Why Most Deals Fail with Shark Tank's Kevin O'Leary

Summary

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The Mello Millionaire with Tommy Mello

Episode: Why Most Deals Fail with Shark Tank's Kevin O'Leary
Release Date: November 14, 2025
Guest: Kevin O'Leary, investor, entrepreneur, and "Mr. Wonderful" of Shark Tank
Host: Harley (Mello Studios)

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Episode Overview

This episode features a candid and wide-ranging conversation between hosts Tommy and Harley and world-renowned investor Kevin O’Leary. The discussion centers around the realities of entrepreneurial success, why most business deals fail, and how founders and investors need to adapt to win in today’s dynamic landscape. With stories from his own career, lessons from Shark Tank, and straight talk about leadership, execution, brand building, and personal development, O’Leary delivers actionable advice for founders, operators, and would-be millionaires.

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Key Discussion Points and Insights

1. Entrepreneurship: The Journey, Not the Destination

• On supporting entrepreneurs:
  O'Leary shares, "Entrepreneurship is not a destination, it's a journey and we're all in it together... if you are going to do it, you want to talk to other entrepreneurs, you want to share ideas, you want to help entrepreneurs not make the same mistakes that I made." [02:06]
• Only about a third of the population is really suited for it, he notes—it's hard, and it isn’t for everyone.

2. The Resilience of Home Services and the Changing Business Landscape

• On the home service industry:
  "It's probably one of the best times ever to be in it... it's never going to be replaced by AI or any of this disruption stuff. It's the core of most people's net worth is where they live and they care about it," O’Leary says. [02:55]
• Host Harley notes that multiples on businesses in the sector have rocketed up, backed by recurring revenue and a market shift toward valuing stability.

3. Investment Priorities: Recurring Revenue & Risk Management

• O’Leary’s main investment filters:
  • "How do I get my money back, first of all? Secondly, how stable is the recurring revenue?" [03:53]
  • The safety of subscriptions, reoccurring revenue, and executional skill matter more than hype or shiny forecasts.
  • “That’s why [the market] went from a 7 to a 20 [multiple]... the market decided that because that’s what the market wants.” [04:43]

4. Adapting to Technological Change and Not Betting Against America

• O’Leary is optimistic about technology, debunking doom scenarios:
  • "I don't believe in predicting doom in the American economy. That's never worked... We're good at doing stuff that makes it easier to live and more productive." [05:24]
  • Technological change always brings disruption, but the economy expands and roles evolve, as with the car replacing horse-drawn buggies.

5. Private Equity: What Most Get Wrong and the Importance of Founders

• PE firms that “treat [companies] like a cog, a wheel” and cut founders out almost always fail.
• "The analysts that do that work have never actually run a business... Until you've made payroll on a Wednesday night, you don't know what it's like." [08:06]
• Modern PE is shifting: "They're starting to realize they got to partner with the founder... You give them incentives to actually work as hard as they did when they controlled it." [08:50]

6. Tech-Enabled Productivity for Entrepreneurs

• O’Leary describes how he uses advanced tech (like a $6,000 Bluetooth IFB from Starkey) to handle communications in real-time and improve productivity. [09:34]
• Host Harley emphasizes using tools like ChatGPT5 and AI-driven platforms for both efficiency and marketing ROI.
• O’Leary: "We all have subscription services... We'll do three versions [of content], put it through ChatGPT... Then we test it... Boom, it worked better. But testing works." [10:50]

7. Key KPIs and Talent Acquisition

• Harley’s universal business dashboard: Booking rate, conversion rate, average ticket, and cost per lead—metrics that transcend industries. [12:08]
• On finding and retaining great talent, O’Leary prefers a portfolio strategy, keeping companies under a holding company umbrella, and describes the balancing act between disaster and euphoria that comes with managing many businesses at once. [13:14]

8. Storytelling & Humanizing Your Brand

• "Quit making ads transactional. Tell stories... let people get to know you." [14:36]
• O’Leary agrees, referencing his investment in Wicked Good Cupcakes: “Cupcakes are a total commodity... but they turned it into a massive business and no one saw it coming.” [15:10]
• Authentic stories and founder transparency drive connection and loyalty: “If people want to be part of that community and that culture and that vision, they’re going to become your customer. Those are very valuable.” [15:09]

9. Mentors, Moms, and Millionaire Mindsets

• Both men attribute key values and lessons to their mothers:
  • O’Leary’s mother told him, “Always tell the truth. And you’ll never have to remember what you said.” [16:21]
• On advice: “If I could treat people like mom, they keep coming back.” [16:15]
• On hiring: O’Leary now favors bringing in new team members as higher-paid contractors for six months before fully hiring, to ensure fit for both parties. [18:38]

10. Execution Over Ideas

• "Great ideas are diamond dust, and executional skills are impossible to find... I like to see people come up through sales because they understand how hard it is at the beginning of the month to be zero." [19:51]
• You can share the playbook, but “less than 1 out of 10 people could do the same thing.” [20:09]

11. Lessons from Steve Jobs and Elon Musk

• O’Leary describes Jobs as brilliant and brutally focused:
  “He was an asshole, 100%... He also taught me about the concept of signal to noise ratio—get three things done every day, and block the rest out.” [20:40, 20:56]
• Musk is “100% signal” as well, hyper-focused and “wildly successful in so many sectors... The rest is all bs." [29:20]
• Ownership of mistakes is a must. If someone blames the market or others for failure, O’Leary won’t invest. [30:24]

12. Equity Incentives and Building Teams

• O’Leary: “Everybody that's important to the business should have some sweat equity in it.” [23:37]
• In his model, both he and the founding operator get diluted equally as new key hires join—ensuring selectivity and shared outcomes.

