The Truth About Success No One Told You — Shark Tank’s Robert Herjavec Reveals It All

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2:51This is another vote for the live band. Clap it up for the live band, y 'all. This is elevated. It feels like prime time. This is prime time. This is beautiful. How's everybody doing? Feeling good? So we have your favorite shark tank, Shark. Yeah. We've interviewed a few sharks already. Yeah, we've gone down the list of sharks. We started out with Mark Cuban. Anybody know Mark Cuban? Of course. We had a good friend of ours, Damon John. I'll be honest with you, our favorite, well, probably today's going to pass it, but Barbara Cochran was amazing. Clap it up for Barbara. But there's one guy who kind of resonates with us a little bit.

3:33You know, the way he carries himself, the way he dresses, the way he conducts himself when he talks about marketing, and that's Robert Heverjan.

3:47And I hope you're excited. because we're excited. This is the first time we're getting to talk to him and we got a lot of questions and we're going to do it from the entrepreneurial mindset. How many entrepreneurs in here? Oh, this is great. We know a thing or two about that, huh? Sure, for sure. All right, well, without further ado, let's cue it up for Robert and let's get it going.

4:20I was born in Croatia. I think what makes me different than the other sharks is I'm an actual immigrant. That shapes a lot of how I think and who I am. There is no certainty in life. My dad came here at 37 on a boat, didn't even speak the language. What I look for is people that can land on their feet and adapt. So you have a great degree. Harvard sounds really fancy, but you missed one school. You didn't go to the school of hard knocks. What matters is that the world becomes a better place to live. The world cannot become a better place to live if you don't contribute to it. There is no rearview mirror in my life.

4:57You gotta let go. This is the deal in front of you right now. Let's go! Are you breathing? It's cold! This is Ferrari. Freedom is the ability to control your own life. No one can fire you. No one's gonna tell you what to do. It's all up to you. I'd like to be part of the journey. If you're going to dream, let's dream big, baby. I told you about the style, right? Hey, everybody. Thanks for having me. How great is the band? You guys are killing it. Give it up for the band. Yeah. All right. All right. If you guys are excited for this conversation, make some noise. For sure. So, Robert, let's get into it.

5:50So, you know, your journey as far as being an immigrant, coming to this country, being extremely successful in business. What mindset shifts, if any, did you have to make to kind of have the success that you've had in the United States of America? You know, we sharks always talk about this, like what makes one person successful and another one not successful. I remember one night we were having dinner with Mark Cuban and we got into this topic. Like I said, Mark, when you were 12 years old, did you know you were going to be successful? And Mark said, yes. I knew I was going to be very wealthy and I was going to buy a basketball team one day.

6:39And I remember how much that affected me because at 12 years old, I just didn't want to be poor. And so this mindset of fear and simply getting by is what I had to change. I think if you're going to build a great business or you're going to do anything great in life, you have to have the ability to believe in yourself. And most people have this fear, what if I don't make it? What if people make fun of me, especially as an immigrant? You know, people are always making you feel less than you are. And I think that was the big mind shift for me because I wasn't born like that. I wasn't born Mark Cuban.

7:29I wasn't born confident. When I was 20, I was afraid of my own shadow. I couldn't speak in front of a group of people. And so that was really hard for me to get out of that shell. Yeah, you spoke about something that I'm sure that everybody can resonate in here. And that's that idea of like, I just don't want to be poor. And so when people go into business, and a lot of people here are entrepreneurs, the first thing they think is, how can I make money? And I think that's kind of a mindset shift that we need to change. One of the things we recognized earlier was money wasn't the goal. It was really the value.

8:07Talk about how you have to have that mindset shift because if you're going into just trying to make money and then you don't, then you give up on it. Yeah, I'm going to disagree with you just a little. Just a little bit. I think there's two phases of starting a business. Just reality. I think the first phase is survival. I think a lot of people start a business to get out of a condition they're in, or at least I did. I just wanted to start my business in order to make enough money to pay my mortgage and maybe pay off my house one day. I mean, my dream was to make$1 ,000 for my life. So if I was 50, to make 50 grand a year, buy a used Corvette, and maybe pass part of my house one day.

