- The standards in which people want from companies
is completely, completely impossible for most companies,
they may be good at the environment
but they're bad at wages.
They may be like,
companies are, are a convoluted animal.
Just like people
(upbeat music)
- [Gary] You got your perspective.
(crowd cheers)
I just wanna be happy.
Don't you wanna be happy?
- And we're gonna just jump right in
First up,we've got none other than Kevin O'Leary
He's not only the star of ABC's "Shark Tank",
he's an active photographer, a watch collector, guitarist
and author of three number one bestselling books.
Welcome Kevin.
- Great to be here. Thank you so much
- Kevin. It's a real, real, real pleasure to have you here.
First of all, how've you done through this pandemic?
Both on a personal level
and maybe in macro kind of like a business level,
you know
cause this pandemic has created a lot of winners
and a lot of losers
It's been very all over the place.
You have a vast portfolio,
you know, how are you?
And then comma, how is your business world?
- Well, you know, Gary
that is the question for everybody in America today.
And you're right.
There are winners and losers,
but you know personally I'm adjusting just like you are
to living world in a digital way
just every day
I communicate as we are right now.
All of my companies,
I have over 50 portfolio companies now,
have gone through this incredible transition
to what I call the Digital Pivot America 2.0
the ones that have survived.
You know, first of all,
we've gone through this seven months now,
have been able to tell a story online
shift to direct to consumer sales
become very proficient at logistics
and have been able to just take away what they lost
from retail sales and sold it direct to customer.
So in this crazy outcome
that I could have never foreseen,
80% of the portfolio
even though revenues are down
are actually ahead of free cashflow forecasts.
Why?
Because they've gone from just doing 10% direct to consumer,
to doing 40 to 50% direct to consumer
at almost a 100% gross margin.
And they've saved their companies.
Now the ones in travel, the ones in entertainment
the movie theater businesses,
the wedding--
- live events
- Those, those the live events stuff
I'm sorry, they're going to zero.
And that's 20% of my portfolio,
but 80%, that's fantastic.
They're going to make it.
- So let's frame up the question
that this whole show is gonna be about.
And we have an incredible lineup starting with you.
Where, where is the customer's attention?
How do you synthesize that question and what is the answer?
- Well, never in our lives Gary,
have we had the opportunity to have such a captive customer.
They are sitting at home just like you and I are.
They're looking to be entertained, communicated with
they are willing and able to purchase products and services,
but they want it done conveniently
and delivered directly to them.
They are not going to go get it anymore.
This is the digitization of America in a very fast way
and what I've learned,
and this is really binary.
I used to have this joke, Gary
I used to tell people what career should you have?
And I'd say, well, there's three careers.
If you're gonna go to college and invest in yourself,
engineering, engineering and engineering
(laughs)
But now you know who I'm hiring?
Story writers ,videographers, photographers, editors.
I'm having to compete all around the world
I'm hiring some people in Israel,in Italy and France
to cut video because all of my companies
are telling stories on their websites.
And so we have now empowered a whole new generation
of artists who are doing phenomenally well
that I would have never guessed.
Storytelling , direct communications with your customer
compelling them to watch that 19, 20, 39, 49 second video
that communicates what your product or services
is what the successful companies are doing.
And we are spending millions of dollars
during this Digital pivot
- Obviously because of Dragon's Den and then Shark Tank
You have a personal brand.
How have you, the human, cause you're talking
you know, obviously,
as you can imagine, I'm listening to the first five minutes
of this conversation.
I've been spending the last 11 years building
a communications death star
to do everything you just talked about,
because I basically believed that the internet
was gonna squeeze the middle.
Everything was gonna be direct to consumer
whether that's OTT or E-commerce
and that the ability to story-tell and run the arbitrage
under distributions was actually the game.
So I like those chess moves of how they played out to me.
I'm curious because I'm sure a lot of people
who are watching are curious right now.
What about you yourself within social media?
Have you in these nine months?
Cause I'm sure you've been busy helping mentoring
I'm sure you're constantly on calls with entrepreneurs,
these 50 plus businesses
but what about you and your own personal brand?
