An Interview With Gene Simmons

PREV 4 of 7 NEXT

L.G: Talking about learning curves, when you see that the people who are most successful in the financial world, the heads of huge investment banks like Bear Stearns and Merrill Lynch, when you see that they've managed to lose tens and tens of billions of dollars, what do you make of that?

G.S.: Arrogance. Arrogance. Warren Buffett doesn't lose. And that's not because he's Buffett, but because he has a philosophy. He's very conservative. And when you get full of yourself, arrogance kicks in. It's like Tyson, when he was hungry and lean and mean, nobody could stop him. And then he decided to get into the ring in Japan and not train because he thought, "Hey, I'm Mike Tyson." So he got knocked out. It's arrogance.

L.G.: By the way, do you have investments with Berkshire Hathaway?

G.S.: Perhaps.

L.G.: I'm not asking you numbers, Gene. I just wonder if you think it's a good operation, and whether you've put your money there.

G.S.: Well, it's difficult to be quoted. I watch financial guys all the time, especially on the Fox entity, because it just becomes so spirited, and debate goes back and forth. And I also watch CNBC and CNN. I like everybody's point of view, and I've been on those broadcasting entities. I want to make the point about the financial geniuses of the stock market, the ones who have been successful, and there was a study on this. Over the course of the year, they picked 10 places to stick money in and they kept moving it around. And a monkey was given a dart and kept throwing 10 darts at a dartboard, and the monkey beat the best guys in the business. In the short term, that's possible. In the long term, the conservative point of view is what wins.

 L.G.: Between a monkey and Warren Buffet, you'd pick Warren Buffet?

G.S.: I would, because, over the long haul, he's been successful. I think his average is 20 percent or more per year through the years. And if you take a look at what he invests in, it's biotech and communications and medicine and so on. It's AT&T, and every once in a while he'll go Disney. But it's not going to be a startup operation, it's going to be an entity that's been around a long time with a lot of assets. So this guy is a good guy to look at. So why does he do over 20 percent average per year, and the street does about half that? You know, people get greedy, arrogance kicks in. "I'm the genius." You get your face on the cover of BusinessWeek, and then it becomes about the celebrity. People start asking you questions, the way you're asking me, "So what do I do with my money?" And you become full of yourself, and then you think your opinion is the only thing that matters. It's not. I'm very conservative. If I have the cash to buy it, I'll buy it. Perhaps not all for cash, but you have to take a look at the downside. If the ship sinks, do you have another boat so you can move on? You can't just get on and go, "Hey, it's not going to sink." Well, maybe it will.

L.G.: Are you and your business partner, Richard Abramson (who together own a branding and marketing company, Simmons Abramson Marketing), still advising ITU Ventures, this venture capital firm in Century City?

G.S.: We talk. We talk the way we talk here, and the talking is what makes people make decisions. You're the President of the United States, you want to go to war, you don't want to go to war, you sit down, and you talk. You talk with people who have their snoots to the ground. In general, it's pop culture, but everything costs money. Venture capital is a good word for life. Because everything costs money. We think there are different rooms in this building—pop culture is over here, and oil is over there, and communications and biotech are over there—but it's really all the same. Everything costs money, and everything needs people to give you money for either that service or for the product. You have to figure out how to get your stuff into their hands and get their money into your hands, and therein lies the big hurdle. How do you do that for the least amount of money, for the most amount of money, and how do I get them to understand they can't live life without my stuff? And I use that word in a Marshall McLuhan-esque sense. My stuff is important and they need it, and I have to convince them they need it, so part of that is branding and marketing and positioning and advertising. Or, if you can bypass that, then your business model works better, because it doesn't cost as much to get your message out there. Viral is best, because it's the most seductive. That's what we sort of do.

I can't tell you why I know the things that I know, but I'm also clear I know what I don't know. And if you're clear about the issues you don't know, then you're getting a pretty good read. So it doesn't matter whether you're a venture capitalist or whether or not you're in pop culture. Because, as you know, we're the branding marketing company of the IndyCar Series, and that includes the Indy 500. I'm the one that came up with "I am Indy"—and the song. But in order to position a message, you have to understand something about what the thing is and where it wants to go. Those are sort of vague language notions, but I know what they mean. And that doesn't mean I know squat about how an Indy car works. I can't tell you a gear from a schmeckle—I have no clue. And it's completely unnecessary, actually, in the world that we live in. That's why you hire engineers. You have to keep your eye on the big picture, otherwise you'll never get there. And so I understand certain things based on a little bit of this, a little bit of that. It's sort of like [Sony chief executive] Howard Stringer. If you sit down and talk with Howard, he'll tell you, "Look, I'm not trained. I don't know a lot about business and stuff like that, but I have a point of view."

L.G.: Now he tells us!

G.S.: Oh, no, he was always very clear, and you want to get a guy like that who isn't concerned with the minutiae. You know, the captain of the ship is not going to be able to fix the ship's engine if it breaks, and can't tell you how it works, but he knows where he's going.

L.G.: Let me ask you about your whole Kiss operation and the licensing. You have 1,000 products that are licensed, as you say, everything from condoms to caskets. Are you licensing new products all the time?

G.S.: All the time. And it's 3,000 products!

PREV 4 of 7 NEXT