8:58Because that's something my parents had never done. So in the realm of my ability to dream, that was, man, that was it. But to your point, I did that. And then, if you do that, and your goals are really small, you look around and you realize it's pretty empty. Because if you're only doing it for the money and you have some level of success, you're going to get very lonely. Money doesn't keep you warm at night. Money doesn't inspire you to keep going. So when you make a million, if that was your goal, what makes you go to 10 million or 20 million or 100 or a billion? And I think eventually you have to have a great purpose.

9:45Eventually, you have to look at yourself and say, all right, forget the money. Why am I working my ass off 20 hours a day, not getting in to sleep, sacrificing everything? What's my why in doing it? So for entrepreneurs, I'm sure everybody watches Shark Tank. And, you know, when people come in front of you guys, you ask them a lot of questions as far as their profit margin, their addressable market, their marketing plan, all that stuff. What do you think is the key, the number one thing as far as on a business bottom line that entrepreneurs need to focus on and completely understand fully in their business?

10:27Wow, that's a great question. I think, first of all, every business is slightly different. I think everybody out here who has a business, you have to figure out what the heartbeat of that business is. And it's different for every business. So I know in my business, I had to know what the recurring revenue was, what our margin was, and what our cash flow was on a daily basis. So if you woke me up at 2 o 'clock in the morning and said, what was the cash flow from yesterday? I could tell you that. Now, I couldn't tell you a bunch of other things because I have to learn along the way, but I think you have to figure out what the heartbeat of your business is, and it's usually only two or three things.

11:14You know, people make the mistake of trying to do too much, but there's two or three things that advance the ball every single day. It's not about maintaining. It's about growth and what are the things that are growing your business. you talked about fear just earlier and a lot of people have that fear and they start to question the why right I wonder at what point did you realize this is my why because sometimes people get passion and purpose confused and that could sometimes be hurtful in business when did you discover the why oh man that's such a that's such a great point and I think that's such an individual thing for everybody.

11:55And I think I was very fortunate to figure that out really early, because I think a lot of people don't, they kind of drift along. And fear can be all-consuming. Everybody in this room is going to wake up one day and have a crappy day and question, why am I doing this? Why is this so hard? Why isn't it easy for me? So for me, I started my first business, and you know, man, I'm working like 18 hours a day. I'm not making enough money in my business to support myself, so I'm working nine to five at the business. I'm waking up at five in the morning to read about cybersecurity because I'm not an engineer, and I'm competing with engineers.

12:46And then from eight at night to one in the morning, I'm working as a waiter to make enough cash to pay my rent. And I'm doing this every day. And I come home one day and I'm like, this sucks. And I go, this is really hard. And my mom is in the room and I'm telling her how hard it is, and woe is me, my life sucks. And my dad comes home. He's working at the factory, sweeping floors, and he comes home to take a shower and get some food before he goes back to the factory to work a second shift to pay for them to exist. And I look at him and I say, I will never in my lifetime work as hard as that man is working right now.

13:52And that was it. And what I realized is they gave up everything. 37 years old, they came to a foreign country, didn't speak the language, didn't know anybody, would live in someone's basement for 18 months in order to give me an opportunity. How do I then not acknowledge and justify that sacrifice? And that was my why. And I realized, stop complaining. Nobody cares. Nobody cares. And from that moment on, like customers would say to me, Robert, how are you doing today? And I'm a pretty happy guy 90 % of the time, but everybody in this room has a crappy day where you don't feel good and something's going wrong.

14:45My customers ask me, Robert, how are you doing today? You know how I'm doing 100 % of the time? I'm wonderful because I get the opportunity to live out my dreams and somebody gave up everything in their life to give me that opportunity so if you're not gonna if I'm not willing to work hard enough for me I better be willing to work hard enough for them I believe one one time you said strategy without structure is just a wish. So can you explain that? Because a lot of people have put together their business strategy quarterly or at the beginning of the year. But talk about the structure part of that.

