Barbara Corcoran, CEO of Barbara Corcoran Inc.
What Shark Tank’s Barbara Corcoran Can Teach You About Entrepreneurship
Barbara Corcoran doesn’t look far past the family tree for inspiration. While many entrepreneurs seek seasoned businesspeople to learn from, Corcoran’s mentor was her mother, not because her mother managed a company—she didn’t—but because she managed a family.
“She ran our little, tiny two-bedroom flat like a corporation,” Corcoran recalls. Everything was organized, and everything had a system. Her mother did a phenomenal job motivating each of the children, helping them do what they did best. “If she had been in business, she would’ve been a tycoon,” Corcoran says. “I wouldn’t have wanted to compete with her.”
Common sense was one of her mother’s virtues, and it’s a trait that Corcoran says is vital in business. “I think you have to trust your natural instinct,” she says to aspiring entrepreneurs. Business is about street smarts. It’s not something you can learn in a classroom—you have to do it.
That’s exactly what she has done. Corcoran’s resume includes several businesses and millions of dollars, and she’s now a “shark” investor on ABC’s Shark Tank TV series.
She started young. “I had a flower-of-the-week club when I was in college that failed miserably,” she says. “It was good for a while and then it failed. How did I get that job? I just invented it.”
She later founded two real estate companies. Failure isn’t exactly how I’d describe these: she sold one of the companies for $66 million. She invented those jobs, too.
Corcoran has channeled that experience into her role as an investor on Shark Tank, a reality TV competition that pits entrepreneurs against each other in a contest to pitch their ideas and get big funding. The show’s run includes six seasons, and she’s been along for the whole ride.
Here’s Barbara Corcoran’s One Simple Tip for Mastering Your To-Do List
Corcoran told Foundr that she tries to focus on the tasks that truly matter.
Each morning, she glances at her to-do list and rates each item with an A, B, or C. Then she starts immediately with the A’s.
What makes an A? Any item that’s likely to bring a great amount of success. The other stuff is small, and it can wait.
Competition is built into the show’s premise, but according to Corcoran, it’s a concept that stays afloat beyond the tank. “If you’re not competitive, you’re not going to succeed in building a business,” she says.
That’s not the show’s only takeaway for everyday entrepreneurs. To win the game of business, you should play to your strengths. When Corcoran partners with startups, she dives right in to that. “The first thing I do is I try to figure out what the individual entrepreneur’s strengths and weaknesses are,” she says. “What are they good at? What are they bad at?”
Once you figure out what your own strengths are, you need to compensate for your weaknesses, which could include hiring people to do tasks you can’t do well yourself.
But knowing and embodying your talents isn’t just a narrow tactic. For Corcoran, considering a person’s strengths can filter out which business ideas hold promise. “It’s got to suit the entrepreneur or it ain’t going to go nowhere,” she says. You should mold your company to what you’re good at.
No matter a plan’s merits or a person’s motivations, startups rarely blast straight to the stratosphere. Corcoran is convinced that she knows what separates the non-starters from the go-getters: “Their ability to take a hit,” she says. “Their ability to take a hit and not feel sorry for themselves.”
Successful entrepreneurs don’t lay down—they get out and try again.
Corcoran praises that ability to come back swimming against the current. “All the good stuff happens in the bad times,” she says.
She remembers back to her days in real estate, when interest rates in New York City has scaled the charts and topped off at 21%. It chilled the housing market and challenged Corcoran, who faced huge debt as a result of the slowdown.
“I hardly could sleep at night, and it was going on and on,” she recalls. “There were lots of apartments that couldn’t be sold.”
But she took the hit. Instead of feeling sorry for herself, Corcoran made plans for success. “I went to Equitable Insurance, which is a huge insurance company, and I told them I had an idea to sell 88 apartments in an hour,” she says. “They didn’t believe me, but they gave me the shot.”
With big money—and her future—on the line, Corcoran had to outmaneuver market realities. She set a level price for the 88 apartments, and told her salespeople to invite only their best friends, their best customers, and a family member or two. With a limited number of units for sale, she made clear to potential buyers that there weren’t enough to go around. The gambit worked, and all 88 units sold within an hour.
Corcoran just kept swimming. It’s a story whose waves reveal a pattern: to take a hit and take advantage of hard times, always look for opportunities to exploit.
One such opportunity today, Corcoran believes, is crowdfunding. It allows anybody to pitch their idea to the Internet and solicit small contributions from thousands of backers, which can propel entrepreneurs over the prime barrier to business: money.
“I would say that at least 40% of all the entrepreneurs that we met on Shark Tank already had raised a lot of money online through crowdfunding,” she says.
You can teach yourself how to crowdfund. Analyze successful crowdfunding campaigns. Watch their videos. Read their copy. See their products. Figure out what works.
