Shark Tank Icon: Turning $1,000 to $1Billion! (ft. Barbara Corcoran)

0:00At 30, I thought I was over. If I had known how good I looked, I would have run around the streets naked. So when did you start thinking about money? I had a boyfriend who loaned me the$1 ,000 to start the business, and he left me for a younger woman. I thought I'd rather die than let him succeed. I sold the business for$66 million. He was out of business in two years. I just used that insult to push me forward. Let's say the same thing happened to you today, and you were left with the same amount of money. What would you do? Hi, I'm Barbara Corcoran, and welcome to The Burnettes. Well, starting off, we have so much to talk about, but we wanted to start first with what do you think is your biggest failure?

0:36From the day, from the first day I was born, I was a terrible student, and I've never left it behind. I think I go out every day trying to prove to the world, once and for all, that I'm not stupid. Because when I was in school, I felt stupid. I was told I was stupid. And my idea of hell on earth was being asked to read out loud in front of the other kids who would all laugh. and you never really leave that behind, but gave me a lot to overcome and it gave me great empathy for people who are struggling. And I really think I'm a great leader because of it because I empathize with anyone I meet. And then how did that transition when you were starting your career?

1:11Well, when I was 23, I started the Corcoran Group. And by 23, I had 22 jobs already under my belt. And I had worked at every menial job in the book. And I learned very early what my traits were that I was good at and what I was bad at. For example, I was terrible at arithmetic. I knew that I was terrible at writing. Not a lot of menial jobs involved writing. I was terrific with my mouth. I could talk a dog off a meat wagon. I could talk a dog off a meat wagon. I love that. Exactly, but I could. And so as a result of that, I built my personality around my gifts, which was my mouth. And I was a natural leader because I had, I frankly thought I could lead better than any of the bosses I ever had.

1:51And I really wanted to be my own boss, which I became my own boss. And that made all the difference. I had a boyfriend who loaned me the thousand dollars to start the business. Thank God I had him to loan me the thousand. I wasn't in a situation where I could have gotten it from anywhere else. And he became my boyfriend. I think he was going to sleep with me or I was going to sleep with him. Wait, so he gave you the money before he was your boyfriend? No, as he became my boyfriend, maybe two months later, he said, you'd be great in the real estate business. I'll fund a real estate company and I'll be the 51 % partner, the money partner, and you'll be the managing partner.

2:23I think I went for it because it sounded so fancy. And I said, a managing partner, from secretary to managing partner, not bad. You know, it sounded a lot more important. But he left me when I was, I guess I was 30. And he left me for a younger woman. If you could imagine finding a younger woman at 30, she was prettier than me. And it decimated me. It shouldn't have, but he had found me in my little town of Edgewater. He had taken me out of the diner. He had given me the$1 ,000. He told me I could be somebody. And without him, I felt I would be nothing ever again. And I couldn't even walk. I took it so hard.

2:58But when I ended the business six months later, I divided it in half. He gave him half, and I took half and went out the door. He gave me the best gift of my life. He said to me, you know, Barbara, you'll never succeed without me. He was angry. So I could appreciate that. but never succeed without him, which in my heart I felt was the truth. But that he said it like that, I thought I'd rather die than not succeed. And I just used that insult to push me forward because I was really outraged by the insult more than I was by the girlfriend. And that whole chapter was over and I started on my own.

3:32Sophia:It's so crazy listening to your story. It sounds like kind of almost like these waves of competence. Like, you know, you have low competence when you're in school. You're getting bullied by the kids for your reading. I remember struggling with dyslexia when I was young and thinking, oh, my gosh, I'm the stupidest person. I can't believe that terrible way. My parents gave birth to me. I have no idea what I'm doing. I can't read anything. I remember reading back. We had some tutor read back my IQ scores on reading to my parents. And I remember being so embarrassed. I had no idea what I would do if I didn't get the tutoring and support with dyslexia.

