Washington University Commencement Address
Friday, May 19, 2000

Good Morning. I must admit, that this is really weird for me to be up here today, it was 16 short years ago that I was sitting exactly where you are, listening to Bob Hope in the Quad talking about the future as I was graduating from Wash U. My parents where really pissed off with me because I wore shorts under my gown, had long hair (see what 14 years of entrepenurship can do). The photos looked like I was stark naked under the blue gown and all I could think about at the time was, what the hell am I going to do now, and boy would I miss my friends and my girlfriend. (Sarah, who ended becoming my wife 7 years later.) My circle of friends seemed to be my entire universe, the ones who had driven with me in my jeep up the steps of Brookings freshman year, or - I suppose in retrospect, I wanted to graduate as the renegade and say to the institution, see, I didn't need the lessons YOU gave me, I don't want to be a Wall Street clone, just work for a paycheck and not enjoy what I do. When I graduated from here, I only knew what I did NOT want to do.

So, what a wonderful honor and opportunity it is to have the last word with all of you, you the graduating class of 2000 and give you my anomalous comments, my thoughts on how the 4 years of Wash U and the fundamentals of the business education were very helpful moving forward from this day of graduation. This first graduation class of the new Millennium, a group of people who are entering a newly wired world that is moving at exponential speed, with new paradigms for doing business, new currencies for making transactions, and an unprecedented global market that is all one click away. Right now, the world has never been smaller and more exciting to do business-the digital revolution has leveled the playing field and a younger generation, a "smart" generation are running the largest businesses in the world. Today, even more than our parents, we have the opportunities to create a life that is personally fulfilling AND possible to create wealth beyond your imaginations. We, at KnitMedia, just had an intern who started a business in San Francisco take his Company public and now it is worth over two billion dollars-thus, our first billionaire intern. It is in this context that I would like to have you consider the word "valuation" - a word being thrown around a lot right now, a word that has implications for most of your salaries - given that stock options are a common currency in many of the compensation packages of most dot.coms companies, e-businesses, and other growing companies. "Valuation" is word that is the barometer for all publicly traded corporations, and a benchmark for all start-up and privately held companies. But while the typical definition of "valuation" is a quantitative benchmark, I'd like to propose a more qualitative and intrinsic definition. What is the value you will place on your time, your investment in your day, on what you do with your life? What is your time valuation?

With that said, I did not know what to do with my time after graduation. I knew I was not ready or want a job, certainly not a 9-5 job, so I convinced my parents I needed to expand my horizons and went to Europe for a year, spend 5 months in Barcelona to study Spanish-given I was too busy here at Wash U, studying business & psychology. While in Spain, a friend of mine in a band in Wisconsin asked me if I would manage them, and I agreed. However, unable to figure out how to pay the rent, I decided to go to Law School in Madison where I could get some support to cover more education, meanwhile I started a record label to put out the music of the band I had failed to get a record deal. Still uncertain of what I really wanted to do, but certain that I was not interested in being a lawyer or going to more school, I decided to take my savings that I started from my Bar Mitzvah to pay for College, but was fortunate to not need to use most of it, and took this little nest egg with me to NY to try and build a record company. After a few months, I could not get any record store or distributor to pay me for the albums I had made and was about to come back to Wisconsin with my tail between my legs, when I decided to try opening a small performance space that would have music, dance, theatre, poetry, all the good beatnik stuff from Jack Kerouac novels. This became the Knitting Factory. In the front, and I could sell coffee, tea, and cake to have some cash flow to support myself. I moved the small record label into the office in the back and for about a year, lived with a futon under the desk. To shower, I joined a fitness club around the corner for $19.95 a month, not only did they have showers, but a steam room, sauna, and whirlpool. I loved it - the separation of work and life was never distinct.

Now, 13 years later, we have 4 record labels under the Knitting Factory brand with over 370 titles and 3000 songs, a large publishing catalogue, distribution in 40 countries and of late, release music in every type of digital format imaginable for on-line distribution, such as MP3's and secure downloads. We have produced some of the first New York shows of artists such as Beck, Elliott Smith, The Indigo Girls, and have he honor of working with Lou Reed, Ornette Coleman, The Neville Brothers and Laurie Anderson. Three months ago we had Pat Metheny in the club for a week, and we reminisced about his shows in 1983 at Graham Chapel, back when I was head of security for Team 31. Today, KnitMedia has helped pioneer making the digitization of music on-line, pushed the boundaries of interactive experiences in our club, and done everything but digitize beer on our websites (although we are working on that too.) As we have transformed from a brick and mortar business, or as we call it a beer and mortar business, into a content/internet business, the lesson's I picked up in business school have never paid off more. Understanding EBITDA, and the deeper principles of accounting, finance, taxation, economics-while I thought irrelevant as student and even more irrelevant as a start-up entrepreneur, have been critical as we have made our transformation from old world to new, from a small club and label, to global entertainment company. This is where having an business education that helps you support definitions of valuations based on modeling of present value of next years earnings or revenues does, indeed, pay off.

But let me share with you a wonderful personal dilemma I am wrestling with to help better understand the real definition of valuation. As we, KnitMedia, have now completed three rounds of financing with institutional Venture Capital, we are entering another round of capital financing before we do a potential IPO, or strategic sale/investment. Either way, I will remain CEO/Chairman, but will be diluted to a level of potential loss of control. Sometime in not too distant future I will need to make a decision on how much is it worth to potentially not do what I want to do. Do I possibly want to make an investment of my time not doing it the way I want, just for the money?

We shall see, I am not making the decision right now, but following my options as they come. My word to all of you is, if you have the opportunity to not force the decision of what you want to do until you understand your time valuation. School was a luxury to start your consideration of your time investment, of thinking about the possibilities in front of you. In my lifetime, I have never seen the world so ready for opportunities in almost any area of interest to combine a vocation with valuation.

Today's globally networked economy is ripe to nurture any of your ideas or dreams, no matter how wacky or visionary, and create businesses that have a positive effect on the world, that can make you not just wealthy, but more importantly, bring personal value to your time on this planet. Thank you for your time. Good luck and have fun.