Isaac Larian, entrepreneur: Failure is the foundation for success

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1:28Rahul Tandon:Consider your to-do list done. Members get more at Lowe's. Available in select zip codes only. Cancel any time. Non-refundable fee. Product purchase required. Terms and service restrictions apply. Details at lowes.com slash terms. Subject to change. Hello, I'm BBC presenter Rahul Tandon, and this is the interview from the BBC World Service. The best conversations coming out of the BBC. People shaping our world from all over the world. If you're not a little bit afraid, then you're not paying attention. We have never seen a people so united. Do not make that boat crossing. Do not make that journey.

2:06Being born in America, feeling American, having people treat me like I'm not. We're more popular than populism. For this interview, I met the Iranian-American businessman Isaac Larian. He was in California, I was in a studio at the BBC headquarters in London. The 72-year-old billionaire is the founder and chief executive of US-based MGA Entertainment, one of the world's largest toy companies. Over the years, he's been involved in several high-profile toy launches, including the Bratz range of dolls back in 2001. But his success today, regularly appearing on rich lists compiled by the likes of Forbes, is a far cry from his early years growing up in Teran, where his family often struggled to put food on the table in a home without electricity or running water.

2:58His father ran a small textile shop that young Larian would work in buying and selling stock. And at the age of just 17, Larian took this business experience with him when he bought a one-way ticket to America to seek his fortune.

3:13Rahul Tandon:First of all, the things I remember when I got to LAX, wow, the airport was so much bigger than the Tehran airport. I've never flown or actually I've never travelled anywhere. My first trip out of Iran was that trip. Did you speak any English before you went there? And when you landed then, was it easy to get a job? How did you get a job? Yeah, no, so I didn't speak English. So after about a month in Los Angeles, I was left with 25 quarters in my pocket. I got a job as a dishwasher in a coffee shop. And through the graveyard shift from 11 to 7 in the morning, I washed dishes. And in the morning, I went to school.

4:02Welcome to the interview from the BBC World Service with Isaac Larian.

4:07Rahul Tandon:I was born in a city called Qashan in Iran. And when I was four years old, my dad, who was a textile merchant, went bankrupt for various reasons. And he moved the family to a place at the time in Tehran called Narmak. And Narmak was at the time really a slump of Tehran. There was no running water. There was no electricity. So I was four when we got there. Then I grew up in Narmik and my dad opened the shop near our house. And since the age of eight, I worked in that shop. From that young an age, you had actually begun to work. Yeah, and work and go to school at the same time. So, yeah, it was a difficult time.

5:07It was a difficult time. And that was a lot for your father, your family to go through and you as a child. Was it a happy time? Was your childhood happy? Did you enjoy bits of it? Because it was a struggle, wasn't it?

5:19Rahul Tandon:Yeah, it was. Yeah, of course, it was very difficult. I mean, we had, but I remember we didn't have food to eat. When I had to do homework, we didn't have electricity. I had to do it on the candlelight. Yeah, it was definitely a struggle. I mean, I have some good memories. One of them is that we didn't have money. So I made my first toy was a kite that I made with pieces of wooden stick that I found on the street and some glue. And that's what I remember as my joy when I flew that kite, playing soccer on the dirty sidewalks. It's important to have those happy moments. But you said you were working from a very young age and studying.

6:13What were you doing in your father's business? And I presume, clearly, you shouldn't have been working at that age, but you learn from that experience, don't you?

6:21Rahul Tandon:Yeah, that's something that really has been the foundation of my business and my life. Of course, it was hard. I was a child. And what I did, I would take two buses at that young age, go to Bazar of Tehran and buy textile for the shop and bring them back so my dad could sell it. And I was always looking for deals. Even at that age? I mean, did you have the confidence as a child to be striking deals? Well, I learned, you know, my mother was a very strong person and a strong influence in my life and my siblings life. And she taught us to be strong and life has a lot of ups and downs. Keep your chin up and do what you have to do.

7:12Rahul Tandon:And that's what I did. I mean, she was a very strong woman. At age 17, finally, after I graduated from high school, I told my mom and dad that I want to get out of Narmac and go to America. I had seen a movie called Easy Rider. And they said, oh, I want to go there to Los Angeles. When you sat down with your mom and dad and you said to them, I want to leave Iran and I want to go to the U.S. And it's always a scary experience for a parent, I think, to see their child go. But what did they say to you? Did they try and talk you out of it? Yeah, my dad was absolutely against it. He didn't want me to leave.

7:54Rahul Tandon:And he said, we don't have money to support you. How are you going to make it? Living there, no way. And my mom insisted and she won. She was very strong. So that, no, let him go and let him have a better future than we're having here. So she persisted and she borrowed$753 from her brother's one-way ticket and a yellow blanket, which I still have. And off I was to Los Angeles. Do you remember that moment when you landed in Los Angeles? Because your picture of America had come through Hollywood movies. So when you landed, it must have felt very different. It was absolutely very, very different.