Learn More About Crowdfunding With Our Epic Guide
Crowdfunding—jumpstarting an idea by raising small sums of money from a large number of people, usually by offering rewards to backers—has democratized capital. The money to fund your idea exists, and you can have it if you run a successful campaign.
We’ve poured hours into assembling a special guide that will help you do just that. Featuring the stellar writing and actionable advice that you’ve come to expect from Foundr, the guide includes over 13,000 words worth of tips from people who’ve raised big bucks: Starstuff Clothing, the Oto-Tip, Who Gives A Crap, and more!
We even scored an interview with IndieGoGo co-founder Danae Ringelmann.
Corcoran sees promise in crowdfunding: “The access to capital isn’t at your local bank—it’s online.”
Whether you crowdfund or bootstrap or raise venture capital or wind up on a reality TV show like Shark Tank, Corcoran’s story makes clear that determination and common sense go a long way in business. With the right attitude, you can find opportunities. With the right opportunities, you can succeed.
And the journey is worth it because you design the destination. By becoming an entrepreneur, Corcoran says, “you’re 100% in control.” You can invent your job. “Do you know how much better that is, to create your own world exactly as you want it?” she asks.
“You can only do that if you’re working for yourself.”
- Barbara’s story on how she rose to success
- The critical elements she believes it takes to become a successful entrepreneur
- A super productivity hack to get the most of your day
- A super productivity hack to get the most of your day
- What Barbara looks for in an entrepreneur and the companies she invests in
Full Transcript of the Podcast with Barbara Corcoran
Nathan: Hello, and welcome to the “Foundr Podcast.” My name is Nathan Chan and I am your host coming to you live from Melbourne, Australia. I hope you’ve all been having a great week. It’s starting to get really, really rainy here in Melbourne, and I really, really don’t like the rain. So yeah, just stay indoors and try to avoid the rain as much as I can.
What’s been happening in my world? You know, it’s funny, we talk about hustle and we talk about wanting it bad enough. I’ve been saying with you guys around my e-mails, and I had, like, 300 last week. And I just smashed it out so hard. I use this tool called RescueTime, and I highly recommend it, because it tracks all your activity on your computer. And it turned out that I spent around 42 hours on my laptop last week. And doing that, I spent around 22 hours in Gmail. And what was the result of all those hours smashing away on the keyboard? I actually really, really hurt my wrist. So it’s what my friend actually calls “Progammer’s Disease.” I’ve never had any wrist problems before, but you know, that was a sign for me to take a break, I guess, from smashing it out. So this week, I’ve had a bit of a break.
And it’s been awesome, actually. I’ve just been watching some really cool TV series and taking it easy. But I’ve also been doing some really, really epic interviews. So I’m not working as hard as I usually do, but I’ve got some epic interviews coming for you guys, and I’m so extremely excited to bring them to you.
So now about today’s guest, it is the one and only Barbara Corcoran from “Shark Tank,” and she was an absolute pleasure to speak with, guys. She shared a lot of entrepreneurial gold with us. And in fact, I even…like, I sent her a list of questions that I was going to ask and cover, and I forgot to ask one of them, and she actually put me up on it towards the end of this interview. And she said, “Aren’t you gonna ask me this question? Because no one’s ever asked me this before.” So make sure you listen to the whole interview, because I know you’re gonna absolutely love it. Barbara’s an absolute superstar, real estate mogul, investing mogul, and there’s a lot you’re gonna learn from her.
So that’s it from me, guys. If you are enjoying the show, please do take a minute to leave us a review on the podcast. Check out the magazine, visit our website, visit us on Instagram, Facebook, Twitter, you name it. I’m gonna plug myself hard because the more that we spread the word of what we’re doing at Foundr, the more our mission spreads, and the more businesses we can create, and the more game-changing things people can do to live a fulfilled life. So that’s it from me, guys. Now, let’s jump into the show.
Thank you for taking the time. And can you give us a run-through of how you got your job?
Barbara: Oh, at “Shark Tank,” you mean? My business, where I built my business?
Nathan: Your job as an entrepreneur.
Barbara: Oh. Well, that was my first one. Actually, I had a couple of businesses. I had a “Flower of the Week” club when I was in college that failed miserably. It was good for a while and then failed. How did I get that job? I just invented it. Then, of course, I started a real estate company, which was a huge success, and I ran it for close to 30 years. Built it and ran it…well, I really had one other real estate company with a partner that I ended. And then I started a second real estate company, had that for 30 years, and then sold it for $66 million, thank God. And then I was fishing around for what to do next, and I started doing some TV work, and then I got my job on “Shark Tank.” Actually, I saw an ad when I was in Melbourne that you’re gonna have “Shark Tank” coming on your TV sets, I think, soon. I saw an ad for it.