13. Branding: Customer Service as Brand Building

• "Brand building is now storytelling... What happens is if you are a great provider, the customers start talking about your brand, your company, your service. They're the best ambassadors..." [24:03]
• “You should spend a lot of time taking care of unhappy customers and they become a huge asset to you.” [24:53]
• Order of importance: “Customer, customer, customer, then employees, and then shareholders, in that order.” [25:38]

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Notable Quotes & Memorable Moments

• On Listening:
  “When you listen, you get more power. I'm happy to just listen. And it's very powerful. It works immensely. That's one thing I wish I'd learned in my 20s because I talked too much back then, but now I don't. I'm very careful. I just listen.” — Kevin O’Leary [00:00, 26:06]

• On Truth in Business:
  “The great thing about telling the truth is you never have to remember what you said.” — Kevin O’Leary [00:23]

• On PE Mistakes:
  “Until you've actually made payroll on a Wednesday night, you don't know what it's like and how hard it is to run a business... rarely works out.” — Kevin O’Leary [08:06]

• On Execution vs. Ideas:
  “Great ideas are diamond dust, and executional skills are impossible to find. Great people have them.” — Kevin O’Leary [19:51]

• On the Role of Technology:
  “You should use every tool that you can afford to advance productivity, both personally and in your business, because your competitor definitely is.” — Kevin O’Leary [09:36]

• On Founder-Led Success:
  “Never get rid of the founder. Never get rid of the founder.” — Host Harley [07:46]

• On Brand-building:
  “Unhappy customers are very valuable because they give you an opportunity to make them happy again.” — Kevin O’Leary [24:46]

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Timestamps for Major Segments

• [00:00] — Kevin O’Leary on the power of listening
• [02:06] — Why O'Leary loves working with entrepreneurs
• [02:55] — The enduring value of home services
• [03:53] — What O'Leary looks for before investing
• [05:24] — Not betting against American innovation
• [08:06] — Why deals fail in Private Equity (PE) and the necessity of founder retention
• [09:36] — Leveraging advanced tech for productivity
• [10:50] — AI and data-driven marketing
• [12:08] — Key business metrics (KPIs)
• [13:14] — The “portfolio strategy” for entrepreneurs
• [14:36] — Ads that tell stories, not just make transactions
• [16:21] — Lessons from mothers; always tell the truth
• [18:38] — O’Leary’s new hiring strategy: contractors first
• [19:51] — Why sharing the playbook isn’t enough
• [20:56] — Steve Jobs, signal to noise, and productivity
• [23:37] — Equity incentive models
• [24:03] — Building a brand through honesty, community, and customer obsession
• [25:54] — Three questions: best advice, millionaire habit, and what O’Leary would do with $10M
• [29:20] — Role models: Steve Jobs, Elon Musk, and the importance of accountability
• [31:14] — Book recommendation: Keith Richards’ autobiography
• [32:08] — Final message: Entrepreneurship as a noble journey

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Final Takeaways

• Listen more than you talk: Power and opportunity flow to those who observe and absorb before acting.
• Execution beats ideas: “Diamond dust” ideas are everywhere; few can reliably execute.
• Founders matter: Removing the founder often kills deals. Founders are the heart and memory of an organization.
• Storytelling builds brands: Authenticity trumps transactionality for lasting customer relationships.
• Own your failures: Investors want leaders who claim responsibility and learn fast.
• Be tech-enabled and adaptable: Successful entrepreneurs constantly upgrade their tools and processes.
• Diversify wisely: O’Leary’s rule—limit exposure to one sector or company, except in real estate which he knows intimately.

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Book Recommendation

• Keith Richards’ Autobiography (Life)
  “[It’s] all about longevity and focus, sticking on mandate... there’s so many lessons to be learned.” — Kevin O’Leary [31:14]

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Closing Quote

"If you ever get a chance to come to one of these sessions, you should. It's just a group of entrepreneurs just talking about building businesses. And I think there's nothing more noble than that."
— Kevin O’Leary [32:08]

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Transcript

[Kevin O'Leary]

When you listen, you get more power. I'm happy to just listen. And it's very powerful. It works immensely. That's one thing I wish I'd Learned in my 20s because I talked too much back then, but now I don't. I'm very careful. I just listen.

