← DTC Podcast
Loading summary
Transcript96 lines
- [00:00]
Kevin O'Leary
When you get it right, you make a lot. 10 x 20 x 30 x 40 x 50 x 1000 x. One of the most important things I've.
- [00:08]
Eric Dick
Learned is any ones that got away, any brands that you really wish you'd.
- [00:13]
Kevin O'Leary
Jumped on, the great entrepreneurs, the ones that had huge exits, have this talent, which I believe you can learn to get. You can actually build it into how you operate to distinguish the noise from the signal. It's a very simple concept. The thing about building a brand storytelling is you've got to be authentic. You have to feel it and they have to feel it from you and they have to believe you in any strategy. Direct consumer. It used to be, well, maybe it would be nice if it was authentic. Now it has to be.
- [00:52]
Eric Dick
Hey everyone, it's Eric from the DTC podcast and I am fresh back from Shop Talk in Las Vegas. What an incredible event. One of the highlights of the event was getting to do a podcast with Mr. Wonderful himself, Kevin O'Leary, who has partnered with Tatari to create Wonder Ads, a way for brands to easily access high performance television ads. We got to conduct a short interview, 20 minute interview at shop Talk on a whole range of topics including how to make great TV ads as well as we dove deep on what he looks for in entrepreneurs as well as the deal that still haunts him to this day. That got away from him. He was gregarious. He is an interesting thought leader. Great to interview. I hope you enjoyed it. It's my first ever celebrity on the D2C podcast. Hopefully the first of many. Patrick Schwarzenegger from the White Lotus and the Mosh Bar, I'm looking at you. We want you next. Maybe even Ryan Reynolds, although he's maybe not that in right now. But anyway, I hope you enjoy this interview with Wonder ads, Kevin O'Leary, aka Mr. Wonderful and on with the show.
- [01:59]
Kevin, welcome to the D2C podcast. I'm a longtime fan of your work. It's great to have you here in Las Vegas.
- [02:05]
Kevin O'Leary
Great to be here. Thank you so much.
- [02:07]
Eric Dick
You've done business with so many different e commerce brands and founders. Just sort of curious if you could highlight a few of your more successful interactions or successful investments you've made in the space.
- [02:16]
Kevin O'Leary
You're right, I've done a lot of deals and maybe the best way to approach this is to say what were the attributes of the successful ones versus the ones that failed? Because I had many failures and luckily the success is paid for all the mistakes. And so when you get, when you get it right, you make a lot. 10x, 20x, 30x, 40x, 50x, thousandx, you know, whatever it is, versus the ones that die because the nature of venture capital is a lot are going to fail. So one of the most important things I've learned is can the entrepreneur, can the founder tell a story about the product or service? Can they make it a compelling, authentic story about what motivates them every day to get up and sell this product or service and why does it matter? What problem does it solve? The story is the whole deal. And then do they have the executional skills to build it?
- [03:10]
Unnamed Interviewer
Yeah.
- [03:10]
Kevin O'Leary
So the ones that are successful are able to do it. But there's another attribute I've learned that, and this is a lot of the secret sauce, the great entrepreneurs, the ones that had huge exits, have this talent, which I believe you can learn to get. You can actually build it into how you operate to distinguish the noise from the signal. And when I say it's a very simple concept, every day, if you're an Entrepreneur, you're working 14, 15, 16 hours a day, whatever it is, you got to get certain things done. You know what they are, they have to happen that day. You got to get them done. And what distracts you from getting that stuff done is all the noise that's hitting you. So to the extent that you can have a really high signal to noise ratio, in other words, 70% of the time you're working on the tasks that have to get done, versus 30%, you're involved in noise, whatever that noise is, you know, doom scrolling or you're listening to music, or you're, you know, whatever it is that is not getting the task done, that's noise. So you're going to find that the ones that are successful have really focused on the signal and the other attribute. And this is kind of interesting. I learned this myself from one of my women entrepreneurs. She said, you know, Kevin, I've noticed something about you. You talk too much. You really talk too much. Why don't you shut up and listen? And why don't you reverse the ratio? You're talking 2/3 of the day and listening one third. Why don't you listen two thirds and talk one third? Son of a bitch. She was right. Because you learn so much when you listen, that makes you a better investor or better executional skills, whatever it is, you want to listen. And so if you get all those right, you talk about the signal to noise ratio, great storytelling, and shut up and listen. Those are powerful winners. Those are great companies.
