welcome back to segment 3 with kevin
o’leary all right two words Steve Jobs
the toughest bastard you’ve ever met he
is tough he was you know I went to his
his saw I called him up I said to him
listen Steve you have two and a half
percent of the market and we are you’re
nuts right what year is this
this is 1998 before Apple ruled the
universe they were in a wobbly situation
two and a half percent share my
development cost for 54 million a year
for his titles you know I was the number
one title on the Mac platform for
reading in math and I called him up and
I said look Steve I need to meet with
you the economics not working for me he
said sure I’ll take a meeting with you
so we go out to Cupertino and job shows
up with probably seven other executives
in the room I’m there with my head sales
guys it’s at Steve thanks for coming out
I’d have a very simple request you’re
gonna have to give me fifty four million
dollars if you want me to develop the
next cycle of titles for the Mac because
it’s not there’s no economics that make
sense for me he looked at me and he just
started to braid me for all ik every
swear word in the world just he said are
you out of your beep and they just got
up and out of his charity circled around
and said you be some Fifi Pete I’m
looking at him I’m stunned like the guy
is just beating me up verbally I’m used
to hard time so you know whatever I said
hey listen this is all great but are you
gonna give me the 54 minute laughs and
he said just abusive like crazy I said
okay this is over I walk out to the
parking lot and there’s one of these
windows you have to roll up to the
bottom and he rolls up he’s yelling at
me from down in the parking lot hey I
looked up and said so do we have a deal
or not call me tomorrow like the guy
just wanted to beat me up he was I guess
frustrated that he had a lot of pressure
all that good so anyways at the end of
the day we remained in
number one player on the Mac platform we
built a business often years later I met
Wozniak and who was a completely
different kind of guy but I understand
how jobs work there’s a certain amount
of fear in that organization for him I
mean he tears into people after he looks
at the AI air or anything of a product
and he’ll rip their heads off yeah like
people don’t want to get in an elevator
with them okay so you have this line
about if you don’t come to work on
Saturday don’t bother coming to work on
Sunday or Monday are you serious or do
you value some balance for your
employees no no there’s no balance we
work for me and look here’s the whole
point
see I’ve discovered that this is the way
it works if you want balance go work for
a company that’s nine-to-five buy a dog
go see your kid play baseball but you’re
never gonna get rich you’ll work for me
generally speaking you get options in
the company I expect you to work 24/7
like an animal until we’re successful so
that you can cash out you’re trying to
get some form of freedom when you work
for me so my employees only when I meet
with them say look here’s how we work if
this is gonna work for you give it a
shot maybe you work for three years four
years you cash out that’s great don’t
come here to make friends I’m not gonna
be your friend come here to make money
it’s that simple not everybody can take
that but the ones that do come in we
form powerful teams
we’re vicious competitors that’s the
kind of guy I want work for man or woman
okay so one thing is you have been
called a lot of bad words you’re right I
will say this everyone has an ego it’s
how you manage it but I did not detect
the single hint of arrogance in this
book which is I think surprising people
would have expected you to be somewhat
arrogant but my question is you did one
thing with Michael Parekh which I think
even I’m not man enough to do which is
when you brought him on to be your
partner you made him CEO and an equal
partner now mind you you had vested I
guess to some extent so it was easier to
do that but that’s a big thing to do I
mean because the company had been around
so what is your view on partnerships and
why are they so important so here’s the
way I look at it you know the key to
success as an entrepreneurs not to
understand your strengths it’s to
understand your weaknesses
now here’s what I knew I was weak at
logistics manufacturing and shipping
logistics bores the crap out of me
I just not interested in it when Walmart
came on board and said look we’re gonna
change this whole
we’re gonna make you our guys in
education software we had the challenge
of moving 80 million units I can’t do
that that’s not my skill set Michael
Parekh on the other hand is myopically
focused at that kind of thing and I knew
that he’s one of our shareholders I went
and approached me said listen why don’t
you leave your PE firm okay I’ll give up
the title of CEO you’re gonna be a CEO
you’re number one role is going to be
logistics because if we are not
successful at this we’re gonna fail this
is the only thing that matters is
shipping these units all around the
world he looked at me and said what’s in
it for me I said you know what I own a