[Podcast Host Tommy]

Sharp, legendary, wonderful. Our guest today is Kevin o', Leary, one of the most recognizable investors and entrepreneurs in the world.

[Kevin O'Leary]

The great thing about telling the truth is you never have to remember what you said.

[Podcast Host Tommy]

Known to millions as Mr. Wonderful on Shark Tank, Kevin built his reputation by pairing sharp business instincts with direct, no nonsense advice that cuts straight to the truth.

[Kevin O'Leary]

You come into my kitchen, buddy, you gotta take the heat.

[Podcast Host Tommy]

He's the chairman of Oshares Investments, a bestselling author and a champion of entrepreneurship. He's helped countless founders sharpen their pitches and scale their businesses.

[Kevin O'Leary]

Every entrepreneur I've ever talked to has a defining moment where they are pushed into this path.

[Podcast Host Tommy]

Beyond television, Kevin has built and advised companies across industries, from software to consumer goods. One thing has never changed his relentless focus on execution and profitability.

[Kevin O'Leary]

There's the people that own the store and there's the people that scrape the shit off the floor.

[Podcast Host Tommy]

Whether you agree with him or not, Kevin o' Leary forces you to think differently about money, success and business.

[Kevin O'Leary]

Watches and wine go so well together.

[Podcast Host Tommy]

Get ready. It's time to hear some of the top tier business advice directly from the shark's mouth.

[Podcast Host Harley]

All right, guys, welcome back to the Mellow Millionaire. Today is a very special day. We got the freedom event out there. Kevin o', Leary, sit next to me. Today's guest, Harley, needs an introduction. Known as millions as Mr. Wonderful from Shark Tank. World class investor, entrepreneur, business leader who built and sold the learning company in one of the largest tech deals of all time. He went on to launch o' Leary Funds and o' Leary Ventures and today manages a diverse portfolio that spans everything from fintech crypto to consumer brands. Bestselling author, global speaker and a straight shooter on personal finance. Kevin, I'm really excited that you're here, brother.

[Kevin O'Leary]

Appreciate it.

[Podcast Host Harley]

Why did you decide to do this is my first question.

[Kevin O'Leary]

I love working with entrepreneurs and you know what that room was full of was entrepreneurs. People that really understand that entrepreneurship is not a destination, it's a journey and we're all in it together and we were sharing our thoughts together. I really enjoyed that session because there's a lot of energy in that room. But that's what it's about when you start a business in America, it's It's a. Only a third of the population can pull it off. I mean it's, it's not for everybody. And I'm not telling people to do it. But if you are going to do it, you want to talk to other entrepreneurs, you want to share ideas, you want to help entrepreneurs not make the same mistakes that I made. So I kind of go through that journey saying here's what worked, here's what didn't, here's what I've learned recently, here's what I've applied, here's how it's worked. I want to share, you want to give back is the way I look at it.

[Podcast Host Harley]

What do you think about the home service industry?

[Kevin O'Leary]

It's probably the one of the best times ever to be in it. Not only technology advancing it, it's never going away, it's never going to be replaced by AI or any of this disruption stuff. It's the core of most people's net worth is where they live and they care about it. It's a, it's a spectacular industry.

[Podcast Host Harley]

You know, there we run at my company 25000 jobs a month. And you know what's crazy what happened through Covet is we were deemed essential. And I've been through 2008, as you know, the multiples went from 10 to 12 to 14 to 18 to 20x. Yeah, isn't that crazy? 20x. And it's hard to do the math really of 20x multiples on EBITDA. Then I learned about annual reoccurring revenue. You get a multiple of that.

[Kevin O'Leary]

Yeah.

[Podcast Host Harley]

And it's fun stuff. What do you look for when you make an investment?

[Kevin O'Leary]

I look exactly for that. How do I get my money back, first of all? Secondly, how. How stable is the reoccurring revenue? How risky is that recurring revenue? Like what would make it stop? I mean, I'll pay way more for a safe investment that has recurring subscription or whatever it is to keep continuing every month. That's what you're describing. And that's why it's valuable. And it turns out the whole market feels that way. So these multiples have increased for a reason. It's the safety of the investment. First to return the capital invested and then to accrue the benefits of a renewed pace of free cash flow. That's very, very valuable. People covet those kind of investments. And so it takes executional skills too. You have to have someone that can execute, that can do it. But if you understand the model and how to acquire customer and how to maintain it and it generates cash that's pure gold. And that's what this business is. That's why it went from a 7 to a 20. That's not you or I deciding. The market decided that because that's what the market wants. And so you're very lucky to be in that space right now.

[Podcast Host Harley]

Very fortunate. And I think it's going to 6x in the next seven years. And I watch a lot of people, there's a lot of jobs going away and it's scary. It's kind of scary in a one way. I mean I just heard Bill Gates come out and say in 10 years there's going to be a government subsidized. You're going to have to pay people to live because robots next year, Elon Musk, it could cook for you, it could walk the dogs. I mean, where are we going? What do you think about in the future?