- [04:59]
Eric Dick
You mentioned storytelling. And I Think we're here. Tatari kind of helped set this up, and I know you're working with them on wonder ads. Storytelling is such an essential component of marketing and especially of TV advertising. I'm just curious, what sort of drew you. You've obviously had such long career in tv, but what sort of drew you to this opportunity of wonder ads and building, building that out?
- [05:21]
Kevin O'Leary
For founders, it was the experience we had in one of our companies during the pandemic. We were spending almost 2 million bucks a month on digital advertising, and we decided to test television. So we did. The mistakes everybody makes. We went directly to a network and bought inventory. What a stupid thing that was. And there was no way to measure success. And they just said, keep buying. Don't worry about it. You're building your brand. But I remembered Philip, the CEO of Data. I did a keynote for him three years earlier in San Francisco as hq. All these huge brands were there, and I'm thinking, what are all these giant brands using Atari for? So I called him up and said, hey, Philip, listen, we're spending a couple of million bucks a month now. Can you help us? And he said, sure, we can run a test. And it worked. I mean, what happened was we began to realize that in the pandemic, everybody's going direct to consumer. It can't do. Retail is kind of dead. And we were using traditional social media. Every platform. But the CAC kept going up. The customer acquisition costs kept going up. And when we tested with Tatari, we realized the CAC in all these different elements of television. Because Tatari is the only platform that you can buy every aspect of tv. Traditional linear networks, cable operators, all the way through to streaming, you know, and direct services like Hulu or Netflix. We started using it a lot, and it ended up being 40% of our spend. It was very effective because they were able to measure it. So I said to him, you know, Philip, this is great. If you're spending 2 million bucks a month, what happens if you're spending 50 grand a month? He said, well, let's partner. Let's create wonder ads for companies between 5 and 500 employees that are spending 50 grand a month or more. It's been wildly successful. I mean, it's. It lets you play with the big boys with the same tools they're using to measure every aspect of CAC on every platform on television. And I tell everybody, don't make any assumptions until you test. Because the great thing about wonderance is it tells you exactly what your CAC is, exactly what your Eyes is exactly which outlet is working, which is not. So you pour gasoline on the effect of cac because CAC and ROAS are the whole deal for entrepreneurs. And so as I like to sing, CAC and Roaz, CAC and roas, kind of that old line, that's all I care about now.
- [07:42]
Eric Dick
You're a true performance marketer.
- [07:43]
Kevin O'Leary
Totally. Because Wonderaz lets you actually do this and all of my companies using it. You can even retarget on Wonder ads. That's a concept where they visited your website, left without buying. You can go chase them and find them, you have all that digital capability and show them the product again and of course get a really high ROAS from it.
- [08:04]
Eric Dick
And then you're on tv. So you've got great consumers. Great consumers watch tv.
- [08:09]
Kevin O'Leary
Maybe more so they're not doom scrolling because they're sitting as couch potatoes watching tv. Yeah, I don't care if they're watching it on their cell phone or their laptop or their tablet, whatever. They're engaged in television and you're getting them at the right moment. But all that matters is you. You can prove to yourself pretty quickly that this vehicle is better right now than the very expensive aspects of a lot of social media where the algorithms have driven up CAC consistently every quarter. So it's just another weapon, another, you know, arrow in your, in your quiver. That's the whole idea.
- [08:41]
Eric Dick
And it has such powerful effect on brand is something I hear again and again on the podcast versus when you see an ad maybe in your, in your mobile feed or on TikTok or something like that. It's a little bit different when it's sort of almost legitimized when you see it on, on the big screen.