Barbara: Yeah. So I’m one of the sharks on that show. Of course, in the United States, where “Shark Tank” got started, and we’re in our sixth year. And as a result of that particular job if you want to call it, or “gig,” as I would call it, I started buying into all of these small businesses. And so, I’d become a partner with many entrepreneurs. And so, I’m doing a lot more of what I originally did, was build businesses. It kind of went all full-circle on me.
Nathan: And I’m really curious…like, I’m a massive fan of “Shark Tank,” and you do fund a lot of businesses. Are you able to give us an insight to the process you take entrepreneurs and businesses through once you fund them via “Shark Tank”? How do you take that business to the next level?
Barbara: I actually start that process before I fund them. Because once we’ve come off the set of “Shark Tank,” we’ve committed to a business. It usually takes a good two to sometimes three months to do due diligence on the firm. Where we’re poking and poking and trying to figure out “What’s wrong with it?” Or “Am I gonna lose money? Am I gonna make money?” Assuming we close on the business, which is a great majority, unless there’s something desperately wrong with them.
I do the same thing every time. I don’t even…I guess you would call it a “routine.” I didn’t mean it to be a routine, but it’s effective for me and it’s effective for them. The first thing I do is I try to figure out what the individual entrepreneur’s strengths and weaknesses are. Their personality’s strengths and weaknesses. What are they good at? What are they bad at? And I make myself a list. How I do figure them out? A) by looking at their business through due diligence, and B) by talking to them. I talk, I see what they like, what they don’t like, what turns them on.
And then, very importantly, I just have a click in my head. I try to focus, hyper-focus in on “What do I see this business becoming?” You know, “What does it want to become? What does it want to be when it grows up?” And I get the picture in my head and I’ve never changed my mind. And I’m always right if I could brag. I just get that picture, based on who I have there, and I go, “Yep, you know what you’re gonna do? You’re gonna turn this into a franchise.” Yep. “You know what you’re gonna do? You’re gonna sell.” “You know what you’re gonna do…” because you know why? It’s got to suit the entrepreneur or it ain’t gonna go nowhere. They might have fun with it for a while, but I’m never gonna make money, it’s never gonna get big, and in the end, it’s gonna lead to disappointment on everybody’s side. So I really want to click the big picture based on what I think their advantages and disadvantages are.
And then so far as building the business day to day, I’m always trying to compensate for what they don’t do well. In other words, “Who do you hire? Why are you hiring that guy? He’s just like you. No, no, no. What you need is an inside guy. You’re an outside guy. You need an inside guy. You need a guy who’s good at this,” da, da, da.
So I try to keep shoring them up, I guess. Trying to make the foundation rock solid so it can support big business and a lot of growth. Because the odd thing happens on “Shark Tank” that doesn’t ever happen to any other new business in America from what I’ve seen: it gets showered overnight with notoriety. The good news to that is you get one big shot at running it up the flagpole in sales. The bad news to that is it tends to swell the heads of the entrepreneur. All of a sudden, they think they’re geniuses.
And that’s when I start the other half of what I do with these guys. I start squeezing their heads in. “No, you’re not a genius.” “No, you’ve had a good month.” “No, you’re gonna have inventory problems, you’re gonna have cash flow problems, you’re gonna have management problems. So let’s get ready for it.” Because I really see, “My god, I went from $50,000 in sales in my first year and ‘Shark Tank’ night, I did $700,000. My god, we’re rich.” And then. Because they don’t want to spend the money right away. “Let’s our company, let’s do advertising. Let’s…” “No, we’re not doing anything now. We’re gonna build a business.”
So I get kind of down and dirty on all that stuff. But you know what? It’s essential. Because it’s an oddball kind of a way to build a business under the lamp light of “Shark Tank” and that primetime coverage. So I like to take advantage of what’s good about it and definitely control what’s bad about it. Most of them want to have a reality TV show. “Oh, we’re gonna do a reality TV show. We’ve got an offer.” “No, you’re not. Put it in your files two years from now.”
Nathan: I see. And I’m curious, what can our listeners and readers learn from, I guess…because not everyone can get on “Shark Tank” and be funded by you. What lessons they can learn to grow their business?
Barbara: Well, there’s something other than “Shark Tank” that makes money, which is the major reason why people don’t go into business. It’s not lack of dreams, but lack of money. Which is called crowd-funding. And I’m gonna tell you, in the last season on “Shark Tank,” I saw a marked difference. I would say that at least 40% of all the entrepreneurs that we met on “Shark Tank” already had raised a lot of money online through crowd-funding.
And you know what? That’s what everybody should know. That the game of getting investments to start a business on “Shark Tank,” that’s kind of like the Hollywood version of crowd-funding, right? But to the everyday person, they could make a video pitch, say what they believe in, put it up online on any of those giant sites out there and raise money. I believe raising money on that is easier than any other money they’ll ever get their hands on.