4:02Sophia:But it sounds like your entire life is like these bouts of confidence. I do think that I'm very good at insults. I think I see insults for what they are. and I've usually done my best work on an insult. Like I'll quietly be insulted by the old boy network when I was starting out and competing with them because it wasn't a woman's business. They were all competing and taking me seriously. I was just saying to my breath, I'll get even. I'll whip your ass. You know, whatever I had to say. But the insult, it's easy to work off an insult because it's motion. You could jump off it. But just being quiet to yourself doing your own business, it's hard to really get your confidence.

4:38I actually think I got all of my confidence because of all the failures I had to encounter because I learned by the failures that I'm good at getting back up and I'm confident all the time simply because I know I'm going to outwork anybody else I could outwork anybody else and win and knowing I'm that way as a person I think gives me consistent confidence even though I don't look

4:59Sophia:at that time but I look scared because I am scared you know and you're married now how do you feel like that relationship is different and how did you guys meet each other oh well Bill Bill is a whole story on himself. Bill is a wonderful husband, but he has his traits that are good and his traits that are bad, as everyone does, as I'm sure I do. And what he's not good at is making money, and he's not good at managing money. So I took control of that early in the marriage. In the second year, I said, I'm in charge of everything. So he contributes to the household, but he makes no decisions because I make better decisions.

5:31I make no bones about it, and we're very honest about it. He calls himself Lucky Bill. He's come around to figuring he's a lucky man. And he is because he doesn't have to do anything really for our finances to make sure that he makes the money. But he's a great guy. He's really opposite me. You count my traits and he's got the opposite traits. How did you guys meet? What made you drawn to each other? I didn't mean to be drawn to him. I saw him at a business function and he was cocky. Like I said, hi, I'm Bill Higgins. And I thought, who cares? You know, but there's something about a man, I think, for me anyway, there's something about a cocky man that's enticing, I guess.

6:12So I thought, who does he think he is? And I delved in to find out who he was, of course. I fell in love with him very quickly. He was a wild man. He would just say to me, you want to go to the Paris Open tonight? I didn't know I was paying for the tickets. And then we'd get on a plane. Then I would buy the tickets. I'm like, what am I doing here? But that was our relationship. And it was that way for all the years we've been married. We've been married a lot of years. I've lost count. What is the craziest adventure you two have gone on? With Bill? Bill, mostly the surprises. I wouldn't say it was a real adventure, like the way you would think of adventure.

6:48But he always surprises me. Like he took my business card. He asked me if he could become chairman of my board. I said, Bill, no way. Everybody would quit. Absolutely not. So then he took my business card out to a local printer and he had to print it up. Bill Higgins chairman and he handed out to everybody for three months before I knew he was doing it well that's an adventure it's an adventure talking him down off the cliff because I'm ready to kill him if he can snap but he always surprises me like he's not controllable and I guess that's not good but for somebody like me who's so measured who's so over prepared who's so so so so you know it's a it's a good counter to me and gets me to do things I wouldn't normally do that wasn't in the program you know always a spontaneity always a curable but he has t-shirts many of

7:34Sophia:them that says lucky bill oh i love that it's like the win win loss return to pam then the other woman has the shirt that's like i am pam yeah i sometimes think i need those for me and sophia if loss return to sophia well i mean me and phoebe probably spend more time together than anyone else more than your husband our lives a hundred percent eye to eye boy more than our boyfriends easy, no question about it. And I guess that's also what I wanted to better understand about. So that period of time when you were working with your early boyfriend, what did that look like? To what kind of scale did you get the business?

8:09And then how did it evolve once you guys parted ways? Well, we ended that business. So I should say when I ended the business, he didn't want to. We had 14 salespeople. So we each got seven salespeople. We were renting apartments up and down in New York. We had been in business already seven years. I was making a living. I had a paycheck better than a waitress job. I was saying, boy, I'm a success. I'm really a success. Once we ended that business, I grew the business to a thousand people in seven years. But he was wrong when he said I would never succeed without him because I sold the business for 66 billion.