- [08:53]
Kevin O'Leary
Yeah. Well, in a way it's amazing. You don't have to spend. We did incredible tests. We produce commercials for up to half a million bucks and then we did really gritty stuff on a cell phone, you know, moving and really low production value. The low production value stuff worked better. That's interesting. And so we said, wait a second, what we need to do is make 15s, 30s and 59 second commercials and test them all. Yeah, high production value, low production value and run with the ones that work. Because if you're already producing social media, you're already creating the content you can apply onto the Wonder Ads platform. You have to be a content creator. Well, why don't you put it on television too and it works and you can test it. You definitely get the metrics, the platform that Wonder Ads gives you the template, the dashboard, is invaluable because the key is don't waste money.
- [09:46]
Unnamed Interviewer
Yeah.
- [09:47]
Eric Dick
I'm curious if of all the brands you've kind of invested in, if you were to start a brand today, if you had to start a brand today, would you go with something like a passion project like wine or watches or something like that, or what sort of area would you choose to play in in this sort of like e commerce or retail world?
- [10:02]
Kevin O'Leary
I would play in a, in a product category that I'm desperately passionate about because I know I'm going to be working, you know, 24 hours a day.
- [10:10]
Eric Dick
Yeah.
- [10:10]
Kevin O'Leary
So I got to love what I'm doing. I love watches, I love guitars, I love music. There are certain products in the food category I love. Yeah, probably I do something direct to consumer on watches. Right now I'm a well known watch collector.
- [10:21]
Unnamed Interviewer
Yeah.
- [10:22]
Kevin O'Leary
You know, so I would have credibility there. The thing about building a brand is storytelling is you've got to be authentic.
- [10:28]
Unnamed Interviewer
Yep.
- [10:29]
Kevin O'Leary
You have to feel it and they have to feel it from you and they have to believe you. You can't BS your way. That's why a lot of these celebrity brands on, you know, products don't work because everybody knows it's. They're being paid to endorse something. You have to say, look, I love this product. It's all I do all day long. I'm building a community. I want you to be part of it. Tell me what you don't like about it, I'll fix it. You know, whatever it is you have to do. And you build that word of mouth, you build that authenticity and they support you as you grow. That's the most successful businesses I've invested in. And, you know, whether it's Felicious or Boost Oxygen or First Saturday Line, there's so many of them been successful because the entrepreneur, the man or woman driving it, you can tell they're not messing around.
- [11:15]
Unnamed Interviewer
Yeah.
- [11:15]
Kevin O'Leary
They eat and breathe it and they're, they're the real deal. And so that's what it takes. And executional skills and good logistics and shipping and, and, and, and, and, and now it turns out television too.
- [11:27]
Unnamed Interviewer
Yeah.
- [11:27]
Eric Dick
It's not an easy business, that's for sure.
- [11:29]
Kevin O'Leary
No, no, it's not. But I mean, when you get it right, you buy financial freedom.
- [11:32]
Unnamed Interviewer
Yeah.
- [11:32]
Kevin O'Leary
That's the whole deal.
- [11:33]
Eric Dick
Buy your time back.
- [11:34]
Kevin O'Leary
You buy your time back.
- [11:35]
Eric Dick
Spend time on your boat in your boxes.
- [11:36]
Kevin O'Leary
You get to do whatever you wish. If you want to be here doing a podcast with you, you can do it. I can afford to do this. I'm happy to do it and I love it. And I work harder today than I did when I had my first liquidity event.
- [11:45]
Eric Dick
Were there any, any ones that got away? Any brands that you really. That you turn or that you really wish you'd jumped on?
- [11:52]
Kevin O'Leary
Well, Doorbot, which turned into Ring Jamie's company. I mean, I thought it was a turd on a stick when I saw it because it looked like he was never going to make any money. Yeah, well, I was wrong. I mean, that one got away. He sold it for $1.2 billion and I was the only guy willing to give him 600 grand. But I wanted it. In debt with equity.