[Kevin O'Leary]

You know, I've listened to that narrative for multiple generations now. And I bet you if you were, you had a family business back 150 years ago making horse drawn buggies and you went and saw the first car roll off the Ford production line with four tires on it and an engine and you say, oh, we're, we're, we're dead. I mean we're all going to lose our jobs. That's not what happened to the economy. New technologies, advanced productivity, There's a shift in who works on what and where that happens. There's this dislocation, but because it's productivity enhancing, the economy actually expands. It's the same argument as saying, oh well, television is going to destroy radio that's complete. Radio still exists, comes from satellites. Now I don't worry about that kind of stuff. I don't believe in predicting doom in the American economy. That's never worked. It never has happened. I've never bet against the American economy. It's provided an 8 to 10% return on average for almost 200 years. I mean we're good at doing stuff that makes it easier to live and more productive. If I need a robot or a car that's going to drive me, great. And whoever was going to drive that car is going to do something else. Probably a business that's more valuable and make even more money. It's going to free human beings from tedious tasks like flipping burgers. I saw a robot flipping burgers the other day. I don't care, I'll eat the burger as long as it tastes good.

[Podcast Host Harley]

Yeah, I think a lot about where business is going. And just like you Just showed the video of you. I can speak in Russian, Japanese, my AI. Hey, Gen, some of the other tools we're using. I just watched a thing. Have you ever heard of N8N? It's like Zapier, but for AI. I could literally have it research the number one post for home service and build a whole integration that actually goes out, does the research, writes it. I'm talking builds a thumbnail, which Mr. B spends $40,000 on a thumbnail. And it post and build it. Perfect for X, TikTok, Instagram. I know every major company in the space, all of them, Blackstone, kkr, Apollo, all of them. And they walk in, they treat them like a cog, a wheel, and they watch it fall apart because they say, number one, you can't cut your way to success. And I've seen very few people pull it off. That's why P just learned never get rid of the founder. Never get rid of the founder. What is that? I don't know if you've ever seen that. When they go in and they start looking at balance sheets and income statements and cash flow and they try to figure out a way to absorb the like, make it more profitable very quickly. Have you ever seen that in business?

[Kevin O'Leary]

Yeah, yeah, I see that all the time. The challenge is the analysts that do that work have never actually run a business. It's a problem with PE and venture capital. Until you've actually made payroll on a Wednesday night, you don't know what it's like and how hard it is to run a business and just use the metrics of, okay, I'll put debt on it, or I'll change this, I'll change that, and it's going to be more profitable. Rarely works out. And the PE guys aren't that stupid anymore. They're starting to realize they got to partner with the founder, figure out a way to keep them motivated. So a founder in their 60s or 70s is looking for some liquidity for generational reasons, but they don't necessarily want to stop working. And so the better strategy is to partner with them. Maybe you buy, you know, a 80% control position and you cash out the family, but maybe some members want to stay working and they know all the customers. That's a much better model. And you give them incentives to actually work as hard as they did when they controlled it. It doesn't always work, but it works a lot better than just buying it out and thinking you can just parachute in some random CEO that doesn't know anything about the history and the culture And I would also say something that you touched on at the beginning of this question about technology. You know, you should use every tool that you can afford to advance productivity, both personally and in your business, because your competitor definitely is. And I'll give you an example. Damon got me into this. I'm going to pull it out of my ear. This is an ifb, a Bluetooth IFB from a company called Starkey. I don't own any of Starkey. Why am I wearing this thing? This thing is connected to my phone and it reads to me every communication I'm getting. Even if it comes in a foreign language, it translates it into English for me. I've chosen five different languages because I'm doing business in the Middle East. You can use it for all kinds of purposes. You know, if you've got a bum ear, you can use it at a hearing aid. But if I want to listen to the conversation over there, I can tune it to listen in over there. Now these are not cheap. $6,000. But this thing has saved my hiney so many times when I travel, you know, or, or I'm doing something like on television. I've got the director in my ear, I'm on live TV and I'm getting my messages on all of my deals. And this year it's reading it to me. And I'm able to absorb that and be more productive. So the minute I get off air, I can call. I'm not the only guy. I mean, a lot of the sharks are using these things now and Dana brought them to us.

[Podcast Host Harley]

That's great.

[Kevin O'Leary]

It's very cool. Very cool.

[Podcast Host Harley]

You know, I'm going to get one of those clips that, that actually monitor everything I do in the day. Yeah, and they listen to everything. And I just know my assistant, my executive, she's right over there. She's the best. Ashley. She's hiring another assistant for her. And I said they gotta be using ChatGPT5. They've gotta be tech enabled.

[Kevin O'Leary]

I use that every day myself. Our entire companies use it. We all have subscription services. We look at our, our social media, put it through all of the models to see if we can change one or two words. You know, a 15 second commercial has 75 words in it, which 75 because we spent a lot of money on digital advertising. So we're testing, we'll do three versions. We'll put it through ChatGPT and other models and say it'll change two words. Then we test it in the Florida market. Boom. It worked better. But testing works. I mean you can do it by, by geolocing your Facebook buy or whatever you're using. And it's so easy to do it now. Like it's not that complicated.

