Monday, May 26, 2014

TOM STEYER NEWS: Can Tom Steyer Save The World From Climate Change?

As many of you know I grew up with Billionaire Tom Steyer.  We were both graduates in the class of 1975 at Phillips Exeter Academy in Exeter, New Hampshire.

Tom Steyer was not only a brilliant student but was also an amazing athlete at Exeter and then Yale.

Now Tom is spending $100 million to make Climate Change a hot point issue in the Fall mid term elections here in the United States.

People in New Hampshire and Michigan froze their asses off this winter so it will be interesting to see how they react to Tom's pitch.  Michigan and New Hampshire are states where Tom Steyer has promised to spend millions.

Tom is advocating that the Keystone pipeline is a bad investment for the United States.  President Obama has yet to agree...but why?

President Obama is getting pressure from Democrats who believe that we need the jobs the Keystone pipeline will create.  He's even getting pressure from unions dominated by Democrats to approve the Keystone pipeline.

Keep this in mind---if we don't build the Keystone pipeline it won't matter, the oil that is available in Canada (where the pipeline would originate) will still be sold...most likely to the Chinese.

China and India are pumping carbon emissions into the atmosphere with reckless abandon.  Dirty fuel is cheaper short term than clean energy.  Of course nuclear energy is cheap until you have a melt down or Tsunami as Japan did a few years ago.  Now their food supply is radioactive. Sushi anyone?

Now here's what's important to understand for Entrepreneurs and what I want to point out to you today...if you only use one benefit to sell your product you might make sales but you won't make as many as if you have a second, third and fourth benefit added to your pitch.

Selling Benefits In Direct Response Marketing Versus Political Campaigns

In the case of selling something in the political arena different number one benefits will be different for different political beliefs.  In other words, Republicans and Democrats might buy what you are selling for different reasons.

When you sell products or services via DRTV and direct response marketing you will usually find after surveying customers, that there is a very specific number one, two, three and fourth benefit that your customers are responding to that is causing the sale.

Let me give you a specific example of how Tom Steyer is limiting himself and limiting his response by limiting the benefits he's pitching---it's easy to make this mistake.

I'm an Independent who was once a Republican.  My grandfather was an officer at Standard Oil.

I was convinced at a very young age that Democrats would burn in hell and that Lucifer himself was a Democrat and the founder of the political party.  I think that's how politics are with just about everyone...we discuss it as we are growing up and are greatly influenced by our relatives.

Keep in mind I grew up in a state (Massachusetts) where Democrats usually win by a couple of touchdowns versus Republicans in almost every election,  for every office being sought.

So although I'm an Independent, I still skew toward Republican ideology and vote almost always for Republicans.

I've read interesting, very heady positions against anthropogenic Global Warming (AGW).  I recently read several George Will articles where he tore the argument for Global Warming apart piece by piece.  He was very convincing.  As a matter of fact he was better at laying out the argument against Global Warming than Vice President Al Gore was in making it and I thought an Inconvenient Truth was brilliant.

I'm sure Tom Steyer could crush the Koch Brothers in a debate but if he were to debate with FOX NEWS and The Washington Post's George Will, he'd have his hands full.  It would be great TV to see them go to war on Chris Wallace's FOX News Sunday or David Gregory's Meet The Press.  Heck, I'd pay $20 to see them on pay per view!

For me using oil long term, which is what the Keystone pipeline would produce,  makes economic sense but to me it's bad for our country's long term security, innovative technologies and future economy.  If we pump that oil and build the pipeline you might think that will bring economic security but there's another side to the story.

Despite What You Think Oil Doesn't Trade In A True Free Market

Here's my argument...oil does not trade in a free market.  Supply can be reduced easily since OPEC is a cartel of countries that are for the most part our current and permanent enemies.  If they decide to upset the Global supply they can do so just by agreeing on a conference call.

What's worse is most of our enemies are OPEC members; they take ten percent of their income and send it to militant factions like Boko Haram and then kill Christians or in the case of Hamas, Jews.

When Boko Haram killed a friend of mine they cut off his arms first and then one leg, then he died.  He refused to denounce Christ and was killed for his beliefs.  I wonder what most Christians in the United States would do if posed with the same situation. Would they acknowledge Christ or renounce him just to save their lives?