- [12:09]
Eric Dick
Yeah.
- [12:09]
Kevin O'Leary
And he just didn't like that structure. But we're still friends and we get together every year in July, right after July 4th and host a big lunch Galley beach in Nantucket. And we've stayed friends for almost a decade.
- [12:21]
Eric Dick
Often on the program when I was watching a lot of Shark Tank and Dragon's Den. You were after royalties in a reason. Is there a reason you really favor royalties versus other situations? Is that still the case?
- [12:31]
Kevin O'Leary
Yeah, because it aligns interest. I mean, if I'm getting a royalty right off the top, I want to grow sales. Yeah, and you want me to grow sales. All I care about is can we get the revenue going forward. Your job is to make it profitable to execute well on your manufacturing and royalties immediately. I'm starting to get my capital back versus waiting for some kind of IPO or acquisition. And so look, I'll take less equity to get royalties, but I still want equity as well. That's why I'm very competitive on Shark Tank. I'm the guy that invented the royalty deal. Now everybody wants the royalty deal, but they're just Johnny Come lately. They don't understand how to do it. And so all the other sharks are discount sharks to me. That's what I say.
- [13:07]
Eric Dick
Oh, interesting. A lot of people going to be buying expensive bottles of wine out at dinners here at Shop Talk. And I've heard someone say that anything $700 is just showing off.
- [13:19]
Kevin O'Leary
Do you agree with that?
- [13:20]
Eric Dick
Is that true?
- [13:20]
Kevin O'Leary
I sell $3 million. 3 million bottles of wine a year. Very fine wines. Here's some stats because the numbers don't lie. 97% of wines sold in America sold for under $14 a bottle. The juice I put into an award winning Cabernet Sauvignon or a Chard is also sold under different brands at six times the price. Branding is a big deal. In the wine business, I sell direct to consumer. 39 pound case. I ship it. My partners QVC. I'm the largest purveyor of wine. People trust. I know what I'm doing in wine because I do. And I've been doing it since I was a teenager blending wines. That's again, the authenticity of my brand. If I say this Cabernet is spectacular, it's spectacular. Plus I win awards like crazy because I blend amazing wines. My wife does the whites, I do the reds. Everybody knows that story. That's an authentic brand built by an entrepreneur, me, and made for your family because I use it for mine. If you come to my place, my kids and their friends are drinking my wine and they love it because I make great stuff and I don't like shit wine.
- [14:23]
Unnamed Interviewer
Yeah.
- [14:23]
Kevin O'Leary
So I make sure that it's not just my name slapped on a bottle. I would never let that happen because if it's not great, I'm not going to sell it. And the boards, you know, anybody else would go to their head. But I've won countless awards now because I really deliver great stuff. But that again is how a brand is built. But you know, you think about authenticity as a motivation in any strategy. Direct consumer. It used to be, well, maybe it would be nice. It was authentic. Now it has to be. Yeah, it has to.
- [14:53]
Eric Dick
And it's coming up at the same time. The proliferation of AI, AI everywhere. People are using it for creatives, they're using it for their landing pages. But it can sometimes play directly against that need to be authentic. Are you seeing it used effectively? Are you worried that people are kind of overusing AI in the, in the marketplace?
- [15:10]
Kevin O'Leary
No. They're using a lot of AI and I can smell a. Smell it a mile away. What I like, what I prefer to do. If I use AI Kevin, I say, hi, I'm AI Kevin. Right beside me is the real Kevin.
- [15:19]
Unnamed Interviewer
Yeah.
- [15:19]
Kevin O'Leary
And here's why AI is doing my some work today, because I'm really busy and I want you to hear this information. Yeah, I'm using the being authentic about AI so that people will try it. Because I have AI Kevin in 42 languages. So, you know, we use it if we're going to hail Chinese New Year or something. Hi, AI Kevin here and I want to talk to you in Chinese. People kind of forget about that seconds after you tell them the truth. You just have to be authentic and be transparent and be honest about using AI when you try and BS your way into it and people figure it out pretty damn fast.