I remember going back about a month ago, I had heard that there was a guy who started a honey business with bees…I think he was in Vermont or Maine, up north of where we are, up in the country. He had raised over $1 million to buy honey and bees, and I’m like, “How does he do that? He must really know that business.” I looked at the video, he was a guy who could hardly talk English. Because he was that illiterate. And he was plain-looking, he had no expression, he almost looked like a spoof on a beekeper. But he said, “I really like bees. I really need some money to get my bees and I’ll send you the first jar of real, fresh honey.” I thought it was laughable, but he raised over $1 million. Unbelievable.
So the access to capital isn’t at your local bank, it’s online. But that is something that if people aren’t using, they’re crazy, you know? And you can educate yourself. You can go online. You can see who raised the most and watch their videos. You could watch 50 or 100 or 200 of them and do your own. Is that very common in Australia right now?
Nathan: Yeah, yeah. Look, yeah, we’ve got a crowd-funding platform that originated from Melbourne and it’s quite popular called Possible. We recently interviewed the founder of Indiegogo for a whole crowd-funding series.
Barbara: It’s very accessible isn’t it?
Barbara: Don’t you see? It’s accessible to everybody.
Nathan: So I’m curious…
Barbara: Nobody your educational background, yeah.
Nathan: I’m curious, what is a common problem you see in early-stage startups and businesses? And what do you think is a likely fix?
Barbara: On all of my businesses, of course, every platform…the biggest challenge I have, and I know this doesn’t sound that exciting to write about, is shipping. Shipping here…I don’t know how it is, it’s extremely expensive. Outwitting the shipping system, how do you get your rates down? Because there’s also…concurrent with that, there’s a feeling among consumers that they hate to pay for shipping. And we have many products where the shipping is more expensive than the product. So skinning that cat is a real issue. You know, how do you position it?
So you come up with clever ways. Like, for example, I know we just changed…one our businesses is named Daisy Cakes. She produces homemade cakes from her homemade kitchen…now, because her business is successful, but initially, she was doing a year, 30 cakes a year. But what was difficult for her is she has to bake the cakes, freeze them immediately, ship them frozen, and get them…expensive shipping. It weighs a lot, it’s frozen goods, so it’s a special rate here. It needs a big box to accommodate both the cakes and the ice, the dry ice, all right? And she’s got to get them there fast, which is more expensive shipping, right? So matter what we did, we brought the shipping down by nickels and dimes, you know? But we really couldn’t…until we came up with the idea that she simply puts on her website “Get an additional…one more Daisy Cake for no additional shipping.” And now, two-thirds of her orders are for two cakes versus one. That made a huge difference in her business. So that’s a good example of getting around shipping issues here.
Another example is I have another business that sells fresh lobster and frozen lobster and they ship nationwide.
Nathan: Ah, nice.
Barbara: And shipping’s an issue for them for the same reasons, but how they got around it is they used the “Shark Tank” card and talked about how much they were gonna ship, how much they were gonna sell; they’re great salespeople, these two guys. And they got our largest shipping company to discount their rates almost 50% in anticipation of great quantities. The quantities never happened to the degree that they had hoped, but they got those low shipping prices. So shipping is an obstacle that every entrepreneur, young business has to deal with, okay? That’s one.
The other big one…and of course, I’m in a little unusual position with my businesses because they’ve aired on “Shark Tank.” And so, getting big heads is my biggest problem, and staying focused. Because once they get primetime TV, people fall in love with them, they get jobs offers from all over. “Why don’t you do this?” “How about you extend your line?” “Do you want to open restaurants instead?” “Or do you want to do an addition? What about a franchise?”
They get hit with so many offers that are…so you went from rags to riches overnight, it’s very sexy for these kids, you know? So jumping their initial successful wagon too quick and jumping on to a bunch of wagons is always an issue, trying to keep them focused. I would say those are…one’s very practical and one is psychological, I guess. Those are the big problems that I feel like I hit on every business.
Nathan: Interesting. And when it comes to focus, you know, I’m curious around how do you focus with so many things going on? Do you have any tips, tactics, or strategies?
Barbara: I certainly don’t have answers. I’ve gotten better at it. Do you know, when I built my business, I had 1,000 people working for me, and I probably had 40 managers? So anything that came across my desk, I would just decide whose category it was, anything that came at me, and throw it to the very capable person. Everything was done, bang, bang, no issue, right?
Now, I’m in a very different business. I have a very small office; I have five people that work here. Everybody has their specialty, but I’m involved in all of it, because I’m the TV person. You know, I can’t somebody to do “Shark Tank” for me. I can’t send somebody to become the partner of these entrepreneurs, you know? So I could delegate a lot, but I can’t delegate enough. So as a result, I’m scattered; it’s a very difficult thing, and I’m a hyperfocused-type person.
So what I have done instead, on the other side…I’ll skin the cat from the other side. What I do is I try to size up as quickly as I can “Who’s gonna really make it? Who’s gonna be a big hit and who’s not gonna be a big hit?” And I would say one in four of the businesses I invest in, I feel rock-solid that they’re gonna be a huge hit, okay? I just have to give a little time and a little energy.
