404 - Will You Be Successful? Barbara Corcoran Reveals ‘The Tell’

0:03Hey there, I'm Marie Forleo and for the last 20 years I've helped millions of people transform their businesses and lives. If you're ready to make the difference you were born to make, get ready because this is the Marie Forleo Podcast.

0:19He said to me, going out the door, you'll never succeed without me. I call it FU fuel. And I'm like, bullshit is the best fertilizer. You sold for 66 million. I was able to make over a million dollars in one hour flat. But if you don't buy into this lesson, you're never going to be a great boss. And that is... Barbara Corcoran's credits include straight D's in high school and college and 20 jobs by the time she was 23. But it was her next job that changed everything. She borrowed a thousand bucks and quit her job as a waitress to start a tiny real estate company in New York City called The Corcoran Group, which she grew to become the largest, best-known brand in the business.

0:57Barbara is the author of the bestseller Shark Tales, How I Turned$1 ,000 into a Billion business and hosts a podcast called Business Unusual with Barbara Corcoran. For over 11 seasons now, Barbara has been on the Emmy award-winning show Shark Tank, investing in well over 100 businesses. Barbara, thank you so much for making time to be here. I adore you. I respect you. I admire your book, Shark Tales. This is awesome. I had so much fun reading it. We're both from Jersey. Oh no. Yes. There's a lot of Jersey grit happening and so much. Most populated state in the nation, by the way. But I think also really cool people.

1:35Yeah. Some cool, some not so cool. Some pain in the ass. Yeah, that's true. That's true. Me too. Okay. Let's go back to the early days. For anybody who doesn't know, can you tell us a little bit about how you got your start and how this$1 ,000 loan slash gift launched this billion dollar business? It was my first truly lucky break in life. I recognized it for what it was just plain out luck. I was working my 22nd job as a waitress and I was 23 and a man walked into the waitress and asked to sit at my counter. And he gave me a ride home, became my boyfriend. And this was Ramon Simone. And a year later he said, why don't you start a real estate business?

2:13You have a great personality. I think you do really well in it. And he gave me a thousand dollars. He took 51 % of the shares, gave me 49 % of the shares. He was the financer and I was the worker. And that's what started my first real estate company until he left me for his secretary. Seven years later, I was so heartbroken. It took me a year, but then I ended the business. And fortunately I had the second lucky break of my life, which was, he said to me, going out the door, you'll never succeed without me. And I am telling you, I use those words for the next 20 years to build a giant business.

2:48I just couldn't stand the thought of him seeing me not succeed and that drove me on every day of my work. When he said that to you, you're never going to make it without me. Was there any part of you that was like, wait, is he right? Or was it an instant like, for me, my Jersey version, I call it FU fuel. And I'm like, bullshit is the best fertilizer. Like anyone tells me that I can't do something. I'm like, that is really my cue. Like watch me. Like that whole thing comes out. But you do need the cue. Yes. Yes. I think I spent the year leading up to the end of that business worried and doubting myself.

3:25After all, he had found me in my small town. He had given me the thousand dollars. He took me out of New Jersey, showed me the big city. He showed me the way to make money in real estate. And then suddenly he's gone. I thought I'd be nothing without him until he said that. And then I was like a steel rod. There was no way I was going to succeed. I love that. So So one of the things I loved learning about in the book was how unbelievably smart, creative, and clever you are about creating interest and desire. Oh, yes. Oftentimes where there is none. And for anyone, you know, we have such a big audience of entrepreneurs, aspiring entrepreneurs, established ones, people going on to their next chapter.

4:00And you did so many cool things. So I'm going to say three of my favorites and then we can kind of unpack. Nice to hear you have favorites. Oh, I do. It was the one empty desk story. Ah, really? Oh, I loved that. I love the one bedroom plus den because as we were just talking, I'm obsessed with Street Easy and apartments and it's just like my addiction. And then the one day, one price promo that was inspired by the puppy. So whichever one that you want to peel into, because I think they're also delicious. I'll do the very first one to begin with because it's short. I never advertised for salespeople with an S on the end and I was desperate for salespeople.

