Show Notes:

The investment philosophy that shaped Mr. Wonderful. “My mother was very pragmatic. She had had a traumatic life in the sense that her life turned upside down when my dad died. She really believed in financial independence. She didn’t want someone to have control over her destiny, and so from a very early age in her life, she started putting away 20% of her income from her salary. She was not a financial analyst, but she invested in telco bonds and S&P companies that paid dividends. She had a portfolio for over 55 years that she’d kept secret from both of her husbands. When she passed away, I got a call from the executor of the estate saying ‘You’ve got to come down here. Your mother died a very wealthy woman.’ I said, ‘No, that’s not possible. We were middle class.’ But lo and behold, I saw the effects of 55 years of compound dividends and interest, what that can do for you, and how putting aside some of your income for your whole life accrues incredible benefits later. That really was the foundation of my investment philosophy, because I saw it actually happen.”

Do women make better entrepreneurs? “A few years ago, we started to notice the differentiation between our companies run by men and the ones run by women. The outcomes were significantly better on the female-operated companies. You can’t deny cash. That’s what matters when you’re in a private company and you’re dealing with entrepreneurs. It’s not return on capital but return of capital that you care about. Over and over again, these women outperformed, so we started to go look at how they did it. Here’s what we discovered: In the companies that were run by men, in our case, they had very high growth targets, but they only hit their targets 65% of the time, and they had average growth rate targets of 30%. Then we looked at the same data for the women, and we discovered that they hit their targets 95% of the time, but they only assumed growth of 15%.”

The entrepreneur’s real motivator. “When you become an entrepreneur, if you’re going to be successful, it’s never about the greed of money. It’s because you’re so passionate about what you’re doing. If you are that way and you’re not pursuing money, you’re pursuing freedom. To a certain extent, if you love to get up in the morning and work, you’re setting yourself free. I enjoy everything I do. At that time, we were working seven days a week, 20 hours a day, and flying all over the world. We were growing like a weed, really competitive, being very successful, and growing market share — and we loved doing it. We had a really focused team of people that had been together for almost eight years. We were brothers and sisters on this mission to be successful.”

You’re either one of two people. “In the world, there are two types of people: the people that scrape the stuff off the floor and the people that own the store. For me, I wanted to be the store owner. That’s what set me on my journey, and I never worked for anybody again.”

The truth about entrepreneurship. “Entrepreneurship is not a destination. It’s a journey. It’s not for everyone. It’s not easy. It’s hard. But the whole idea is personal freedom each day. I tell my students when I teach this, ‘Look, the whole idea of being an entrepreneur is to get to a place in your life where you do not have to pick up the phone when it rings — that nobody has control over your destiny anymore. If the phone is ringing and you don’t want to answer it, you don’t have to.’”

How Mr. Wonderful got on Shark Tank. “I got a phone call when I was working on another show for the Discovery Channel called Project Earth as an investor in London, England. It was Mark Burnett. Everybody knew who Mark was because of Survivor and how successful it was. He said to me, ‘Listen, I’ve got a show based on Dragons’ Den, which you can see on BBC tonight in London, but I’m going to call it Shark Tank here in America. I’m looking for a real a**hole and you’re it. Don’t go changing. I’m looking for you. Get over here. There are two tickets at the airport. I want to meet you at Shutters tomorrow morning to talk about this opportunity for you, and you’ve got to get on the plane right now.’ I said, ‘No, I don’t want to do that. That’s crazy. I’ve got to fly for like 11 hours and then turn around?’ He said, ‘Yeah, you want to do this.’ That’s exactly what I did….Now, I’m rolling in next week for the 14th season. That was 14 years ago, and every year Mark says the same thing to me. He says, ‘I’m looking for that a**hole. Don’t go changing.’”

Harsh truths are kinder than gentle lies. “I’m not a mean guy. I just tell it the way it is, and I think there’s a role for somebody to do that. Somebody’s got to tell the truth when Barbara’s beside you saying, ‘Oh, listen, I’m not going to invest in you, but you keep on doing what you’re doing.’ How disingenuous is that? They’re going to go bankrupt. They’re going to wipe out their savings. They’re going to lose their home. They’re going to mortgage their house or something. I say, ‘Your business has no merit. It’s going to go to zero. Take it behind the barn and shoot it and try something else,’ which is what they should do. I’m not wrong about this.”

