Morning Brew Daily Podcast Summary
Episode: Kevin O’Leary on the Future of AI, Working With Steve Jobs, and Shark Tank
Release Date: November 29, 2024
Host: Neal Freyman and Toby Howell
Guest: Kevin O'Leary (Mr. Wonderful)
Introduction
On this special Black Friday episode of Morning Brew Daily, hosts Neal Freyman and Toby Howell engage in an insightful conversation with renowned entrepreneur and investor Kevin O'Leary, famously known as Mr. Wonderful from Shark Tank. The discussion delves into O'Leary's perspectives on the evolving business landscape, his experiences working with Steve Jobs, his investment strategies, and his passion for watch collecting.
Kevin O'Leary on AI and Data Centers
Timestamp: [04:35]
Kevin O'Leary opens the discussion by sharing his enthusiasm for artificial intelligence (AI) and its significant impact on various industries. He emphasizes the critical role of infrastructure in supporting the AI revolution, particularly focusing on the challenges associated with building and powering large-scale data centers in the United States.
Kevin O'Leary: "AI is going to be huge. We use it in all of our businesses, particularly around translation... the real opportunity in AI is not just in the software."
He highlights the demand for massive data centers required by tech giants like Tesla, Google, Microsoft, and Amazon, noting the scarcity of suitable locations due to stringent regulations, such as Virginia's recent law prohibiting backup generators in data centers. O'Leary underscores the financial and logistical hurdles in scaling data center infrastructure, estimating a $4 billion investment for a single gigawatt data center.
Kevin O'Leary: "What does it cost to build one of these? $2 billion just for the platform and another $2 billion for the stacks of chips. $4 billion in the ground for a 1 gigawatt data center. I built those. And we can't get the power. I don't care what state you go to. We have no power in America right now."
Reflections on Elon Musk and Twitter
Timestamp: [06:12]
The conversation shifts to Elon Musk's acquisition of Twitter, where O'Leary provides a critical analysis of the business move. He questions Musk's business acumen, citing the significant drop in Twitter's valuation post-acquisition.
Kevin O'Leary: "He didn't buy it. The investors bought it... I thought he overpaid like crazy, but the reason he didn't change the price at the last minute was he already had the bondholders teed up."
O'Leary expresses skepticism about Musk's ability to restore Twitter's value, noting the legal challenges Musk faces and the ongoing controversies surrounding his management style.
Working with Steve Jobs
Timestamp: [06:30]
Kevin shares personal anecdotes from his time working with the legendary Steve Jobs. He recounts the demanding nature of Jobs, highlighting his relentless focus and high expectations.
Kevin O'Leary: "Jobs looked at her and said, no, you're not... Nobody knows what they want until I tell them what they want. I said, Steve, you sound like such a dick."
He illustrates Jobs' intense work ethic and meticulous attention to detail, which drove innovation but also created a challenging work environment.
Kevin O'Leary: "He would work 18 hours a day... 85% signal, 15% noise."
O'Leary praises Jobs' unwavering dedication, comparing his efficiency to that of Elon Musk, whom he describes as "100% signal."
Evolution of Shark Tank
Timestamp: [09:35]
Discussing the longevity and impact of Shark Tank, O'Leary reflects on how the show has grown into an international platform for entrepreneurship. He credits Mark Burnett for creating a space where entrepreneurs can showcase their ideas and secure investment, thereby fostering global business relationships.
Kevin O'Leary: "It's an international platform... entrepreneurship is bipartisan. Every single leader... wants to create jobs."
He shares his experiences traveling to various countries for Shark Tank events, emphasizing the universal appeal of entrepreneurship and the show's role in nurturing business talent worldwide.
Investment Philosophy
Timestamp: [13:57]
O'Leary delves into his investment criteria, stressing the importance of understanding customer acquisition costs (CAC) and the sustainability of business models. He warns against investing in companies that lack clarity in their CAC, citing the high bankruptcy rates of businesses that fail to manage these costs effectively.
Kevin O'Leary: "Do you know what it costs you to acquire a customer? Do you have any idea what that cost is? Most people don't. And if they don't, I never invest."