8:43He was out of business in two years. I'm not wishing him harm or anything, but it's amazing how an individual could take your confidence down. At 30, I thought I was over. I didn't think I would find a husband. If I had known how good I looked, I would have run around the streets naked, honest to God. But I thought I was over. It's just funny what your head can do for you. Most of everything, I think, plays out in your head. I wish I told myself as a younger woman, you're a lot more capable than you think you are. It took years to really learn that. Honestly, my favorite thing is when a girl breaks up with her boyfriend.

9:17And honestly, when her boyfriend breaks up with her and then she has an amazing both career glow up, personal glow up. I honestly do think that's one of the best catalysts for personal growth is leaving a relationship that is not serving you. Yeah. When you're filling in the blank of activity, which is helpful, you focus more on your business. I mean, focusing on my business got me through the bad time, honestly. Maybe not so healthy to be all business, but it got me through the bad time. And I think that gives you extra energy to push through. Yeah, I would agree with you.

9:47Sophia:Let's say the same thing happened to you today and you were left with the same amount of money. What would you do? $1 ,000? I would go around and try to get more than$1 ,000. You can't open a business for$1 ,000, I don't think. Well, you could open maybe an apple stand or something. But other than a real business, I think you'd need more than$1 ,000. But let's say I did get more than$1 ,000. The equivalent of that today would be roughly$12 ,000, I think, or thereabouts. What would I do with$12 ,000? I'd either open a business again, a brokerage business, which is doable, and I would be fiercely competitive again.

10:23And I'm sure I would compete through everybody, without a doubt. Or most importantly, I think I'd rather be a ski racer. I think I'd pick something else, yeah. Explain to me how would you open the brokerage business? Like what would you do? How would you compete and win? Well, the first thing I'd do, which I did with Corcoran Group, is I'd have a vision of who I wanted to be. I had a vision that I'd be the queen of New York real estate. I was one person on my little pink princess phone on a rented desk. But when I picked up that phone, I said, hello, the co-worker. I was very important because I knew I was going to be the queen of New York real estate.

10:55I just saw it in my mind. I saw me like the pope because I used to watch him on TV with the gowns and everything in the rings and people kissing his ring. And I thought, that's who I want to be. And that's, of course, I didn't want to be a pope, but my real estate version of it. And I worked toward that image. And I'm just not a big believer in business plans, although most of the entrepreneurs I work with have one, because they only take you so far. Once you get out in the street and you apply the business plan, all kinds of shit hits you. You don't know what to expect. You have to revise your business plan.

11:26But if you have an image of who you want to be, nobody can touch it. It's yours alone, yours to work toward, yours to see if what you're doing matches it. And I want to dive in, though, to so you clearly are fiercely competitive, which is incredible. And if you were to boil this into a couple of skills or recommendations that you would have for other young people early in their career, what do you think are good attributes to develop if you're interested in business? Well, I think being competitive helps you in business. But I don't believe people are naturally competitive, nor do I feel if people aren't competitive by nature, they learn to be.

12:01I work with a lot of entrepreneurs. I invested 150 businesses to date. I generally find that the competitive entrepreneurs are the ones that win. They make me money. So I'm always trying to figure out if the person standing pitching in front of me makes great sense, makes great common sense. Are they really competitive? Because I really need to see that trait if I want to partner with them. Because if not, they just don't succeed. I'm competitive to a sick degree. I probably need to shrink because I would compete for things in real estate if I knew my competitor wanted them. It had nothing to do with what I wanted.

12:36I would just see what they wanted and I would outdo them. That's sick, really. I really needed some help. But that's the way I am. Like if I ski today, if I'm going down a slope, even if it's an easy slope, someone goes by me, I'm angry. So I race them down the mountain. They don't know they're in a race, but I know they're in a race. I have to beat them down the mountain. So no, I think that's a big trait. But in answer to your question, which I think was, what if someone's younger and starting out? Is that what you're saying? Yeah. So if I am starting out, maybe I'm not naturally competitive.

