If you think you can have a balanced life as an entrepreneur, that’s just all bullshit.
What I’ve learned about business over all these years and all these deals, it’s never as good as it sounds, but it’s never as bad as it looks either.
– Kevin O’Leary
Kevin O’Leary’s Top 10 Rules for Success Vol. 2
Evan: Hello believe nation, I’m Evan Carmichael. My one word is believe and I believe that entrepreneurs are going to solve all of the major problems of the world.
So to help you on your journey, today we’re going to learn from Shark Tank investor, Kevin O’Leary, and my take on his Top 10 Rules For Success, Volume Two.
Rule number one is my personal favorite, and I’d love to know which one you guys like the best. And as always guys, as you’re watching, if you hear something that really resonates with you, please leave it down the comments below, put quotes around it so other people can be inspired, and when you write it down, it’s much more likely to stick for yourself as well. Enjoy.
Rule #1: Work For Yourself
I was working once at an ice-cream parlor when I was about 15 years old, my first real job. And on the second day, I was asked to scrape the gum off between the Mexican tiles on the floor, and I said to the woman who owned the store, it was called Magoo’s Ice-Cream Parlor, you didn’t hire me to scrape gum, you hired me to scoop ice-cream.
And this girl in the shoe store across the way that’s looking at me, I don’t want her to see me scraping the gum. And she said, “What are you talking about? “I own this store, “I’ll do anything I want with you. “Get down on your knees and scrape that gum.”
And I said, “I’m not doing it.” She said, “You’re fired.” Last job I ever had. I owe that woman everything. I don’t like to work for people. Many of you in here I hope inherit that. There’s nothing wrong with it. If you want to control your own destiny, you work for yourself.
That’s how it works. I’m trying to inspire those of you who are on the tipping point. Take the chance, you’re young. Go for it. There’s nothing better than being able to wake up in the morning, 10 years or 20 years from now, and do whatever you like. It’s about freedom.
That’s what matters. I’m not saying being an employee’s bad, but believe me, being an entrepreneur is better. I’m a little biased. `
Rule #2: Focus On What Matters
Unfortunately, one of the great benefits of technology’s productivity. One of the big down sides, it’s incredibly distracting. People check their Twitter account or they’ll answer a Facebook message, or they’ll do something that has nothing to do with making money.
And the reason you go to work in the morning is to make money. That’s what you’re there for. All the other wonderful things you can do with your time are based on your ability to create an income for yourself and your family. So why spend any time doing all that crap, which is distracting?
And so that’s the number one thing I find in my companies is when you see someone failing and you look at how they manage their time, you’ll see right there what’s going on. They’re not focused on what matters.
Rule #3: Appreciate Genius
Last time we were here we talked about your meeting with Steve Jobs, and I read a lot about Steve Jobs since he passed away, and people talk about he was so unbelievably difficult and tough in a way.
Yes he was.
Would you characterize him that way, yeah?
He was a prick.
Yeah? But do you have to be that way to accomplish what he’s done?
You know, I respect him for the tremendous success and the vision he had. I was proud to work for him, because that’s what I was doing, supplying him educational software.
I always thought in person he could’ve been a nicer guy, but would that have changed the outcome? Maybe. He was a genius, and I remember him saying, I asked him about, “Well, maybe we should do “some market research on this “before we spend two million dollars,” on a particular product we’re doing for Reader Rabbit.
And he said, “We don’t do market research. “We tell them what they want.” and I thought wow, not only is that arrogant, but it’s brilliant.
And it worked.
And so again I said, “Okay big guy, let’s do it.” And it was very successful.
Rule #4: Always Bring Your A-Game
That whatever you do, somebody can do it better. You have to bring your A-game in every single day. There’s nothing unique about any one individual.
What’s unique is their passion, their ability to execute, to meet targets and exceed them. The minute you lose that ability, in capitalism, you’re gone. It’s a fair trade. The engine that makes you rich can take it all away from you. There are no guarantees. I think that’s incredibly important.
Rule #5: Articulate Clearly
What’s a deal that you missed that one of your fellow sharks was able to secure that you look back on and say, “Wow, I didn’t know that one was going to work out that well, “but it’s proven to be a big success.”?
And there is one, and I remember the moment. It was that deal called Sponge Daddy. It was a yellow sponge with a smile in its face. And I thought, “What a piece of crap this is. The guy wanted $500,000 for, like, 50% of it. And Laurie was beside me, you know, the queen of crap, as I like to say.
