INTRO: We all know Robert Herjavec as the chill guy
sitting in the right corner in Shark Tank.
In many episodes, we hear Robert talk about his background in software and his rough upbringing
as an immigrant.
But, it’s never made clear how he made his fortune and what exactly he’s doing now.
Aside from a vague background, superfans of the show are often quick to argue that Robert’s
chill demeanor is just a facade, and that in reality, Robert is a rather passive aggressive
dude that never follows through with his deals.
According to Forbes, within the first 7 seasons of Shark Tank, Robert made 24 deals on air,
but only 11 of these actually closed.
This means that Robert’s closing rate was only 45.8% which is the lowest of all the
sharks and nearly half of Mark’s closing rate.
So, who really is Robert Herjavec and how did he get rich in the first place?
ROUGH UPBRINGING: Taking a look back, Robert’s backstory isn’t
just some sob story for TV.
He really did have a pretty difficult childhood growing up as he was born in Varazdin, Croatia
on September 14, 1962.
At the time, this territory was controlled by Yugoslavia.
Yugoslavia wasn’t as strict as some other red countries, but they were still communist
and they upheld its principles.
Robert’s family was never big fans of these ideologies, and Robert’s father was actually
repeatedly jailed for talking out against the regime.
Apparently, it was common for him to get drunk and go on rants about how bad the system was.
Despite their differing views though, the family put up with Yugoslavia up until Robert
was 8 years old when the family immigrated to Halifax, Canada.
When they arrived in Canada, the family only had a suitcase filled with clothes and $20,
so Robert’s father instantly started looking for a job and eventually found a job at a
factory earning $76 per week.
It’s not clear if he was actually a janitor at the factory, but Robert has mentioned many
times that his father used to mop floors at a factory.
As for Robert, despite these extremely hard circumstances growing up, he says that he
was never mad about his situation.
He didn’t even know how life was on the other side of the world, so he had nothing
to compare to.
Once Robert started attending school in Canada though, he started to complain a bit.
You see, Robert didn’t know any English and many of his classmates would bully him
about it.
One day, he came home and complained to his mom about how mean all of his classmates were.
Though his mother comforted him, his dad told him to stop complaining and have some pride
and courage in himself.
Ever since this experience, Robert says he got very good at just putting his head down
and working through hardships, and unfortunately for Robert, there were many more hardships
to come.
Robert would end up attending New College at the University of Toronto and graduate
with a degree in English literature and political science.
In the meantime, Robert took on many side jobs working minimum wage to help his family
financially.
He took on roles as a waiter, a newspaper delivery man, and a retail salesman.
Things didn’t get much better after college either as Robert would struggle to find a
job and he would end up stumbling into the film field.
He didn’t become an A list director or anything, but he was able to score some nice short term
gigs.
For example, he served as a third assistant director for the movies Cain and Abel and
The Return of Billy Jack.
He was also a field producer for Global TV for the 1984 winter olympics.
While Robert enjoyed these opportunities, none of these provided him with a stable income
and he was still waiting tables to make ends meet.
What Robert really wanted was a job in the fast growing tech industry, but no one would
consider him due his lack of background and experience.
Instead of complaining though, Robert looked for ways that he could gain this knowledge,
and the easiest idea that came to mind was offering to work for free.
A company called Logiquest would eventually agree to this offer, and after working for
six months for free at Logiquest while still waiting tables, Robert would secure a full
time position and finally break into the tech industry.
FIRED: Despite working so hard to get the job though,
Robert was only able to stick around for a few years as he was let go in 1990.
By this point, Robert was fed up with trying to prove himself to employers, and decided
to start his own business.
He says that he never had any large ambitions of being a business owner or anything like
that.
At the time, starting a business seemed like the only way to continue progressing in his
career and that’s why he took the plunge.
To this day, Robert is a massive proponent of working a 9 to 5, and thinks that he’d
probably still be working a 9 to 5 if he wasn’t fired from Logiquest.
Anyway, Robert started his first company with Warren Avis who is the founder of Avis Rent
a Car.
It’s not clear what the business was called or what they even did, but the most important
part of this business was the experience with Warren.
Warren became a sort of unofficial mentor to Robert, and was pivotal in his future businesses.
One experience with Warren that was especially influential was a story about hot dogs.
It looks like the duo's business had something to do with sales like all businesses, and
one day, Warren told Robert that his approach to sales was terrible.
Warren compared Robert’s sales style to that of a hot dog vendor.
Robert was desperately peddling as much product as possible on a daily basis to simply make
ends meet like the hot dog vendor.
But at the end of the day, it wasn’t the hot dog vendor that made the big money; the
person who made the big money was the hot dog vendor's supplier.
Warren advised Robert to aim to be the supplier not the vendor, and this story really resonated
with Robert.
But this wasn’t very realistic for him at the time as he was just trying to make enough
money to afford his monthly mortgage payments.
Once his business with Warren grew to a moderate size though, Robert would sell his stake for
$60,000, and focused on starting a business where he could be the supplier, and that brings
us into BRAK systems.
HITTING IT BIG: BRAK systems was focused on developing internet
security software similar to McAfee.
And, given that the internet was just in its infancy at that point, Robert was able to
ride the wave up through the 1990s, and BRAK systems would become the largest internet
security provider in Canada by the end of the decade.
Before he knew it, he was getting acquisition offers left and right, and it didn’t take
him long to secure a deal with AT&T Canada for $30.2 million in 2000.
The deal was almost finalized, but it was up to Robert to choose if we wanted to cash
out in stock or cash.
