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Show Notes:

In part 1 of my interview with Kevin O’Leary – of Shark Tank, Dragons’ Den, CNBC, etc. – brilliant business mind and investor in Easy Daysies, he talks about how female CEO’s are bringing home the bacon (and why), what makes him put his “soldiers” (dollars) to war, the similarities and differences between parenting and running a business, and what he gets done before noon every day. A must listen!

 

Kevin O'Leary on Elaine's Kitchen Table Podcast

Transcript:

Elaine:                                  00:10                     Hi, welcome to Elaine’s Kitchen Table. I’m so honored to have you here with us today where we talk about the business of real life. That’s the lessons we learn right here off the kitchen table about business, about parenting, and about life so that we could feel equipped and encouraged and motivated to be successful and be that example to our kids. Today, we have a guest who probably does not need any introduction. You would know him as one of the original Sharks on Shark Tank and one of the original Dragons on Dragons’ Den and I am honored to know him as one of the investors of my company, Easy Daysies, the magnetic daily schedules for children. This man is Kevin O’Leary and before we start, here’s a word from our sponsor.

Easy Daysies:                     00:56                     Are you tired of being stressed out in the mornings? And frustrated with nagging at your kids to get things done so they can get out the door faster in the morning? Are you too busy or just don’t know how to help your kids to make good habits stick? Well, let’s get our kids organized an independent and cooperative and into routine with Easy Daysies magnetic daily schedules for kids. Easy Daysies was created by me, Elaine Tan Comeau, a school teacher and a mom of three by parent demand to help kids get out the door faster in the morning and have easier days. These fun magnets with everyday activities allow your children to take part in planning their day, which makes things smoother for everyone, especially mom. Now all the illustrations were drawn by me to make it simple enough for children who are non readers, whether they are two or 12 to feel that accomplishment and that confidence in completing their tasks. And there’s comfort in knowing what comes next, so there are no meltdowns and tantrums. Now I’ve had happy moms email me telling me awesome things like getting 20 minutes of extra sleep every day because of Easy Daysies that they just love that their kids are brushing their teeth without being told over and over eating their breakfast, getting their socks and shoes on and waiting at the door with their backpacks all ready to go. So if you want to check out Easy Daysies, I’d be honored at www.easydaysies.com and use this promo code – Elaine15 to save 15% on your entire order today.

Elaine:                                  02:26                     Welcome back. Now I know that you might know Kevin O’Leary as the chairman of O’Leary Funds. You might also know him as a contributing columnist to CTV, BNN and the Bell Media Radio Network. You might also know Kevin as a contributor to CNBC, ABC News and Good Morning America just to name a few. Now I’m very aware that many of you know Kevin as an investor of ABC television’s, Emmy Award winning television show called Shark Tank. But did you know that my guest is also an active photographer, a guitarist, and the author of three number #1 bestselling books: Cold Hard Truth; Men, Women and Money, and my all time favorite Family, Kids and Money. I am so honored to say that Easy Daysies is actually in Kevin’s third book, so you’re going to have to pick that up. But without further ado, I would like to introduce our guest to you, Mr Kevin O’Leary.

Kevin O’Leary:                   03:24                     Great to be here, thank you Elaine.

Elaine:                                  03:26                     I am going to jump right into this because I know how busy you are and I just want everyone to learn from your tidbits, your eureka moments, your, I think everything that you will come out of your mouth is a gem. So we’re going to jump right into this. My first question, Kevin, is you were recently interviewed in a magazine called the Business Insider, where you stated that of your 27 companies that you are investing in, including Easy Daysies Ltd., the ones that are making a profit are the ones that have a female CEO. Why do you think that is the case? Why are they the profitable ones?

Kevin O’Leary:                   04:08                     Well, it’s very interesting because it’s over a multi years, at least six now. And on top of that, it’s across many different sectors of the economy and these businesses involved in wide range of different activities and yet it’s all the women CEOs that are delivering the performance and returning capital. And I speculate, maybe it comes from an old adage that it’s, if you want something done, give it to a busy mother. You’ve heard that before. It may be that for small and mid cap businesses, time allocation and execution of, you know, allocating time properly is one of the most powerful creations of value and of reducing risk and of executing on the business plan. And so maybe that’s what’s happening, but you know, this is not speculating. This is actual hard returns. And so my bias for investing in women CEOs has gone up dramatically in the last few years because I’m getting such phenomenal returns from, and I think, you know, women CEOs, even in large cap companies are a hidden asset. And I think most corporations are figuring that out now too.

