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Fort
Worth, Texas: Bob Simpson and Steve Palko founded Cross Timbers Oil in
Fort Worth at the same time many others were getting out of the business. These
two are visionaries with a long range plan and they teach us all what it means
to take calculated risks.
XTO
Energy has quickly grown out of the ranks of a small business, but we
believe the spirit of small business, the people who dream the
impossible dreams then turn them into multi-faceted realities with deep-seated
values, will permeate this business forever.
Learn how in
the beginning, Robert Rubin (once US Secretary of Treasury) raised their seed
money -- $35 million in three hours. Bob and Steve knew that by the time that
seed group was ready to harvest (cash-in or get liquid), they would have taken
their business into its sixth or seventh round of funding.
Learn how
their geologists use and develop advanced technologies to determine where to
drill for oil (hitting over 95% of the time!) and how money is raised to pay
for it all.
These two
applied their years of experience working in big companies to grow their own
business. Founded in 1986, incorporated in 1990, went public in 1993, this
business is now one of the top ten gas producers in the USA.
This is
The All-American Dream come true.
When you
watch the show, you'll feel their confidence. That only comes from going
through a lot of pain and learning strategic lessons. These people have a lot
to teach us. Here are three first principles for all of us:
1. We all
need to learn when and how to raise capital. These folks really learned
about the power of the financial markets. Yet they learned the hard way like
all of us tend to do. We hear how they lost their first business, Southland
Royalty, to a hostile take-over, and how they came back.
First, they
had friends and a loyal following; additionally, they were open to learn even
more about how they could use the equity markets to finance growth. In the
beginning, Robert Rubin, (of US Secretary of Treasury fame), raised their seed
money -- $35 million in three hours. Bob and Steve knew that by the time that
seed group was ready to harvest (cash-in or get liquid), they would have taken
their business into its sixth or seventh round of funding.
Now that's
knowing how to play with the good old boys. They had a very big idea, a track
record, and a game plan.
There are
other ways to raise money, usually not so much, not so fast (and not so
expensive). No matter what the business, you've got to have a clear vision of
what it is you want to do. You have to have a track record. And you need that
game plan, called "The Book" to tell people what you are going to do and in
what time period.
Can you be
that clear? Too many people attempt to start a business where they have no
expertise, no historic perspective, and no new insights on how they'll do
something just a little better. That is just foolhardy.
2. We all
need to have a few key ideas. At one time we marked up a transcript
according to each "big" idea. We now call each a "key" idea. Big ideas
sometimes can be detached from reality. They are big, but also improbable. Key
ideas are incisive; they go inside a problem holding many possible combinations
to unlock the problem and release a solution. So much of the dot-com bubble was
based on a big idea that the web infrastructure could be used to capture a
market. But ask any of those who failed, "How you going to do it?" and there
were very few key insights or answers to those questions. The two outstanding
exceptions, eBay and Google, the market found them because their technology
worked so very well.
Whatever your
business (even if it is still just in the idea stage), look at it in the
largest possible picture frame within your industry and within your own
personal but-largest-possible learning framework.
3. Make
part of your goal service to your country! We all need to work on the
larger goals. Steve, Bob, Louis and their people are actually contributing to
the energy independence of the USA. Nothing could be more important in these
times. And there is plenty of room for new ideas -- for more technological
breakthroughs for even more efficiencies, for conservation, for alternative
fuels, and for fundamental scientific breakthroughs. A little bit of common
sense might go a long way as well.
CONTACT:
XTO Energy a/ka/a Cross Timbers Oil Company
810 Houston Street, Suite 2000
Fort Worth, Texas 76102
T:817.870.2800
URL:
http://www.xtoenergy.com
http://www.crosstimbers.com/
- SUPPORT PUBLIC
TELEVISION:
Become a member of your local station. If you are
already, great. If not and your business is doing well, consider joining the
Producers' Club ($1000).
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