ton of stock lots and lots of it I’ll
make a deal with you I’ll make you us
equal partners and this is how I’ll talk
in the book and writing it I looked at
every transit transaction where I’ve
made money not just learning company
storage now the O’Leary funds deals
before that all the deals where I made
money were partnerships all the ones
where I had catastrophic failures are
things I tried to do myself so I’ve
learned now that it’s much better to
partner with with somebody who actually
fills in the holes or many people yeah
many people of course but I in the case
of Perak there was actually three people
myself
Perik and Scott Murray so Parekh was
logistics I’m sales and marketing and
Murray’s the CFO we were the most feared
management team in the consumer software
business if we got if we called you
you know bad times are coming your way
because either we’re buying your company
or we’re going to compete with you you
mentioned word if you’re better to be
respected or feared both respect and
Florida know both on this no no it’s
over spirals the reason people respect
you is they fear you that’s what happens
okay actually are the same thing okay
but again only one it can’t be both it
what’s more important who you know or
what you know that’s a good one who you
know okay you’ve eaten and I say this
very respectfully but you talk about
them in the book you’ve eaten cat food
amazing story as a former sales guy
myself and you scraped gum off the floor
which one changed your life more when
you look back you’re like scraping gum
off the floor cuz I got fired and it
changed the direction for me forever
fair enough fair enough you say money
goes to bad people but not to bad ideas
which i think is a very
true and genius thing to say expand on
that on you so the concept is that you
know people say well you have to be
really nice guy to make money that’s not
true many assholes make lots of money
money goes to the path of least
resistance it doesn’t care about your
personality it’s looking for an
opportunity to grow and expand with the
least risk with the least you know
resistance to success so I’ve learned
that I work with many people that I
would never be friends with but I make
money with them and I respect them for
that many many many people I can
certainly keep the emotion of that
decision you mentioned that altruism and
capitalism have to coexist my question
is I see that to some extent but in your
mind does everything have to make money
yes everything everything has to make
money or have performance metrics think
about even a charity yeah I talked about
the five four five sure my strategy is
very simple because I get bombarded with
requests to give away money and happy to
do so I take the same percentage every
year of my income after tax and I pick
five charities for five years and they
get the same amount every year for five
years I mean that five years is over I
get five new charities and that way I
could stay focused make a difference
they know that they’re gonna have some
kind of return from me and it’s and that
way I can I can do this in a way that
I’ve got that deal done and I know it’s
gonna work agree or disagree greed is
good which is a quote from the fictional
character Gordon Gekko you talk about
greed is good but do you agree with
disagree I did I agree and I think greed
is not only good it’s wonderful it’s
wonderful care to expand next question
okay let’s go a nice question there’s a
few more things there’s a quote from
douglas iva store former CFO and brief
CEO of coca-cola he basically says quote
when your competitor is drowning stick a
hose in his mouth
end quote do you agree or disagree with
that I agree but I would pour boiling
oil into that holes ouch
alright next quote dick Parsons former
chairman of Time Warner current current
chairman of Citigroup quote when you
negotiate leave a little something on
the table end quote in other words don’t
get so much like every penny you could
because it’s a short life you’re gonna
run into the same business people and if
they fuel you’ve had the massive upper
hand and it wasn’t a fair transaction
they’re not really going to want to deal
with you again is Dick is mr. Parsons
right or wrong well he’s right in some
ways but I look at a different way the
best deals are ones where both sides are
unhappy
Oh interesting okay not happy I’m happy
both are unhappy that expand why because
if you’re both unhappy
you’ve both left both sides lots on the
table in other words you never got what
you wanted either the other side that’s
a good deal and generally a beginning of
a great partnership
what is stronger and this I think is
more investing question but it would
apply to management entrepreneurship as
well what is a stronger feeling greed or
fear fear I think fear is a better
motivator than greed is the stock market
efficient in terms of information do you
have massively more access to
information than regular drove who’s
looking at investing in IBM or Apple no
the the market is not accusing you of
Enzo
I don’t do insider trading anyways I
mean I don’t actually trade at all