8:42Rahul Tandon:I mean, first of all, the things I remember when I got to LAX, wow, the airport was so much bigger than the Tehran airport. I've never flown or actually I've never traveled anywhere. My first trip out of Iran was all within Iran, to be honest with you, was that trip. Did you speak any English before you went there? And when you landed then, was it easy to get a job? How did you get a job? Yeah, no, so I didn't speak English. So after about a month in Los Angeles, I was left with 25 quarters in my pocket. So yes, at the end, you know, I got a job as a dishwasher in a coffee shop. And for the graveyard shift from 11 to 7 in the morning, I washed dishes.

9:32Rahul Tandon:And in the morning, I went to school. So that was my first job,$1.65 an hour, which, you know, I multiplied by the exchange rate in Iran. It was pretty good. Prices were a little bit higher, I think, in Los Angeles than they probably were. Much, much higher. Than they were in Iran. And you were studying. And then at this time, while you're studying and you're working and earning, you know, not much money, but when you put it in that Iranian currency, seems a little bit more. Had you always had a thought of, you know, I've seen my dad do business. You've been involved with his business at a young age.

10:10This was something you wanted to do. You wanted to move into your own business.

10:14Rahul Tandon:Well, you know, I got a civil engineering degree first because, you know, my dream was get an engineering degree, go back to Iran. Oh, OK. Yeah. Build infrastructure, etc. And what age, what time is this and what year did you graduate? Do you remember? Yeah, I graduated in 1978. And the reason it took so long was that I was working. I graduated from washing dishes to busboy and waiting tables. so I could not take full classes. So I graduated in 1978. I went to work for the Department of Highway Patrol in California and that job lasted, I think, eight or nine days because when I got there, they were asking me to bring files and coffee and I was saying, you know, I went to school and through hardship to become an engineer, I didn't come here to bring you coffee and do filing.

11:12Rahul Tandon:So I quit. I quit and I went back to work as a waiter and started a little company. And what was that company doing? It was importing from Korea giftware and selling it on mail order. And where did you get the money from for that? Because I presume for businesses, you had to pay up front for what you were bringing in or were you only bringing in very small amounts to begin with? Yeah, no, nobody. I mean, I was, when you work in the restaurant, not only they pay you at that time$6.50 an hour, but you make tips. I was charming, so I made a lot of tips and saved that money. I had$13 ,000 when I started my business, so I used my savings to fund it.

12:01That's not bad, is it, from that moment when you had a couple of quarters left, that over the years you managed to save so much money. And has that been an important part of your success in business, that you are careful with whatever you earn and whatever you have, you're looking to reinvest it?

12:16Rahul Tandon:Yeah, I am careful. Of course, now I have more money at 72, so I'm more easy at spending money. but a lot of people tell me that I'm cheap and I'm proud of that. You know, in a modern world, it's a good thing to be cheap sometimes. Be careful with that. I always say to my children, maybe you should be a little cheaper than you actually are, but they're not listening at this moment. Of course, in 1978, you come out of college. So 1979 is a significant moment in your life and a lot of people listening to this will be watching events in Iran and will know 1979 was the Islamic revolution. So was that a moment where you suddenly realized you couldn't go home?

12:58Rahul Tandon:No, actually, after the revolution, I did go home. When I was growing up in Iran, I was not a big fan of the Shah. We'll just remind people he was the man who ran Iran and, of course, was replaced by the Islamic Revolution, wasn't he, Ayatollah? Right. Yes, exactly. But I went there and I was in Iran, I think, for two, three months. And I realised that this regime is worse than the previous regime. So I packed my bags and came back to USA.

13:32You're listening to the interview with the BBC World Service. We always like to give you a little picture of what the interview was like. Isaac, I have to say, is somebody who is full of life. And even though we weren't in the same studio, I could hear in his voice, I could also see him as well, how much he was enjoying, not just the interview, but he's somebody who enjoys life a lot as well. And I think you get a sense of that in the story that he told to us.

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16:05Okay, let's return to my conversation with Isaac Larian. When we talk about Iran, and of course it has dominated the news for weeks, what do you make of the situation that Iran is in now? And economically, you left a country that seemed to be in a much better position than it is now. How does it get back to where it was, do you think?

16:24Rahul Tandon:Yeah, so unfortunately, this regime, I call them occupier regime, basically took over and brainwashed a portion, not all, a portion of the Iranian population. You know, there are right now 92 million people living in Iran. And out of that, I estimate about 10 percent or about roughly 10 million people who support the regime. But that 10 million people have, they're part of the corruption, they get the money, etc. And have taken the rest of 82 million people in Iran as a hostage. and it breaks my heart. Iran is an old, old civilization that has brought a lot of great things to science over the years.