Elaine:                                  05:14                     Thank you. I know that I actually discovered that by accident because you had your team do a little investigation on the companies that were providing returns to your portfolio and that’s how you discovered that. And my next question, Kevin, can I call you Kevin? Sure absolutely. Although I will also refer to you as Mr. Wonderful. Now, may I ask what are those top three qualities that you think are necessary in identifying someone who will succeed in business? Who may be worth your investment? What are three of those qualities?

Kevin O’Leary:                   05:51                     I think I can actually point to a trend that is evident in Dragons’ Den and Shark Tank around three attributes that all of the teams had that were successful in getting funded. And so, and it turns out that these are also three attributes that matter in business. So here they are.

Kevin O’Leary’s Investment Funding Attribute #1: Articulate the opportunity in 90 seconds

Kevin O’Leary:                   06:09                     One, you have to be able to articulate your business plan and your opportunity and your investment in 90 seconds or less. It’s gotta be a simple message. Here’s what we do, here’s why people will buy it. Here’s why there’s value in how they spend their money on it. So a very simple message that you can easily understand, you know, is number one.

Kevin O’Leary’s Investment Attribute #2: Explain why you are the right person to execute the plan

Kevin O’Leary:                   06:28                     Number two is to explain why you’re the right CEO to execute on the business plan. What is it about you, about your past, about what you’ve delivered on, about what you’ve done in the current business that would make an investor confident that you’re the right person to run the business?

Kevin O’Leary’s Investment Attribute #3: Know your numbers

Kevin O’Leary:                   06:43                     And lastly in 100% of the cases of people that who got funded, they knew their numbers. You have to understand the market you’re in; the breakeven margins of your business, what the size and growth of your market is. What are the metrics around your business that will make it successful? What do you have to do in volumes to break even? All those kinds of things. If you can’t explain that to investor, you lose their confidence very quickly.

Elaine:                                  07:05                     Thank you. And now you’ve listed as 90 seconds, you have to know your pitch. Your second one was why you are the right CEO. And that third one is the numbers. Would you say that is your rank of priority in accepting a pitch as something you wouldn’t invest in?

Kevin O’Leary:                   07:22                     It is, because I’ve been doing this for a lot of years now and if I don’t see all three of those come together, I generally don’t invest because I know that there’s something missing in that team or that individual that will hold them back from being successful. You actually need all those attributes. If you don’t have them, you have to find a partner that does make up for the ones you’re missing cause you don’t have all three, you’ll fail.

Elaine:                                  07:42                     Yes. And I you once told is that, it’s great to find a partner who has strengths where you have weaknesses and vice versa. Is that something you still go with?

Kevin O’Leary:                   07:51                     Definitely. That’s exactly how I feel. And it’s, you know, I think partnerships are lower risk and people can bounce ideas off each other, but they can augment each other’s strengths and weaknesses, which matters a lot. You have to end up getting the full package, even if it requires two or three people. Someone has to be great at accounting, great at marketing, great at sales, you need everything.

Elaine:                                  08:12                     Thank you. So that actually leads into my next question. When you are doing your shows like Shark Tank right now, how soon do you know that you are going to invest in that pitch? Do you know right away within that first 90 seconds like you say or do you wait to hear it all out?

Kevin O’Leary:                   08:30                     I generally wait to hear it out because what I’ve learned is just because someone has a great 90 second pitch and they can come through explaining why you’re the right person to run the business. If they don’t understand their numbers, I have no interest in investing with them. So I need all three to come together and when all three come together, you can feel that whole room change in energy. It’s like watching an isotope sizzle because now you know many Sharks or Dragons want to invest, because those are the three things you need to be successful.

Elaine:                                  08:56                     Thank you. I’m gonna dig into your eureka moments right now. Is there a best lesson in business that you have learned either from a mentor or from your own journey that make you who you are today, Kevin?