13:08What are other skills that I can develop that can help me in my career? You could develop the skill of finding yourself a partner because I can tell you if you're not competitive, you're not going to make it. There's so many obstacles you have to overcome in building a business. I've learned to be like a jack-in-the-box. Hit me on the head, bounce up, hit me again, hit me again. It's like a stupidity contest, really. But you have to have that in you. You have to compete. And if you aren't competitive, you need a partner who is fiercely competitive. All my best entrepreneurs have certain traits that are in common.

13:40Not a lot. They are high energy because I never saw anyone without high energy to succeed in business. They have to pour themselves into their work. They have to be competitive, as we just talked about. And the third trait is getting back up.

13:54Sophia:Those are good traits. Resilient, competitive, and high energy. I love that. Yeah, thank you. Thank you. You could speak for me. Okay, so you have to be resilient, high energy, and competitive. And in terms of, so do you think those are things that are just innate to people? Do you think that they can be developed? I think you could build up your energy through exercise and good diet and hanging around with people who have high energy. You'll tend to be more energetic yourself. I think there are a lot of people that suck your energy down. You've got to stay away from them. So I think you can build that up.

14:26Can you become competitive if you're not? No, I don't think so. I wish I could answer you yes, because then everybody would feel good in America. But I haven't found that to be the case yet. And what was the third one? Getting over resilience. Resilience. I think you learn as a kid. It's very hard if you're not resilient to learn as an adult. I find the entrepreneurs that I do very well with had something that went wrong in childhood. They had a father who beat them, a mother who down went to hell, didn't give them love or something. They're out to prove something. And I love to see someone who is coming in with a deficit because what they're doing is they're working through the deficit through their business.

15:05And those people usually wind up being very tough and very successful. Maybe not so healthy, but I like an unhealthy partner. I realize they're going to do well. I remember early on when me and Sophia first started working together, the biggest shift we had is at first it used to be like we were competitive against each other.

15:22Sophia:Like, do we work all night? Oh, I worked, you know, an hour later. It's like, wait, but what were we working on? A business idea that didn't even have any money we could make on it or that wasn't a thing we should solve? I remember one of our early ideas was electric cruise ships. It was like, who could make the longer brief about electric cruise ships? The mindset shift of, wait a minute, this isn't about us. It's us versus the world. Yes. Because that, for me. Game changer. It was like, oh, yeah, me with my friend, we can take down anybody. And that was when it became like a fun game. Your biggest competitor is not on the outside.

15:54That I learned years ago. I used to really focus on what everybody was doing. I did it for about a year and a half when I was in business eight or nine years. and I knew what everybody was doing, what the assets were, what their disadvantages were, how market share they had. I studied everything. If you want to know anything about the New York market, come to me. I was a genius. But that was the only year I didn't pull ahead because I was so busy watching the competitor that I didn't bother to really watch my own knitting and get myself ahead. It's nice that you feel that way about each other.

16:23Do you know, with all the businesses I've invested in, the most successful, with a few exceptions, have been partnerships. just partnerships it's a great advantage to have a partner as you know you look to each other i i think y combinator did a study that found that the vast majority of their successful investments were all people who had co-founders and being a solo founder is much more difficult and it decreases the probability of your success but also it's interesting that you said the point about the jack-in-the-box getting punched in the face that's pretty similar to actually what michael rubin said when he came on the podcast that he very much realized that being an entrepreneur is getting punched 10 times in the face a day and you need to love it.

17:03You need to want. It sounds so heroic, but it really sucks. Yeah. But you need to be the type of person that can deal with chaos and things going wrong. So I'm curious. I mean, you said that for other entrepreneurs that they had to have some sort of something go wrong, let's say in their childhood. What do you think it was for you that made you the way that you are? It was because I was inspired at school. I think of it all the time. If I go into a business meeting. I could be in total control of the meeting. I could have out-prepared everybody there. So there's nothing I don't know. I'm like a, I'm really so prepared for the meeting.