4:38I usually had 12 desks empty. I'm dying to get commissioned salespeople to sit in them and no one was coming in until I stopped advertising immediately for salespeople, come and be with us. And people just felt like I had an unlimited supply. And then I decided to write one empty desk. And I got five times the response to my ad was everybody always wants what there's a limited supply of. And that became my way of recruiting salespeople very fast. The second one was what? The one bedroom plus den story. Most importantly, much more important than the previous story. The one bedroom and den really gave me such a heads up of how to advertise in real estate or any game would apply to anything.

5:22I had one listing because my old boss allowed me to have a listing in his building to rent. And I looked at it and I compared to all the listings in the New York Times that listed everything. That day, it was like street easy. and everybody advertised the same thing. One bedroom, three 40, one bedroom, three 30, sunny, one bedroom, three 40. Well, and on and on and on when the, so I went back to my old boss. I said, if you build a wall between the living room and the L and put a double frame door in there, we'll call it a one bedroom and den and I'll get you$20 more a month. And I advertised $20 more a month.

5:57And the phone never stopped ringing. I ran that ad every single week for probably five years, I just kept getting another one Benjamin Dent to advertise. And he built those walls so fast because he got his$20 more a month. And that's called making more of something than you actually have or positioning it smartly. And from that lesson, I learned to position everything smartly and to really examine any circumstance I was in and think, how could I do it differently? How could I do it with a gimmick? How could I do it smartly? And that always gives you 10 times someone buying for your buck, which you need when you're starting a business because you're so poor, you don't have enough money to go around.

6:36Totally. Well, I think it's so important though for any size business. Yes. Especially when you're starving. Yes. Especially when you're starving. But I think also some businesses, and I'm curious to your perspective on this, when they start to get success, they might get a little lazy. Yes, very much so. You know, and so - Or they buy the help. Yes. Versus create their own solutions. That's right. And they get lazy on that marketing and lazy on that creative positioning of saying like, what do we have and how can we differentiate it? And these are like simple, but magical and profitable ideas.

7:06Yes, you're right. You know, the one day, one price promo. So you can set the context for this story, but I was thinking about it in sense of like, oh my God, there's all of these apartments that nobody wants and they're sitting on the market and they're just days and weeks and months going by. And I can't even imagine what the developers, you know, what everybody's thinking. And then you come up with this one day, one price sale. Tell us what this is. And it worked like a dream because I was able to make over a million dollars in one hour flat. Come on. Yeah. And this is back in, give us the year for context.

7:39I don't really even remember early eighties. Okay. But all I do remember very clearly, it was the worst real estate market I had ever seen. It was a time when interest rates were 18%. And if you were a broker in Manhattan, you were starving and going out of business because nobody would buy anything. It was, there was no market. Then a developer insurance company comes to me and asked me a solution to selling 88 dogs of apartments. They were the worst in the business. And there was no way to sell them. And I told them that. And fortunately, the developer said, you're a smart girl. You'll figure it out.

8:10I felt like I couldn't disappoint him. And I came up with a theory that I imitated a puppy sale that my mother brought us to when we were kids, where the farmer, who's a smart woman, had eight puppies and she had 20 people waiting in line to buy them from the city in fancy cars. My mother said, watch that farmer woman. She's smart. She invited everyone at the same time. And all the people from the city were fighting for the puppies. Why? Because there weren't enough to go around. And that gave me the idea how to sell the units. I priced them all, I equalized them, whether they were in the back, in the front, whether they were bigger, smaller, whether they had kitchens or not.