We are in a Holy War which will never stop and make no mistake about it Russia is helping Iran get a nuclear bomb and their goal has been clearly stated, they want to kill everyone in Israel and in the words of

Mahmoud Ahmadinejad, "wipe it off the map."


There are a lot of things in life I discount and disregard but not Bible prophecy, it always comes to pass.

It's not a question of if....it's a question of when we will see the Straits of Hormuz blocked.  Our position as a country is clear, we will attack Iran when this happens. That's my other objection to using oil long term...how many wars do we need to fight over oil?

Pearl Harbor was attacked over oil, the Gulf War was about oil, and World War III will be about oil.  Our recent adventures in the Middle East have cost us trillions of dollars and have destroyed the value of the dollar.

$400 A Barrel Oil

What would happen to the United States economy if oil goes to $400 a barrel?  Here in Texas a lot of people would be in "high cotton" making a lot of money fast as what happens in the Middle East would increase the value of the oil we pump here.  But what would the impact on the general economy be?  Good question isn't it?

Let's pretend that using oil doesn't cause any damage to the climate...but can you make an argument that it's good for us?  Can you convince me that the smog in one of my favorite places in the World, Los Angeles, is something else?

I guess my question as a technology Entrepreneur is "Can't we do better?"  Can't we make our country stronger?  Can't we be independent of the Middle East?  Can't we create more jobs in new energy technologies? Those are my hot buttons. Tom Steyer ignores all of  those elements in his core pitch.  Tom is a bright guy but he's being incredibly short sighted or his political adviser needs to call David Axelrod for some coaching advice.

Tom's singular benefit mindset will dramatically reduce his response.  He's trying to sell something without all the benefits being presented to his prospect.  This is one of the worst mistakes you can make when you pitch. Sadly, my prediction is Tom will get his ass kicked, but I'm certain he'll learn from it.  Maybe he'll re-think how to pitch so he succeeds.  The Tom Steyer I know won't give up, nor should he.

The Keystone Pipeline And Tom's Achilles' Heel 

There are a lot of reasons why people are attacking Tom Steyer.  As co-founder of Farallon Capital, he has made millions in oil and coal.  How many millions, or billions?   Who knows?  So the hypocrite argument isn't easy to defend, but with great salesmanship it can be diffused.

I grew up with Tom Steyer and he had character and integrity when we were teenagers.  I admired him then and I still admire him now for stating his beliefs.  Tom as a Christian is my brother.  So I hate seeing him get pounded but he knew he'd take a lot of flack by stating his position.  I've been in the public eye and have learned you have to have thick skin to survive.  Tom will need alligator skin to survive the attack from the right.

I'm certain Rush Limbaugh and Sean Hannity will skewer him repeatedly as this story heats up. Maybe that's what Tom secretly wants...a real bi partisan American debate.

Maybe Sean Hannity or Bill O'Reilly should invite him to FOX NEWS.  Tom has a lot of balls...he'd probably show up unlike most Democrats.

Rush, Sean and Bill are great at debating but I doubt they have studied this like Tom has.  I'd still bet on Tom in a head to head battle with any of them.

What's My Point From The Standpoint of Salesmanship

Tom is really missing the mark by focusing on one sales benefit (climate change) that is easier to sell to Democrats than Independents and Republicans.

I want to buy economic security and freedom from the Middle East along with clean air to breathe and clean water to drink.  I also want fixed energy costs and I have a simple plan for that.  My plan would also re-boot heavy manufacturing and create new jobs.  If Tom were to add all of these benefits to his pitch and work demographic audiences much like President Obama did in his re-election campaign, he'd win, probably not in 2014, but more likely in 2016. If he doesn't get true bi-partisan support I doubt anything will ever change. We'll be choking on exhaust fumes for the next three hundred years.

Sell What People Want To Buy

Do we know all the benefits to what we pitch and sell to our prospects?

Can we expand benefits and sell more people what we want to sell?

Do we know the benefits that are most important to our prospects?

Have we called people that are our existing customers or used Survey Monkey to find out why people buy from us and then re-design our pitch?   Or, are we somewhat ignorant in our approach. Are we selling what we believe the market wants or selling what they really want?  This is the critically important question that I'm posing to you.

