Forbes - USA (February 2018)

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TRUMP’S TOWERING TENANT CONFLICTS



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Contents // FEBRUARY 28, 2018 VOLUME 201 NUMBER 1










COVER STORY


60 | PROPHETS OF BOOM
The craziest bubble ever has created
billion-dollar fortunes, almost
overnight. Meet the freaks, geeks
and messianic visionaries who have
scored cryptocurrency riches.
REPORTED BY PAMELA AMBLER,
ANGEL AU-YEUNG, GRACE CHUNG,
JEFF KAUFLIN, ALEX KONRAD,
LAURA SHIN AND NATHAN VARDI























































COVER PHOTOGRAPH BY VIRGILE SIMON BERTRAND FOR FORBES


4 | FORBES FEBRUARY 28, 2018

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FEBRUARY 28, 2018

13 | FACT & COMMENT // STEVE FORBES
Don’t wreck the new boom.
LEADERBOARD

17 | 30 UNDER 30
Europe’s latest crop of young entrepreneurs, inventors and
disruptors.
20 | NEW BILLIONAIRE: THE BIG WHEELER
Ernie Garcia’s used-car kingdom.
Plus: Another billionaire president—what are the odds?
22 | SPORTSMONEY: THE NBA’S MOST VALUABLE
TEAMS
A pro squad is now worth an average of $1.65 billion.
Plus: Who’s richer—LeBron or Steph? The league’s highest-
earning players.
24 | THE 10-Q: GEORGE GILDER
The technology prophet on Bell’s Law and Google.
Plus: Utah’s charitable chemical king.
26 | FROM THE VAULT: GETTY’S MIGHTY GRIP,—
JULY 15, 1957
By mid-century J. Paul Getty’s empire spanned continents and
fueled industries.
28 | CONVERSATION
17 Readers rap about YouTube’s top earners and our inaugural
Just 100 ranking.
36 STRATEGIES
31 | OVER A BARREL
In an exclusive interview, ExxonMobil’s new CEO lays out
his plan to supply a growing world with energy—without
destroying it in the process.
BY CHRISTOPHER HELMAN
TECHNOLOGY
36 | DIGITAL MEDICI
You no longer need to be rich to be an arts benefactor. But can
crowdfunding site Patreon save creators from the starvation
wages of online advertising?
BY KATHLEEN CHAYKOWSKI























42



6 | FORBES FEBRUARY 28, 2018

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FEBRUARY 28, 2018

ENTREPRENEURS
42 | FAMILY TREE
Jonathan Saperstein began his efforts to professionalize and dominate
the nursery industry with a hostile takeover of a grower—from his dad.
BY AMY FELDMAN
48 | CRACKING THE CODE
Challenged by a female employee, Gusto, an HR-software unicorn in
San Francisco, figures out how to hire women engineers.
BY SUSAN ADAMS
FEATURES

79 | BEST-IN-STATE WEALTH ADVISORS
In the age of robo-advice, meeting clients face-to-face can be a real
competitive advantage. Here are the top-ranked advisors in all 50 states.
BY HALAH TOURYALAI, MAGGIE MCGRATH AND KRISTIN STOLLER

85 | THE FINTECH 50
The future of your money.
EDITED BY JANET NOVACK AND MATTHEW SCHIFRIN
88 | OPEN FOR BUSINESS
Forget the international partnerships and the D.C. hotel. The surest
way to put money into Donald Trump’s pocket is through his core real
estate assets. More than 150 tenants—from foreign governments to big
banks—throw him some $175 million a year without an accounting of
who they are or how much they pay. Until now.
BY DAN ALEXANDER AND MATT DRANGE
REENGINEER YOUR RETIREMENT
88
97 | TRUSTS IN THE AGE OF TRUMP
December’s tax overhaul is spawning new ideas for transferring big
bucks and minimizing taxes. Procrastinators, beware: Your current
estate plan may now be booby-trapped.
BY ASHLEA EBELING
102 | LIVE WELL WHILE THE MARKET TANKS
Here’s a spending formula to protect you in retirement from panic and
from penury.
BY WILLIAM BALDWIN

104 | THE HAIL MARY RETIREMENT PLAN
Looking to turbocharge your retirement account? Put some crypto in
your IRA, but only if you can stomach extreme risk and high fees.
BY JEFF KAUFLIN
110 | SUNNIER DAYS ON SESAME STREET
After a merger knocked him from his CEO’s perch, Jeffrey Dunn
considered globe-hopping. Instead, he headed to Harvard and then on
to retool an iconic not-for-profit.
110 BY KERRY HANNON
FORBES LIFE

118 | SEPARATED AT REBIRTH
Thanks to signature models, Rolls-Royce and Bentley are both enjoying
a renaissance. But the iconic British automakers have traveled two very
different roads.
BY JOANN MULLER
118 124 | THOUGHTS
On value.

8 | FORBES FEBRUARY 28, 2018

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INSIDE SCOOP

EDITOR-IN-CHIEF
Bringing Crypto Out of
Steve Forbes
FORBES MAGAZINE
CHIEF CONTENT OFFICER
Randall Lane the Shadows
EXECUTIVE EDITOR
Michael Noer
ART & DESIGN DIRECTOR
Robert Mansfield
IF YOU’RE LOOKING for the statesman of cryptocurrency, you
FORBES DIGITAL
could do worse than Joe Lubin, the soft-spoken founder of Consen-
VP, DIGITAL EDITOR
Mark Coatney
sys, which helps big companies with blockchain and launches prod-
VP, INVESTING EDITOR
Matt Schifrin ucts based on the Ethereum platform, which he cofounded. His peers
SVP, PRODUCT AND TECHNOLOGY apparently agree: When he sat down with me recently to discuss his
Salah Zalatimo
concerns about our inaugural list of crypto-asset tycoons—we found
VP, WOMEN’S DIGITAL NETWORK
Christina Vuleta ten who hover near $1 billion and another ten who could be on their
VP, VIDEO way—he said he spoke for himself and others in the ranking.
Kyle Kramer
Lubin suggested that he and his ilk were simple programmers
ASSISTANT MANAGING EDITORS
Kerry A. Dolan, Luisa Kroll WEALTH who weren’t looking for public attention. He made this argument at
Frederick E. Allen LEADERSHIP
Loren Feldman ENTREPRENEURS the World Economic Forum, as we sat in a private meeting room in
Tim W. Ferguson FORBES ASIA the “Ethereal Lounge,” a three-floor building he’d quickly built out
Janet Novack WASHINGTON
Miguel Helft SILICON VALLEY on Davos’ main promenade. For a week, thousands of the world’s
Michael K. Ozanian SPORTSMONEY economic elite flooded in for panels, powwows and free drinks and
Mark Decker, John Dobosz, Clay Thurmond DEPARTMENT HEADS
Jessica Bohrer VP, EDITORIAL COUNSEL food. Next door, a giant Crypto HQ drew similar throngs. Hardly
signs of a person or industry trying to remain private—a point
BUSINESS
Mark Howard CHIEF REVENUE OFFICER Lubin, from his Davos perch, conceded.
Tom Davis CHIEF MARKETING OFFICER
Jessica Sibley SENIOR VP, SALES, U.S. & EUROPE His second argument: How were we sure our numbers were
Janett Haas SENIOR VP, BRAND SOLUTIONS & STRATEGY right? Fair question, one we ask ourselves perpetually. During 36
Ann Marinovich SENIOR VP, CONTENT PARTNERSHIPS & STRATEGY
Achir Kalra SENIOR VP, REVENUE OPERATIONS & STRATEGIC PARTNERSHIPS years tracking the world’s richest people, we’ve honed our methods
Alyson Papalia VP, DIGITAL ADVERTISING OPERATIONS & STRATEGY but kept the underlying philosophy consistent: Err on the conserva-
Penina Littman VP, SALES PLANNING & ANALYTICS
Nina La France SENIOR VP, CONSUMER MARKETING & BUSINESS DEVELOPMENT tive side. It’s an imperfect science—and in this instance we’ve ad-
Lisa Serapiglia DIRECTOR MEDIA PLANNING & OPERATIONS opted ranges to factor in the lack of transparency and wild volatility.
FORBES MEDIA Finally, Lubin brought up security: Since crypto sits outside the
Michael Federle CHIEF EXECUTIVE OFFICER
Michael York CHIEF FINANCIAL OFFICER banking system, it’s more vulnerable to theft. True among the small
Will Adamopoulos CEO/ASIA FORBES MEDIA fry, for sure. But those on this list (and we spoke with almost every-
PRESIDENT & PUBLISHER, FORBES ASIA
Rich Karlgaard EDITOR-AT-LARGE/GLOBAL FUTURIST one on it) confirmed they’ve taken steps to protect themselves from
Moira Forbes PRESIDENT, FORBESWOMAN hackers and thugs—breaking up passwords and storing pieces in
MariaRosa Cartolano GENERAL COUNSEL
Margy Loftus SENIOR VP, HUMAN RESOURCES safe deposits scattered across the country.
Ultimately, Lubin, along with other members of the crypto elite
FOUNDED IN 1917
B.C. Forbes, Editor-in-Chief (1917-54) I chatted with, acknowledged the importance of this project. While
Malcolm S. Forbes, Editor-in-Chief (1954-90)
James W. Michaels, Editor (1961-99) even the biggest crypto bulls will privately acknowledge that 95% of
William Baldwin, Editor (1999-2010)
initial coin offerings are hype, scams or worse, a blockchain-enabled
financial system of some kind is here to say. As in the dot-com boom
FEBRUARY 28, 2018 — VOLUME 201 NUMBER 1 in 1999, some of these crypto billionaires will bust, the Pets.com of
their era. Others will weather the inevitable reckoning and morph
FORBES (ISSN 0015 6914) is published monthly, except January and July, by Forbes Media LLC, 499 into something stronger, crypto’s eBay or Google. Our list provides
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MASTER: Send address changes to Forbes Subscriber Service, P.O. Box 5471, Harlan, IA 51593-0971.
pull crypto away from its provenance as the favorite currency of drug
CONTACT INFORMATION
For Subscriptions: visit www.forbesmagazine.com; call 1-515-284-0693; or write Forbes Subscriber Service, dealers and into the adolescence of a legitimate asset class.
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Copyright © 2018 Forbes Media LLC. All rights reserved. Title is protected through a trademark registered
with the U.S. Patent & Trademark Office. Printed in the U.S.A.
—RANDALL LANE, CHIEF CONTENT OFFICER
10 | FORBES FEBRUARY 28, 2018



