Forbes USA 20 January 2014 (e-magazine full)

INTRODUCING A CAMERA

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2 | FORBES JANUARY 20, 2014

contents — JAnUARY 20, 2014 VoLUMe 193 nUMBeR 1

88 | neXt-generation

entrepreneurs

Four hundred and f fty

faces of the future.

11 | FAct & cOmmENt

by steve forbes

The lies continue.

lEAdERBOARd

14 | ScOREcARd

2013: a very good year.

16 | BEiNG REEd hAStiNGS

The man running the show at Netfl ix has a story

that any screenwriter would be proud of.

18 | thE YEAR’S hOttESt StARtUpS

A panel of VCs and entrepreneurs selected these

businesses from more than 300 contenders.

Plus: FORBES makeover.

20 | thE mOSt OvERpAid ActORS

Adam Sandler tops the list.

Plus: Up-And-Comers.

22 | ActivE cONvERSAtiON

A CEO eggs on the haters.

thOUGht lEAdERS

24 | cURRENt EvENtS

by paul johnson

Dealing with Iran: impossible?

26 | cApitAl FlOwS

by george leef

More college does not beget more

economic prosperity.

cover photograph by michael grecco for forbes

78 | the young and the reckless

Is Snapchat more than Silicon Valley’s

next vanishing act?

FORBES

30

UnDeR

30

IBM Cloud supports 24 of the

top 25 Fortune 500 companies.

When you’re among the highest-performing businesses in the world,

you can’t afford to roll the dice on underperforming alternatives.

That’s why more and more of the best companies are tapping into

100-plus Software as a Service (SaaS) business solutions in the

IBM Cloud. Start powering your cloud at ibm.com/getstarted

This is Cloud on a Smarter Planet.

IBM, ibm.com, Let’s Build a Smarter Planet, Smarter Planet and their logos are trademarks of IBM Corp., registered in many jurisdictions worldwide. See current list at

ibm.com/trademark. ©International Business Machines Corp. 2013.

4 | FORBES JANUARY 20, 2014

contents — JAnUARY 20, 2014

28 | iNNOvAtiON RUlES

by rich karlgaard

Enduring success: soft-edge excellence.

StRAtEGiES

30 | thE BiGGESt BEt EvER

George Soros, John Paulson and Leon

Cooperman are facing of against Sheldon Adelson

over the future of gambling in America.

by nathan vardi

34 | thE BiG EASY’S

mOviE mONEY pit

Louisiana politicians decided handouts

would turn the state into a Tinseltown rival.

Now they’re stuck with them.

by dorothy pomerantz

tEchNOlOGY

38 | iNSidE A BEAtiNG

SilicON hEARt

Designers have used computers for years to build

elaborate machines. But what about model￾ing complex experiences? Dassault Systèmes is

leading the charge.

by joann muller

43 | chiNA BitES iNtO BitcOiN

A speculative frenzy turned BTC China

into the world’s biggest Bitcoin exchange.

Then Beijing dropped the boom.

by kashmir hill

ENtREpRENEURS

46 | SEcONd liFE

Reggie Aggarwal almost lost his event

platform to bad luck and overspending.

Here’s how he clawed his way past $1 billion.

by karsten strauss

50 | REAdY, FiRE, Aim

TrackingPoint makes a $27,500 rife

so smart that it can’t miss.

So why has the company been misfring?

by abram brown

iNvEStiNG

54 | tURN dOctOR BillS iNtO

REtiREmENt iNcOmE

Creating super-IRAs out of health

savings accounts.

by william baldwin

56 | mONEY FROm NOthiNG

Looking for high yields? Consider buying the

funds that sell the call options on your stocks.

by john dobosz

57 | pORtFOliO StRAtEGY

by ken fisher

A big (bull) surprise for 2014.

58 | iNvEStOR chEckUp

by john buckingham

Beating back the bubble babble.

34 | it’s a flop

Louisiana’s Hollywood

tax-break horror show.

30 | high rollers,

high stakes

A bevy of billionaires battle

over online gambling.

43 | the

forbidden

coin

China’s Bitcoin

crackdown is

dashing the

dreams of a

cryptocurrency

entrepreneur.

50 | under the gun

Profting from a futuristic

frearm is a tricky shot.

46 | saving cvent

In the event of emergency,

reinvent.

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6 | FORBES JANUARY 20, 2014

contents — JAnUARY 20, 2014

60 | iNtRiNSic vAlUE

by david pearl

Cap ex comes out of the closet.

FEAtURES

72 | REiNvENtiNG wAll StREEt

Troubled UBS has been transformed into a wealth

management juggernaut.

by halah touryalai

30 UNdER 30

78 | NOw YOU SEE thEm...

Will Snapchat cofounders Evan Spiegel and Bobby

Murphy become the youngest self-made

billionaires ever—or will Snapchat fade

into business infamy?

by j.j. colao

88 | 30 UNdER 30 liSt

Introducing the brightest stars under the

age of 30 in 15 diferent felds.

edited by caroline howard and michael noer

liFE

104 | pARAdiSE 2.0

Can Larry Ellison model the future on the

Hawaiian Island of Lana’i?

by laurie werner

112 | thOUGhtS

On New Year’s diets.

ExclUSivE!