Watch this war that Tom Steyer is waging and you will see some interesting developments in the next few months that will be a great marketing lesson for every Entrepreneur and Politician.

Tom is now embedded in this war and knowing him he won't back down a bit.  I doubt he will win this war until he makes this a bi-partisan American and Global issue rather than just a Democratic won on a state by state basis. I am certain that if he sticks to the climate change pitch as a singular sales point in his pitch he'll lose in 2014 and 2016.

My advice to him and to you is simple...expand your audience by expanding benefits to expand overall response and close more sales. Poll and survey your prospects to determine what benefits are more important than others. Do this constantly as certain conditions can change your prospect's hot buttons.

If you are pitching in a 60 second DRTV ad you have very little time (48 seconds) until your CTA (call to action) so you must know what your benefits are in the order of your prospect's desires.  I'm really surprised his political advisers are missing this. He could have a data base of 25 million people by the end of his campaign (which he could create a relationship with for the next two years) to create bi partisan support for real legislation in 2016.

If I were pitching in Michigan and New Hampshire along with every other state he's pitching in I'd get real numbers on jobs created in a green economy because AGW isn't an easy sell when you shovel snow in April like folks in New Hampshire and Michigan did.

Here's a great interview from Bloomberg with Tom Steyer. Tom is a great guest and is very like able on camera. He has the chops to sell this,  it's the lack of benefits in his pitch that's killing him.  I hope he gets it right not for his sake but for our country's sake.

                                                  written by Brad Richdale Author



About Tom Steyer

Thomas Fahr "Tom" Steyer (born 1957) is an American hedge fund manager, philanthropist, and environmentalist.[2]
Steyer is the founder and former Co-Senior Managing Partner of Farallon Capital Management, LLC and the co-founder of the One California Bank, an Oakland-based community development bank.[2] Steyer is responsible for funding the creation of the TomKat Center for Sustainable Energy at Stanford University, part of the Precourt Institute of Energy.[3] Since 1986, he has been a partner and member of the Executive Committee at Hellman & Friedman, a San Francisco-based $8 billion private equity firm. Farallon Capital Management, LLC, manages $20 billion in capital for institutions and high net worth individuals. The firm’s institutional investors are primarily college endowments and foundations.[2][4]
In 2010, Steyer and Kathryn Ann Taylor, his wife, along with Warren Buffett and Bill Gates, signed the Giving Pledge to donate half their fortune to charity.[5] Steyer is on the board of Next Generation, a non-profit that intends to tackle children's issues and the environment.[6][7] He serves on the Board of Trustees at Stanford University[8] and is active in political campaign fundraising.

About Hellman and Friedman

Hellman & Friedman LLC, founded in 1984, is a private equity investment firm well respected for its distinctive investment philosophy and approach. Our offices are located in San Francisco, London, and New York. We raised our first institutional private equity fund in 1987. During our 25-year investing history, we have raised over $25 billion of committed capital and have invested in over 75 companies. We are currently investing our seventh fund, Hellman & Friedman Capital Partners VII, L.P. (HFCP VII), with over $8.9 billion of committed capital.
Our objective is to invest long-term equity capital to support the strategic and financial objectives of outstanding management teams operating businesses with defensible positions in growing markets. Over our lifetime, we have distinguished ourselves as a flexible source of capital and a value-added partner.
Our team consists of over 45 investment professionals, including 18 managing directors with an average tenure with the Firm of over ten years. This allows us to spend substantial time working with the companies in which we invest.
Limited partner investors in our funds include many of the largest U.S. and international corporate pension funds, U.S. state pension funds, university endowments and foundations. Additionally, in HFCP VII, the General Partner is one of the largest limited partners.

About Next Generation

Next Generation promotes solutions to two of the biggest challenges confronting the next generation of Americans:  The risk of dangerous climate change, and the threat of diminished prospects for children and families. Through the use of non-partisan research, policy development, and strategic communications, we identify strategies that help deploy clean, advanced energy technologies; we also work to ensure a level playing field from which today’s kids can build a brighter future.
Next Generation takes lessons learned from California, America’s largest, most populous state, and helps spread innovative ideas that can be enacted through public policy, private enterprise, families, and individuals.

This story also appears at http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=47286685