8:47And I said, first come, first serve, keep it a secret, going to only bring your best customer to my salespeople. I whispered it out because I had no money for advertising and they brought their customers, the best customers. And I woke up to like 150 people waiting in line for 88 puppies or apartments and they flew off the shelf because there weren't enough to go around and they were all equal. So somebody was going to get a better deal than the next guy. Isn't that amazing? Everybody wants, you have this in the book, everybody wants what everybody wants. Yes. Always the case in sales. I feel like I've seen that in our business.

9:22And, you know, we do a lot of digital courses and experiences. And I've had people tell me so many times, and I've been doing this now for about 22 years. They're like, Marie, why aren't you selling your stuff all the time? Why do you have these open and closed periods? I'm like, because scarcity is this thing in our human psychology and it creates interest and desire. And there's other reasons too. It's not just that, but I'm like, y 'all, these are real things. They're timeless ideas that can work in any business. I was even surprised I fell for it last night trying to choose a restaurant. There were three restaurants.

9:52I didn't really care what I want to eat. I just want to eat. And then I noticed the one was the most crowded with people waiting in line. I got in the line. Yeah. Did I know anything about the restaurants? No, but I figured the crowd meant it was the best restaurant. Yeah. Everybody falls for it every time. Let's talk about gut instinct because I know that has played a big role in your success. My gosh. I rely on it for everything. Smart lady. Thank you. Is there a specific example that comes to mind, whether it's recent or from your early days where the gut instinct was like, so there. And maybe other people were like, no, Barbara, you're crazy.

10:27You know what I mean? Trying to get you to go where they wanted you to go, but your inner compass was like, uh-uh. Probably the first thing that comes to mind is me hiring my first clunker, my first salesperson who was great at sales, but a chronic complainer. And when I sat down and interviewed her, I was really surprised because I was going to get a salespeople, salesperson who had a great track record, making lots of money. I'm like, wow, wow, wow. But something about her as she's talking and smiling, it was bothering me, bothering me. I hired her and I soon found out what was bothering me.

11:00She was a chronic pain in the ass. She complained about everything, drove me almost to sell my business to get rid of her. No way. And I realized you didn't pay attention to your gut because you couldn't define what your gut was saying. And that's not important. If your gut is hesitating, that translates to no, don't do it. Every time in my business career, when I ignored my gut, it was the wrong move. And most importantly, when I listened to my gut was when there wasn't the logic to back something up, like to justify a move or a spend or something like that. But just in my gut, I felt like I had to do it.

11:32They were always the best decisions. And, you know, let's talk about finding and keeping the right people, actually. You cued this up perfectly. I love the story of when you were first starting to hire all of your salespeople. I felt like that system was ingenious where you had folks come in and they were either dressed for success or not, and they either got a pencil or a pen. Can you walk us through why you did that? I feel like it was like such a callback to your amazing mother and her organizational skills. It was an organizational skill, you're right. Yeah. One of the issues in hiring salespeople is no one grows up saying, I want to be a real estate salesman.

12:12They fall into it. And so you have to think of a way to cast a big net to catch a lot of people who might think about becoming a real estate salesperson. Otherwise, you don't have enough applicants. You can't sharpshoot. So you're almost just trying to get as many bodies as you can in the door. So I had a gimmick where I would advertise, learn everything you want to know about real estate. It might be for you, noncommittal. And then people would come in by droves for my career nights. But the problem with it is if you get 50 people in, you have to do something with them after they leave. So I decided that if someone came in the door and they looked attractive, sounded attractive, and they seemed to have a happy disposition, I handed them a pen to sign in on my pad.

12:55And if someone came in, I was, ah, I handed them a pencil to sign in. So after the career night was done, the following day, of course, everybody would call you who was interested in joining a firm, which were the majority of the people, because I ran a great show for them, of course, and turned on the dog. But everyone who would call, I would just look at the list and if it was in pencil, I'd say, I'm sorry, that's been filled. If it was in pen, sure, when can you come in? So it just spun through a lot of people. So I was able to have a lot of career nights without spending a lot of time at it.