Furthermore, O'Leary shares his success rate with women-led startups, attributing 70% of his successes to companies run by women. He praises their ability to mitigate risk and effectively manage business operations.
Kevin O'Leary: "Over 16 years, 70% of my successes have come from companies run by women. So I tend to invest with women because they're very good at mitigating risk."
Entrepreneurship and Leadership
Timestamp: [16:51]
Addressing the future of Shark Tank, O'Leary expresses confidence in the show's continued success and its role in advancing entrepreneurship. He highlights the show's adaptation to modern investment instruments like convertible debentures and safe notes, which have become widely recognized even by young audiences.
Kevin O'Leary: "We're now doing convertible debentures, up 20%. We're doing safe notes... I think we've done a great job in advancing the cause of entrepreneurship."
He underscores the show's enduring appeal and its capacity to evolve with changing economic landscapes, ensuring its relevance for years to come.
The Importance of Hobbies
Timestamp: [19:57]
O'Leary discusses the significance of engaging in hobbies and activities outside one's professional sphere. He believes that challenging oneself with new tasks stimulates brain activity and fosters personal growth, which in turn enhances professional performance.
Kevin O'Leary: "It's challenging yourself in something that you do not have a comfort zone for. What keeps the brain active is trying to solve for a new task that it never did before."
He advocates for leaders and entrepreneurs to pursue interests in the arts or sports, as these pursuits encourage creativity, discipline, and resilience.
Acting in "Marty Supreme"
Timestamp: [23:23]
Venturing into new territories, O'Leary recounts his unexpected foray into acting for the movie Marty Supreme. Despite having no prior experience in scripted performances, he embraced the challenge, demonstrating his willingness to step out of his comfort zone.
Kevin O'Leary: "I realized I am that guy. That's me in 1952... I'm in the groove, and that was outside of my comfort zone, and I love it."
His dedication to mastering the role, despite physical limitations like a recent hip replacement, showcases his commitment to personal development and embracing new experiences.
Horology and Watch Collecting
Timestamp: [25:39]
A passionate watch enthusiast, O'Leary shares his love for horology—a term referring to the art and science of timekeeping. He contrasts traditional watchmaking with modern smartwatches, arguing that mechanical watches represent contemporary art and superior craftsmanship.
Kevin O'Leary: "Watchmaking is like contemporary art... They appreciate better than a Warhol. You can wear them. They're extraordinary in terms of what they represent, the craftsmanship."
He underscores the global community of watch collectors, highlighting the cultural and artistic value of mechanical timepieces compared to electronic devices like the Apple Watch.
Kevin O'Leary: "The people I've met through watch collecting are unbelievable. They're from every country, every religion, every gender, everything."
Conclusion
Throughout this engaging episode, Kevin O'Leary offers a multifaceted view of the current business environment, intertwining his investment strategies with personal anecdotes and passions. From the complexities of AI infrastructure to the nuances of horology, O'Leary's insights provide valuable lessons for entrepreneurs and investors alike. His candid reflections on Shark Tank, leadership, and personal growth emphasize the importance of adaptability, honesty, and continuous learning in achieving sustained success.
Notable Quotes:
-
On AI and Data Centers
Kevin O'Leary: "[04:35] AI is going to be huge... but we can't get the power. I don't care what state you go to. We have no power in America right now." -
On Elon Musk's Twitter Acquisition
Kevin O'Leary: "[06:33] He overpaid like crazy... I don't know if he can [restore value]." -
On Steve Jobs' Leadership
Kevin O'Leary: "[06:33] Steve, you sound like such a dick." -
On Investment Criteria
Kevin O'Leary: "[13:57] Do you know what it costs you to acquire a customer?... if they don't, I never invest." -
On Hobbies and Personal Growth
Kevin O'Leary: "[20:21] What keeps the brain active is trying to solve for a new task that it never did before."
This episode of Morning Brew Daily offers a deep dive into Kevin O'Leary's business philosophies, personal experiences, and diverse interests, making it a must-listen for anyone interested in entrepreneurship, investment, and personal development.