Kevin O’Leary:                   09:12                     Well, you know what I’ve learned over time is you need certain elements to be in place. For example it’s better to start a business in a market that’s growing than opposed to stealing market share from competitors. That’s an area that sounds like a no brainer. Secondly, you’ve got to make sure that you’re able to control your expenditures because cash is the blood of a business. And if you’re not willing to make tough decisions every day about what not to spend on, you’re going to go bankrupt. And lastly, you need some good karma, business is partly luck. You need it to be a person that, you know what comes around, goes around as they say, and you’ve gotta be someone who helps others out, if you’re going to get that karma. Because I’ve seen great business plans with great leaders fail, who knows why? Maybe it’s karma.

Elaine:                                  09:56                     Kevin, if you could teach a business course for small businesses, what would that course be called? What would you call it? What do you think that every small business needs to know from Professor Kevin O’Leary?

Kevin O’Leary:                   10:11                     Well, I do teach that class. I do it to many different cohorts, I did MIT and Notre Dame and recently McGill, and I call the class “Business Is War and Don’t You Forget It” because I think that’s what it is. I mean, successful business leaders understand they’re in a competition. There’s winners, there’s losers. Money is binary. You make it or you lose it. You have to be willing to be competitive and be able to deliver things to customers that you’re stealing market share away from competitors. You’re fighting with your competitors all the time, in a legal fashion of course. But you have to be a winner. They have to lose clients. You have to gain them. That’s how business is. And if you don’t have what it takes to understand that business is war, you end up being the victim. You’re the dead soldier on the field. So you know, it’s not a social club, you don’t run a business to make friends. You run a business to make money for yourself and your shareholders. And that’s what I really try and focus on when I teach business to students.

Elaine:                                  11:03                     Where can we sign up? That’s a great course. It’s a good idea to think of it that way. Absolutely, and especially when we are women, a lot of our audience right now are women in business. Women who have children and you know, we try to teach our children to be kind, to give, to be generous, to be thoughtful, to think of others first. So how do you take those concepts and and use that in business to a woman who is a mother who is going to be that example to her children?

Kevin O’Leary:                   11:36                     Well, I think you can do both. There’s nothing wrong with being kind to understand your role as a mother and a family but business is different. You know, it’s the whole idea of business is once you take a shareholder in, you have to start thinking about their interests as well as yours. And you’ve got to deliver profitability because that’s how you sustain a business and you have to do things that are tough sometimes including firing and hiring people, making tough decisions because you can’t ever everything you want when you have limited resources. It’s not the same as raising a family. Running a business is about making money. Raising a family is providing a protective shield for those people you love. And the reason you can do that is you’re running a profitable business. Great families have a financial pillar of stability. And the way you get that in particular if you’re running a family business is to be profitable. So these two things are interlinked.

Elaine:                                  12:24                     Thank you. So Kevin, what are your top habits? Now you must have habits that you always do, whether it’s one habit daily or two or three habits daily that help maintain your success in business. What would you share with our listeners that are your habits?

Kevin O’Leary:                   12:42                     Well, first of all, I set out goals every night before the day starts that I’m going to get done before 12 noon, generally three to 10 things. And I don’t let anything distract me towards getting those things done. It’s a checklist. So I don’t take a call from somebody else. I don’t do anything that isn’t going to finish me getting those 10 things done. That’s how I become productive. That’s how I create productivity. And you have to learn the discipline of doing that. That means you focus on those 10 things. It’s usually, you know, anywhere from three to 10 depending on the complexity of them. And I do everything in my power to get those done before noon. And then if I want more white space on my calendar, I do it after noon where I do eclectic things that interest me or just random things that pop up. But in order to advance your businesses and I have many investments, I have to make sure that I get my priority list done before noon and I start my day pretty early, usually around 6:30 in the morning. So that’s one of my lessons and it works for me and it can work for you.

Elaine:                                  13:41                     No, that sounds great. It sounds like I need a Mr O’Leary Easy Daysie list for entrepreneurs. Yeah, absolutely. Teaching those life habits start at an early age, but definitely is that life skill when we are in business.

Elaine:                                  13:58                     We’re gonna pause our interview with Mr Kevin O’Leary right here right now because we want to keep our podcasts short and sweet. You do not want to miss part two with Kevin O’Leary where he gets a little more personal. I always love to hear from you. So please do find me on Twitter @chatwithelaine or on Facebook at Elaine’s Kitchen Table, and I’d be so honored if you could take a moment on iTunes and rate our podcast and leave a comment there too. And I would be so honored to say thank you to you personally on my next podcast. So have a wonderful day and I hope you got inspired and the business of real life. Bye!