because I’m a fiduciary well Larry fine
so I provide you know prohibited from
trading
so I look at it this way the market has
become extremely volatile because
there’s lots of transparency and lots of
information and we now have high-speed
trading programs that do this so I
anticipate that we’re gonna have two or
three percent moves every day for the
rest of my life in the market okay you
talk about business being in your DNA
you’ve also heard about the line about
you know Warren Bennis professor at USC
he says leaders are they born or they’re
made so my first question is you are a
hell of a salesperson are salespeople
born or are they made well everybody is
born but the way I look at it is great
salespeople are able to live with very
strict metrics so when I hire all my
salespeople and I what I try and look
for in them is can they get up in the
morning and say I want to go to bed at
night richer than I woke up that’s the
hallmark of a great salesman because
they’re paid on commissions that’s how
it works you know sales is tough and
only two-thirds of your sales force are
gonna work out long term most of my
firings occur in the sales area because
it’s clear to me it’s not working it’s a
combination of relationships a little
art a little science and in an
organization the people I respect the
most are not the CFOs the CFO’s it’s the
salespeople that’s where I have a kid
minspeak
couple more questions don’t you say
don’t let others determine your worth I
totally get that now let me ask you
something your best sales guy walks into
your office and says boss it’s time
for me to go start my own company do you
a try to pan so much to stay be change
his mind or see say I want to invest in
you or D you’re a trader you’re not
loyal to get out of my own no no but you
know I look kind of pour hot oil on no
no if people don’t want to stay I never
try and keep them that doesn’t make
sense I mean if he’s found a better
opportunity but I would never invest in
a Salesman because they’re not generally
the best managers they’re the best
salesmen never promote your best
salesman to run sales yeah salesman
which is a different different breed
okay final questions are sort of sub
questions regarding your investing right
track record of on Dragon’s Den and
Shark Tank so how many companies have
you invested on the two shows oh about
20 by now okay 20 how much money have
you invested in all of them I’d have to
add it up the deals are in size the
height the biggest one was 2 million and
the smallest one was five thousand bucks
what did you get what percentage for the
2 million that deals a royalty deal so
it’s 51% but here’s something about
thinking this statistics because you’ll
guess this is an interesting line let me
tell you the the stats venture investing
this is gonna be shocking to you since
from the from 1992 to 2001 in 10 deals
got liquid and made their shareholders
money they hear me on this since 2002 to
today it’s 1 in 25 the returns on
venture investing actually negative on
Dragon’s Den and Shark Tank every time
as a handshake when you see a deal like
that only 1 in 3 of those clothes
because two out of three knowledge
survived due diligence of the investment
portfolio including the British the
American and the Canadian where there
are hundreds of deals done one in 17 has
made money I don’t doubt that its
venture capital investing but I get a
sense from the little I’ve seen of the
show on what I’ve read and what I’ve
heard it’s more almost like a bank loan
or like asteroid well no it’s changing
now because banks aren’t lending so real
companies are coming on think of
Dragon’s Den is this it’s the venture
capital it’s the American Idol venture
can yeah if you get your product on
there two million people see it four
times a week it’s like home shopping
your sales are going up thirty five
percent so I’d argue that I’d rather
invest in a company that’s a consumer
good or service and have it on dragons
then get the free advertising but making
money with it now
the deals are being tailored with
royalties or some percentage of cash
flow pay back to the investor form a
factor yep so okay I want to just two
more sub questions on this any exits yet
from your investment on the shows yes
there was one called
IQ zone in season 2 which was an app one
of the early apps for Nokia cell phones
that was an exit it was a good outcome
there’s another one that’s coming along
very very well called diggit gloves
which is from two seasons ago went from
zero to four on a thousand in sales this
thing is taking off it’s building a
brand
the rest are living dead basically you
know I’m writing checks and that frankly
that’s gonna be the ratio it’s gonna be
two in eighteen all right we could chat
for hours fascinating
you do a great job of telling your life
story is probably from a buy up like
biography perspective this book was
probably more entertaining than most
BIOS and from the money and business
lessons it was great cold hard truth
it’s available in bookstores online many
great places kevin o’leary thank you
very much thank you very much