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FACT & COMMENT
“With all thy getting, get understanding”




DON’T WRECK

THE NEW BOOM


BY STEVE FORBES, EDITOR-IN-CHIEF




TWO BIG THINGS threaten the improv- and election-winning prosperity. Nixon
ing U.S. economy: a weak dollar and trade did win his second term, but the net
protectionism. Both routinely seduce poli- result was a debilitating decade of gas
cymakers, and both always result in bitter lines, inflation and economic stagna-
aftermaths with terrible political conse- tion. An economy that was in the throes
quences. Yet some in the Trump administra- of its most serious crisis since the Great
tion are playing with both—and with fire. Depression contributed to the condi-
t The dollar. Great nations do not have tions that ran Nixon out of office. Jimmy
weak currencies. Nonetheless, with a Carter pursued similar policies later in
surety born of ignorance, Treasury secre- that decade. Both Carter and Nixon were
tary Steven Mnuchin has bluntly stated his economic losers.
desire for a weak dollar. In 1987 Treasury secretary James
Thankfully, President Trump immediately contradicted Baker pushed for a weak dollar to—you guessed it—sell
him. But the fact that Mnuchin and his department want to more U.S. products abroad and “mend our trade deficit.”
undermine the value of our currency is troubling. Mnuchin That October he told Germany: “Either inflate your mark
has bought into the alluring fallacy that trashing the green- [the German currency at the time], or we’ll devalue the dol-
back will help sell more of our stuff overseas, thereby lar.” He vowed to “drive the dollar down.” Combined with
strengthening the U.S. economy. Such false and toxic no- Congress pushing through protectionist measures that could
tions obviously mean the poor fellow has completely forgot- prompt a trade war, Baker’s moves triggered a ghastly stock
ten real-world experiences. market crash. Thankfully, the Reagan administration backed
This is an incontrovertible fact: No country has ever de- off, and the markets recovered.
valued its way to greatness and enduring prosperity. Ever. Unfortunately, in the early 2000s the U.S. was back at it.
Ask Brazil, Argentina and Zimbabwe. Check out what President George W. Bush’s Treasury chiefs thought that a
happened to the Roman Empire when its Mnuchin equiva- slow-motion devaluation of the greenback would stimulate
lents undermined the empire’s currency. more growth. The weakening of the dollar—as it always
Mnuchin needs to take a stroll down memory lane. does—triggered a fake housing and commodities boom, as
In the summer of 1971, President Richard Nixon was markets flee to hard assets when money becomes unstable.
fretting that the country wasn’t recovering fast enough from We all know how that ended.
the 1969–1970 recession and that this sluggishness might Secretary Mnuchin, sadly, has learned nothing from all this.
jeopardize his reelection in 1972. Moreover, the world was on What Nixon, Connally, Mnuchin and their ilk never
the so-called Bretton Woods gold standard, and the U.S. gold grasp is that money isn’t wealth. It measures value, in the
supply was shrinking, which was raising alarm bells in the same way a clock measures time or a scale measures weight.
financial markets. The Federal Reserve was printing too many Imagine the difficulties in cooking if the standards for mea-
dollars—trying to stimulate the economy—with the obvious suring cups and spoons changed each day. The same is true
consequence that foreign governments were getting rid of for money: Volatility makes commerce and investing more
their losing-value dollars by trading them in for our gold. uncertain, and economic progress is hurt.
Tragically, Nixon was beguiled by his Treasury chief, Money has no intrinsic value. It is a system based on trust.
John Connally, into “closing the gold window,” thereby ef- In that sense it’s like a ticket to an event. The ticket in and of
fectively ending the gold standard and engineering a major itself is worthless, but it’s a claim on a real service.
devaluation of the greenback. Devaluing the dollar is similar to cheating with weights
The idea was that this would generate a trade surplus and measures: You pay for a pound of cheese but get 12



FEBRUARY 28, 2018 FORBES | 13

FORBES
FACT & COMMENT STEVE FORBES

ounces instead of 16. It also disrupts dant production. By the time the legisla- massive taxes on thousands of items. A
increasingly more intricate supply chains tion made its way through the congres- global trade war ensued, and the Great
here and around the world. You may end sional sausage factory, we had imposed Depression was under way.
up paying $15 for a part that should cost
$10. Companies have to devote valuable The Road Not Taken
brainpower and resources to figuring out Max Boot (Liveright, $35)
how to hedge countless currencies, a cost
THIS BRILLIANT, extremely well- and then won election as president
that hinders growth. written book about a forgotten (Lansdale was his behind-the-scenes
t Protectionism. Trade deficits? In and
figure who was one of the most manager), adopted Lansdale’s strategy
of themselves, they tell you nothing. The extraordinary and utterly un- of finding ways to win what came to be
U.S. has had merchandise trade deficits orthodox espionage agents in termed the “hearts and minds of the
for most of its existence. A key to our history contains a telling scene that people,” combined with fundamental
growth has been—and still is—invest- encapsulates what went tragically changes in military operations. Civilian
ment capital coming to our shores. wrong with the Vietnam War. The casualties were sharply reduced. Lans-
We’re starting to get inflows of hun- operative, Edward Lansdale, was dale also showed he was a master of
dreds of billions of dollars, thanks to the visiting President John F. Kennedy’s propaganda and psychological warfare.
Trump tax bill. defense chief, Robert McNamara. What had looked like an inevitable com-
It’s one thing to update trade agree- The former president of Ford Motor, McNamara munist victory withered into a total rout.
ments such as Nafta, quite another to profoundly believed that everything could be Then, in the aftermath of the French defeat
blow them up or try to dictate specific managed by numbers (or what we today call by Ho Chi Minh’s communist forces, Lansdale
outcomes, such as forcing companies to “metrics”). McNamara had an IQ that could boil played the indispensable, key role in the mi-
move their facilities back to the U.S. water, a personality that could freeze the tropics raculous creation of the state of South Vietnam.
Ditto trade abuses, such as China’s and a deep disdain for anyone he considered his In this he worked with a man named Ngo Dinh
unfairly restricting access to its markets intellectual inferior, which was almost everybody. Diem, a monkish figure given to rambling, hours-
for foreign companies or forcing busi- Lansdale was given ten minutes—no more!—to long monologues. Lansdale won his confidence,
advise McNamara on how the U.S. should deal as had no one else except Diem’s paranoid
nesses to part with their proprietary
technology, not to mention its outright with the growing communist insurgency in South brother. Against all odds—and with Lansdale’s
Vietnam. The allotted time was a harbinger of considerable help—Diem routed the warlords
theft of trade secrets via hacking. how the meeting would go. and powerful sect leaders, and a real country
But the thrust of trade negotiations
Lansdale was a man well worth listening was created from the post-French rubble.
should be reducing barriers, not erecting to. In the 1930s he’d been an advertising man In 1959, against Ho Chi Minh’s wishes, hard-lin-
them via import taxes or anti-import
in California, where he had demonstrated a ers in North Vietnam decided to make an all-out
regulations. real knack for writing and a firm grasp of the assault on the South, which was what eventually
The rest of the world is moving ahead. psychology involved in the art of persuasion. led to Lansdale’s meeting with McNamara. On the
Japan has concluded a great trade deal In WWII Lansdale ended up in the Office of defense chief’s 9-foot-long, immaculate mahoga-
with the EU. The 11 nations that were Strategic Services (OSS), precursor of the CIA, ny desk (it was polished every evening), Lansdale
part of the Pacific trade deal that the U.S. which was run by the legendary William “Wild dumped a bunch of “dirty weapons, caked with
scuttled last year are constructing a new Bill” Donovan. This fish had found his water. After mud and blood,” including “handmade pistols
one, leaving out the U.S. Thirty-five new the war he moved into the newest branch of the and knives, old French rifles, and bamboo punji
bilateral and regional trade pacts are being military, the Air Force, which served as cover for sticks.” Lansdale told the startled secretary,
negotiated, which will mean more trade his overseas activities. (Even late in life, he was “The enemy uses these weapons. Many of them
between the countries involved. Increas- loath to acknowledge he had been in the CIA.) are barefoot or wear sandals. They wear black
ingly, the U.S. is on the outside looking in. Lansdale soon found himself posted in the Philip- pajamas, usually, with tatters or holes in them . . .
Fortunately, the recent tax bill pines, which was facing an increasingly powerful yet, the enemy is licking our [well-armed] side.”
should stimulate more investment from communist uprising called the Huk Rebellion. Lansdale warned that if we didn’t grasp the
businesses here and overseas. But we The Filipino government and military were nature of this new style of war, where ideas and
shouldn’t end up “leaving money on responding in ways that were fueling the insur- ideals were critical, tragedy would result.
the table” by unnecessarily losing better gency, especially by killing numerous civilians But while Lansdale had a unique ability
in the fight against the rebels. Lansdale quickly to work with foreign figures, his hatred of
market access.
Most of all, a trade war à la the 1930s grasped that these kinds of responses to a skillful bureaucracy had made him a pariah in Wash-
guerrilla enemy, one that also employed effective ington. Reflecting these attitudes, McNamara
must be avoided. Back in 1929, freshly propaganda, was a formula for a bloody defeat. ignored his advice. Even though Lansdale re-
minted President Herbert Hoover
Lansdale befriended and then won the total turned to Vietnam, his time there was mostly
thought that putting new tariffs on food confidence of an incorruptible politician—a true an exercise in frustration. He was given no
imports would help beleaguered Ameri-
rarity in that country—Ramon Magsaysay. The real authority, and the U.S. made the same
can farmers, who had been hurt by low two became inseparable, and Magsaysay, who blunders the French had, along with a few
commodity prices because of our abun- with Lansdale’s help became defense minister others of its own. F