[Podcast Host Harley]

You know, it's interesting. I just thought of this as I'm a big fan of attribution. I have 7,000 call tracking numbers. Every single landing page has a separate UTM parameters like I know exactly. We spend right now on average 3.75 million a month in marketing. And what do you think?

[Kevin O'Leary]

What do you think you make back on that? They can make 9 million bucks. What do you think?

[Podcast Host Harley]

No, I get up, my advertising budget is 12% so I almost get a 9.4%. My ROAS I'm getting almost a 10 times return.

[Kevin O'Leary]

And if you're getting 10, you, you fine tuned it. That's what, that's amazing.

[Podcast Host Harley]

I spent a lot of money on branding. Even our trucks is a logo. It's a driving billboard. But one thing that was really interesting is it's been very, very hard for tv, radio, billboards to get attribution. What I'm going to talk about here a little bit is four KPIs. I track that. I could build the budget. I could go into any business. I don't care if it's dental, I don't care what country I'm in. Their booking rate, which is your contact center is when the phone call comes in or the ad or the lead comes in. Conversion rate when you're door to door knocking and you meet the client. The average ticket and the cost per lead. I don't like cost per acquisition because this funnel already builds that into it. And with those numbers I could actually build the future of any company. And I'm like how do you do more with what you got? Everybody saying I need leads. Well, in Covid everybody said I need people. So I look at marketing is how do I attract good talents? And one of the things, if you're going to build businesses, how do you acquire great talent? Like what do you look for? How do you find great talent? Why have 54 companies too? Is is why not put it all into one?

[Kevin O'Leary]

Well, it is in the holding company. They're all owned either through debt or equity. Not all in a control position, but many of them. It's a portfolio strategy and at any one time, you know, within that portfolio there's a catastrophe happening or a euphoric outcome. I have one that just yesterday told me they're getting sued and then an hour later I get a phone call from another saying they're they're going public and they're going to be listed in three weeks. I own a huge piece of that. So, I mean, I get, I get. The portfolio strategy is heartbreak one hour and euphoria the next. And I've kind of learned that that's just the way it is in life. You're going to have good, bad and ugly. But having many companies means the outcomes generally I look at on an annual basis 17%. Well, if that's. We've had better years, that's not the greatest. Private equity gets 22. So we have some work to do. But 17 is pretty damn good.

[Podcast Host Harley]

It doubles in four years. I just.

[Kevin O'Leary]

Yeah, no, I'm very proud of what we've achieved. And that means we're doing a good job managing them, they're profitable. And then of course, on top of that, we get the distributions every month. I'm getting checks from pretty well everything and that maintains and supports the community, the families that work. Our biggest cost increase, social media. Boy, it's expensive. I mean, we're just spending a fortune generating content. And as long as our roas is four or better, as you know, we're happy with that spend.

[Podcast Host Harley]

Have you ever heard of a guy named Roy Williams in Austin, Texas? I've worked with him and dot com. He said, quit making ads transactional. Tell stories, let people get to know. You talked about that on stage is let people see who you are. So I started writing ads about me and my dad working in the garage working on a car. And people just relate to it. And if you could tell stories on ads and not say we're cutting prices 15% off and that works, but it's kind of a race to the bottom. Walmart figured it out. But every. Nobody could ever be Walmart again. I don't think.

[Kevin O'Leary]

Well, their scale of purchase, you can't beat them. But your point is, it's being transparent about who you are. And if people want to be part of that community and that culture and that vision, they're going to become your customer. And those are very valuable. And I agree with that. That is the Wicked Cupcake story. What we learned from Wicked Good Cupcakes. That whole thing was unbelievable what happened there. I mean, cupcakes are a total commodity. Anybody can make a cupcake. But they turned it into a massive business and no one saw it coming.

[Podcast Host Harley]

I tell customers I was in the garage for nine years. I'm an overnight success of two decades. So I was running jobs, I was running six a day, six days a week. Failed Relationships. Never been married, no kids. But I got a fiance now.

[Kevin O'Leary]

Congratulations.

[Podcast Host Harley]

I'm very excited about it. But I say, you know, Mr. O', Leary, here's what you need to do. Here's what you should do. And this is the third one that works every time. My mom worked three jobs when I was a kid. She worked her ass off. I love my mom more than anything in this world. Here's what I'd be telling my mom to do. This is what I tell people. This is what I'd be telling mom to do.

[Kevin O'Leary]

Yeah.

[Podcast Host Harley]

And I always give them what I would do for mom. And if I could treat people like mom, they keep coming back.