o’leary all right two words Steve Jobs
the toughest bastard you’ve ever met he
is tough he was you know I went to his
his saw I called him up I said to him
listen Steve you have two and a half
percent of the market and we are you’re
nuts right what year is this
this is 1998 before Apple ruled the
universe they were in a wobbly situation
two and a half percent share my
development cost for 54 million a year
for his titles you know I was the number
one title on the Mac platform for
reading in math and I called him up and
I said look Steve I need to meet with
you the economics not working for me he
said sure I’ll take a meeting with you
so we go out to Cupertino and job shows
up with probably seven other executives
in the room I’m there with my head sales
guys it’s at Steve thanks for coming out
I’d have a very simple request you’re
gonna have to give me fifty four million
dollars if you want me to develop the
next cycle of titles for the Mac because
it’s not there’s no economics that make
sense for me he looked at me and he just
started to braid me for all ik every
swear word in the world just he said are
you out of your beep and they just got
up and out of his charity circled around
and said you be some Fifi Pete I’m
looking at him I’m stunned like the guy
is just beating me up verbally I’m used
to hard time so you know whatever I said
hey listen this is all great but are you
gonna give me the 54 minute laughs and
he said just abusive like crazy I said
okay this is over I walk out to the
parking lot and there’s one of these
windows you have to roll up to the
bottom and he rolls up he’s yelling at
me from down in the parking lot hey I
looked up and said so do we have a deal
or not call me tomorrow like the guy
just wanted to beat me up he was I guess
frustrated that he had a lot of pressure
all that good so anyways at the end of
the day we remained in
number one player on the Mac platform we
built a business often years later I met
Wozniak and who was a completely
different kind of guy but I understand
how jobs work there’s a certain amount
of fear in that organization for him I
mean he tears into people after he looks
at the AI air or anything of a product
and he’ll rip their heads off yeah like
people don’t want to get in an elevator
with them okay so you have this line
about if you don’t come to work on
Saturday don’t bother coming to work on
Sunday or Monday are you serious or do
you value some balance for your
employees no no there’s no balance we
work for me and look here’s the whole
point
see I’ve discovered that this is the way
it works if you want balance go work for
a company that’s nine-to-five buy a dog
go see your kid play baseball but you’re
never gonna get rich you’ll work for me
generally speaking you get options in
the company I expect you to work 24/7
like an animal until we’re successful so
that you can cash out you’re trying to
get some form of freedom when you work
for me so my employees only when I meet
with them say look here’s how we work if
this is gonna work for you give it a
shot maybe you work for three years four
years you cash out that’s great don’t
come here to make friends I’m not gonna
be your friend come here to make money
it’s that simple not everybody can take
that but the ones that do come in we
form powerful teams
we’re vicious competitors that’s the
kind of guy I want work for man or woman
okay so one thing is you have been
called a lot of bad words you’re right I
will say this everyone has an ego it’s
how you manage it but I did not detect
the single hint of arrogance in this
book which is I think surprising people
would have expected you to be somewhat
arrogant but my question is you did one
thing with Michael Parekh which I think
even I’m not man enough to do which is
when you brought him on to be your
partner you made him CEO and an equal
partner now mind you you had vested I
guess to some extent so it was easier to
do that but that’s a big thing to do I
mean because the company had been around
so what is your view on partnerships and
why are they so important so here’s the
way I look at it you know the key to
success as an entrepreneurs not to
understand your strengths it’s to
understand your weaknesses
now here’s what I knew I was weak at
logistics manufacturing and shipping
logistics bores the crap out of me
I just not interested in it when Walmart
came on board and said look we’re gonna
change this whole
we’re gonna make you our guys in
education software we had the challenge
of moving 80 million units I can’t do
that that’s not my skill set Michael
Parekh on the other hand is myopically
focused at that kind of thing and I knew
that he’s one of our shareholders I went
and approached me said listen why don’t
you leave your PE firm okay I’ll give up
the title of CEO you’re gonna be a CEO
you’re number one role is going to be
logistics because if we are not
successful at this we’re gonna fail this
is the only thing that matters is
shipping these units all around the
world he looked at me and said what’s in
it for me I said you know what I own a
ton of stock lots and lots of it I’ll