15:33And even for your personal routine, how disciplined are you in making sure that the strategy goes from idea to ideation? man great question again um so i i think it's fluid i think everybody in the room that has a business realizes there's a lot of fluidity in business everything you think is going to happen is probably going to happen differently so most businesses controlled chaos and strategy is really important and planning is really important and scale is really important, but execution is better. I think too many people make really well-laid plans and they are kind of like deer in the headlights when their plan doesn't work out.

16:26I love that Mike Tyson quote, right? Everybody has a plan until they get hit in the face. Running a business is getting hit in the face every day. so I think if you're running a business it's chaos you have to execute every day but eventually you get to a point where if you're the one executing on everything and and I went through this I used to you know one of the things I used to say is I'm the best salesman in my company and I'm the best this in my company then one day I realized if I'm the best I me in my company? How am I ever going to grow? Who's ever going to buy this business? So eventually you have to get to a point where you shift from being the best doer to being the best enabler.

17:19And if you want to build a$5 million business,$10 million business, you go out there and be the best everything in your company. You want to build a$100 million business? You better be a great leader and a great enabler because your number one job becomes making others successful. Can you just go a little bit into that? Because I feel like enabler has a bad connotation to it. Yeah, you're right. That was a bad word. But I mean, I guess it can be good too, right? As far as like, you know, just nurturing people on their journey to kind of oversee it. somewhere along the way I realized I've got to amplify me right like I have to leverage and make more of the things that I'm not good at and you know it it gets easier in some ways where you get bigger the dynamicism and the energy becomes harder the bigger you get I mean my last company at the end, we had, you know, 1 ,200 employees.

18:26And so I get in the elevator and I'd be like, does this person work for me? Do I, like, should I know who they are? And that was odd for me, because in my company, I knew everybody. Like, we were like, whoa, one team, go. But when you're starting out, you can't afford to hire somebody with five years of experience in marketing. So instead of hiring for experience, you hire for aptitude. And you've got to look at those people and say, what are they missing to make them great? How can I teach, lead, give them the experience to become better at marketing than I am or somebody who had the experience.

19:13You know, when you have money, you hire for experience with aptitude. When you don't have money, you hire incredible aptitude and give them the experience. That was a jewel. That was a jewel. I'm looking now and the Shark Tank theme, it was speaking to me when we walked in. I'm sure everybody that walked in recognized it as well. One of the things that, you know, you watch the show that I know you're keen on and big on this authenticity and why that's important in storytelling. There's a lot of entrepreneurs in here. They want to get to the next level, but people don't know about their business, right?

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21:04It's not just about payments it's about giving you time back so you can focus on what matters most ready to see how square can transform your business visit square.com backslash go backslash eyl to learn more that's square.com backslash go backslash eyl don't wait don't hesitate let square handle the back end so you can keep pushing your vision forward that they have at their advantage is that there's only one of them in this world. Talk about the role that authenticity plays in marketing and growing your business. Yeah, it's such a great point. You know, why does Shark Tank work? Because you would think you're going to launch a business show that's going to entertain also.

21:53Let's get a bunch of celebrities. Wouldn't that be your knee-jerk reaction? Let's get a bunch of celebrities that are entertaining and interesting. But to the incredible credit of our producers and the people that put on Shark Tank, they didn't do that. They got authentic, real business people. And when you see the show, it's really us. I mean, Barbara not being able to do math, that's really Barbara. You know, Kevin calling somebody a cockroach. I've been at dinner where he's called people a cockroach. I mean, it's really him. And so, it's very, very authentic. And I think that's why the show works.

22:40We are not actors. We are not scripted. When we get mad, when we get excited about something, we're mad and we're excited. And, you know, to your point, you cannot fake authenticity on a long-term basis. You can spike authenticity. You can go viral once for some BS thing you did or you staged. But consumers today are too smart and they see through that. Some of the best investments we've had on the show that I've had, SandCloud, Tipsy Elves. I mean, these people are so authentic, it's in their blood. Everybody in this room is great at something. Greatness doesn't come from you changing who you are.