All of his lawyers and business buddies were telling him that taking the stock was a no
brainer.
He could defer taxes and make much more money long term.
But Robert’s father told him to take the cash, and Robert would end up listening to
his father.
For nearly two years after the acquisition, Robert says that he was very triggered as
AT&T stock just kept going up as the dotcom bubble roared on.
But, as we now know, the bubble would burst and AT&T Canada would end up filing for bankruptcy
protection.
Now, AT&T Canada did end up surviving, but I think we’d agree that taking the cash
buyout was a way better path than going through a bankruptcy.
Objectively though, Robert wouldn’t have really been hurt financially even if he took
the stock as he also had another business that was booming.
Right after he sold BRAK, Robert joined a startup called RAMP networks as vice president.
RAMP networks also provided internet security software, but unlike BRAK systems, RAMP also
provided broadband access solutions like routers.
Robert didn’t work at RAMP for too long though as RAMP would be bought by Nokia in
January of 2001 for $127 million.
I doubt Robert owned very much of the company given how long he worked at the company, but
considering the magnitude of the acquisition, even just a few percent works out to millions
of dollars.
So, Robert was easily a multi millionaire if not a deca millionaire, and Robert would
decide that it was time to retire.
His wife was still working, so Robert became a stay at home dad and focused on raising
their children.
Robert says that this felt wonderful at first.
He didn’t have to worry about money, he could do whatever he wanted, and he was building
experiences with his children.
It seemed like things couldn’t get any better.
But, as his children started going to school and he was the only one at home, it didn’t
take him long to start wondering WTF am I doing with my life.
After just 3 years of retirement, Robert decided that the retirement life simply wasn’t for
him and that he far preferred building businesses especially given that he could now build them
out of passion as opposed to necessity.
And with that, Robert founded the Herjavec group in 2003.
CHILLING: Robert didn’t bet the bank with the Herjavec
group like Elon Musk though.
Instead, he preferred to start up the company with just $20,000.
Clearly, he didn’t want to be broke again if the business failed which is smart.
But really, Robert didn’t have much to worry about as the Herjavec group was another internet
security company, and he was quite experienced in the field by this point.
The Herjavec group initially specialized in email anti spam detection, but they have since
expanded into all sorts of cybersecurity services, and their revenue has closely followed.
In their first year of business, the Herjavec Group pulled in $400,000 in sales which is
already quite nice, but by 2012, this number would explode to $125 million.
Today, the Herjavec group is the largest internet security firm in Canada and pulls in $223
million per year in revenue.
Unlike his last businesses though, Robert has no intention of selling the Herjavec Group.
He’s looking to grow the company into a multi billion company, and at this point,
it’s just a matter of time until he gets there.
According to Google, Robert is currently worth $200 million, but I’m pretty sure that this
number is out of date.
I’ve seen Google display this number for at least 5 years, and I’m pretty sure Robert
hasn’t been stagnant for 5 years especially in today’s market environment.
So, I think a more realistic estimate is probably $300 to $500 million if not more.
So, Robert is well on his way to becoming a billionaire, but he’s not in any rush
to get there either.
Robert has been enjoying the process, and he’s been spending a lot of time on hobbies
like racing and Shark Tank.
In 2011 for instance, he won the rookie of the year award at the Ferrari Challenge.
As for TV, Robert made his TV debut in 2003 on Dragon’s Den and he has since become
a regular investor on Shark Tank as well.
And that brings us into all the Shark Tank controversy.
SHARK TANK CONTROVERSY: One of the biggest critiques against Robert
is that he’s often passive aggressive towards some of the other sharks and especially Mark.
There’s really no arguing against this as it’s oftentimes very clear, and I think
this really stems from Robert’s insecurity of not being wanted.
Most entrepreneurs who come onto Shark Tank want to make a deal with Mark or Lori.
Sometimes they want Daymond for clothing businesses, but basically no one comes in looking to make
a deal with Kevin, Barbara, or Robert which is a shame given that Kevin and Robert are
awesome sharks.
Kevin chooses to play into this persona by ironically calling himself Mr. Wonderful and
squeezing the other sharks.
Meanwhile, Barbara acts like nothing is going on and that entrepreneurs love her.
I think Robert, however, is a bit triggered by this and that this is what leads to his
occasional passive aggressiveness.
And as for his close rate, while it's true that he has the lowest close rate on Shark
Tank, it should be noted that the sample size is rather small and the other sharks except
Mark aren’t much better.
They all hover at about 50/50.
Also, something else to keep in mind is that the low number may be the entrepreneurs fault
as well.
We know that most entrepreneurs gravitate towards Mark and Lori, so maybe the problem
is that Robert just ends up with lower quality entrepreneurs.
As for Mark’s exceptionally high closing rate, I suspect that this is just an ego play.
I bet that he likely feels 50/50 about many of his deals as well, but he ends up following
through anyway just because he can.
Mark cares more about keeping his word and following through than losing half a million
dollars, and that’s completely fine given that he’s worth 4 times more than the rest
of the regular sharks combined.
Also, it’s not like Robert hasn’t invested a large amount himself.
As of 2019, Robert committed to investing a total of $16 million on Shark Tank, and
even if only half of those deals closed, that’s nearly $10 million which is probably a significant
amount if not a majority of Robert’s liquid wealth.
And, at the end of the day, I think Robert says it best.
Shark Tank is not a business show that’s on TV.
It’s a TV show that happens to be about business, but that’s just what I think.
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Comment that down below.
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