14 | FORBES FEBRUARY 28, 2018

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20 22
20 24 26
THE USED-CAR MOGULS’ WHITE THE NBA’S MOST GEORGE GILDER PONDERING
BILLIONAIRE HOUSE ODDS VALUABLE TEAMS VS. GOOGLE J. PAUL GETTY






30 UNDER 30



ORA OF


SUCCESS
“I ASSERT MYSELF in things that
I want to achieve, and I just don’t
give up,” says chart-topping singer
Rita Ora, 27, who started out per-
forming at her father’s London pub
after her refugee family emigrated
from Kosovo when she was just
a year old. Ora kept at it, sitting
Rita Ora wears a dress by
outside Universal Music Group in Thom Browne, tights by
Wolford, shoes by Christian
London when she was a teen and Louboutin, vintage Chanel ear-
rings from Found and Vision, a
handing out her record to people watch and ring by Cartier.
exiting the building. Fast-forward a
decade: One of the people who took
the music from her is now produc-
ing her second album.
That sophomore record, due out
later this year, comes five years after
her first in the wake of struggles
with her former label Roc Nation.
If the success of her latest single,
“Anywhere,” is evidence, there’s
plenty of pent-up demand for her
music: The song peaked at No. 2 on
the British charts in November.
Ora’s persistence has landed
her on our third annual 30 Under
30 Europe list as one of 300 young
disruptors who are helping create
the future now. These entrepreneurs
and innovators hail from a record
34 countries, including smaller
places like Belarus and Ora’s native
Kosovo. An elite cross-section of
the group gathered last month at




PHOTOGRAPHY BY LEVON BISS FOR FORBES
HAIR & MAKEUP: MELANIE SZABO
STYLIST: ALICIA ELLIS
FASHION ASSISTANTS: CASSIE WALKER, CONOR BOND
PHOTOGRAPHY ASSISTANTS: IAN SCARAMANGA, CHRISTOPHER BAKER FEBRUARY 28, 2018 FORBES | 17

LeaderBoard INDUSTRY
ERIK GATENHOLM
28, SWEDEN
30 UNDER 30 COFOUNDER
Lordship Park in North London to CELLINK
Gatenholm’s firm manufactures
share their stories with one another ink and printers that go into SCIENCE & HEALTH CARE
the 3-D-printing of human ANAÏS BARUT
and sit for the group portrait you 25, FRANCE
organs used in medical
see here. research. The $140 million COFOUNDER
Ora has kept busy between al- company went public on the DAMAE MEDICAL
To take the place of biopsies, Damae
Nasdaq after only ten months
bums, designing more than a dozen in operation. developed a noninvasive device capable of
instantly diagnosing a broad spectrum of skin
collections for Adidas, debuting a conditions, including skin cancer, the most
lipstick and nail polish line with common form of the disease.
cosmetics maker Rimmel London
and partnering with Absolut Vodka
in a project in which she collabo-
rated with fans on a new song.
“I wanted to do it all. I feel like
we’re in an era in which entertain-
ment can be so diverse,” she says.
“Being able to be an actress, be on
TV and still put out an album, I
think I’m part of a new breed.”










































ART & CULTURE RETAIL & E-COMMERCE
NEGIN MIRSALEHI
SUSIE MA
29, NETHERLANDS 29, U.K.
COFOUNDER FOUNDER
GISOU
TROPIC SKINCARE
Two years ago social-media star Mirsalehi turned When she was 15, Ma, a Shanghai native, started making
down $800,000 for a brand ambassadorship with homemade skin-care products, such as moisturizers and masks,
a major hair-care line. She had bigger plans: She to help her mother make ends meet. The venture eventually
self-funded and now runs Gisou, a maker of hair- covered her college tuition and earned her a spot as the youngest
care products, like a honey-infused hair oil, inspired contestant to appear on the BBC version of The Apprentice. Her
by her family’s long history as beekeepers. vegan, cruelty-free beauty line, Tropic Skincare, generated
$27 million in revenue last year.
18 | FORBES FEBRUARY 28, 2018

MEDIA & MARKETING TECHNOLOGY SOCIAL ENTREPRENEURS TOP ROW:
Erik Gatenholm
GERT VAN VUGT Cotton shirt by Drake’s ($170),
JAMIE BOLDING OLIVER DLOUHÝ 29, NETHERLANDS
27, U.K. 30, CZECH REPUBLIC wool sport jacket by Maison
FOUNDER FOUNDER COFOUNDER Kitsune ($580).
Anaïs Barut
Jumpsuit by M&S Collection
SUSTAINER HOMES
JUNGLE CREATIONS KIWI.COM The building industry accounts for
Clients such as Disney and Apple With no more than a high ($80), velvet heels by Charlotte
pay Jungle Creations to create viral school education, Dlouhý one third of global CO2 emissions. Mills ($270).
Jamie Bolding
video ads; those campaigns added built a flight-booking Sustainer Homes has developed a Cotton-blend sweater by Ralph
up to $14.3 million in revenue for the website that delivers the line of sustainable prefab dwellings Lauren ($180).
company over the last calendar year. lowest fares using a propri- that have only 10% of the emissions Oliver Dlouhý
Cotton sweater by John
Thanks to an average of more than etary algorithm to combine of a typical house. In addition to Smedley ($200), jeans by R.M.
5 billion video views each month, flights from carriers that having designed or constructed Williams ($170).
that figure is expected to nearly do not typically cooperate nearly 200 homes already, Van Gert van Vugt
Cotton sweater by Farah ($100).
triple, to $38.5 million, for 2018. with one another. Kiwi Vugt plans to begin construction on
really took off in 2017, three entirely sustainable neighbor- BOTTOM ROW:
grossing $700 million in hoods in the Netherlands this year. Negin Mirsalehi
Shirt and jacket by Paul & Shark,
revenue, double its take skirt by Kye x Yoox ($194),
two years prior. leather boots by Louis Vuitton
($1,750), 18kt yellow gold ring
and diamond by Allison Bryan
($2,340), 18kt yellow gold and
diamond ‘Oui’ ring by Dior
($900).
Susie Ma
Satin mules by Minna Parikka
($450), gold earrings by Jane
Koenig ($170), 18kt pink gold,
diamond and onyx necklace
($1,950) and 18kt yellow
gold and diamond bracelet
($20,200) by Dior.
Vyacheslav Polonski
Cotton shirt by Sunspel ($80)
and jacket by YMC ($250).
Victoria van Lennep
Blazer by Racil ($1,150), sweater
by John Smedley ($180), gold
bracelet ($310) and choker
($370) by Sophie by Sophie.
Rita Ora
Jacket by Thom Browne,
vintage Chanel skirt and vintage
Chanel earrings from Found and
Vision, tights by Wolford, shoes
by Christian Louboutin, ring
by Cartier.
















LAW & POLICY FINANCE ENTERTAINMENT
RITA ORA
VYACHESLAV POLONSKI VICTORIA VAN LENNEP
28, GERMANY 28, BELGIUM 27, U.K./KOSOVO
COFOUNDER COFOUNDER MUSICIAN
(See p. 17.)
AVANTGARDE ANALYTICS LENDABLE
Born in Ukraine and raised in Germany, Oxford-educated Van Lennep and Martin Kissinger helped found Lend-
Polonski founded a political consultancy that grew from his able, an online lender that automates credit decisions
Ph.D. research project, which used social media to predict and delivers funds within an hour. It has given out some
the U.K.’s Brexit vote a month before it occurred. $160 million in loans over three years to more than
30,000 people.
Edited by Alexandra Wilson and Madeline Berg
Reported by Robin Andrews, Natacha Bastiat-Jarosz, Rachelle Bergstein, Biz Carson, Hayley Cuccinello,
Chris Denhart, Thomas Fox-Brewster, Shellie Karabell, Ellie Kincaid, Dan Kleinman, Alex Knapp,
Maggie McGrath, Parmy Olson, Natalie Robehmed, Ludovico Ruggieri and Leonard Schoenberger FEBRUARY 28, 2018 FORBES | 19

LeaderBoard

NEW BILLIONAIRE MONEY AND POLITICS



HIS FELLOW
BILLIONAIRES
HERE’S SOMETHING political
observers agree on: Donald Trump’s
victory in 2016 will undoubtedly
make others among the nation’s ultra-
rich consider a presidential run. For
now, Trump is the front-runner for
2020; bookmaker Betfair gives him a
5/2 chance of winning. But there are
plenty of ten-figure challengers, even
if some of them deny being interested
in the job. We pulled the wagering
odds from Ladbrokes and gambling
sites like Bet365 and then asked
veteran Democratic pollster Mark
Penn to analyze the field.




