Robert Herjavec, CEO and Founder of the Herjavec Group
Robert Herjavec: How to Swim With the Sharks
The ‘Shark Tank’ investor on conquering your fears and thriving in dangerous waters
As one of the hit reality show Shark Tank’s longstanding “sharks,” Robert Herjavec is both a television media personality and a veteran entrepreneur in the tech space. You may have spotted his ice-blue eyes glaring at some fresh entrepreneurial prey on TV, sizing them up during a pitch that may have taken months of planning.
Across seven seasons of Shark Tank, Herjavec and his co-hosts have by now seen a small army of would-be entrepreneurs. It seems everyone thinks they have a business idea that could make millions. However, not all ideas have what it takes, and this tech titan has a trained eye in finding weaknesses in new business models—and the entrepreneurs behind them.
If you’re familiar with the show, you know the drill: entrepreneur enters, delivers a pitch, tries to snag an investor from the panel of sharks. Some get lucky, many don’t. The aired version of each Shark Tank pitch is edited heavily, Herjavec explains. “The average pitch is in front of us for an hour, and is edited down to seven or eight minutes.”
So what does he look for when investing in companies on the show? “Always invest in the operator,” he replies quickly. “An entrepreneur who really believes in their product can make a so-so product great. A bad entrepreneur can take the best product and ruin it. You bet on the jockey and not on the horse.”
Outwardly, Herjavec adopts a casual air of unassuming friendliness. Yet behind his delivery are sets of razor sharp insight developed over a successful lifetime in business. After a false start in the film business that involved directing the 1984 Toronto Olympics, his roommate began working for IBM. Herjavec was enthralled with his friend’s salary and subsequently talked himself into a position. From then on, Herjavec seems to have had the Midas touch. He’s been involved in a string of successful enterprises in the tech space before founding the Herjavec Group in 2003, now a leading global information and cybersecurity firm and one of the fastest-growing technology firms in the United States. Despite having a resume that’s bursting at the seams and authoring several books—Driven: How To Succeed In Business And In Life and The Will to Win both graced top-10 bestseller lists at the same time—he could also teach you a thing or two about work-life balance. Take for instance, his car racing. Herjavec is an avid racer and has the trophies to prove it. He also runs marathons, competes in celebrity golf tournaments, and despite zero dancing experience, competed in Dancing With the Stars, where he met his fiancee Kym Johnson.
Yet none of Herjavec’s success was handed to him on a silver platter. Born in Croatia in 1962, his family arrived in Canada with a single suitcase and $20. What Herjavec lacked in possessions, he made up for in drive, his ability to adapt, and most importantly, his ability to master sales, a skill he was determined to teach himself after being on the wrong end of a shark.
When he was young, he explains, a door-to-door salesperson entered his home and sold his mother a vacuum cleaner for $500, “which at the time was seven weeks’ salary,” he says. “It was really traumatic for us. We couldn’t afford it—it was crazy and really upset .” But for Herjavec, watching as his mother was conned into making an unnecessary purchase was an epiphany, and in many ways was the start of his entrepreneurial journey.
That was the moment he realized, “if you don’t understand the language of business, if you don’t know how things work, people will take advantage of you.” For Herjavec, mastering sales wasn’t a way to get rich; instead it was about gaining a certain amount of knowledge and money to prevent the vulnerability and desperation that had allowed a shark to take advantage of his loved ones. Sales became the way he would protect his family. “People are motivated either by fear, pain, or pleasure,” Herjavec says, “and my motivation definitely comes from the avoidance of pain.”
His early success and everything following it came down to a fundamental understanding of the sales process. “You don’t have to be a shark,” Herjavec says. “But if you want to learn to swim with them, you need to know sales—sales is everything. If you can’t sell yourself, you’re going to have a hard time getting ahead.” True, most people don’t want to be sold to, he acknowledges, and knowing this prevents a lot of people from trying to sell.
In his seven years starring in Shark Tank, one thing he’s learned is that people are deathly afraid of sales. “They’re afraid of rejection; they think they can’t do it.” That’s something Herjavec freely admits he’s always found difficult. “For me, the hardest thing about sales was rejection. Because in sales, people say no to you a lot. But you realize sometimes the product just doesn’t fit.”
When this happens, it’s not a matter of bludgeoning your way through someone’s defenses. Instead he learned the best way to execute sales was “to qualify and not waste your time.”
According to Herjavec, the worst mistake anyone can make in sales is “to think they have to be that vacuum cleaner salesman: pushy, sleazy and dishonest.” He says that was a reason he wrote You Don’t Have to Be a Shark, so anyone can be good at sales, without having to conform to the old stereotype. That brings him to his secret to spotting entrepreneurial diamonds in the rough.
“The big thing that I always look for is the ability of that person to sell themselves. If you can’t sell me on you, you’re going to have a hard time selling a product. We usually make up our minds on somebody in the first couple of minutes. And everything that happens after that either supports that opinion, or something extraordinary happens to make us change our minds. It’s how they come out. How they speak. The cadence of their voice. How confident they are.”