make a deal with you I’ll make you us
equal partners and this is how I’ll talk
in the book and writing it I looked at
every transit transaction where I’ve
made money not just learning company
storage now the O’Leary funds deals
before that all the deals where I made
money were partnerships all the ones
where I had catastrophic failures are
things I tried to do myself so I’ve
learned now that it’s much better to
partner with with somebody who actually
fills in the holes or many people yeah
many people of course but I in the case
of Perak there was actually three people
myself
Perik and Scott Murray so Parekh was
logistics I’m sales and marketing and
Murray’s the CFO we were the most feared
management team in the consumer software
business if we got if we called you
you know bad times are coming your way
because either we’re buying your company
or we’re going to compete with you you
mentioned word if you’re better to be
respected or feared both respect and
Florida know both on this no no it’s
over spirals the reason people respect
you is they fear you that’s what happens
okay actually are the same thing okay
but again only one it can’t be both it
what’s more important who you know or
what you know that’s a good one who you
know okay you’ve eaten and I say this
very respectfully but you talk about
them in the book you’ve eaten cat food
amazing story as a former sales guy
myself and you scraped gum off the floor
which one changed your life more when
you look back you’re like scraping gum
off the floor cuz I got fired and it
changed the direction for me forever
fair enough fair enough you say money
goes to bad people but not to bad ideas
which i think is a very
true and genius thing to say expand on
that on you so the concept is that you
know people say well you have to be
really nice guy to make money that’s not
true many assholes make lots of money
money goes to the path of least
resistance it doesn’t care about your
personality it’s looking for an
opportunity to grow and expand with the
least risk with the least you know
resistance to success so I’ve learned
that I work with many people that I
would never be friends with but I make
money with them and I respect them for
that many many many people I can
certainly keep the emotion of that
decision you mentioned that altruism and
capitalism have to coexist my question
is I see that to some extent but in your
mind does everything have to make money
yes everything everything has to make
money or have performance metrics think
about even a charity yeah I talked about
the five four five sure my strategy is
very simple because I get bombarded with
requests to give away money and happy to
do so I take the same percentage every
year of my income after tax and I pick
five charities for five years and they
get the same amount every year for five
years I mean that five years is over I
get five new charities and that way I
could stay focused make a difference
they know that they’re gonna have some
kind of return from me and it’s and that
way I can I can do this in a way that
I’ve got that deal done and I know it’s
gonna work agree or disagree greed is
good which is a quote from the fictional
character Gordon Gekko you talk about
greed is good but do you agree with
disagree I did I agree and I think greed
is not only good it’s wonderful it’s
wonderful care to expand next question
okay let’s go a nice question there’s a
few more things there’s a quote from
douglas iva store former CFO and brief
CEO of coca-cola he basically says quote
when your competitor is drowning stick a
hose in his mouth
end quote do you agree or disagree with
that I agree but I would pour boiling
oil into that holes ouch
alright next quote dick Parsons former
chairman of Time Warner current current
chairman of Citigroup quote when you
negotiate leave a little something on
the table end quote in other words don’t
get so much like every penny you could
because it’s a short life you’re gonna
run into the same business people and if
they fuel you’ve had the massive upper
hand and it wasn’t a fair transaction
they’re not really going to want to deal
with you again is Dick is mr. Parsons
right or wrong well he’s right in some
ways but I look at a different way the
best deals are ones where both sides are
unhappy
Oh interesting okay not happy I’m happy
both are unhappy that expand why because
if you’re both unhappy
you’ve both left both sides lots on the
table in other words you never got what
you wanted either the other side that’s
a good deal and generally a beginning of
a great partnership
what is stronger and this I think is
more investing question but it would
apply to management entrepreneurship as
well what is a stronger feeling greed or
fear fear I think fear is a better
motivator than greed is the stock market
efficient in terms of information do you
have massively more access to
information than regular drove who’s
looking at investing in IBM or Apple no
the the market is not accusing you of
Enzo
I don’t do insider trading anyways I
mean I don’t actually trade at all
because I’m a fiduciary well Larry fine