[Kevin O'Leary]

Well, I have a similar story. I learned so much from my mother about how I conduct myself today. She told me something once that I've never forgotten, and it's actually, you know, changed who I am, I think, over time. Um, always tell the truth. She said this to me. Always tell the truth. And you'll never have to remember what you said, which is very hard to do in the moment, because when you tell people the truth, sometimes they don't like it. It's still the truth. And that, in the context of Shark Tank made me the bad guy, but I'm actually the friendliest guy. Cause I'm telling you, you have a bad idea and you're going to go bankrupt with it. And it's, you know, you should try something else. But the point is, you get great lessons from mothers because they care a lot about you. But that one for me was great. And she taught me how to invest, even though she wasn't an anal or anything. Diversification is everything. And always get a check. Either buy a bond with interest or a stock with, you know, dividend. And that. That's kind of what I did. And she was right about that. But, you know, it's. It's really become an interesting journey for me. You always have mentors in your life. And there was another guy named Jerry Patterson who said, you know, you really should focus on things you got to get done during the day and not listen to all the noise around you. He was actually a hockey agent, the first guy to bring in a Russian hockey player into the NHL, which was really controversial, but he did it. And he was my partner in a company called Special Event Television. We used to shoot the intermissions in Boston and Detroit and New York for the league. Yeah, I mean, it was so. I really got involved in hockey. And so 1988-85, when Gretzky was in the league, And I learned so much from Jerry, just about how to conduct business. And I learned a lot about hockey and the game it's become and about professional sports. There's so many different lessons you're going to learn in your life through your journey. And you should always pull knowledge out of everything you're doing. And it just makes you a better and more productive entrepreneur, I think.

[Podcast Host Harley]

Ben Hardy, Dr. Benjamin Hardy and Dan Sullivan, I don't know if you know them, but they wrote several books. Who not how is one of my favorite and just the cliche or the message of who. How do I get the right who's I love? When I walk in a board meeting, everyone says no to me. How do you get the right people on your team? What do you look for?

[Kevin O'Leary]

What I do. And I've changed this recently, maybe the last three years. The right people are ones that can work within the team on a mandate that everybody agrees on. So they're all going the same direction. But you don't know that when you hire somebody, you're not sure. So don't hire them, hire them as contractors first. My standard deal is, look, let's work out your contracts as if you were already successful. Let's get that and put it here on the shelf. But I'm going to pay you 30% more to be a contractor for the next six months. And at any time during that six month period, we can change our minds. Say you fit into the team, it's all working. Or you can walk away saying, I don't think it's going to work here and you won't be a blight on your resume. You just acted as a contractor. So you don't have to say you were hired and fired and I don't have to do the same to you. So you're paying 30% more. Who gives a damn? It costs you a lot more than that to hire somebody and two weeks later fire them. Yeah, that's crazy. And so this is my new strategy. And that's how I find great people. And they appreciate it. And it just plain works when you.

[Podcast Host Harley]

Share everything like you do. And people always ask me, why do you give me your playbook? When people come into my shop, my competitors, and I say, well, you know, you're more likely to be a millionaire than have a six pack. And I could tell you exactly how to get a six pack. You still got to do the work. Less than 1% of the people will do the work. But you share everything.

[Kevin O'Leary]

Yeah, I mean, look, you know, I'm happy to share it, because I know the magic sauce is executional skills. You can understand how a business is successful. You can't necessarily execute the same way. Great ideas are diamond dust, and executional skills are impossible to find. Great people have them. Their ability to set a goal and achieve them consistently over and over again. And that comes from being a great salesperson, learning that way. I like to see people come up through sales because they understand how hard it is at the beginning of the month to be zero and then have to hit the goal every month. I did that for my whole life. Still do. But just because you know how a business is operated and it's transparent about. About it, I bet you less than 1 out of 10 people could do the same thing.

[Podcast Host Harley]

It's very rare. I mean, less than that. You mentioned you worked for Steve Jobs.

[Kevin O'Leary]

And he was an asshole, 100%.

[Podcast Host Harley]

I love the fact that he was just a creator, but I always. I watch all of his videos and he goes the worst. I love the fact that he goes, if you h. Great people, they'll tell you where to go. And that's what he figured out. I mean, but I. I could see.

[Kevin O'Leary]

The in him 100%. He just was really difficult to work with. It doesn't mean he wasn't a genius. He was. He also taught me about the concept of signal to noise ratio, which I've really adopted. He would argue that you need to get three things done every day, whatever they are. Three to five. Three to five things you have to get done every day. And that's the signal. The noise is all the stuff that comes at you that stops you from getting the three to five things done. And so you have to identify the three things, and then you have to fight off all of the noise coming at you. To stay within 70, 30 ratio, you gotta block out 70% of the noise. So that 30% is getting the three things done. Now, because you're blocking out noise, you're perceived as an asshole. You're just. You're stopping people in mid sentence saying, I'm not interested. Not interested. Just not wasting time is what he was about. He was blunt, he was difficult, he was ornery. He had a woman working beside him back then named Heidi Rosen who would smooth things out afterwards, you know, and we would have contentious meetings in the old headquarters. Brutal. And he would just, you know, be brutal. And some of my staff would be crying when it was over. And then Heidi would call me on the way back to SFO and say, look, we're going to pay you the 12 million for the update or whatever it is, you know. But she wouldn't even apologize for Steve. We were past that. I didn't need to. And he would. There was no text back then. He would email me at three in the morning, Boston time and expect an answer within five minutes. And I would give it to him because he was such a huge client. I'd wake up for that. That was him being on signal. And so I've kind of adopted that too. You gotta understand you will get stuff coming at you all day.