23:36Greatness comes from discovering what it is that you bring to this world that nobody else can and leveraging that

23:53the biggest topic of discussion right now is artificial intelligence so i'm interested to to hear your take on how you're currently using ai for your companies and any advice for entrepreneurs that may be a little intimidated or they don't fully understand and they're not fully educated on AI? So let me start by saying AI is the greatest technological shift in everybody in this room's lifetime. If you don't think that, you've got the wrong mindset. So you have to run to AI, not walk or dawdle or go gingerly into the night. You have to sprint towards AI. And if you don't know about AI, go to YouTube University and learn everything you can about AI.

24:47So it is going to change the dynamics of everything we do. First of all, the simplest application of AI for any business is taking any redundant task and changing it with AI. So if you have a customer service business and you want to hire more people to do customer service, one of your competitors is hiring less people and using AI to do customer service. If you're doing logistics with human beings and you've got people doing simple tasks, that's going to be replaced by AI. And it's not about getting rid of people or laying people off. It's about upscaling your workforce to do higher value tasks.

25:36The one task that AI will never get rid of is human interaction. So the one thing we're always telling about our business is, you know and Disney has a great saying every time you touch a client in a physical interaction or an online interaction they call those MOMs moments of magic because every client interaction or a consumer interaction is an opportunity to create magic. So use human beings to create that magic because that's what we're really good at. We're really good at relationships and talking to each other. AI is not going to replace you guys. It's not going to replace me. But if you have somebody typing into a keyboard every day, repetitive tasks, that's going to go away.

26:33And then the third part of it is, how can I feed AI to give me creativity in my business? A good friend of mine is an e-commerce online expert. He does about 600 million a year. He just saw a product, slippers, they're trending well online. So he used AI and created in two hours an entire video to promote it and then put it out there and is selling it. I mean, you can do that with your business. Absolutely. And I like that you said you got to run toward it because most people think, yes, we have to use it. And it's funny. I just heard Vlad Tenev said 10 years ago, every company that is a publicly traded company is a tech company because it needs a tech component.

27:22This week he said every company will be an AI company in the next five years. So true. The other part of AI is the protection of it. And that's kind of a sweet spot for you because cybersecurity is something that is going to be vastly needed because the more we create apps and the more we create and give tasks to AI, we still need protection from it. Talk about the role that cybersecurity is going to play in the near future. So this is going to sound funny coming from me, but I think the security risk of AI is overwrought. I think we're making too big a deal out of it. So I've been in cybersecurity for 40 years.

28:00I'm probably one of the top people in the world on cyber. The Wall Street Journal did a study a number of years ago where they stood on a street corner and said to people, I will give you a free McDonald's hamburger for your name, date of birth, and a copy of your driver's license. How many people you think said yes? 72%. Hamburger? Happy meal? Not even a cheeseburger? I forget what the meal was. But it was free food. So consumers want to talk about security, but there's an expectation that the company will take care of security. Meaning, if I'm buying from this company and they get hacked, you know what I'm going to do?

28:55I'm just going to go buy from another company. So consumers care about it if it's simple. But if you're forcing me to do two-factor authentication, if you're forcing me to buy off your website and I have to click here and are you a robot and then I have to go here, you know what that consumer is going to do? They're going to go the path of least resistance and go to somebody else. What really drives and will drive AI security is compliance. That's what drives most security. So today, if you're a publicly traded company, you have to have a certain level of security because the onus of proof goes to the companies as opposed to the consumer.

29:39So I'm not really worried about it that much because I think it'll become a competitive feature And if the three of us have a company and my company's more secure, more consumers are going to buy from me. If you're getting hacked, guess what? Consumers aren't going to buy from you. Today, it's very fluid. People can buy from you today, somebody else in an hour. And I also think the promise of the eye will make some of the security easier and harder. You've had an amazing career. You've done a variety of different things on television, off television. You talked to us backstage about bringing Shark Tank to Egypt.