17:35And yet when I walk in, I think that everybody's smarter than me. Now, where does that come from? It doesn't come from my practical life experience as an adult. It's left over from being a kid. It's hard to shake what goes on as a kid, whether you're not loved enough, whether you're not a student, my case, whatever it was, it's hard to shake what you have as a child. And I'm very adamant and strong-willed. And I made an enemy of that kind of memory. In fact, probably till I was, I think, 35, I would have a self-tape that I had to consciously really change. My tape would say, hey, Barbie, you should have never been here.

18:14You didn't need to come to this meeting. You're better off with the salespeople at home. You'd get more done. You motivate them. I would tell myself why this particular group situation was a stupid idea to come to. And then when I was about 35, I realized that tape was pulling me back. It was old tape. So then I replaced it. I said, Barbara, you're a genius. Fuck them all. You're great. You know, I just, I just replaced it. And I didn't believe it. But by running it all the time, 35 to 40 to 45, by the time I got to 50. I pretty much believed it, maybe, you know, but it's hard to shake it. And I want to shift gears a little bit because I want to know how money played into all of this.

18:54At what point in your life did you start making money? Was money ever important to you? I'm curious about that aspect of things because obviously now you're incredibly successful and you scaled your business so much. So when did you start thinking about money? Well, as a kid, we were born in a small town. It was a blue-collar factory town. No one had money, so I never knew what money looked like. When I went to high school, because we went to the next town, which was middle class, because we didn't have our own high school, I was shocked to see people in that high school. They were middle class, but to me, they looked like rich dudes.

19:25It's all relative, right? And I distinctly remember noticing, it sounds corny, but noticing the difference that the girls had real wool sweaters on, and mine was synthetic and had bumps on it. And I was self-conscious and very ashamed that I didn't have money. But it was just relative to middle class, you know? It was crazy. But my mother always said that money was meant to be spent, and we always had enough money somehow to get food, everything else with 10 kids. And my dad worked two jobs. We all worked since we were 11. We all contributed to the family. So we never really had a shortage of money.

20:00We had enough money to go around, you know? But I felt very poor by the time I hit high school. And then I got angry about it, And that got determined to make a lot of money. I liked real wool sweaters. Okay. That's a good motivation.

20:17Sophia:And I want to ask, during all those kind of odd jobs that you worked up until like 22, what was the best and worst boss you had? I ran a hot dog stand on Palisade Interstate Parkway in New Jersey. And my boss was a sweetheart. He said, just do what you want. You've got a great personality. You sell a lot of hot dogs. And I did. And when I was selling the hot dogs, I felt full because I was thinking of his compliment that he left in the morning. I realized he was a motivator. He didn't know if I was going to sell hot dogs. I don't even know if I sold more hot dogs than everybody else, but I was motivated by him.

20:51The worst boss I ever had was Milton, who had me go up to the attic and label the boxes of socks as gray, gray men's socks. And I wrote G-R-A-Y in every box. It must have been 600 boxes. When I got home, I told my parents that he reprimanded me in front of everyone, saying I didn't know how to spell gray, which was a shameful thing. But my father, who's a very good student, all the kids in my family are good students, he said, no, you could spell gray two ways. And he showed me in the dictionary, it was G-R-E-Y and G-R-A-Y. And I went in and told him I quit that next day, all the boxes. So I think I was just measuring people who made you feel good bosses or bosses that made you feel less than.

21:33And I was determined that when I was a boss, I was going to build on my people and make them each feel like a million bucks until they complained that I was going to fire them. Would you rather fire someone or would you rather see if you could coach them? It depends on what's wrong. I found always that you could always teach someone how to do a better job or do a different job, move them to a better job for themselves, but you couldn't change attitude. If someone has a bad attitude, I hired my first salesman from another firm, and I worked on her like crazy for a year and a half, thinking I've got a great attitude, I'm a great boss.