so I provide you know prohibited from
trading
so I look at it this way the market has
become extremely volatile because
there’s lots of transparency and lots of
information and we now have high-speed
trading programs that do this so I
anticipate that we’re gonna have two or
three percent moves every day for the
rest of my life in the market okay you
talk about business being in your DNA
you’ve also heard about the line about
you know Warren Bennis professor at USC
he says leaders are they born or they’re
made so my first question is you are a
hell of a salesperson are salespeople
born or are they made well everybody is
born but the way I look at it is great
salespeople are able to live with very
strict metrics so when I hire all my
salespeople and I what I try and look
for in them is can they get up in the
morning and say I want to go to bed at
night richer than I woke up that’s the
hallmark of a great salesman because
they’re paid on commissions that’s how
it works you know sales is tough and
only two-thirds of your sales force are
gonna work out long term most of my
firings occur in the sales area because
it’s clear to me it’s not working it’s a
combination of relationships a little
art a little science and in an
organization the people I respect the
most are not the CFOs the CFO’s it’s the
salespeople that’s where I have a kid
minspeak
couple more questions don’t you say
don’t let others determine your worth I
totally get that now let me ask you
something your best sales guy walks into
your office and says boss it’s time
for me to go start my own company do you
a try to pan so much to stay be change
his mind or see say I want to invest in
you or D you’re a trader you’re not
loyal to get out of my own no no but you
know I look kind of pour hot oil on no
no if people don’t want to stay I never
try and keep them that doesn’t make
sense I mean if he’s found a better
opportunity but I would never invest in
a Salesman because they’re not generally
the best managers they’re the best
salesmen never promote your best
salesman to run sales yeah salesman
which is a different different breed
okay final questions are sort of sub
questions regarding your investing right
track record of on Dragon’s Den and
Shark Tank so how many companies have
you invested on the two shows oh about
20 by now okay 20 how much money have
you invested in all of them I’d have to
add it up the deals are in size the
height the biggest one was 2 million and
the smallest one was five thousand bucks
what did you get what percentage for the
2 million that deals a royalty deal so
it’s 51% but here’s something about
thinking this statistics because you’ll
guess this is an interesting line let me
tell you the the stats venture investing
this is gonna be shocking to you since
from the from 1992 to 2001 in 10 deals
got liquid and made their shareholders
money they hear me on this since 2002 to
today it’s 1 in 25 the returns on
venture investing actually negative on
Dragon’s Den and Shark Tank every time
as a handshake when you see a deal like
that only 1 in 3 of those clothes
because two out of three knowledge
survived due diligence of the investment
portfolio including the British the
American and the Canadian where there
are hundreds of deals done one in 17 has
made money I don’t doubt that its
venture capital investing but I get a
sense from the little I’ve seen of the
show on what I’ve read and what I’ve
heard it’s more almost like a bank loan
or like asteroid well no it’s changing
now because banks aren’t lending so real
companies are coming on think of
Dragon’s Den is this it’s the venture
capital it’s the American Idol venture
can yeah if you get your product on
there two million people see it four
times a week it’s like home shopping
your sales are going up thirty five
percent so I’d argue that I’d rather
invest in a company that’s a consumer
good or service and have it on dragons
then get the free advertising but making
money with it now
the deals are being tailored with
royalties or some percentage of cash
flow pay back to the investor form a
factor yep so okay I want to just two
more sub questions on this any exits yet
from your investment on the shows yes
there was one called
IQ zone in season 2 which was an app one
of the early apps for Nokia cell phones
that was an exit it was a good outcome
there’s another one that’s coming along
very very well called diggit gloves
which is from two seasons ago went from
zero to four on a thousand in sales this
thing is taking off it’s building a
brand
the rest are living dead basically you
know I’m writing checks and that frankly
that’s gonna be the ratio it’s gonna be
two in eighteen all right we could chat
for hours fascinating
you do a great job of telling your life
story is probably from a buy up like
biography perspective this book was
probably more entertaining than most
BIOS and from the money and business
lessons it was great cold hard truth
it’s available in bookstores online many
great places kevin o’leary thank you
very much thank you very much
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