But, Herjavec warns, don’t make the mistake of being cocky, which he assures us in no uncertain terms is never the way to an investor’s heart. “We see that on the show all the time—some people just rub us the wrong way. We sit there 12 hours a day. We’re miserable and we all have big businesses to run; you’ve got to know your numbers and you’ve got to stand out.”
If you’ve ever seen an episode of Shark Tank and you’re wondering how much is orchestrated TV drama and how much is real, rest assured: Herjavec says at the end of the day, the show consists of real business people investing in real businesses trying to make real money. “Overall we’ve got about a 12.8% return, which is pretty good.” But the real victory comes down to knowing who to trust with a seed investment. “I’m pretty careful about investing in the right person and the right idea. Most of my investments turned out, and I’ve never had one go bankrupt. I have a couple that I worry about, but I’ve never had one fail.”
Despite his long run as a celebrity investor, Herjavec doesn’t believe venture capital and angel investors are necessary to creating a successful business.
“But you do need to have access to cash when the business needs it,” meaning if you don’t want to raise capital, you should have a solid relationship with your bank. “The only time you should bring an investor in is to help you grow faster,” he says. “As a business founder and owner, your biggest asset is equity. Try to hang on to it as much as you can for as long as you can.”
But perhaps most importantly, he advises young entrepreneurs to keep an eagle eye on their business growth. Because when it comes to persevering, Herjavec drops some tough truths. If your bottom line is hurting and you can’t adjust to changing markets, there’s no shame in giving up and moving on.
“Great founders have the ability to see the wall before they hit it. Great founders have the ability to zig and zag. Great founders adjust. If your business is not growing, in our world, the decision is really easy. You either grow or you die. We don’t have a choice. If we don’t grow, we’re moving backwards. There’s a great saying by Andy Grove, who ran Intel: ‘Only the paranoid survive,’ and I think that applies to everything. And we’re very paranoid.”
Robert Herjavec’s new book You Don’t Have to Be a Shark: Creating Your Own Success is out now and available from Amazon, Barnes & Noble, and anywhere books are sold.
5 ESSENTIAL STEPS TO SELLING
You don’t have to be going door to door to need sales knowledge; if you’re in business, it’s mandatory. Robert Herjavec shares with Foundr his quick guide to sales mastery.
- Never forget the first thing you’re selling is yourself.
- Listen more than you talk. People don’t want to be sold to; they want to be educated.
- Qualify. Know who to sell to. This is almost more important than knowing how to sell. Always try to qualify who the right prospect is.
- Understand what motivates the other side. Whoever you’re talking to, you need to understand what they want, what motivates them throughout the interaction.
- Make it simple. People get bombarded with information all day long. They don’t want big long complex stories, they want it to be simple. Have your value proposition down to a few keywords that you can say in 30 seconds.
- Tips and advice from the Shark himself on how to pitch to potential investors
- Different ways to build a company culture that’s always striving for greatness
- How to scale your business quickly without sacrificing quality
- What goes into selling and how to create a story that will get people hooked
- Why you need to focus on growth as a business
Full Transcript of the Podcast with Robert Herjavec
Nathan: Hey, guys. Welcome to another episode of the “Foundr Podcast.” I’m so happy that you’ve decided to share your earbuds with me, and you’re not going to regret it. You’re in for an absolute treat with today’s guest. His name is Robert Herjavec, the one and only shark from “Shark Tank America.” And, wow, he shares a truck ton of gold. And I know I always say this, but you know, we do try so hard to give you guys as much gold as possible, and give you the best possible episodes, and find the best possible founders and entrepreneurs around the planet that we can feature just for you. And we really, really have delivered with this one.
Robert was very, very kind with his time. I had a fantastic conversation with him, and we talked everything from pitching, selling, what he looks for when he’s investing, how to build a successful business. We actually go back to the backstory of how he became a super successful entrepreneur. And this is a story that I haven’t really heard him tell before. So massive fan of what Robert’s doing. I love watching “Shark Tank,” and I felt very, very privileged to speak to Robert.
And he also has a new book out at the moment, called “You Don’t Have to Be a Shark.” And he goes through in depth what you need to do to sell yourself successfully. And he talks a little bit about this in today’s episode, which is really, really, really interesting because I know some of you guys, you know, you might not be comfortable with selling to people. People don’t like to be sold to. And Robert is a super humble guy, super genuine, and just an absolute superstar entrepreneur.
All right, guys. So you’re in for a treat. Now, let’s jump into the show.
So the first question that I ask everyone that comes on is, how did you get your job?
Robert: You mean my first job in computers or how we started the company?
Nathan: Just the work you’re doing today.
Robert: So I was originally in the film business. I produced the Winter Olympics for Canada in 1984, and…which sounds really impressive, and it was. But my head became so big I thought I was gonna move to Hollywood and become a big director, and then I couldn’t get a job. I was living in Toronto. And my roommate had a degree in Computer Science and Business, and I have a degree in Classical English Literature. And so I’m crying over the fact that I had this big gig and I can’t get a job, and he’s crying because he went for an interview at this computer company, and he didn’t think he got it. And it was the guy who ran IBM Canada, and he was starting a company and needed a first employee. And so I said, “Blah, blah, blah. Who cares about computers?” But he told me the starting salary, and I was like, “Oh my god. That’s so much money.” And it was like $20,000.