MARK ZUCKERBERG
NET WORTH: $75.8 BILLION
ODDS: 28/1
Penn: [laughs] “He has no skills that
would really work in politics.”
JEFF BEZOS
NET WORTH: $114 BILLION
ODDS: 50/1
“Not this cycle, but I wonder if in two
THE BIG WHEELER
to three cycles. . . . The person who has
A little trouble with the law hasn’t stopped Ernie become the world’s richest person and
runs Amazon has some potential.”
Garcia from hitting the gas on a used-car empire.
MICHAEL BLOOMBERG
NET WORTH: $52.9 BILLION
FOR MANY YEARS, Ernest “Ernie” Garcia II, 60, shunned the
spotlight. Then, last April, he sauntered onto one of the grand- ODDS: 50/1
“Should’ve just thrown his hat in the
est stages in business: the bell-ringing platform at the New York ring last time. I suspect he’s never going
Stock Exchange. Carvana, which has created a popular online to run.”
marketplace for buying, selling and financing used automobiles, JAMIE DIMON
was going public, and Garcia, its largest shareholder, wanted to NET WORTH: $1.3 BILLION
savor the moment. ODDS: 50/1
“I don’t see America putting a banker in
Nearly 30 years ago his circumstances were vastly different. the White House anytime soon.”
Garcia, then a real estate developer, pleaded guilty to a felony fraud
charge connected to Charles Keating’s Lincoln Savings & Loan OPRAH WINFREY
NET WORTH: $2.9 BILLION
scandal and spent three years on probation. (Garcia had arranged
ODDS: 66/1
a complex real estate purchase that allowed Lincoln’s parent to “I’d put her chances lower than her
image would suggest. The Democratic
improperly siphon money out of the bank.) In 1991 he bought
electorate is looking for someone who
Ugly Duckling, a rental-car chain, for $1 million. Unable to turn it is experienced in government and
around, Garcia changed gears: Ugly Duckling became DriveTime, politics.”
a seller and financier of used cars, and he steered it through several
MARK CUBAN
subprime credit crunches. Carvana began as part of DriveTime NET WORTH: $3.3 BILLION ERNEST GARCIA II: MICHAEL NAGLE/BLOOMBERG; ILLUSTRATIONS BY BRIAN TAYLOR
before spinning off four years ago. Combined, Garcia’s stakes in the ODDS: 80/1 NEW BILLIONAIRE BY NATHAN VARDI; HANDICAPPING BY ABRAM BROWN
two firms are today worth over $2 billion. “Knows how to kick up a fuss.”
Garcia has tried to keep his controversial past separate from BILL GATES
NET WORTH: $92.5 BILLION
Carvana—at least somewhat. Although he has never served as a
Carvana executive or director, his son Ernest III now runs the ODDS: 150/1
“Full disclosure: I worked with him for
company, and the two live next to each other in Phoenix. many years. He understands health care,
the international scene, economics. He’d
have to run as an independent.”
20 | FORBES FEBRUARY 28, 2018

SERVING CLIENTS COAST TO COAST



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LeaderBoard

SPORTSMONEY


THE NBA’S MOST
HIGHEST-EARNING
VALUABLE TEAMS
NBA PLAYERS
1. LEBRON JAMES
CLEVELAND CAVALIERS
THE AVERAGE pro basketball franchise is now worth $1.65
Earnings: $85.3M
billion, up 22% over last year and more than triple the figure Salary: $33.3M
of five years ago. Clubs have record operating profits, too—the Endorsements: $52M
2. STEPHEN CURRY
typical franchise earned $52 million, a 68% increase—as the GOLDEN STATE WARRIORS
league enjoys a new $24 billion TV deal with ESPN and TNT. Earnings: $76.7M
Salary: $34.7M
Endorsements: $42M
CURRENT
VALUE 1 1-YEAR REVENUE
($MIL) CHANGE % ($MIL)
9% $426
1 NEW YORK KNICKS $3,600
10 371
2 LOS ANGELES LAKERS 3,300
19 359
3 GOLDEN STATE WARRIORS 3,100
4 281
4 CHICAGO BULLS 2,600
14 257
5 BOSTON CELTICS 2,500
28 273
6 BROOKLYN NETS 2,300
3. KEVIN DURANT
GOLDEN STATE WARRIORS
33 296
7 HOUSTON ROCKETS 2,200
Earnings: $58M
Salary: $25M
7 257
8 LOS ANGELES CLIPPERS 2,150
Endorsements: $33M
31 233
9 DALLAS MAVERICKS 1,900
26 253
10 MIAMI HEAT 1,700
32 259 4. JAMES HARDEN
11 SAN ANTONIO SPURS 1,550 HOUSTON ROCKETS
24 250 Earnings: $48.3M
12 TORONTO RAPTORS 1,400 Salary: $28.3M
Endorsements: $20M
28 240
13 SACRAMENTO KINGS 1,375
35 222
14 WASHINGTON WIZARDS 1,350
5. RUSSELL WESTBROOK
OKLAHOMA CITY THUNDER
10 280
15 CLEVELAND CAVALIERS 1,325
Earnings: $47.5M
Salary: $28.5M
24 223
16 PORTLAND TRAIL BLAZERS 1,300 Endorsements: $19M
16 218
17 PHOENIX SUNS 1,280
22 222
18 OKLAHOMA CITY THUNDER 1,250
33 211
19 ORLANDO MAGIC 1,225
32 221
20 UTAH JAZZ 1,200
48 184
21 PHILADELPHIA 76ERS 1,180
34 205
22 INDIANA PACERS 1,175
30 209
23 ATLANTA HAWKS 1,150
26 202
24 DENVER NUGGETS 1,125
22 221
25 DETROIT PISTONS 1,100
37 179 TOP TO BOTTOM: JASON MILLER/GETTY IMAGES; JONATHAN BACHMAN/GETTY IMAGES; CHRIS SCHWEGLER/
26 MILWAUKEE BUCKS 1,075
A GREAT AMERICAN EXPORT
38 204
27 MINNESOTA TIMBERWOLVES 1,060 SPORTSMONEY BY KURT BADENHAUSEN, MICHAEL K. OZANIAN AND CHRISTINA SETTIMI
It’s not outrageous anymore to envision a sports world in which NBA NBAE/GETTY IMAGES; BOB LEVEY/GETTY IMAGES; JONATHAN BACHMAN/GETTY IMAGES
35 202 teams are worth more than their NFL counterparts. Investors believe
28 CHARLOTTE HORNETS 1,050
the NBA has far greater potential to grow overseas than the NFL,
30 206
which has struggled beyond the U.S. The average NFL franchise is
29 MEMPHIS GRIZZLIES 1,025
33 204 worth $2.5 billion, 52% more than the typical NBA team, but that
30 NEW ORLEANS PELICANS 1,000
spread has been more than halved in the past five years. The NBA
22 246
LEAGUE AVERAGE 1,652
is already selling at higher multiples: Recent deals for the Nets and
Revenue is for the 2016–2017 season and net of revenue sharing and arena debt
service. Rockets value the teams at roughly eight times their regular-season
1 Enterprise value (equity plus net debt) revenue; NFL franchises are worth closer to six times revenue.
22 | FORBES FEBRUARY 28, 2018

Gig-speed you can actually
get at your business.
See what you can do when you























































Building America’s largest
Gig-speed network.


The phone company promises
Gig-speed but can only provide it to a few
customers. Comcast Business makes
Gig-speed available to more businesses
in more places. That’s download speeds
up to 20 times faster than most people
have—all at an affordable price.
Go ahead, Dream Gig.


DREAMGIG.COM
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LeaderBoard

THE 10-Q RICHEST BY STATE
rules that really favor big compa-
nies. It reflects their capability

of lobbying and lawyering and
litigating and finding a path

through the mazes of rules.
Your next book is called Life After
UTAH
Google. Why that title?
I’m convinced the Google para- POPULATION: 3.1 MILLION
2016 GROSS STATE PRODUCT:
digm of massive data centers and
$156 BILLION (3% GROWTH)
artifi cial-intelligence determinism
will be transcended in the next era. GSP PER CAPITA: $51,243
(RANKS NO. 29 NATIONWIDE)
Replaced by . . . ?
NUMBER OF BILLIONAIRES: 2
I’ll refer you to Gordon Bell’s RICHEST:
law: Every ten years, the rate of
JON HUNTSMAN SR.
progress predicted by Moore’s
NET WORTH: $1.2 BILLION
Law produces a hundredfold rise
in computer cost eff ectiveness. DESPITE HIS best eff orts to give away
Which then requires a completely his wealth, Jon Huntsman Sr. remains
new computer architecture. extremely rich. He and his foundation
A NEW GILDED AGE
have donated $1.8 billion—more than
Technology prophet George Gilder Your point being that we’re now past 150% of his current net worth—most
the ten-year point of Bell’s Law and
believes Silicon Valley’s innovations the cloud. prominently to cancer research, having

benefit only a select few. And lo and behold, a new architec- founded an eponymous Salt Lake City
ture is arising. It will solve the in- institute to study the disease in 1995. (It
claims to have identified more cancer-

Is progress in technology accelerating or creasing concentration problem of the internet, causing genes than any other such cen-
decelerating? which is porous security. It will be millions of ter in the world.)
It is not accelerating. It’s continuing to ad- small data centers around the world, many of Huntsman himself has battled can-
vance, of course, but I completely agree with them mobile, all using cryptography and a new cer four times, and both his parents
Peter Thiel that technology progress is not computer architecture based on blockchains died from it—experiences that have

inevitable. and other inventions. given him a clear-eyed view of mortal-

What do you mean by that? Why would Google not see this? ity. When Warren Buffett invited him to
Recall Margaret Mead’s story of mariner tribes Google is trapped by its own illusion. Th e sign the Giving Pledge in 2009, Hunts-
that once made their living building stream- advances in machine learning that Google man replied, “You don’t have the formu-
la right. It should be 80%. Why should
lined canoes to catch fish in huge volumes. trumpets and preens about are really just ad- someone who has $5 billion give away

Over time, they just forgot how to make the vances in the speed of processing. When their only $2.5 billion?”
canoes. When Mead found them, they were Go-playing computer can play more Go games Huntsman, 80, first landed on The

sitting on the beaches looking at the oceans in a minute than the whole human race has Forbes 400 in 1989, 19 years after found-
with no idea that canoes were the solution to played through all history, that’s not a great ing his chemicals firm, Huntsman Corp.

their food shortage. advance in intelligence. It’s the same intelli- Today it’s a $9.7 billion (sales) giant;
But in our day, learning is stored forever on billions gence just accelerated to terahertz speeds. Huntsman remains a director, having
of devices. It’s not going to disappear. And this creates this illusion for Google and handed the chairmanship to his son
We’re actually at risk of this kind of amnesia. others that machine learning can somehow Peter in December. Another son, Jon Jr.,
We forget the real entrepreneurial sources of gain consciousness and usurp humans. Utah’s former governor, is currently the
U.S. ambassador to Russia.
creativity and progress: invention, summed up Artificial intelligence evokes both excitement and

in technological progress. It’s not good to have fear. Elon Musk, for one, is fearful.
most of the stock market advance [coming Musk is a tremendous entrepreneur and a quite

from] five companies, which buy back their stale thinker. When he starts pretending that
own stock and buy up the shares of their rivals. he’s an ethical visionary, that human life is just
I’m talking about Google, Apple, Facebook, a simulation in a smarter species’ game . . .

