for them I can’t cure that problem so uh that’s some of the stuff you get or just some will do you mind if I talk to you about a business opportunity. So I’m pretty good at getting out of work and I’m getting at it I’m pretty good at getting out of those conversations but I think it’s a lot of nerve to ask me for charity some of these wealthy folks here ask me for charity I think come on you’ve got to give your own money and I have my own pet causes.”

“My main is uh in California we have this horrible way of funding Public Schools the fancy one that is my neighborhood gets 37 000 per student per year two miles away is a school in a more impoverished area they get ten thousand five hundred dollars a year tell me that is in any way Fair so we try to equalize the poorer schools we uh I have an ortho we have an orthodontist program where we help fix the children’s Title One children’s teeth and it seems to me that you have quality uh Orthodox or you can have happier life better and car less incarceration better college graduation Etc so uh we that’s one of my pet projects I think maybe if I before I die I’d like to make sure every child has a pathway to orthodontia especially in The Superficial California where you are engaged by your smile yeah.”

Teaching kids about money

• The speaker teaches his kids about money skills from a young age.

“How do I teach my kids money skills? Yeah, okay when they’re six years old…” Teaching kids about money

• Warren Buffet talks about how he taught his kids about money from a young age.
• At five years old, he gave them five dollars a week and they had to keep a log of what they spent.
• Three dollars were for spending, one dollar was for giving, and one dollar was for savings.
• He encouraged his kids to be entrepreneurial and start businesses, such as lemonade stands.
• When they were eight years old, he took them to see a stockbroker.
• He believes it’s important for parents to teach their children about money skills.

“I think it’s very important and a lot of parents aren’t doing the thing about money skills they’re letting the stupid grade the schools dictate their children’s happiness 100.”

Legacy and life’s purpose

• Buffet doesn’t think about his legacy or how he will be remembered.
• He believes we are insignificant in the grand scheme of things and thinks about the concept of infinity.
• He admires people with a strong faith because it gives them comfort.
• He hopes to go to “financial heaven” but believes it’s harder for wealthy people to go to heaven.
• He doesn’t recognize Christ in fancy churches and thinks of him as more of a “down-home, hang loose, forgiving type person.”
• He believes people should use their intuition and trust their instincts to become successful.

“Use your eyes and your intuition but unfortunately we’re too damn rational a lot of times it’s intuitive we don’t trust our instinct why does a customer want to buy something.” Managing People vs. Things

• Some people feel comfortable managing things, while others feel comfortable managing people.
• It is important to recognize which category you belong to and not try to be something you’re not.
• This reminds me of the Maytag repair person.
• Some people who become promoted and manage others may have a nervous breakdown.
• It’s important to acknowledge that not everyone is cut out for managing people.

“Some people aren’t cut out for it”

Entrepreneurship Isn’t for Everyone

• There’s a common misconception that everyone should be an entrepreneur.
• However, not everyone is cut out for it, and being an employee or working for someone else can be a great thing.
• It’s important to recognize that entrepreneurship isn’t for everyone.

“People shouldn’t actually be it, like it’s really not forever”

Business Ideas in Today’s Economy

• There are many business ideas in today’s economy.
• However, many people want to do highfalutin things, while sometimes it’s the down and dirty stuff that can be successful.
• For example, creating a car wash that charges $40 and washes your car while you’re at lunch.
• It’s important to recognize the value in simple and practical business ideas.

“The kids are too highfalutin”

Importance of Work-Life Balance

• To be successful, it’s important to have three things in balance: work, love, and play.
• If you work too hard, your balance is screwed up.
• It’s important to strive for a balance, and to enjoy time with family and loved ones.
• Injecting fun into the workplace is also important, and can be done through things like company picnics and alcohol at work events.

“To be successful you have to have three things in balance: work, love, and play” Giving recognition and the importance of candor in business

• Giving recognition and glory is important in the culture of a business.
• People value recognition through memorabilia, plaques, and pins.
• Candor is important in a business as it promotes directness and honesty.

“One of the things I regret in the old business is candor wasn’t important. Get along was too important. We all got along so well, and I don’t think we were as candid as we should have been with each other.”

The role of HR and the importance of lawsuits

• HR departments in businesses are responsible for firing employees.
• HR departments can be unnecessary and take up too much space.
• A lack of lawsuits does not necessarily mean good HR practices.
• A few lawsuits can indicate that a business is taking risks and pushing boundaries.

“That means you’re keeping a bunch of deadbeats in these stores. I don’t want that zero lawsuits.”

Responsibility in owning a business

• Owning a business involves a great deal of responsibility.
• People rely on business owners and their commitments.
• Honor is important in business dealings.

“You have people really rely on you and your representations. You want to shake someone’s hand and honor your commitments. Everything is easy to the person who doesn’t have to do it.” Giving away money and vetting charities

• Noah Kagan discusses how he gives away his money and vets charities to donate to.
• He mentions getting involved with impoverished elementary schools, particularly those with a high percentage of students on free or reduced lunch, as a way to identify those in need.
• Kagan also mentions the lack of resources available to teach essential life skills such as financial management, nutrition, and conflict resolution in schools.
• He believes that every child should know how to swim and has made it a priority to provide swimming lessons to those in his community who cannot afford it.
• Kagan emphasizes the importance of involvement and commitment to organizations and schools when it comes to donating money.

“Every child should know how to swim…that’s a sin”

Counter-intuitive pieces about wealthy people

• Kagan discusses his thoughts on inherited wealth and the entitlement mentality that can come with it.
• He notes that many wealthy people feel they deserve their inheritance despite not having earned it themselves.
• Kagan finds it ironic when wealthy people criticize welfare recipients for being “chiselers” when they themselves have also received unearned money.
• He believes that inherited wealth can lead to a lack of motivation and productivity, as those who have not had to work for their money may not have the same appreciation for its value.

“I work so hard for my inheritance”

Kagan’s daily schedule

• Kagan describes his daily routine, which includes breakfast with friends, a workout at 10 AM, lunch, and possibly a nap or TV-watching in the afternoon.
• He mentions that he teaches at two universities but admits that he doesn’t have much to do, as his classes are more like casual discussions.
• Kagan emphasizes that the most important thing in life is asking questions, not finding answers.
• He teaches his students to question everything and think critically about the world around them.

“Life’s about questions, not the answers” Noah Kagan’s approach to writing articles

• Noah Kagan explains that he approaches writing articles by asking himself questions such as “if 9/11 happened, how would you cover it?”
• He then solicits the opinions of others for their ideas on the topic.
• Finally, he writes an article based on the information he’s gathered.

What makes a great life according to Noah Kagan

• When asked what makes a great life, Noah Kagan responds that, for him, it’s family and children.
• He equates success to when your children want to be with you when they’re adults.

“Success is when your children want to be with you when they’re adults”

The importance of family to Noah Kagan

• Noah Kagan emphasizes the importance of family in his life.

“Oh family”

Noah Kagan’s definition of success

• Noah Kagan defines success as having children who want to be with you when they’re adults.

“You know what success is. Success is when your children want to be with you when they’re adults”

The coolest thing Noah Kagan has ever been called

• Noah Kagan reveals that the coolest thing he’s ever been called is “Dad.”