And so, those people, I spend with. The minute I sense that someone isn’t gonna be one of those huge hits, I don’t spend any more time with them. I’ll say. They don’t ever call. Rarely call. And then I have a little technique I use in my office that keeps me on the straightened arrow. I frame each entrepreneur, pictures of them, the minute I close on them and I hang them on my wall in my office. And the minute I realize they’re not gonna make it, I turn them upside-down. They’re still on my wall, but. It’s to remind me not to spend any time on it, you know? It keeps me straight. And then I have all this time in the world to spend with my people who are very capable.
And that brings up another question you didn’t ask, or maybe you did, or maybe you meant to, but you’re gonna get the answer for it now. What’s the difference the one in four that are hugely successful than everybody else? And you know what I narrowed it down to? Their ability to take a hit. Their ability to take a hit and not feel sorry for themselves. All the other ones that are hanging upside-down, took a hit, took a hit, and nursed their wounds. And “Oh, poor me,” and “Oh, my, we better not try that again.” And “Oh, blah, blah, blah.” And my best entrepreneurs are the ones with the lowest IQs. They simply take a hit, get hit, and say, “Hey, hit me again.” You’re not so smart, “Hey, hit me again.”
So that what helps me organize better, and I at least know my priorities. And then the only other organizational thing I could share with you, but I bet everybody in the world doesn’t, is I take my to-do list in the morning, which is divide it into calls, followup, and projects. And I rate them “A,” “B,” or “C,” that’s it. And I get rid of the “As” right away, which are not usually the fun ones.
But what makes an “A” on my to-do list is what has the best likelihood of bringing the greatest amount of success. Not what I like to do, but with the best upside potential. And that becomes an “A.”
Nathan: That’s great.
Barbara: That’s it.
Nathan: I want to switch gears. I’m curious around…you know, I love watching “Shark Tank,”and it’s been really inspiring for me. I’m curious…
Barbara: Do you watch our “Shark Tank” in Australia?
Nathan: Yeah, I’ve been watching it for years.
Barbara: You mean “Shark Tank” has aired in Australia?
Nathan: No, no, in America.
Barbara: Oh, in America. Oh, yeah, but can you see the American “Shark Tank” in Melbourne? American TV?
Nathan: Yeah, I just watch it online.
Barbara: Oh, online. I’m forgetting about that. Okay. But it’s not on your network TV yet, right?
Nathan: No, no, no.
Barbara: I see. Okay. You know why I ask that? Is because one other thing that was so nice about being in Australia is I only posted pictures three times, and I was there for ten days. It was like free of “Shark Tank.” I was anonymous. It felt wonderful. I was really, really on vacation. Yeah.
Nathan: Well, that’s awesome.
Barbara: Yeah. So I’m shocked to hear that anybody in Australia had ever even seen “Shark Tank.” I felt nobody had ever heard of it, never had seen it, because everybody left me alone.
Nathan: Yeah. That’s really interesting.
Nathan: Well, look, I’ve been watching it for a very long time. And it actually kind of segues great to the next question, and that is why don’t you like investing in technology businesses?
Barbara: It’s nothing against technology businesses. There are two notes of caution there. The most important is I don’t know enough about it, okay? I think you need technical expertise. I can judge whether it makes common sense, the concept of hearing it on “Shark Tank.” But I can’t judge whether it’s gonna compete and win because I don’t know the marketplace well enough. I don’t know what else is out there competing with it. Whereas when I buy into the consumer product, it’s something I know. I shop, I eat, I live. And so, I have that firsthand experience, all right? If someone told me, for example, that they had a new taxi app that was gonna send a taxi immediately to your door whenever you wanted it, that I know. Because I use Uber and I would say “You don’t have a chance in hell. I’m not investing.” You know, I’ve already covered that one. But if it’s not something so obvious and so well known as that…and they rarely are, it’s usually a splinter business or something, I can’t judge it well. I don’t trust myself.
I very much trust myself if I know something about something. I have a gut reaction, I follow it. But I don’t get that same gut reaction in the technology space. However, if Mark Cuban, who sits to my right, says “I’m in it,” I will often jump in to the deal. Because he knows that space inside and out, you know? That’s a little different. But no, I don’t like to invest in things I don’t know.
You know, I’ve been in real estate my whole life, and I’ve watched people make a fortune in real estate, and I’ve done very well with properties I’ve bought, traded, and held on to and rented out over the years. But I’ve watched so many people much smarter than me lose as much money as I’ve made. And you know what they forgot about? They forgot to invest in their own backyard, what they knew. They went to Dallas or they heard that this market was phenomenal and off they went. These people always lost their shirt. I like to stick with my and know what I know. And do what I know. Because my chances of success are so much better.