Do the Sharks like each other? “You have to respect all those sharks. Every one of them is self-made. They’re all self-made, and they’re all self-made from different disciplines, different sectors of the economy. How can you not respect that, whether you like them or not?”

What makes a business investable? “I like to invest in entrepreneurs that have the ability to pivot, that are able to take a horrendously difficult situation and somehow fix it. I don’t care how they fix it. Obviously I want them to do it in a legal way. That’s the nature of business: You have to play by the rules, and they do, but I want people that can pivot. That’s the most important thing for me because I don’t care what your business plan is. It’s not going to work out that way. It never does. You’ve got to be flexible. That’s number one for me.”

Execution is more important than ideas. “Great ideas are a dime a dozen. Executional skills are really hard to find. The ability to pair executional skills with a great idea is what you’re looking for, because then you’re going to have somebody that can drive the business forward.”

A business’s real hierarchy (spoiler alert: you are not at the top). “When it comes to business, there’s a pecking order. Number one is the clients. They’re always first, and you have to do things that take care of them first. Number two is your staff. They’re really important because you can’t run your business without them. If you have debt from a bank or an investor, they’re number three. They’re very important. You’ve got to take care of them. But my whole point is you’re last. You’re the last person to worry about. You’re at the bottom of the whole hierarchy because you own the business, and so you’ve got to take care of everybody else first.”

The best lawyers build brands. “I deal with a lot of lawyers…The good ones build brands. They create their own brand that they’re known for something that they’re very, very, very good at. You always go and pay a premium for that specialist that does that one thing so well that I encourage every lawyer to find that niche.”

Don’t listen to the critics. “[Jerry Patterson] said to me, ‘Kevin, the more successful you are, the more critics you’re going to have, and they’re going to be very vocal. Critics are incredibly noisy, and if you’re to be effective, you’re going to have to figure out how to create a filter where you don’t take any of your energy and apply it to that noise. If they distract you for one second of your day, you’re a loser and they’re a winner.’”

What does being a game changer mean to you? “It’s changing the path for a better outcome. That’s what it means for me. If you are an entrepreneur, if you’re a manager, if you own a business — if you enjoy that work, you have to be a game changer because you have to keep moving forward. You’re never going to get to the destiny. You’re never going to get to where you think you have to be. You’re going to be on a journey forever, and it just gets more and more interesting. Great entrepreneurship is about enjoying the journey and understanding you will never get to the destination and that’s okay. That’s what a game changer is.”

RESOURCES & REFERENCES
Champaign-Urbana
University of Illinois
United Nations
Cambodia
Tunisia
Ethiopia
Cyprus
Japan
Pol Pot
Haile Selassie
United Arab Emirates
Ireland
Canada
Telco bonds
S&P companies
Dividends
Compound interest
Tom Brady
New England Patriots
Rob Gronkowski (Gronk)
Tampa Bay Buccaneers
Basepaws
Shark Tank
Nabisco
Siamese cats
New York
The Learning Company
Reader Rabbit
Bozo the Clown
Mavis Beacon
Big Bird
Cambridge, Massachusetts
Dragons’ Den
Janis Mackey Frayer
NBC
BNN
Amanda Lang
BBC
Peter Jones
Discovery Channel
Project Earth
London, England
Mark Burnett
Survivor
Barbara Corcoran
Daymond John
Lori Greiner
ABC
MGM
Sony
Geneva, Switzerland
Zurich, Switzerland
Austria
Mark Cuban
Los Angeles, California
Plated
Blueland
Wicked Good Cupcakes
Hickory Farms
Lovepop
Ring
Amazon
Jamie Siminoff
Russia
Original Six
Boston Bruins
Philadelphia Flyers
Montreal Canadiens
Toronto Maple Leafs
Detroit Red Wings
Communism
Trust fund
Boston, Massachusetts
Tesla
Game Changers Summit 2022