Microsoft and Amazon. A rather demoralizing view of humanity.
How does big tech’s success hurt innovation? It’s really nuts. It’s clinically crazy. Silicon
Their success does not represent some funda- Valley should stop trying to make human JONATHAN KOZOWYK FOR FORBES; ILLUSTRATION BY CHRIS LYONS


mental change in technology. It refl ects, rather, beings obsolete and figure out how to make
a vast enlargement of government regulations, them more productive again. RICHEST BY STATE BY LUISA KROLL
GEORGE GILDER SPOKE WITH RICH KARLGAARD, OUR EDITOR-AT-LARGE
AND GLOBAL FUTURIST. THIS INTERVIEW HAS BEEN EDITED AND CONDENSED.
FOR THE EXTENDED CONVERSATION, VISIT FORBES.COM/SITES/RICHKARLGAARD.
24 | FORBES FEBRUARY 28, 2018

Someone has to manage



all those robots in accounting.



Why not you?

Did you ever think you’d see the day when you’d be working side-by-side with robots? Would you be
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LeaderBoard

FROM THE VAULT



GETTY’S MIGHTY GRIP:

JULY 15, 1957
BILLIONAIRE J. PAUL GETTY’S empire stretched from
California to Arabia, encompassing oil wells, refineries,
tankers and hotels. It totaled some $1.1 billion in assets,
almost $10 billion in current money. And Getty ruled
absolutely, with unbridled ambition. “He just can’t
stop as long as there’s a Shell or a Standard Oil
bigger than he is,” one Wall Streeter observed.
“He’s driven to keep growing.” Getty owned
trophies, including the Pierre Hotel in
Manhattan, but most of his wealth
came from oil, and in the late 1950s,
he was watching a bet on Middle East
reserves begin to pay off.
Emperor Paul lived a life of contradic-
tions. He eventually took up residence in a 73-
room English manor and amassed a museum-quality col-
lection of art (Rubens, Titian, Gainsborough and many more).
Yet he was famously parsimonious and “steadfastly shun[ned] public-
ity, some say for fear of being kidnapped,” we noted. As the Oscar-nomi-
nated 2017 movie All the Money in the World depicts, Paul wasn’t the Getty who
ended up getting abducted. His namesake grandson was instead—and true to form,
the tightfisted elder Getty initially refused to pay the ransom. Getty’s eccentricity, Forbes
concluded in 1957, was “symptomatic of a deep urge to create wealth—and keep it.”



NEWSWORTHY AND NOTABLE
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SIGN OF THE TIMES
Big Hopes,
Little Cars
Detroit had seen the
future, and it was smaller
automobiles; GM and Ford
FAST-FORWARD
were planning diminutive Brewing Ambitions
vehicles to copy the success of 1957: Gus Busch (above, center), the man
imports like Volkswagen. But who made Budweiser the everyman staple it
the Motor City blew it: Bulky is today, had already turned his family’s small L TO R: WILF DOYLE/ALAMY; HANS VON NOLDE/AP; AP
cars still filled America’s roads operation into the U.S.’ second-largest brewer.
when the oil crises of the 2018: Ten years after Brazilian investors bought
’70s hit. By 1979 a bankrupt Anheuser-Busch and ended the Busch family’s
Chrysler would need federal role in the company, the combined AB InBev, BY ABRAM BROWN
support to keep going. with some $45.5 billion in annual sales, is the
world’s largest beer maker.
26 | FORBES FEBRUARY 28, 2018



LeaderBoard

CONVERSATION

OUR DECEMBER 26 issue debuted the
Just 100, ranking the country’s best cor-
porate citizens. Maggie McGrath’s cover
story chronicled how the scrum to at-
tract top talent has prompted American
companies to shower their workers with
perks and benefi ts—“Competition is
the new union,” as we put it. Said M&A
analyst Dinesh Advani, “Employees have
the power to be your biggest promoters ’TUBE TOPPERS
or your biggest detractors, and I know Readers marveled at the money made by
which I’d rather have.” (Cover star Brian the highest-paid YouTube personalities—
Krzanich, CEO of top-ranked Intel, one toy-testing tot in particular.
muddied his company’s victory with a
post-press-time stock sale before news KISHALAYA KUNDU, BEEBOM.COM:
“YouTube means big money these days,

broke of a major Intel-chip security fl aw and nothing exemplifies this more than
Forbes’ recently released list of the
in early January. Tsk, tsk, sir.) Krzanich’s highest-earning YouTubers.”
actions aside, many readers clamored
for further tales of corporate kindness.
“Please keep writing about companies NATHAN MCALONE AND JOHN LYNCH,
BUSINESS INSIDER: “YouTube has
with heart,” offered Benita Lee. “We need become the de facto launchpad for the next

to know they’re out there.” generation of internet celebrities.”
@SKM353: “PewDiePie got canceled
THE INTEREST GRAPH
. . . but he still got paid anyway.”
TheyTube, YouClick: The internet’s top-earning entertainers far outclassed the competition
in our December 26 issue, gaining nearly six times the page views of the runner-up.
1,122,645 views
The Highest-Paid YouTube Stars 2017


The NHL’s Most Valuable Teams

243,735
Just 100 2018
@||SUPERWOMAN|| (LILLY
64,410 SINGH): “I’m very grateful that
my passion has become my career.
Looking forward to seeing more women
Chris Cline Could Be the Last Coal Tycoon Standing on the list next year. Thank you @Forbes
“Cline is amused @WomenAtForbes @YouTube”
by the popular
34,443
misconception
Unions Are Dead? Why Competition Is Paying that coal is on its

Off for America’s Best Workers deathbed. Coal’s @SALLYMACFOX26: “@Forbes
“This might surprise death—if it comes at says a 6-year-old @YouTube star’s
less-enlightened CEOs
33,693 all—will be long and channel earned $11 million this year!
and investors: Treating Ryan tests new toys. So on top of the $
BlackRock’s Edge: Why Technology workers right ultimately slow.” he gets toys! What’s my 6-yr-old doing?
Is Creating the Amazon of Wall Street benefi ts shareholders Our kids are slackers.”
after all.”
12,482
LENNY, TODAYFM.COM: “This will have you
What Do You Get a Billionaire for Christmas? grabbing a toy and the nearest child.”
11,751
“The program
How to Make a Warren Buff ett–Inspired Cocktail
expands and THEQUINT.COM: “It’s time for some
contracts, from a adults to slump into a pit of shame.” BY ALEXANDRA WILSON
THE BOMB
holistic view of fi rm-
410 VIEWS wide risk down to a QUICKHONEY
single trade in a split
second.”
28 | FORBES FEBRUARY 28, 2018

EDUCATION FOR LIFE





































LEARN MORE. CALL 866.467.7651 OR VISIT WWW.OUTWARDBOUND.ORG



Verticals






31 38 42 118
STRATEGIES TECHNOLOGY ENTREPRENEURS LIFE






ENERGY
Over a Barrel


In an exclusive interview,
ExxonMobil’s new CEO lays out
his plan to supply a growing
world with energy—without
destroying it in the process.
BY CHRISTOPHER HELMAN

arren Woods strides
down the long lino-
leum halls of Exxon-
DMobil’s research cen-
ter in Clinton, New Jersey. Named
Exxon’s CEO in January 2017, the
tall 53-year-old electrical engineer
is comfortable here in this nerds’
paradise, nestled safely on 750 bu-
colic acres, behind gates, armed
guards and X-ray scanners. Ex xon’s
legions of scientists, including the
300 based in New Jersey, are spend-
ing $1 billion a year trying to solve
one of the greatest challenges of
our time: how to reduce emissions
while supplying ever more energy
to a world Exxon expects to grow
to 9 billion people by mid-centu-
ry. Woods agreed to meet Forbes
















Exxon CEO Darren Woods with
a helium-ion microscope.
PHOTOGRAPHS BY JAMEL TOPPIN FOR FORBES