17:20Rahul Tandon:Art, physics, math, medicine, etc. to the world has came from that area. So it really bothers me and hurts me, especially when I hear President Trump saying that I'm going to destroy civilization. I think that is really way too far. Definitely this regime in Iran has to go. And eventually I think they will fall. It will take a long time to rebuild Iran. But Iranian people are very smart and resilient and they'll figure it out. So you are hopeful economically, if the sanctions are removed, that we could see an Iranian economy beginning to thrive again. Would you be willing to invest in it? Yes, of course I will.

18:03Rahul Tandon:You know, 17 years of my life in that country is part of my DNA. And I love the culture. I love the language. I love the food. And I love the people. Iranian people are great people. They are not what the news media portrays them. It's only a small minority who have unfortunately taken over the culture. So you came back and did you go back to your same company again? Was that continuing or did you have to start a first? Yeah, it was still continuing. I was doing the business from Iran. I had a friend who would go to the post office and pick up the checks that we were getting for this mail order business.

18:47Rahul Tandon:And so, yeah, I went back to that business. And that business was doing OK, but then you made a big step up, didn't you? And that was with your involvement with Nintendo. though yeah so this uh you know mail order business at the time was very slow and i don't have patience uh because at that time you had to go buy put ads in magazines and the magazines will come out six months later and then you get the checks so it was too slow for me i always say joke and say if I was patient I would be Amazon but so I was impatient and then I got into consumer electronics first and with the consumer electronics that business grew to about 70 million dollars.

19:41Rahul Tandon:Wow what a journey that was. Yeah it was incredible so and I was now I was traveling, I was in Osaka, Japan, and I was reading the Wall Street Journal where Nintendo had become one of the biggest video game companies after the demise of Atari. Yes, I remember Atari when that was launched. And of course, Nintendo did take over. And that was when Japan was dominating those things. All the time when that business grew so much, were your parents still in Iran at that point in time? Or had you all come to the US? And was that heart knowing that they were there? About that time, I brought my brother and one of my sisters to America.

20:27Rahul Tandon:And they were going to school. And when the revolution happened, things were not good. Because we were also Jewish and we were in a really bad area of Iran, and a lot of fanatics. It was hard to live as a Jew in that part of Iran. So I wanted to get my parents out. Eventually, I brought them, smuggled them through Pakistan and Afghanistan to Switzerland and got them visas to come to America. What a journey that had been in your life up to that point. Let's get back to your business. And there you were, you'd had this incredible success with Intender. When was the idea then to move into the toy business.

21:10You talked in this interview about your love of building things yourself at a young age. So what made it, you know, video games are part of entertainment, toys are part of entertainment. Where was the shift there?

21:20Rahul Tandon:So, you know, I was running, as I told you, a custom electronic division and went to Nintendo headquarters in Kyoto, Japan, and got the rights for Nintendo Game and Watch. These were small handheld games at the time that people probably don't remember. I still have samples of them in my office. And that's how I got into toy business. I called that division of my company, Microgames of America. After two years, I had a few million dollars of Nintendo game and watch, and nobody wanted to buy them because kids are very fickle. Well, they are. And that's the world of business. Things change very quickly, don't they?

22:02So it was a good move into the toy section, and people will know about the Bratz dolls and everything else. Did you ever think, though, that it would end up as being as successful as it has become? You are the largest private toy company in the world, aren't you?

22:17Rahul Tandon:To be very frank with you, I didn't think we were going to be as successful as I am now. But one thing I have learned from my childhood till now is that, you know, When you fall, you get up, dust yourself and do it over and over again. And I have had a lot of up and downs in my business life in America. I have had many failures. And people only talk about successes. But failures, in my mind, are foundation of success. What was it that kept you going when things were going badly? Where did you get that inner drive to keep going? Because a lot of people give up, don't they? They say, OK. Yeah, I'm very persistent, and I looked at this, every failure, I looked at this, okay, what did I learn from this?

23:08Rahul Tandon:And now I'm going to do it, find out, and do it better. I mean, when the Nintendo, when we had to liquidate that few million dollars of Game & Watch, what it taught me was, okay, kids are fickle, and toy business is a good business, but it's a fashion business. You don't want to have too much inventory of old products. So from every failure, I learned something and used that to build my business. Do you still have business ideas? You know, toys have been good for you. Do you wake up in the morning at 72 and think, oh, maybe I should move into this area now? Yes, for every day. And that's why the people at my company make fun of me.

23:53Rahul Tandon:What do they say? because you know i have insomnia so i get ideas and at three four in the morning i said oh mate let's make this toy let's make this toy let's make this toy and they say where the hell does you get the energy just stop are you going to do you think i mean come on you made a lot of money don't you sit there some days and think hey i don't need to do this anymore my company's doing well, you know, you've got kids, etc. I just, I don't know, what do you enjoy doing? Go and do that every day instead. Or is business what you enjoy? Yeah, no, I really enjoy this. You know, my wife is an artist.