- [15:52]
Eric Dick
LinkedIn posts and LinkedIn comments are now AI on AI.
- [15:55]
Kevin O'Leary
It's just kind of a circular, like, okay, so I never BS about using AI. And we use it in a lot of different instances. And we use AI also to write copy for our TV ads. 15 or 30 or 59. We enhance it using AI and testing it, but it's still a real ad. And so I think it's going to be a productivity tool that'll be useful for entrepreneurs. I'm not against using it. No.
- [16:20]
Eric Dick
I'm excited for when we actually have AI employees. I see that coming sooner than later. Well, you'll have persistent opportunities.
- [16:25]
Kevin O'Leary
I'm on tech support for sure. And I'd rather have an AI bot that's actually answering my question intelligently.
- [16:31]
Unnamed Interviewer
Yeah.
- [16:32]
Kevin O'Leary
Versus, you know, just going through the same choose five for more. You know, that kind of crap on the phone.
- [16:37]
Unnamed Interviewer
Yeah.
- [16:37]
Kevin O'Leary
Talk to somebody that say, I look at your AI guy. Can you help me here?
- [16:41]
Unnamed Interviewer
Yeah.
- [16:42]
Kevin O'Leary
And often they're pretty good.
- [16:43]
Eric Dick
You mentioned your wife, and I think I recently just saw a LinkedIn post where you were sort of talking about your long lasting and, you know, really amazing marriage that you've had throughout.
- [16:52]
Kevin O'Leary
Well, we've had rough patches like everybody else. But, you know, most of my friends are divorced. Some of them three times.
- [16:57]
Unnamed Interviewer
Yeah.
- [16:57]
Kevin O'Leary
And I say to them, it's, it's you. Actually, it's not the women. Wherever you go, there you are. Yeah. No, it's sort of like you're, you know, you're on your third wife. Well, maybe it's you.
- [17:05]
Unnamed Interviewer
Yeah.
- [17:06]
Kevin O'Leary
And eventually this will be your, you know, third divorce. It's kind of, you got to kind of adjust to being what marriage is all about. Marriage is kind of about family and of course, supporting your spouse in terms of her interests and endeavors. And you got to do a lot of listening. But it's also fun sometimes to be in business with them, but it's not always easy. I mean, it's, it's important to, to invest enough time into making it work because if things. The thing is, you've got to learn as an entrepreneur. You've got to find the right partner because you're going to work so hard that you're not going to make the family soccer game. You know what I mean?
- [17:44]
Unnamed Interviewer
Yeah.
- [17:45]
Kevin O'Leary
You're busy, you're competing with some guy in India or China. And, and I've just learned that. And my wife stuck with me during. We had no money when we started. And the great thing about that is she's definitely not in it for the money? Yeah, she just didn't have any in the beginning.
- [17:58]
Unnamed Interviewer
Yeah.
- [17:58]
Kevin O'Leary
And we're very fortunate now. But I've never thought of her as someone who pursued that. She just wants quality time with her family, and we can afford that nowhere, anytime, any weekend. But I'm working so hard that we try and make our weekends really worthwhile because I'm usually on the road all.
- [18:16]
Eric Dick
Week now, so I think that's dtc. The business is. Founders just put their head down, as you say.
- [18:23]
Unnamed Interviewer
Right.
- [18:23]
Eric Dick
And they don't always take time to sort of sample the really pleasurable things in life. What are some of those things on those weekends that you sort of take a huge amount of pleasure in, that you've sort of reaping the rewards of such a great career?
- [18:35]
Kevin O'Leary
Well, I believe great entrepreneurs have found a wave with yin and yang, because the chaos of arts, or whether it's dance or photography or music or painting or whatever it is, that passion you have takes away from the discipline of business, which is binary. Either you make money, you lose money. You know, it's black and white. And so the great entrepreneurs have both. And so I try and spend my weekends photographing, editing. I like to. You know, I was a film editor once, so I still keep my chops up in premiere. Probably keep my social media team sharp, because if I see a. A bad cut or bad audio, I'm all over it. And so it's kind of like mixing it and so. And also, you know, let's. Let's do something interesting. Let's. Let's rent a boat and go up the Miami River.