FEBRUARY 28, 2018 FORBES | 31

Strategies ENERGY

here for an exclusive interview, thousands of miles Doing it better means doubling down on green
from Exxon’s executive God Pod outside Dallas. tech. Exxon has promised to spend $600 million
The point is to stress that he gets it—carbon diox- on a venture with Craig Venter (who was the first
ide really does threaten to disrupt the global cli- to crack the human genome) and his Synthet-
mate. “We understand the risk and that it needs to ic Genomics. The partnership started in 2009,
be addressed,” Woods says. “We’re sincere in that. and last summer they finally revealed a break-
We believe that.” through. “We figured out the genetic pathway by
But what does that really mean? After all, which algae make lipids,” Swarup says, referring to
Exxon is not about to leave oil in the ground, as the fat cells that would be the building blocks of a
the anti-carbonistas would prefer. In fact, by 2025 sustainable algae oil. “Now we’re going to do it at
the company intends to boost its U.S. oil produc- scale.” But Woods, who spent the past dec ade run-
tion by more than 600,000 barrels a day and to get ning Exxon’s refining and chemicals division, isn’t
another 200,000 bpd from giant new
discoveries off the coast of Guyana.
Exxon’s megatrend watchers figure we
will need every drop as the global mid-
dle class doubles in size and energy de-
mand grows by 25% by 2040. “Go to
places experiencing energy poverty. It
motivates you,” Woods says. “You can’t
just walk away and say, ‘Let’s turn off
the valve here.’ ”
But Exxon is also staring down a
perfect storm of regulatory, social and
shareholder pressure to clean up its
act. What’s needed, says Vijay Swarup,
the Exxon exec who runs the Jersey
research center, are innovations that
meet the four criteria of being “afford-
able, scalable, reliable and sustainable.”
It’s an attitudinal sea change for the
$260 billion (estimated 2017 sales) en-
ergy giant. Lee Raymond, Exxon’s CEO
before Rex Tillerson, famously called global warm- interested in showing off a single batch of algae- “We’re not going to
ing a hoax and the 1997 Kyoto pact “unworkable, derived jet fuel. What he wants is a 450,000-bar- PowerPoint our way out
of this problem,” says
unfair and ineffective.” In 2009 Tillerson softened rel-per-day Franken-algae refinery. And 20 years Vijay Swarup, lab chief.
the party line to support the imposition of a car- down the line—“aggressively patient” in Exxon- “We’re going to science
our way out.”
bon tax and has long pushed clean-burning natural speak—the company just might get there.
gas as the fuel of the future. But Rex didn’t really get In the nearer term, Exxon is working with pub-
the holistic nature of the problem, asking in 2013, licly traded FuelCell Energy to perfect a system
“What good is it to save the planet if humanity suf- that diverts the carbon dioxide and other emis-
fers?” Just a few months shy of what would have sions from power plants, mixes them with meth-
been his retirement date, Tillerson reached a deal to ane, and pipes them into a series of fuel cells that
“sever all ties” with the company and become Don- electrochemically transform the gases into elec-
ald Trump’s secretary of state. Two weeks after he tricity plus a concentrated stream of 90% car-
left came the announcement of Tillerson’s career- bon dioxide ready to be pressurized and inject-
capping deal: the $6 billion acquisition of 250,000 ed deep into the earth. What caught Ex xon’s eye:
acres in the red-hot Permian Basin of New Mexico Unlike other carbon-capture systems, this one is
and Texas from the billionaire Bass brothers of Fort not a power parasite. “It’s like saying unicorns are
Worth. Tillerson personally negotiated the deal real,” says Tim Barckholtz, a senior Exxon scien-
with his friend Sid R. Bass. Woods won’t say wheth- tist with a Ph.D. in chemistry. Like a giant battery,
er he’s had any contact with Tillerson since his Rex- the fuel cell is a 10-by-10-foot cube. Two of them
it (complete with a $180 million golden parachute) are being installed at a coal plant operated by Al-
but intends to build on his legacy. “It’s an unselfish abama Power. A 500-megawatt plant would need
culture,” Woods says. “The expectation is that the the capacity of around 175 cubes to capture nearly
next guy comes in and does it better.” all of its carbon dioxide (and other pollutants) and



32 | FORBES FEBRUARY 28, 2018

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Strategies ENERGY

would see its long-term cost of making power rise ists passed, with 62% of the vote, a resolution call- BY THE
from 6 cents per kwh to 8 cents. Th at’s borderline ing on the company to disclose its plan for coping NUMBERS
economical, especially if Congress enacts a carbon with rising temperatures and to assess the “viability
tax or an oil company wants to buy the CO2 to in- of its assets as a result of the transition to a low-car-

ject into old oil fields to goose out more crude. bon economy.” Scary thoughts when you pump the
Despite these advances, it’s easy to be cynical. equivalent of 4 million barrels of oil per day.
Exxon has a long, sad track record of knowing the Woods chose not to ignore the nonbinding
“right thing” to do—and then not doing it. In 1978 resolution lest he ignite the ire of stock-index-
Exxon climate researcher James Black wrote a report ing giants BlackRock, Vanguard Group and Fi-
titled “The Greenhouse Effect,” warning that carbon delity Investments, all of which supported the



emissions could spur a two-degree rise in global tem- vote. “They used to be dismissive, arrogant,” CHARGED UP
peratures and suggesting that the world had ten years says Tim Smith, a director at Walden Asset

to figure out what to do. “It is premature to limit use Management who has prodded Exxon for a dec- As seats get narrower,
airlines get fatter off bag
of fossil fuels but they should not be encouraged,” he ade. “Their tone is changing.” Last year’s biggest

fees, meals and other
wrote. Also in the 1970s, Exxon scientists invented shocker: naming Susan Avery, an atmospher- extras. Airlines globally
the lithium-ion battery, but the company didn’t both- ic scientist and former head of the Woods Hole were projected to pull
er to commercialize it, investing instead in coal and Oceanographic Institution, to Exxon’s board. in a record $82 billion
in ancillary revenue

uranium. Then came the Exxon Valdez spill. “It’s a start,” says Andrew Logan at invest-
last year, up nearly
Just last year a federal judge imposed $20 mil- ment consultant Ceres, “but the world is chang- fourfold from 2010.
ing even faster than Passengers grumble,
Exxon.” Logan ranks but such additional
HOW TO PLAY IT BY TAESIK YOON revenue is a boost to
the company well be- carrier profi tability—and
ExxonMobil’s strides toward sustainable energy are admirable, but hind Royal Dutch in turn gets invested
why not invest in a pure play? As the only independent producer in new planes, in-fl ight
Shell, Statoil and
of composite blades for the wind-energy market, TPI Composites, entertainment and
Total (but ahead of
in Scottsdale, Arizona, has a global manufacturing footprint and airport waiting areas.
the likes of PetroChi-
has enjoyed strong sales growth since going public in July 2016. The top extra-charge
The newly passed tax bill preserves valuable alternative-energy na and Saudi Aram- highfl iers:
tax credits, so this growth is likely to continue, though earnings will probably lag co) on climate and
Spirit
for now: Costs have increased to support the sizable amount of new business won governance issues. ANCILLARY REVENUE
over the past year. But with $4.4 billion in contracts through 2023 and forays into PER PASSENGER, 2016
Woods denies
other alternative-energy markets (such as composite bus bodies for heavy-duty $49.89
that activists pushed
electric-vehicle maker Proterra), it’s only a matter of time before TPIC’s profi tabil- INCREASE SINCE 2011
him to act. “I would 19.5%
ity catches up. Its shares, down 20% since the end of October 2017, are a bargain.
separate out the cli-
Taesik Yoon, CFA, is editor of Forbes Investor and Forbes Special Situation Survey. Allegiant
mate resolution,” he ANCILLARY REVENUE
says. “We’d be having PER PASSENGER, 2016
$48.93
lion in fines on Exxon’s Baytown refi nery complex this conversation with or without it, quite frank- INCREASE SINCE 2011


near Houston for excessive emissions. Plus there ly. We’ve been engaged with this stuff for many, 43.9%
are those plasticizers: chemicals that Exxon adds many years—long before those proxy proposals.” Frontier
to plastics to make them more malleable. In re- Exxon isn’t bending to activists’ desires; this isn’t ANCILLARY REVENUE
cent years plasticizers have been found to disrupt shameless greenwashing à la BP’s 2006 rebrand- PER PASSENGER, 2016
$48.60
the endocrine systems of toddlers who chew on ing as Beyond Petroleum. Nor will we see a willy- INCREASE SINCE 2011
rubber toys. What other toxins are they not tell- nilly smorgasbord of alternative-energy boondog- 434.1%
ing us about? “That’s not helpful. We’re the exact gles. Wind? Solar? No. “We don’t have a lot to off er

United
opposite,” says Swarup. “We are in the commu- in that space,” Woods says. ANCILLARY REVENUE
nity. Our kids go to school, our kids drink water, But Woods is also clear. Any “real solutions” PER PASSENGER, 2016
$43.46
our kids play with toys.” will require imposition of that elusive carbon tax. INCREASE SINCE 2011
That won’t placate New York attorney gener- “If society wants to address this issue, you’ve got 19.2%

al Eric Schneiderman, who has been investigat- to have a price on carbon,” he says. “Th at’s what’s BY THE NUMBERS BY JEREMY BOGAISKY. PHOTO - JASON HETHERINGTON/IMAGE BANK/GETTY IMAGES
ing ExxonMobil since 2015 for conspiring to de- going to be required. Government has to take that Jet2.com
ANCILLARY REVENUE
fraud shareholders by concealing the risks of global action, and society has to be willing to pay that PER PASSENGER, 2016
$42.46
warming. Company attorneys call it “a fi shing expe- price in order to align the motives and solve this.” INCREASE SINCE 2011
dition.” And then there are the shareholder activists. Be careful what you wish for. It just might end up 18.9%
Last year’s annual meeting was a wakeup call; activ- being called the Exxon tax. Source: IdeaWorks.
FINAL THOUGHT
“Man masters nature not by force but by understanding.” —ROBERT BRIDGES
34 | FORBES FEBRUARY 28, 2018