Have you picked up a platform?
Have you started to use LinkedIn from a content standpoint?
Have you downloaded TikTok?
Where are you the man?
You the shark?
- Yeah (mumbles)
- Where do you sit personally right now with
with social or content creation, whether first party
because you grab the phone and do it
or whether you leave a little bit of the game
I played the rock, ironically
see it for the first time in seven months
have somebody producing for you
You the personal brand.
What's the production around that? If anything
- You know, Gary, you are the role model for guys like me.
You got it, right You guessed it right.
The middle did get squeezed out.There's no question.
And I really got involved in social
about two and a half years ago.
And I hired a team of producers ,editors
and storytellers
to work within my own production company, Leary Productions.
And I, what I learned,
and this is the paramount.
Maybe, maybe I'll give you credit for this
because certainly watching you,
you cannot bullshit people.
You can't lie to them.
You have to be totally transparent
whether that's good, bad or ugly.
You got to tell the truth.
That is what a personal brand is built of.
- Yeah
- The minute.
It's almost like the analogy I use.
I teach this stuff now ,
here in Boston I do.
I used to do lectures in person,
but now I do them virtually at Harvard,
in MIT and Temple and Notre Dame.
And I talk about this stuff primarily
to Graduating Course of Business students and engineers
about entrepreneurship.
It's like dating.
You know, when you fall in love and you meet somebody
and you're just empowered by that magic moment.
And I draw this analogy all the time,
you just, it's so wonderful.
And everybody should fall in love
with whoever it's going to be.
But then as time passes things change
and maybe a year or two later,
you're thinking about cheating. Okay?
And you do.
Now you have a decision to make after you've done that.
Do you tell the truth to your significant other?
Or do you keep it a secret?
And here's why I bring it up for business.
You're going to get caught.
100% of the time when you cheat you're gonna get caught
because you didn't tell the truth your significant other,
can never look at you the same again
you've lost 50% of the equity in that relationship forever.
It may not break up.
You may go on, but it will
never forever the same - Its different forever
Yeah and--
- In business. The first time you lie to your customers
your constituencies, your shareholders,
you lose 50% of the equity forever.
Better to tell the truth and take the hit
- And the ownership and transparency and intent
around the "I'm sorry".
The, the, that such,
That's absolutely right everything out of your mouth, comma,
There's also the half pregnant, sorry.
And there's the real, sorry.
And I think corporations, the standards in which people want
from companies is completely, completely impossible
for most companies.
They may be good at the environment
but they're bad at wages.
They may be like,
companies are are a convoluted animal, just like people.
And this thought
that you don't understand how to say, sorry,
when you're trying to fix something,
people would rather dance.
Look over there, a bird,
instead of owning it.
And to your point,
in that lack of apology creates more damage sometimes
than even the event itself.
- Yes, and then that's exactly it.
And I tell all my CEOs now,
"look, do not lie to the customers.
Don't lie to your employees.
Don't lie to me.
Don't lie to anybody your shareholders even."
Take the pain, take the hit.
Admit the mistake you made
and you will build a relationship,
particularly with customers.
What we're learning online is
if you have a direct relationship with the customer
and you're honest with them
and you tell them,
"Hey, the product's going to be delayed
or sorry, you got a bad product. We'll replace it.
We'll give you your money back, whatever it is,
that communication ends up
being very, very valuable over time.
Those customers stay loyal.
We've learned that a hundred fold in our companies now
and now we're in, in,
across the portfolio.
We're now at 48% direct of revenue to customer
That's magic Gary, that's frigging magic
Cause that's a 100% gross margin business.
- One of the co...
we've run out of time but we're gonna move on.
We really appreciate your time.
But one of the fun topics in the chess game
of what you're talking about is Channel Conflict,
for the people that still rely on a lot of business
from retail, as retail's watching them go around them.
And that is gonna be interesting battles
of the next decade of business.
- Let's talk about that next time, my friend.
Thank you so much
- Thank you Kevin
- Bye bye
- Youtube watcher, what's up. It's Gary Vee.
First of all, thank you so much.
I hope you're doing super well during these times.
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