Nathan: When it comes to real estate, do you have any basic tips? Like, one thing that you would absolutely recommend besides just following your gut to hold you in good stead?
Barbara: You’re talking about as an investor or buying a home for yourself? Those are two different halves.
Nathan: As an investor.
Barbara: Yeah. I think the best I could share in a shared story of every country, is a restaurant that’s really hip and you have a young, gay waiter. Ask him where it is. That’s happened…I’ve discovered every up and coming neighborhood in New York early. Like, two years early before everybody was there. Because they say, “Oh, yeah, yeah. Well, actually, I’m living in the South Bronx, it’s a pain in the ass. But I have a couple of roommates, and you know, we have a lot of space there, we don’t pay a lot.” I’m out there with a bodyguard and a driver at night within a week looking at that neighborhood. Because you know why? The creative community always discovers it first, value drives people there, and once the creative community has settled in an area, you see the nightclubs at night…you won’t see it during the day because everybody’s working their ass off during the day. But you go there at night, and you see the nightclubs hopping around in a ghetto area? Something’s happening. I’m gonna tell you, you go back there three years later, yeah, he’s moving in. The stores follow late, the businesses follow late, but it’s an early head’s up as to what’s gonna pop. That’s what I really believe. And I’ve never been led astray on that.
Nathan: That’s really interesting. So you like to follow trends, or hit the trends…
Nathan: …before they come?
Barbara: How do you make your real money if you’re a real estate investor? You get in early and you ride the value wave up. So I like to be in early by following the predominantly gay community into the neighborhoods that they first move in to. For example, today, you can’t touch Chelsea…this is a part of New York that’s very popular now. It was an entirely gay community, dirt cheap. Nobody wanted the West 20s. Now, it’s the hottest neighborhood, or one of the top three hottest neighborhoods. But it took 15 years to get there, you know? But I bought my first Chelsea building 20 years ago, because of a nice, gay waiter. “Where do you live?” “The West 20s.” “There’s apartments in the West 20s? I thought that was the Meat Packing District.” “No, there are apartments, really cheap space.” “Oh.”
Nathan: Wow. Yeah, that’s really fascinating. I’m curious, who do you learn from? Who influences your decisions?
Barbara: Well, the best businesswoman is my mother. And I have to say, it influences just about everything I do every day. And what did my mother do for a living? She raised ten children. So she never worked outside the home. But if you had been in our house, you would have seen she ran our little, tiny two-bedroom flat like a corporation. Everything had a spot. Every system had a system; she never did the same thing twice, she’d create a system for it. Every kid marched in line. If she had been in business, she would have been a tycoon. I wouldn’t have wanted to compete with her. She had that kind of organized mind and she was also a phenomenal motivator. And boy, could she judge people. She would have each kid do what they did best naturally, you know? She didn’t arbitrate arguments. If you went to my mother with an argument with a sibling, you both got punished. She was extremely efficient. You didn’t go to her anymore. You just settled your own arguments, you know?
So every…I really feel like she gave me a blueprint, which I used in building my first business enormously, and I use every day with my entrepreneurs. Every day with my entrepreneurs, you know? I was even…a month ago, I had an issue in my own office with two people who weren’t getting along. And I thought, “What would Mom do?” And you know what I did? I took them in my office and I said, “Listen, you’re telling me this about her, and she’s telling me this about you. I’m gonna close the door. You guys work it out or you’re both fired.” And guess what? I haven’t had any more arguments since. That’s what my mother would have done. It was just like, “You’re both punished, you’re both fired.” There you go. Done. Got rid of that problem.
So she just had enormous and common sense. And you know what? Business is overrated so far as having anything to do with math, numbers, and learning. It really has so little to do with it when you’re building a business. What it has everything to do with is people smarts. Who you hire, what you use them for, how you motivate them, how you reward them,how you keep them vested, how you listen. You know?
And so, I think I really got my little Harvard MBA back when I was a kid, you know? Until I was 18 and got out of the house.
Nathan: That’s really interesting. And do you have mentors now? People that you go to?
Barbara: No. I really don’t. You know what I go to? I go to my instinct. “Does it feel true? Does it feel right?” And when it does, I don’t second-guess it.I just go with it. Because you know what? The one real you hear, and you could speak to your own culture, is that…which I think, frankly, is like a young America. The second time I’ve been to Australia, it’s always just a young, happy America. Maybe I’m getting a tourist view of it, perhaps.
But one thing…god, what was I saying? What was your question? I just lost my train of thought.
Nathan: Do you have a mentor?
Barbara: Of course. I was starting to say to you that there is so much emphasis today on education, which is a very good thing. But I think so many people think they could learn business, learn about it in the classroom, and there are so few people who are out in the street really learning about it. You know, you’ve got to be on the street, on your feet, thinking on your feet. It’s a different kind of smarts, it’s a street smarts.