She’d get the joke if she was here. And she started bidding on it, and I looked over at her and I said, “Are you out of your mind? “This thing is a sponge. “It’s a sponge.” She said, “Leave me alone.”
I said, “No, Laurie, I forbid you to do this. “I can’t watch you kill money like this. “This is a shame. “You’re going to teach America how to waste cash.” She said, “Shut up, I’m doing the deal.” And she did. Sponge Daddy did $50 million in sales last year. It’s a little piece of crap. I mean, that taught me and I have a lot of respect for her now.
That shows you the power of the Shark Tank platform. Simple product, simple message. There’s actually a great corporate lesson to be learned in watching Shark Tank. And I urge anybody that’s listening to this now to think about this for their own career. If you go back and look at six years of data, of all the deals that got funded, regardless to what the product was.
This does not detail the outcome of the company, just the ones that go a check from a shark. What are the common traits or threads? It turns out there’s three. In 100% of the cases, the entrepreneur was able to articulate the idea in 90 seconds or less. Here’s a sponge.
Under cold water it’s hard, scrapes eggs off plates, under warm water you can polish silver. I get it, right? Very simple. Number two: it’s usually a team are able to articulate why they’re right team to execute the business plan. They have a plan. They tell you what it is and they tell you why they’re the accredited managers for it. That’s interesting. You find it in every case with a success.
And here’s the one that really matters. In 100% of the cases, the entrepreneurs knew their numbers inside out. If you would ask them about break even analysis, margin analysis, market share growth, competition, in every answer they had it, they nailed it.
It turns out in corporate America today, and I teach this now, you know, I taught at Norte Dame, at MIT, the graduating cohorts, I explained this to them. When you’re leading, when you want to be a leader, you have to articulate your idea in 90 seconds or less.
You have to explain why you’re the right person to lead, and above all you have to know your numbers. You can see it happen on Shark Tank. It works in the real world too. And frankly Shark Tank is the real world because it’s real capital. So I use that and I teach it, and I think everybody should think about that. Explaining your vision clearly, succinctly, in a short period of time ends up being really important.
Rule #6: Get Financial Freedom
If you think you can have a balanced life as an entrepreneur that’s just all bullshit. There’s some other guy who wants your customer that’s working 25 hours a day.
That’s what I found, and so I don’t even talk about that any more, saying look, it’s a great-
You have to decide. It’s a path. You either are going to control your own destiny, or you’re going to be an employee. They’re both noble. One gives you time to be with your family, one gives you a more balanced life, and the other one is balls to the wall, and the reason you do it is to eventually have personal freedom because you’ve been successful.
And I think most of the people in this room fall into that second category, balls to the walls, and they’re going to make it or they’re not, and that’s why I come here, ’cause I was a kindred spirit. I like to see entrepreneurs that are willing to risk it all, but have to realize there is no balance.
The reason why you do and pursue an entrepreneurial career is to provide financial freedom one day for yourself and your family. The sacrifice is there’s no balance during the period that you’re growing your business. If you’re successful, the reward is financial freedom, which is the essence. I tell the entrepreneurs, “Don’t do it for the greed of money. “Do it for financial freedom.
“Do it for freedom. “Make yourself free one day “so you can do whatever you wish with your time.” And the only way you can do that in our society is you have to be wealthy to do that. And so the rewards of a great entrepreneur are they achieve that wealth and they’re free to do whatever they wish, which may be more entrepreneurship. You don’t know.
Rule #7: Pursue Your Passion
If you’re passionate and you’re successful, you will wake up one day rich. You won’t really be going for the cash, it’ll just happen to you. Everybody I talk to that’s had success doesn’t remember the day they became a millionaire. No idea.
Not important to them. They remember winning. They remember building a business and being successful. Again, the pursuit of freedom manifests itself in passion. That’s really what it’s about.
Rule #8: Be A Skeptic
And to my exposure, most of the business people I’ve met, the successful ones, the CEOs or whatever, they are at their core optimistic. Can you be a pessimist and be a successful entrepreneur? You have to be optimistic?
I think you have to view the world in a way that assumes success, otherwise you’ll never have the energy. Maybe not a pessimist, but a skeptic is a good thing to be, because what I’ve learned about business over all these years and all these deals, it’s never as good as it sounds but it’s never as bad as it looks either.