13:27Yeah. And going with the, you know, it was like, why waste time on the clunkers when you don't have the time and you don't have the energy and your instincts are like, no, if they can't even show up, like they, you know, give a damn. It's like, uh-uh, they can't represent the Gorkin group. There's an advantage to being underestimated. It makes you scrappy. It makes you creative. And above all, it makes proven the naysayers wrong that much more fun.

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14:27Let's talk about being the best boss. I feel like you've been praised a lot for being a great boss. I am a great boss. You are a great boss. I even like myself. I mean, this is amazing for most of us. To be able to get to really like ourselves and not bullshit, it's awesome. Do you have any advice for business owners who are trying to build a team and trying to become a great boss themselves? I think there's one capital lesson that everyone who wants to be a good boss has to buy into. And if you don't buy into this lesson, you're never going to be a great boss. And that is, you have to see yourself working for the employees, not the employees working for you.

15:00The minute you think you're the boss of the employees that tell them what to do, you're more important or more skilled or more anything, you limit your horizons. My attitude is, I have someone working with me. I will do anything in my power to get them ahead. Anything in my power to keep them. Anything in my power to introduce new things to them. Whatever is going to make them happy. and then I don't have to worry about being a boss. They're going to love me in return. It's just about love. I know it sounds hokey, but it has a good deal to do with love and loyalty you send out first and they give it right back to you.

15:32I've never seen an exception. Yeah. I don't think it sounds hokey at all. I mean, it's humanity, right? It is. It's human nature. It's human nature and it's the most important thing. We're going to talk about money in a little bit, but it's like outside of quote unquote success and business and building and creating and making deals. It's, you know, our health and our relationships, There's nothing more important. It's where you get your greatest satisfaction. A dollar will never give you the satisfaction you hoped it would when you earn it. Yeah. But when people love you and you have a happy family life at work, you're getting satisfaction all the way to the bank, whether you make the money or not.

16:04It's guaranteed satisfaction. Let's talk about when there are folks who are not so great. Like I loved the part in the book that was talking about shooting the dogs early and culling the dead wood and that you guys had as a policy once a year, you'd cut the bottom 25 % of your sales force. How important have you seen it both from your experience in the Corcoran Group, but also at Shark Tank to let go of underperformers and complainers fast? It's as important as hiring the right people. You could try all the tricks in the book to make sure you hire the right people and be right 80 % of the time, but 20 % will sink your team if they're in the team and complaining and pulling the team down.

16:44So you have to let go of people quickly. I think it's equally important when you hire someone to be extremely clear on what your expectation is. My expectation was very simple. Make a deal within three months or you're not meant for the real estate sales business. So they knew they had three months to make a deal or it was over. Most people I hired who couldn't make a deal fired themselves before I even had to fire them. But for those few that didn't, we, meaning my managers, myself, would meet with them and say, I'm so sorry. You know what the rule was? You haven't made three minutes, so we have to move on.

17:20Now there are exceptions to every rule. Sometimes someone has so much capability and you feel it in your gut, but they had a rough or a slow start. Then you make an exception and say, take another three months. What the heck? And you don't fire the person. But for the great majority of people in business, if you know how to hire expertly, but you're not keyed on firing quickly, you'll never have a really big business. Because what happens is I used to think if someone isn't producing, that money that I'm spending on the overhead is taken out of the pockets of the productive salespeople. I can't promote as well.

17:56I can't buy them as many gifts. I can't push them ahead. I can't get them more assistance because it's being drained by the people who aren't able. So I used to do it to protect my good people. I felt like the mother, I had to get my good kids to get ahead. And so I had no issue with firing people. So any tips around that? Because I think firing people, obviously, it's difficult. And you want to do it with respect and with compassion and with a sense of humanity. Is there anything that you would share for someone listening right now or watching, thinking like, God, any advice? I would never fire anyone without giving some careful thought to what they'd really be good at.