And yet, so much of the decision making today is weighed, it’s logical. What’s the upside? What’s the downside? Let’s have a look at this. Let’s see what somebody thinks. And by the time you go through that whole process, the opportunity’s gone. That’s what I think. So I think you have to trust your natural instinct on whether you go or stay, or run away. And go with it. It’s not a left brain exercise to the degree that people think it is.
I remember when people always used to ask me, my competitors as I got much bigger than them and surpassed them, they used to say, “Well, how do you…you always seem to open your offices, like, right on time, early, and then the market catches up. How do you do that?” And I didn’t tell them because they were my competitors; I’m not that nice.” But how I did it was I would just come in on a Sunday night from the country and count the cranes on the New York City horizon. Just count the cranes, boom, boom. Nothing compared to the cranes in Melbourne, by the way. You’ve got so many more than all of Manhattan.
But I would come in and count the cranes, and I would set my ad budget and my office moves based on the head count of the cranes. That’s it. It’s not a financial statement, not a big analysis, but “Hey, there’s a lot of stuff going on. Better move forward. That’s it.” Not too fancy, but it worked. Always. And I was never surprised.
Barbara: But that, you don’t learn unless you’re in the street learning it, you know? Building a business, yeah.
Nathan: And was it always easy for you? Can you tell us about some of the hard times, the struggles, the sacrifices you’ve had to make to get to where you are today?
Barbara: All the good stuff happens in the bad times. I don’t think I ever had a great idea…anything that made a substantial difference, it was in the bad times. You know what? Things were rolling along, everything comes easy, everybody is spending money. Anything you throw money at kind of works because the context is all working, right? It’s not you, you could start to think you’re really smart. But it’s the context that’s working. It’s in the bad times you find out who’s smart and who’s not. Who’s clever, who can outpace it, outrun it. Just, you know, stay with it until it’s gone, and who could think of creative solutions, all right?
And so, I think it was in the bad times that all the struggle came. But with it came always the best successes. I could give you 100. Let me think, early on…the first thing ever was when I gave my first speech and Iost my voice, and I didn’t think I just wanted to see anybody publicly again. I was so mortified, you know? It’s embarrassing. Everybody does that. I didn’t know that then, I was a kid, I was 22, right?
But anyway, so I sign up to teach a course at night, so I wouldn’t know anybody on how to sell real estate because that was the one thing I knew how to do. And who walks into that classroom the very first night is Carrie Chiang, who is still today the number one salesperson in New York City. And she comes up to me and says, “You know how much money I make?” “How much money do you make?” She said, “$220,000 in six months.” My top salesperson was earning maybe $60,000 in 12 months? I hired her out of that class by the end of the 12 weeks, right? So that was a bad time for me, personally, but look at the prize I got. I got her and her two cousins working for free moving into my office.
I remember when we had…I don’t know if you had in Australia, we had interest rates that went to 21% in New York City and it stopped the market. We had no sales for a year and a half. I owed over $300,000, which maybe doesn’t sound like a lot to you, but at that time, that would be like today owing maybe $2 million and have no way to pay it, you know? I was…I could hardly sleep at night. And it was going on and on. I was hoping it was gonna change, hoping it was gonna change.
But it was in that climate that there was lots of apartments that couldn’t be sold. Insurance companies owned them, banks owned them. Developers couldn’t unload them. Blocks and blocks of apartments. I went to Equitable Insurance, which is a huge insurance company. I told them I had an idea to sell 88 apartments in an hour. They didn’t believe, but they gave me the shot.
And what I did is I priced them all. Like, “Big apartments, little apartments. Back apartments, front apartments. West Side apartments, East Side apartments.” I set a level price. And I told my salespeople “Only invite your best friends, one maybe, one best customer, and a family member, because we don’t have enough to go around. It’s a one-hour sale. First come, first serve.”
What was I really doing? I was imitating a pick of the litter with a puppy sale. You know, if you three dogs and 12 people who want them, all the dogs get good really fast. All the puppies, right? And that’s exactly what I did with these apartments. They all sold within an hour. I made over $1 million in an hour in the worst real estate market.
So you could say that was the worst time, it sure was the worst time. I was going out of business. But it was really also the best time. The best opportunity, you know? It couldn’t have happened in a good market. Everything would have been selling, right?
You know, I started after a while thinking that if something was wrong, I could probably really find a solution if it got wrong enough. You know, like, waiting for the bad times, right? It’s kind of a sick view, but I started thinking. “There’s gotta be something good coming here. This is so bad,” you know?
Nathan: Okay, this is great. Last question, because we have to work towards finishing up. What can the readers and the listeners take away from your skills as an entrepreneur that you’ve acquired over so many years? What are three action items that you would like to give?