Every day, I’ve got 32 portfolio companies now, something wildly bad is happening to one of them, and the cellphone rings at six in the morning, and something fantastically great is happening to another one. And it seems to me, the random serendipitous nature of it all is really intriguing to me, because if I could only show the pessimistic or very depressed entrepreneur that is calling me saying, “Oh my goodness, “we just lost Walmart,” or whatever it is, it’s the nightmare of their day, versus, “We just got Walmart,” on the other business.
Well I’m trying to get everybody in the same universe to realize it’s never as bad as it sounds, but never as good either. You have to get up in the morning and go back to work.
Rule #9: Delegate
Great entrepreneurs are able to delegate. The successful women CEOs are remarkably good at this. Remarkably good at it. And the way it works is, Sarah, I’ll give you an example of the way Sarah works. She hires somebody, she sets a goal for 90 days, and gets out of their way.
Gets completely out of their way. Lets them achieve it. It they achieve it she moves them up the organization. If they don’t, they get three tries until they’re out. If you can’t achieve your goals in business, that’s what happens. But her whole thing is let them do the work themselves, let them figure it out. I don’t want to use my time for it, that’s what I hired them for.
Rule #10: Have Fun
What do you want to play? See, if I think-
Kevin O’Leary, you know what I want you to play for me?
I want you to sing This Land Is Your Land.
The classic, pro-labor, political subversive song. We got to bring the lyrics-
I got to tell ya, ’cause I got to have the lyrics, ’cause I’d never sing this thing.
I know, that sounds good.
This is absolutely against everything I am.
Host: I know .
Remember this tune? Starts with a G. Ready? We’re going to go. ♫ This land is your land ♫ This land is my-
I screwed it up, let’s start again. That’s how much I hate this tune.
It sounds good. That’s all it is, right? ♫ This land is your land ♫ This land is my land ♫ From California ♫ To the New York island ♫ Cape
Ooh, I hate this tune.
All right. ♫ This land is your land
Okay, go, go.
Let’s try it again. I want you to sing with me.
Dude, are you crazy?
You’re not getting away with this.
All right, here we go. ♫ This land is your land ♫ This land is my land ♫ From California ♫ To the New York islands ♫ Blah blah-blah blah blah blah ♫ To the Gulf Stream waters
Here we go.
Everybody! ♫ This land was made for you and me
Thank you guys so much for watching. I hope you enjoyed. If you want to get your pick of who I should profile next in the Top Tens, check out the link in the description and go and cast your vote.
I also want to give a quick shout-out to Amy Schmittauer. Amy, thank you so much for picking up a copy of my book, Your One Word, and doing that awesome podcast on your channel, and you Tweeting it out. I appreciate all the support, and I hope you enjoyed the read.
So thank you guys again for watching. I believe in you. I hope you continue to believe in yourself and whatever your one word is. Much love. I’ll see you soon.
Know Your Product
Great entrepreneurs have a tremendous amount of knowledge of what they’re selling. They know a lot about everything, but they better know a lot about what they’re selling. You never want to be caught explaining yourself and not knowing your product. That’s because you’re so passionate you’re spending all your time doing it. That’s exactly what matters.
Be Motivated By Failure
I actually think what motivates entrepreneurs is fear of failure, and this certainly happened to me. You start a deal, it’s not working, you work harder to make it work, you pivot, you figure out what you’re doing wrong. Fear of failure is the ultimate motivation, and I think many , Every entrepreneur has failures.
Go To Win
Your job is to go out into the world and understand who you serve. It is not your responsibility to solve all the societies’ problems. You pay taxes to a government to do that. Your job is to go to war every day and win. To win market share. To salt the earth your competitors walk on.
To steal their customers, and to take their profits and win. That’s your job. And to make profits for your shareholders so they give you more capital to create more jobs, to be more successful, to pay more taxes, to provide the standard of living that we have in America today.
Your job is not to solve everybody’s problem. It’s to solve your customer’s problems, your shareholders problems, your employees problems. I’m very distressed when people tell me a business should give a third of it’s profits to charity. That’s outrageous.
It should give all of it to its shareholders who then give to charity. Think of all the great things that are done today by the Bill Gates of the world, the Warren Buffets of the world. The only reason they can do that is they make money for their shareholders. Don’t get lost in this debate. Stay focused and true to the mission. Business is war. You have to win. And you take the spoils which are profits, and you help your fellow man. But first you make money.
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