BRUNO mARS’

30 UNdER 30 plAYliSt

If you really do want to be a billionaire, start with

these 22 songs, handpicked by our guest DJ,

Grammy-winner (and 30 Under 30 nominee)

Bruno Mars, to enjoy while reading this issue.

to listen along, go to forbes.com/under30.

“Move On Up” - Curtis Mayfeld

“Mirror in The Bathroom” - The English Beat

“More Than a Woman” - Bee Gees

“Devil’s Pie” - D’Angelo

“Waters of Nazareth” - Justice

“God Only Knows” - The Beach Boys

“Shake a Lil’ Somethin’ ” - 2 Live Crew

“Little Red Rooster” - Luther Allison

“Am I High” - N.E.R.D

“Butter” - A Tribe Called Quest

“Da’ Dip” - Freak Nasty

“Me Name Jr. Gong” - Damian Marley

“Kung Fu Fighting” - Carl Douglas

“All Me” - (feat. 2 Chainz & Big Sean)

“Get On the Floor” - Michael Jackson

“Animal” - Miike Snow

“Somebody to Love Me” - Mark Ronson & The

Business Intl.

“Won’t Fade Away” - Lewis Taylor

“Salute To Kareem” - Red Hot Chili Peppers

“Midnight Rider” - The Allman Brothers Band

“Sweat (A La La La La Long)” - Inner Circle

“Young Girls” - Bruno Mars

72 | the new ubs

Winning the war for the

wallets of the world’s

wealthiest.

54 | it’s what the

doctor didn’t order

How to use an HSA to

play the stock market

triple tax free.

104 | ellison’s eden

Is economic viability a

forbidden fruit for the tech

honcho’s Hawaiian hideaway?

95 | super bowl mvp

Bruno Mars’ halftime

performance could be

an even bigger hit than

his latest album—if the

weather cooperates.

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vP, InvEsTIng EDITOR

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Dan Bigman – Business, Tom Post – Entrepreneurs, Bruce Upbin – Technology

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ExECUTIvE DIRECTOR, DIgITal PROgRaMMIng sTRaTEgy

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Tim W. Ferguson FORbEs asIa

Kerry A. Dolan, Connie Guglielmo, Kashmir Hill sIlICOn vallEy

Janet Novack WasHIngTOn

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Mark Decker, John Dobosz, Luisa Kroll, Deborah Markson-Katz DEPaRTMEnT HEaDs

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bUsInEss

Mark Howard CHIEF REvEnUE OFFICER

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Charles Yardley PUblIsHER & ManagIng DIRECTOR FORbEs EUROPE

Nina La France sEnIOR vP, COnsUMER MaRkETIng & bUsInEss DEvElOPMEnT

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FOUnDED In 1917

B.C. Forbes, Editor-in-Chief (1917-54)

Malcolm S. Forbes, Editor-in-Chief (1954-90)

James W. Michaels, Editor (1961-99)

William Baldwin, Editor (1999-2010)

8 | FORBES JANUARY 20, 2014

FORBES

EDITOR-In-CHIEF IN BRIEF

Steve Forbes

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jaNuaRy 20, 2014 — volumE 193 NumBER 1

The Social Network

On Our New App

by lEWIs D’vORkIn

What’s a magazine? At FORBES we think it’s an experi￾ence, not sheets of paper. Increasingly, consumers do, too.

It’s about turning, clicking, tapping or fipping to discover,

read, learn or be entertained. These actions seem natural.

The magazine we’ve produced for 96 years has nearly

1 million subscribers. On Flipboard, only a few years old,

our stories attracted 1.8 million readers in October and

racked up 44.5 million fips. Still, magazine experiences

must evolve for new behaviors. In the age of social media

they need to be far more social.

Most magazines remain solitary experiences. A reader’s

relationship is with the brand, the editors who pick the

stories and the authors who write them. There’s never

been a way for readers to easily share, connect or be part of

a community.

We’re changing all that. Last January we launched an

iPad app that made it easy to clip and share text, photos,

charts or whatever. Pinch the screen with two fngers.

Select and frame the content. Tap a Twitter or LinkedIn

or Facebook button to share. With this issue we’re taking

a big leap forward. Now FORBES enthusiasts can be part

of a frst-of-its-kind mini social network. Clippings are

included in an image stream for all app subscribers to see.

Tap any clip in the stream and go directly to the content—

or share it again. Editors select stories for each issue. The

community curates them for others.

“Stream,” as it’s called, was developed by MAZ, our app

partner. A startup founded by ex-Apple and ex-Adobe de￾signers and engineers, MAZ understands the challenges of

building new experiences with economic efciency. Most

media companies hire large, expensive stafs to re-create

their magazines for tablets and smartphones. The MAZ

solution repurposes PDFs used in print magazine produc￾tion by layering on actionable buttons. Last March our

Billionaires issue contained 2,000 links to Forbes.com posts.

“If you think about it,” says MAZ founder Paul Canetti,

“we’ve been sharing content the same way for 20 years.

Copy text, paste text, get text—words or links. ‘Stream’ is

part of the online world’s massive shift from text-based

media to visual-based media.”

For this 30 Under 30 issue on iPads and iPhones, there’s

audio, too. Bruno Mars has curated a 22-song playlist to

accompany this special issue. Clip, share, join the stream—

and listen in. It’s a special experience. F