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Technology CROWDFUNDING

what led him to invent Patreon in the fi rst
place. “A lot of creators depend on us being a
high-performance team,” Conte says during
an interview at Patreon’s San Francisco of-
fi ce. “That’s the most important thing in the

world to me, so there’s less time for music.”
Conte’s dedication stems from a convic-
tion that Patreon can save content creators
from having to survive on digital advertis-
ing—an all but impossible task for most—
or resort to one-time campaigns on sites
like Kickstarter and Indiegogo. Th e compa-
ny is built on a counterintuitive bet that fans
are willing—even eager—to pay monthly
subscriptions for content that they could get
for free as long as it helps support their fa-
vorite artists and it’s easy to do. Th ere’s rea-
son to believe he’s right. More than a mil-
lion Patreon users are helping provide some
50,000 artists with a predictable monthly
paycheck. “On Kickstarter and Indiegogo,
creators essentially have to start over every
time,” says Danny Rimer, a partner at Index
Ventures who is a Patreon investor and
board member. “It’s the same reason soft -
ware companies went from licensed soft -
ware to subscriptions: predictable revenue
and better service for customers.”
Digital Medici ago with his Stanford University roommate
Since Conte started Patreon four years
Sam Yam, 33, who is CTO, the compa-
You no longer need to be rich to be an arts benefactor. ny has paid out more than $250 million to
But can crowdfunding site Patreon save creators its artists—$150 million in 2017 alone. Pa-
from the starvation wages of online advertising? treon’s traction is fueled by a simple pledg-
ing system and the direct line it opens be-
BY KATHLEEN CHAYKOWSKI
tween artists and fans, or “patrons,” who get
access to perks like live Q&As or exclusive
t’s 10 p.m. on a Sunday in November at Cali- chats with the artists, and more casual behind-the-
fornia’s Burbank Airport, and Jack Conte, the scenes footage than an artist might share on Insta-
typically beaming, bearded half of the hus- gram or Facebook. It also doesn’t hurt that being
Iband-and-wife musical duo Pomplamoose, altruistic makes people feel good. In other words,
is leaning back in a chair, his hoodie pulled over Conte didn’t need to change human nature to get
his head, trying to get some rest. Conte, 33, spent Patreon to work, he simply needed to facilitate the
much of the weekend in Los Angeles jamming exchange between fan and artist.
with his funk band, Scary Pockets, and now it’s While Patreon is no longer the only player
time to return to San Francisco for an entirely dif- in its category (Kickstarter launched a competi-
ferent type of gig: his day job running Patreon, a tor called Drip in November), it is the largest—

website and mobile app where fans pay month- and it’s growing faster than ever. The number of
ly subscriptions to support their favorite creators, patrons and creators and the amount pledged
from painters to podcasters, singers, dancers, writ- are all doubling yearly. Now Patreon is using
Patreon cofounders Jack ers, game designers and photographers. some of the more than $100 million it has raised
Conte (left) and Sam Yam The moment perfectly captures what Conte from investors, which include Joshua Kushner’s

watched the internet

destroy the business lightheartedly calls his “identity crisis”: being CEO Thrive Capital and Freestyle Capital, to double TIMOTHY ARCHIBALD FOR FORBES
models that supported and founder of a 100-person startup (valued in Sep- its head count over the next year.
scores of content creators. tember at an estimated $400 million) without com- By some measures Patreon’s success defi es logic.
They say their technology

can be part of the solution. pletely giving up on his passion for music, which is The average user pledges $12 per month, more
36 | FORBES FEBRUARY 28, 2018

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Technology CROWDFUNDING

than the cost of a basic subscription to Spotify or ators that the internet has largely eroded. PROTOTYPE


Netflix, which offers access to immense catalogs of Patreon’s artists-first ethos may be lucrative

video and music. (Some users pledge per piece.) for some, but it comes with pitfalls, especially in a
Dozens of artists make more than $30,000 per world where digital business models change fre-
month, including video reviewer Blind Wave and quently. “Creators need to diversify their incomes
a capella singer Peter Hollens, who made about as much as possible so the rug can’t be pulled out
$400,000 on the site last year. from under them,” says Laura Chernikoff , execu-
From the start, Patreon has taken a 5% cut of tive director of the Internet Creators Guild.
each pledge. That’s the same cut taken by Kick- For Conte the mission is personal. He grew

starter and Indiegogo but far less than revenue- up in bohemian-chic Marin County, just north
sharing programs on YouTube and Apple iTunes, of San Francisco, and was hooked on music from
which keep 45% and 30%, respectively. “Th e mis- age 6, when his father taught him the blues scale.
sion is to send as much money to creators as pos- While studying music and composition at Stan-
sible,” Conte says. The commissions generated an ford, he started making YouTube videos with his

estimated $8 million in revenue last year. then girlfriend, Nataly Knutsen, in 2007. (Th e THREE’S
Pledgers sign up for “tiers,” generally ranging two married in 2016.) In 2013 he drained his sav- COMPANY
from $1 to $10—though some pay much more— ings account, maxed out two credit cards and
You often have to
for access to the artists’ perks. Ukulele performer spent three months making an electronic music multitask. Why

Cynthia Lin, who offers fans live lessons, derives video, complete with robots and a replica of the shouldn’t your phone?
about half her income from Patreon and grew her Millennium Falcon cockpit. His fans loved the Researchers at
video, which got more than Dartmouth and two
Canadian schools—the
HOW TO PLAY IT BY JON D. MARKMAN a million YouTube views in Universities of Waterloo
its first year. However, Conte and Calgary—have built

Payment pioneer Square was born in 2009 when its co- a new three-in-one
pocketed just $54 from ad
founder couldn’t accept credit cards to sell his artwork. smartphone, with a trio
revenue over the video’s fi rst
Today you see its iconic card readers at hair salons, of screens nestled into
month. To date, it has generat- a single, 3-D-printed

neighborhood coffee shops and weekend art fairs. The
ed about $1,000. Not including case. The primary
compact white squares leverage the functionality of phone, with the largest
smartphones to bring fast, reliable credit card process- Conte’s time, it had cost more display, can monitor,
ing and inventory management to artisans and small businesses like the than $10,000 to make. “It was control app access and
ones also helped at Patreon. Now the company is betting on the little this rock-bottom moment for share the screen with
guy again, with Square Capital. It uses the company’s data to make in- two smaller peripheral
me as a creator,” Conte says.
stant loans to small businesses left behind by traditional banks. Square handsets. Powered
He knew he’d created some-
Cash, its new payment app, allows peer-to-peer money exchanges by a custom version
thing of value but would never of Google’s Android
without the need of a bank. Square shares rose 154% in 2017 and are up
30% so far in 2018. With sales growth averaging 77%, it’s still a buy. be paid for it. “Th at discrep- operating system, the
ancy led directly to the forma- unit is designed so a
Jon D. Markman is president of Markman Capital Insight. parent can, say, check
tion of Patreon,” he adds. work email while the
Conte discussed his idea kids watch YouTube
fan base from 400 to 1,400 in the past year. With with Yam, who programmed the site in months. It and mine Bitcoin. The
video “sketchbook tours” and chats, Chilean il- went live in May 2013, and within minutes more early version is ungainly,
but the developers
lustrator Fran Meneses pockets more than $4,000 than 100 fans were pledging upwards of $700 a are finessing its looks

per month, which supplements income from her month to support Conte’s work. Within months and functionality (for
diversions such as
Etsy shop and Instagram presence. Patreon had investors. multiplayer games). We
Creators join Patreon for free and don’t have to Conte is now eyeing a number of opportuni- all dislike sharing our
promise exclusivity. The site offers them instructions ties for growth. First is overseas expansion: Th e sacred devices, but this



on how to use it most effectively. It also provides a site is in English and takes only U.S. dollars, yet nascent contraption
points one possible


growing list of back-office tools such as analytics 40% of patrons are outside the U.S. Over time, way toward a more
and email management to help creators run mem- Conte imagines more immersive features, such as communitarian friends-
bership campaigns modeled on those of NPR sta- virtual reality concerts. Farther out are somewhat and-family smartphone
tions. For now, Patreon is designed for creators who fuzzy notions of turning Patreon into a provider future.
already have established followings but aren’t house- of small-business services, including ticketing and
hold names. Long term, Conte hopes to help fund merchandising, to help artists turn their passions
bigger names and prove that technology can help re- into professions. “Artists don’t have to starve any
store the financial underpinnings for content cre- more,” Conte says. PROTOTYPE BY KATHLEEN CHAYKOWSKI

FINAL THOUGHT
“I don’t believe in art. I believe in artists.” —MARCEL DUCHAMP
40 | FORBES FEBRUARY 28, 2018

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Branch manager: Upstart
CEO Saperstein is shaking
up a traditional business
with technology.

Family Tree investing in the company, which had around
$30 million in revenue; instead he was trying to
grow it fast and cheap and then take it public.
Jonathan Saperstein began his efforts to When Jonathan proposed a long-term strategic
plan, David ignored it. When Jonathan offered to
professionalize and dominate the nursery industry
buy the company—if his father wouldn’t manage
with a hostile takeover of a grower—from his dad.
it right, he would—David responded with what
Jonathan calls “an outrageous number” and the
BY AMY FELDMAN
declaration that it was not for sale.
Walking away would have been the easy—
n the summer of 2014, Jonathan Saperstein, and, arguably, the smart—move. What rich kid in
then a 27-year-old executive at and minori- his right mind wants to get into a fight with his
ty shareholder in TreeTown USA, a decora- centimillionaire dad over control of a small com-
Itive tree grower, was worried. “We were up pany in a zero-glamour business? In this case,
against the clock because of the cash position,” he though, the rich kid, now an alumnus of Forbes’
says. The company’s founder—his father, David 30 Under 30, turned out to be every bit the auda-
Saperstein, who had vaulted onto The Forbes 400 cious, shrewd and determined entrepreneur his
after he sold his previous company, Metro Net- old man had been. And he decided to stand up JUSTIN CLEMONS FOR FORBES
works, for $900 million—seemed disengaged. to his dad.
David, who was often traveling overseas, wasn’t In October 2014, Jonathan, with the help of



42 | FORBES FEBRUARY 28, 2018

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Entrepreneurs UNDER 30



20 ft.
Moving Target $5,100 18

Total years
The wholesale price of one from seed:
of TreeTown’s bestselling 9.5 16
Empire Live Oaks $295 $1,580
constantly changes. Total years Total years 14
from seed: $630 from seed:
4.5 7.5
Total years 12
from seed:
$80 6
Total years 10
from seed:
$21 3
Total years 8
from seed:
2
6
PETER AND MARIA HOEY FOR FORBES; SOURCE: TREETOWN USA
4