[Podcast Host Harley]

You know, you mentioned you hire the CEO and when I learned about equity incentive programs, it's equity incentive programs gives people a stake in the outcome. And if you do them right, you make a lot of millionaires and you make a lot of owners. You know, how do you feel about equity?

[Kevin O'Leary]

I 100% believe in it. You know, my model. Often if there's an operating business, someone comes to me and says, let's start this operating business. It's my idea, but I want you as an investor. I'll say, look, I'll do a 70, 30 deal with you. I'll do 70, you do 30. But the minute you hire somebody that needs equity, we get equally diluted. So we start at 70, 30, and then as new people come in, we equally get diluted. That makes the person who's running the deal, the guy with the 30%, sweat every hire because he or she is also taking the hit, the dilution. And so. But I want. They know they have to give away some. And as the business grows, they keep giving away, and they have to, because they're. Because I believe everybody that's important to the business should have some sweat equity in it.

[Podcast Host Harley]

How do you build a brand of somebody in there that's a million dollars, a million dollars revenue in plumbing. What would you say the core essentials are to build a brand? Like Mike Rowe. Everybody loves the guy. Nobody talks bad about him. He's done a great job of that.

[Kevin O'Leary]

Brand building is now storytelling. That's what it is. And I think telling a transparent, honest story about who you are, what you do, how you provide services, what matters to you and your community of customers. That stuff is the only way you can build a brand. And then what happens is if you are a great provider, the customers start talking about your brand, your company, your service. And they're the best ambassadors, they're the best advocates, they're the best advertisers for you. And that's why you have to spend most of your energy taking care of them. And the ones that are the noisiest ones are the squeaky wheels that are the most valuable. You know, it's such an amazing thing. And I talked about this in the presentation. Unhappy customers are very valuable because they give you an opportunity to make them happy again.

[Podcast Host Harley]

And then they become the biggest, biggest advocates.

[Kevin O'Leary]

And so you spend, you should spend a lot of time taking care of unhappy customers and they become a huge asset to you. No matter what it takes. You got to solve that problem.

[Podcast Host Harley]

You know, I used to, I used to take all the one star Yelper, Google calls myself and I'd call them up and I'd say, listen, I'm so embarrassed that this happened and your time's important. Could you tell me exactly what went wrong? And I just, all you have to do is let them talk. And I just listen. And I would listen for 10 minutes and I go, that is so embarrassing. I'm sorry. And I'd make it right. And you know, with 25,000 clients a.

[Kevin O'Leary]

Month, we make mistakes, of course, and.

[Podcast Host Harley]

We learn from those mistakes.

[Kevin O'Leary]

Yeah, but you're guaranteed to make mistakes and you have to learn from them. But that's brand building. I mean, it's customer service in every business. I don't care what it is, financial services or, you know, H vac or plumbing, it doesn't matter. It's customer, customer, customer, then employees, and then shareholders, in that order.

[Podcast Host Harley]

I ask three questions, and I love these questions for you in particular, what's one piece of game changing advice that you wish you knew in your early 20s?

[Kevin O'Leary]

To reverse the ratio of talking and listening? Most people talk 70% of the day, listen 30. You should actually listen 70% of the day, talk 30, because when you listen, you get more power, you understand where you're at. I was taught this by one of my women CEOs a few years ago. She said, kevin, you know, you talk too much and you're not listening and you should try reversing it and see how powerful you're going to become. And she was right. It helps you a lot to just listen, listen. Go into a meeting and just listen. And sometimes there's an uncomfortable moment, you don't say anything and they start giving you information they didn't want to because they feel socially uncomfortable. I don't feel uncomfortable. I'm happy to just listen. And it's very powerful. It works immensely. That's one thing I wish I'd Learned in my 20s because I talked too much back then, but now I don't. I'm Very careful. I just listen.

[Podcast Host Harley]

What's a millionaire habit that sets you apart from the rest?

[Kevin O'Leary]

What I've learned, and I've started to do it recently is I try and spend about 30% of my day doing something that's outside of my comfort zone, something I'm completely uncomfortable about, that I don't know how to do. I'm going to learn it, and that's exercising the brain. The brain wants to do that. You never give it that chance. You're always staying in your comfort zone, and that's very bad. And so I'm trying all kinds of things that I thought I could never do, and it's helping me immensely. And, you know, recently I took on acting. I've never been an actor. I'm dyslexic. I can't memorize lines. Well, I found out a way to do it, and I just. That's helped me on other things. And, you know, it was an amazing journey for me. I don't know what it'll lead to, but it was a hell of an opportunity and I did it. And you can judge for yourself. It's a movie called Marty supreme coming out Christmas Day. It's. It's a big movie with Timothee Chalamet and Gwyneth Paltrow. And I'm in this movie as an actor. And check it out.