- [19:20]
Unnamed Interviewer
Yeah.
- [19:20]
Kevin O'Leary
You know, whatever. It is something that's just different and it really recharges you over the weekend. You get right back to work 6am on Monday morning. And if you get in that rhythm and that cadence, you'll be a much better entrepreneur and your. And your family will support you because they understand your mission.
- [19:36]
Eric Dick
Last question. If I were to give you a million dollars, just a million dollars right here in 2025, at this point, where do you see the best use of that money? Would it be in crypto and gold in. In one of your businesses? Where. Where would you put that money to see it grow the most?
- [19:54]
Kevin O'Leary
Well, I've learned a long time ago, diversification, investing is the only free lunch. And so the way that works is very simple rules. No more than 5% in any one position, no more than 20% in any one sector. Like energy is a sector, technology is a sector. So I. I do invest in crypto. But if you look at my crypto portfolio, it, I treat it like a sector. Yeah, It's. It's about 19% of the portfolio across a wide range of things like Bitcoin, Ethereum, hbar, you know, different positions. And they're, and I manage them. I keep them at 5%. I have gold, I have ETFs. I like ETFs. I don't like to pick stocks, so I use that. You know, I built my own ETF company once, and so I still use that one and sold it, but still use them. And if, if I, if you just let the market do its thing on a million bucks, you're going to be 8 to 10% compounded a year.
- [20:41]
Unnamed Interviewer
Yeah.
- [20:42]
Kevin O'Leary
And you're gonna, if you started today with a million bucks, you'd be very wealthy in 20 years.
- [20:47]
Unnamed Interviewer
Yeah.
- [20:47]
Kevin O'Leary
And so I tell people the strategy in life is when you start out in your mid-20s, take 15 of your paycheck, even if your average income 68, 000 like everybody else. And when you retire at 65, you'll have a million and a half in the bank as long as you keep the discipline of putting 15. And I found that a product that everybody can download that, you know, I use called Beanstalks, makes it real easy. Put the 15 in and automatically diversifies into a blended portfolio every week. So that kind of thing works. But just looping back to why we're here, the big diversification I found in this last year was television. It's a game changer. That's what Wonder Ads is all about. Wonder Ads is diversification. For my investment in advertising, I'm never going to live without television again. Television is here forever. It's morphing into new technologies. But the way to measure it is use a test start engine. Check it out. You gotta have about 50,000amonth in all of your advertising spending to make it work. But if you do, go to, you know, wonderads.com and check it out, I think.
- [21:54]
Eric Dick
And your point about the kind of creative that works. I think people are creating different kinds of media for all of their ads across every different platform. I think for a roadblock for people is they think they have to spend six figures on creative, which is not at all true.
- [22:09]
Kevin O'Leary
No, it's the really authentic crazy stuff that works. You even saw in the Super Bowl a guy holding a hand, holding a phone in vertical position. That's because it works. And the way you know it works is you're using Wonder Ads to test every metric of where you're spending every dollar. Are you getting low CAC and high roas? Yes or no? And if you're getting great metrics, pour gasoline on that outlet until you've milked it dry. And then change your creative every once in a while. You shoot a 15, you shoot a 30, you shoot a 59. Try it all. Test, test, test, test, test. That's the key.
- [22:42]
Eric Dick
100%.
- [22:43]
Kevin O'Leary
Kevin, thank you so much.
- [22:44]
Eric Dick
Thank you. This is great.
- [22:45]
Kevin O'Leary
Take care.
- [22:53]
Eric Dick
Thanks so much for listening to today's episode. If you're not a subscriber to our newsletter, you can do that right now at directtoconsumeralloneword.
- [23:01]
Co.
- [23:02]
I'm Eric Dick, and this has been the D2C podcast.
- [23:05]
We'll see you next time.