Barbara: Yeah, no problem. I could give you probably ten. The first and foremost on the list and more important than anything else is the ability to take a hit. And I know everybody talks about persistence and everything else. But I would put it in a different way. I think when I look at my phenomenal entrepreneurs and the ones that aren’t doing well, it really is that my phenomenal entrepreneurs don’t have that gene or they’re missing the gene that lets you feel sorry for yourself. And when you’re missing that gene naturally, or you’ve learned it, however you wound up that way, wow, is that an asset. Because while the next guy is, like, templing his next effort because he got hit so hard or lost so much, or was rejected so badly…you know, it’s like a scorned lover, you know? You don’t go out in the field right away and start dating right away. But a great entrepreneur is very different. He gets scorned and he figures there’s got to be something better right there, and he’s back out.
And it is a lack of intelligence of sorts. And so, I find that very often, the kids that are the worst students in school wind up being the best entrepreneurs. It doesn’t mean they’re not smart, because there’s all kinds of different smart, but they’re smart in that kind of way. Especially if they grew up, you know, with a lot of hardship or challenges…whatever the challenge is. Whether they be learning disabilities, whether they be family challenges, emotional challenges. They come out of the gate needy, very needy and accustomed to being a loser. And so, they’re pretty well-equipped for becoming great entrepreneurs. I really believe that, okay?
So even on “Shark Tank” when I’m looking at the entrepreneurs, most of my questions, which very often aren’t aired because they’re too personal, get somebody who’s got something to prove, I’m gonna have a big business. It’s as simple as that. Somebody is coming out from the hole, coming up, and they have something to prove. And they are always the ones that take a hit better than the next guy. They just don’t lay low very long. They don’t have that gene of feeling sorry for themselves.
So I’ve spent too much time on that, but I do believe that if there was only one thing that somebody would have to have to succeed in business on their own, that has to be it, all right? I would say that would be number one. What other traits? I think you have to be competitive by nature. If you’re not competitive, you’re not gonna succeed building by business. And so, I think that’s an honest question you have to ask yourself: “Are you competitive?” All right?
I get super competitive even on things I don’t want to compete for. If I think somebody is putting me down, I’ll get really competitive, okay? But guess what? It’s stupid, isn’t it? It makes no sense. But my nature is to compete. So if you don’t have a competitive nature, it’s very hard to build a business, truly, okay?
And then the third is you have to have people skills, you know? This is the only raw material you’ll ever really have to work with. Even if you say, “No, I just need good engineers,” if I’m an engineer, you still have to get energetic engineers, creative engineers, hardworking, engineers, you know? It’s not just the credentials. So you really have to have a great ability to judge people and use them to their best advantage. I mean “use” sounds like a bad word, but I mean to take advatage of their gifts.
Those are the top three I would say today. Ask me tomorrow and I’ll have a different topic for you, but I’ll definitely stay within number one. That never wavers, you know?
Nathan: Yeah, yeah. Okay, awesome. Well, look, we’ll wrap up there. I just wanted to say thank you so much for taking the time to speak with me today. This was really interesting.
Barbara: But you didn’t ask your first question. No, you didn’t ask your first question, which was the best one. Do you realize that? “What do you value the most as an entrepreneur?”
Nathan: Ah, yes. Yes, you really wanted to answer that, eh?
Barbara: Yeah. No, I said that was the most interesting question. That’s what I thought of the whole thing, okay? And nobody’s ever answered it. Everything else, everybody’s always asked. I would say not having a boss. Not having a boss. Anyone telling me what I can and can’t do. That is the joy of being an entrepreneur. And to be able to create your own world exactly like you want it. From the wallpaper on your walls to the people you surround yourself, you’re 100% in control.
You know how much better that is? To create your own world exactly as you want it? You can only do that if you’re working for yourself. You might get part of it, but you’re not gonna get all of it unless you work for yourself. Because you get to pick out everything. You’re the chief architect and guide of your own life.
Nathan: So out of all the money that you’ve attained, that’s what you value the most?
Barbara: Of course. I could sell apples on a street corner and only afford one meal a day. But let me in charge of my own apple cart. I’ve never been motivated by money. I’ve just been lucky enough in good times to make a lot of it and bad times to lose a lot of it. But net, I came out on top.
But no, that’s not where the joy is. The joy is to be your own creator. No money can buy that.
Nathan: It’s like freedom, right?
Barbara: Freedom. You’re totally in charge of yourself. And a lot of people like to think they are. But if you have to work for a living and you’re not working for yourself, you’re really not. That’s my own attitude towards it. It’s not for everyone. But if it’s for you, it’s very important.
Nathan: Awesome. Well, look, yeah, thanks for pulling me up. You really wanted to answer that question.
Barbara: When I read it, I say, “Hey, nobody’s ever asked that. That’s a good question.” Anything that’s different, I like, you know?
Nathan: Yeah. Awesome, awesome. While I’ve been doing my research, I had a good, hard think about it. So yeah, look, thank you so much for taking the time to speak with me.
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