2

0
5 15
Gallon Gallon 45
Gallon 95 200
Gallon Gallon 670
Gallon


his sisters, Stefanie and Alexis, filed papers to include landscapers and big retailers like Home
force the company into involuntary bankrupt- Depot. Revenue is expected to surpass $120 mil-
cy. They could do that because TreeTown’s par- lion in 2018, with operating profits around 15%,
ent company, Seven S Capital, controlled by their above those of most competitors. While a few
father, owed $21 million to three trusts in their private-equity-financed startups have tried with-
names. David never saw it coming. The evening out much success to shake up the nursery busi-
of the day the papers were filed, he called Jona- ness, the roughly $18 billion industry remains
than and started discussing the terms of his sur- populated largely by underfunded mom-and-
render. They quickly reached an agreement. Jon- pop nurseries. Saperstein is trying to break that
athan’s holding company acquired TreeTown’s mold and build a national giant. He and his sis-
assets, and he and his sisters sold their stakes in ters, who have no operating role in the business,
Seven S to their father. The purchase price, in- own equal stakes with no outside investors. Jon-
cluding assumption of debts, was around $50 athan says that while his relationship with his fa-
million. At a companywide meeting called to an- ther survived the takeover, they don’t talk about
nounce the new ownership, a TreeTown execu- the business.
tive brought Kool-Aid and cups and declared, When David founded TreeTown in 2000, Jon-
“We’re ready to drink the Kool-Aid!” Of his fa- athan, his son with his second wife, Suzanne,
ther’s tenure, Jonathan says only, “We underes- was growing up mostly in Los Angeles, where
timated the complexity, and when I say ‘we,’ I his parents were building an epic white ele-
mean we as a family.” David, now 76, declined to phant, a 12-bedroom château called Fleur de
be interviewed. Lys. (Suzanne and David divorced in 2007. The
Since then, with savvy acquisitions and tech- house sat on the market for years before selling
enabled operations, TreeTown has leapfrogged in 2014.) Jonathan, who wears farmer jeans and
past competitors to become the country’s largest carries his cellphone in a pouch on his belt, pre-
tree producer and one of its biggest nurseries. It ferred Texas, where he was born. During col-
employs almost 1,600 people and grows 4 million lege at the University of Texas, Austin, he spent
trees and 18 million shrubs and perennials on 16 summers and school breaks working at the com-
farms in Texas, Florida and California. Clients pany. After graduating in 2010, he joined Tree-



44 | FORBES FEBRUARY 28, 2018

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Entrepreneurs UNDER 30 ELEVATOR
PITCH
Town full-time. “I’d much rather be on the farm ly meetings, Saperstein and his team tweak pro-
in boots and working with people than in the of- duction forecasts, based on demand data from

fice,” he says. customers and the latest growth numbers from
When demand for trees fell following the the fi elds. The trees are grown in containers,

crash of 2008, David, who was funding Tree- and as they mature, they are moved to larger
Town himself, responded by letting some acre- containers to prevent them from getting root-

age go unplanted and postponing maintenance. bound. The company’s most popular tree, an
But by the summer of 2014, although the reces- Empire Live Oak, comes in containers ranging
LOTTE WORLD TOWER, SEOUL

sion was long past, David was still unwilling to from five gallons, which wholesales for $21, to FLOORS: 123
SECONDS: 48
spend, and some TreeTown executives worried 670 gallons, which goes for $5,100. Saperstein WORDS PER MINUTE: 130
that the company had pulled back too far. Unless must forecast demand a decade in advance to
it started planting soon, it wouldn’t have enough determine how many trees to sell at each stage.

product later to keep up with competitors. Th at’s He also has to figure out how to arrange those
when Jonathan made his move to take over the that remain so they can be maintained effi cient-
company. ly. “You take a Rubik’s cube and throw it in the
Once in control, he immediately started to ex- blender,” he says with a laugh. Saperstein is now
ecute his strategic plan, which called for $10 mil- rolling out handheld devices at all of TreeTown’s

lion in improvements partly financed by lines of farms to better analyze labor costs and complete
credit with Bank of America and Wells Fargo. work orders.
He also hired a new chief fi nancial offi cer and Meanwhile he continues to buy farms. In Sep-

human resources director and set up merit-based tember, after 18 months of negotiation, he ac-
quired Village Nurseries, a In the time it takes to
California grower with more reach the 117th-fl oor
HOW TO PLAY IT BY WILLIAM BALDWIN observatory of South
than 900 acres under culti- Korea’s tallest building,

You want growth in your portfolio? Get it from trees. vation. The $75 million deal,
Goldman Sachs alum
Timber barons get to treat their profits from harvest- paid for with a combination Brendan Alper, 30,

ing wood as low-taxed capital gains. That cushy deal of cash from operations and explains why you should
extends to shareholders in forest-product companies
debt, more than doubled Tree- love Hater, a Brooklyn-
organized as real estate investment trusts. Potlatch, for
Town’s revenue. It also fur- based dating app with a
example, paid out $1.53 a share last year, all of it classi- caustic new approach.

ther diversified the compa-

fied as long-term gain. When it completes a pending acquisition, this
REIT will have 1.9 million acres of timberland and ample opportunity ny. Village Nurseries’ specialty “Hater matches
to make that dividend greener. Rayonier, another tree REIT, owns, is shrubs, such as azaleas and people based on what
leases or manages 2.7 million acres. Its $1 dividend last year was 100% philodendrons, which grow they hate. Swipe on
capital gain. thousands of topics
more quickly and cheaply than ranging from ‘Kim Jong
William Baldwin is the Investment Strategies columnist for Forbes. trees. Its location in the coun- Un’ to ‘ketchup on hot
try’s largest nursery market dogs,’ and algorithms
gives TreeTown a new custom- recommend the most
bonuses for employees. Then he went shopping er base of West Coast landscapers and retailers. compatible matches.


for acquisitions. Soon after buying TreeTown, he Saperstein says a greater variety of products Although Hater started
as a comedy sketch,
learned about a troubled tree farm in Bunnell, will help him increase sales to existing custom- we’re no gimmick.
Florida, and bought it for $5 million in October ers—and should also help him withstand the
Studies have shown
2015. In February 2016 he bought a smaller Flor- next recession. “If the market slows down,” he that people bond
ida farm that produces palm trees. says, “you have more fl exibility.” more over mutual
He also set about improving the compa- Unlike his father, who was hoping for a quick dislikes than shared
ny’s tree-manufacturing process, gearing op- IPO and exit, Jonathan plans to be in the tree busi- interests. Thousands of
erations to data and effi ciency. Tree farming ness a long time. “We don’t have equity partners, people worldwide are ELEVATOR PITCH AS TOLD TO SUSAN ADAMS TOP: PETER HOEY FOR FORBES; LEFT: THOMAS KUHLENBECK FOR FORBES
is a highly complex form of manufacturing in so no one is telling us to grow at a certain rate meeting, having fun
and complaining about
which numerous variables, including the econ- per year,” he says. Even if prices were to drop by a tangled headphones
omy and the weather, must be managed care- third, he says, TreeTown would still have positive and chatty Uber drivers.
fully over long periods of time. The Texas and cash flow, allowing him to buy more farms. Hater scored a deal


Bunnell farms have customized automated pot- What worries him? “My biggest fear is that we with Mark Cuban on
ting lines that provide the precise amount of soil are going to get complacent,” he says, “and that’s Shark Tank, and we’re
and fertilizer each seedling requires. In month- what we won’t allow to happen.” backed by the creators
of Candy Crush.”
FINAL THOUGHT
“The creation of a thousand forests is in one acorn.” —RALPH WALDO EMERSON
46 | FORBES FEBRUARY 28, 2018

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Entrepreneurs DIVERSITY



Julia Lee told Edward Kim she was uncomfortable
being the only female engineer at Gusto.
woman. Before she got to Gusto, she told
Kim, “people often assumed I didn’t know
the answer to a problem because I was a fe-
male engineer.” Even at Gusto, she was re-
luctant to share her feelings of self-doubt.
Kim, Lee says, was extraordinarily recep-
tive. In fact, he made it a personal project to
study the gender breakdown on the engi-
neering teams at other tech firms. The num-
bers he found were dismal.
Only 12% of the engineering staffers
at 84 tech firms were female, according
to statistics gathered in a public Google
Doc posted in 2013 by Tracy Chou, then
an engineer at Pinterest. Kim read a U.S.
census report on racial and gender dis-
parity in STEM employment and was
troubled by a National Public Radio re-
port that showed an increase in women
graduating with computer science de-
grees through the early 1980s and then a
steep decline from 1984 on. He also read
a 2015 McKinsey study showing that
companies with diverse workforces out-
perform financially. “The fact that no
one else in tech was able to really crack
the gender diversity nut and solve it rep-
resented an opportunity for us,” Kim
says. “If we want to reimagine what HR
is like for the very diverse workforces of
our small-business customers, we our-
selves have to build a diverse workforce.”
After a series of meetings with Kim and Lee,
Cracking the Code Gusto’s human resources team launched a plan
to attract women engineers. Initial steps includ-
ed writing job descriptions that avoided mascu-
Challenged by a female employee, Gusto, an line phrases like “Ninja rock star coder.” Gusto’s
HR-software unicorn in San Francisco, figures out most important step: For a six-month period start-
how to hire women engineers. ing in September 2015, the company devoted 100%
of its engineering recruitment efforts to women.
BY SUSAN ADAMS
While it solicited only women, it considered male
applicants who approached the firm and treat-
ne spring day in 2015, Julia Lee, a top ed all candidates equally, which kept Gusto from
performer on the engineering team at running afoul of antidiscrimination laws, accord-
the payroll-software startup Gusto, asked ing to Gusto lawyer Liza Kostinskaya. The pitch to
OEdward Kim, the company’s cofounder women included emails signed by Lee inviting fe-
and chief technology officer, for a one-on-one meet- male candidates to have an initial talk with her and
ing. Sitting together on a gray couch in the middle of was backed by $60,000 the company spent to be a
their open-plan office in San Francisco’s SoMa neigh- sponsor for two years at the biggest annual wom-
borhood, Lee, a Stanford grad who had interned at en’s tech conclave, the Grace Hopper conference. TIMOTHY ARCHIBALD FOR FORBES
Google and Palantir, told Kim that she loved her work Kim also published a blog post that made Gus-
but was struggling with one issue. Of the 18 people on to’s diversity numbers public and broadcast its
Gusto’s engineering team, Lee, then 26, was the only goal of hiring more women engineers. “We be-



48 | FORBES FEBRUARY 28, 2018