18:33And I usually had some good ideas as to what they'd really be good at. Sales is an unusually difficult business. Very few people can really sell on a commission basis. But I would watch the person before I fire them, talk to the manager, hear them on the conversation on the phone and think, what would I picture them succeeding with? And so when I sat down with them to tell them it wasn't working out, they weren't meant for sales, I was honest. You have to be brutally honest. Let me tell you why it's not working out. Not like you're no good, but let me tell you what skills are involved that are difficult for you to attain.

19:06However, those skills would really apply to this business, this business, and this business because it's a key skill that you do have. And why would you, I'm happy to act as your endorser. Just use me and all your references put me first and I would always endorse them. And so they would leave my office. My partner Esther used to say, when you fire people, Barbara, they leave your office looking like they got promoted. But in a way they did get promoted out of the business onto something they could do well. Yeah. They left like excited, ready to try the new thing that they were into. I think that's worth a gajillion dollars right there.

19:43I know that's kind of an overstatement, but it is because people, it's so important for relationships. I was talking about this on my team. There's people that I'm doing business with that I was like, oh my God, I've known them for 20 something years. It's like my accountant, when I was a bartender waiting tables trying to start this business, he's still doing my taxes. Yeah. Loyalty. Loyalty. And you never know how your universes are going to collide again in the future. So thank you for that. You know, I can tell you that many times during the real estate business, it's an up-down business. You're always going out of business on the down cycles, always out of business.

20:14So close, you owe out money. And you know, all your suppliers will stay with you. All the people you do businesses, if you're loyal, they always worked along with you. They got me through the recessions, not me, but they got me through the recessions, willing to wait for their money because of my loyalty to them and their loyalty back. It's so important if you're going to build a business. Let's talk about when you sold. You sold for 66 million. My lucky number. Your lucky number. And I love that. I feel like someone, right, there was a suitor who wanted to offer you 22 and you're like, nope, 66 is my number.

20:4466 is better than 22. Oh, it's a hell of a lot better. All into it. So you were writing about in the book when you saw that money in your account, you shared that you would be absolutely crazy not to feel on top of the world, but you felt sad. So I'm going to share your words here. I was running around with a deep sadness and I didn't know how to fix it. What was that experience like? Because anyone listening to us right now going like, OMG, 66 million. You just sold your company. You're seeing all that in your bank account. Why would you be sad? Yeah. I'll tell you why I would be sad because money was never my God.

21:16It was great having 66 million and I would never give it back. So I love having 66 million and everything it brings to you. But I wasn't aware. I didn't pause to think what I would lose. And I thought I'm selling the business, the business. But I should have defined what the business was. What I had done is I sold my family. I had sold the thousand people I had trained, hired, loved me, did special events with me, were always with me all along the way for those 15, 17 years I was building the business. I sold my notoriety. every press person in town was calling me because I was so good at publicity.

21:53They leaned on me for numbers that they wanted, for comments they wanted. I sold the notoriety and my family. And without the notoriety, I felt unimportant, as ashamed as I am to admit that. I love people adoring me and asking me for my opinion. And without my family, what was I going to do? Talk to the wall? It was just terrible. So I really regretted selling the business almost immediately. it was a very, very hard vacuum to fill. How long was that period after? Because I can only imagine the soul searching. I love my work so much. And sometimes when I've felt either exhausted or burnt out or run myself ragged or just lost some spark of what makes me so excited about what I do, I'm like, well, I don't quote unquote have to work anymore.

22:40And then I go and that's and I'm like, oh, no. I was like, absolutely not. Because I love the act of creation. So I'm just curious what that kind of next period was like for you. Was it like a few years before you're like, okay, here's how Barbara's back. Like this is your next chapter. I wasn't back so fast in people's minds, but I was getting back in my own mind. Yeah. What I had decided to do is reinvent myself. What else could I do other than run a real estate brokerage firm? And I knew one topic, only real estate. That was a starting point. I wasn't going to be an expert on vacuum cleaners or anything like that.