[Podcast Host Harley]

We will. If you had to start over tomorrow with 10 million, but you still got all your connections. $10 million. What are you doing with it?

[Kevin O'Leary]

I would do what I do now. I would diversify my holdings into. You know, I have a very simple rule. No more than 20% in any one sector of the economy. There's 11 sectors. No more than 5% in anyone's stock or bond or crypto. But there's one. There's one thing I do break the rule for, and that's real estate. I have 31% of my, you know, net worth in real estate. And I've been a developer my whole life, and so doing, you know, real estate is what I do. It's a core. You know, I've done everything from climate control storage to luxury condos or whatever. It's just. And right now, the hot sector in real estate is data centers. So I'm doing that. But I like real estate. You can touch it. It never goes to zero unless you put too much leverage on it. And so, you know, I'm very careful about how much debt I put into my equation. I keep a very low debt ratio. I want to be able to survive debt and because I went through 2008 in real estate, that was pretty tough. So it's kind of learning from the past experiences. But I take that 10 million, and I think I could probably, you know, do well with it by just being diversified.

[Podcast Host Harley]

Who do you look up to? Who's somebody that you just are like, obviously, I know your mother at it.

[Kevin O'Leary]

Yeah, of course, of course. But I think the guys that had most impact in terms of how I look at it was Steve Jobs and now elon Musk, who's 100 signal. He has no noise. It's made him very awkward socially, obviously. But look at what that guy's produced and how successful he is in so many different sectors. Every mandate he takes on, he's wildly successful. You know, it's just sort of. He really, really understands that. The metric of spending time on the things that matter. I've seen him walk away from a conversation midstream when he realizes there's no value here. I understand why he does it, and I think he's achieved a lot. He's a good example for people to understand the whole noise to signal ratio. And I think, yeah, that's. I just look at executional skills. I look at what's the mandate? When does it get done? Is it achieved? Yes or no? The rest is all bs, like, you know, and people that come to me and say, look, I want you to invest in me. I've had a couple of failures, and I've learned from my mistakes. And I ask them, you know, why did that last business fail? And they start blaming everybody else except themselves.

[Podcast Host Harley]

Blame these two fingers instead of these.

[Kevin O'Leary]

And I always say, you know, you own failed because you screwed up. The only person responsible for failure is you. And you spent the last half hour blaming everybody else, including the market. I'm not going to invest in you. You don't. If you don't understand why you failed, why would I want to invest in you? You should. Every time you fail, you should own it. If you're. If you're an, you know, an entrepreneur, it's not anybody else. It's you. You're the reason. And if people ask you, you should tell them the truth.

[Podcast Host Harley]

I love it. We're gonna wrap up here in a minute. You know, I'm a big reader, and there's several, I guess, depending on the sector. But if you had to pick a book that was just like, change the way you do things, how to win friends and influence people is probably one of my favorite. But what would you say is a book that is the game changer, I think.

[Kevin O'Leary]

Keith Richards autobiography. I've read many books, but that one, really, it's a huge book and it's all about his life. But there's so many lessons to be learned in terms of longevity and focus in that book about sticking on mandate. And even through all of the problems he had, including drug addiction and getting arrested and all this stuff, the guy knew what he wanted to do and what he was good at and how to do it and look at the success he's achieved. And I think everybody should read that book right from the early days when he was, you know, in, in junior school, in, in England and just, just realize there's a lot of lessons. He's very transparent in it. It's. There's some tough parts in there.

[Podcast Host Harley]

All right, close us out. Leave us with something for the listeners. And I, by the way, I really appreciate you being here, brother.

[Kevin O'Leary]

You got it. Well, I really enjoyed it. This was a fantastic day. If you ever get a chance to come to one of these sessions, you should. It's. It's just a. It's a group of entrepreneurs just talking about building businesses. And I think there's nothing more noble than that. And I've really enjoyed it. Thank you.

[Podcast Host Harley]

Thank you.

[Podcast Host Tommy]

Thanks so much for listening to this episode. Like always, we're going to close it out with the Tommy Truth, which is a little slice of wisdom from me to you that can help guide you in whatever you're striving towards right now. The companies I've invested in, I'll give you a cool example.

[Podcast Host Harley]

I put $4 million in a company for 35%. It will exit next summer, and that 4 million will turn into 80.

[Podcast Host Tommy]

It's crazy, because this is not uncommon.

[Podcast Host Harley]

They're everywhere. And there's a lot of those investments.

[Podcast Host Tommy]

I've made, but it takes money to make money, and I gotta continue to be successful. And then all of a sudden, when you got 500 million in Goldman Sachs, they do a lot of special things for you.

[Podcast Host Harley]

If you look it up. They treat clients completely different at 500 million. And then that's how the rich get richer.

[Podcast Host Tommy]

It's crazy. And that's it, guys, we'll talk to you next week.