So I called the guy up and talked my way into the job. And I’ve been in the computer business since I was 20 years old.
Nathan: Yeah. Wow. So tell us about your first company BRAK Systems because you’ve been doing…your main focus as a technology company is you build this internet security, right?
Robert: It is, but you know, back then, security was around IBM mainframes. And so I started out with IBM mainframes, things called terminal emulators, switches, that kind of stuff. And then my first company did the first firewall in North America. And we just sold products, added some services to it, that kind of thing.
Nathan: I see. And how did that company start? How did you build it up and then ended up selling it to AT&T? Can you walk us through, take us back to the early days?
Robert: Yeah. I started it because I ended up getting fired from a company I had started with somebody else. And they basically kicked me out, and I couldn’t get a job in time. And I hadn’t put up any money in that company. There was an investor and they kinda kicked me out. And I was like, “Well, I don’t wanna…I hate this running-a-company thing. It’s so risky. Look what happened. I got fired.” So I’m gonna go out and get a job, but I couldn’t get a job in time to, you know, pay my mortgage. And so I sold a product, and slowly just started the business, and you know, grew it over time.
And what we did was we really went and built a brand again across Canada in the security space, built it up, and then security became really hot, and we sold it to AT&T.
Nathan: Yeah. I see. And can you take us through the hard times in the early days, as a founder, building up that company? I’m sure it wasn’t easy.
Robert: You know, the hardest thing about that was we really…it took us a long time to get very comfortable with change, because the thing with the computer business, especially security, it moves so quickly, and there’s so much change. And every three years, I like to say that the tech space eats its own young. And that’s kind of really what happened to us is we found that the pace of change was really something that we had a long time to get used to.
And the other thing was we were selling to large enterprise customers, but we were this small, little company. And it took us a long time to get our heads around that and find a way to add value. And what we learned out of that is you don’t have to be big. You just have to constantly add value and innovate.
Nathan: I see. And how did the sale to AT&T come about? And is…and after that, is that how you became an investor?
Robert: Security became…in the late ’90s, early 2000s, all the carriers wanted to get into security because it was driving other sales. The problem with the telephone business was, inevitably, the margins were declining. So they wanted to get into other high-value services which is how we got into…they bought us. And they just approached me. I knew that the market was becoming too hot because everybody I knew was making money off internet stocks except me. And so everybody was giving me all this internet advice, and you know, we were just trying to build a great business. And so AT&T called us up out of the blue like many other carriers, and we just sold the business.
Nathan: I see. And back then when you sold that business, who got a good deal? Was it like how deals go down today in “Shark Tank” or…
Robert: Yeah. I think we…I mean I look at back on it and I…you know, I had this long talk with people I know like Mark Cuban and other people. And I always think, “When is the right time to sell your business?” When the money changes your life. And back then, you know, we sold the business for $32 million, I think, and I didn’t have any money. I mean I was putting everything I made into growing the business. And you know, we were always rich on paper, but poor in cash, like many entrepreneurs when they started out.
So getting $32 million in cash was gonna alter my life, my kids’ lives forever. And you know, it was really hard. In fact, I always treated it like my baby, and I didn’t wanna sell it, but I’m really glad I did because it got me kind of to where we are today.
I always think there’s three reasons to sell your business. One is if the money you’re getting will change your life, if you think the market you’re in has peak, and if you don’t wanna do it anymore. And I wanted to do it. I thought the market had legs, but the money was so extraordinary back then it really altered things for us. And so we sold it.
Nathan: Interesting. And when you…you did a previous interview, and you said that one thing that you wish you had have done in the earlier days was dreamed bigger. What exactly did you mean by that, and why do you think this is important?
Robert: Well, you know, I think it’s kinda like we’re talking about we’re now a global company. We compete in the U.S. We bought a company in the UK. We compete there. I never imagined that. You know, I never imagined that we could do that. We didn’t have that confidence to be able to scale to that level. And I think the beginning of any great journey is you kinda have to have an idea where you’re going. And I grew up in Canada, all my businesses were in Canada, and so our vision was to be the biggest and the best company in Canada. And now, my vision is to be the biggest and the best player in my space in the world. And I think, “Why can’t I do that?And it’s just the level of confidence. I wish I would have thought on a larger scale. It would have given me more growth, and more incentive, and a greater vision to start.
Nathan: I see. And you talked to so many super successful entrepreneurs. I’m curious. Who do you learn from? Who are your mentors?
Robert: I think I’ve always been really good…I don’t think I have a mentor, but I think I’ve always had a great ability to absorb knowledge. I have a lot of respect for people who love what they do, and if I can learn from them…I don’t have a very big ego when it comes to doing things better. If you’re doing something better than I am, I’m happy to take it from you and apply it to our business. So I learn from people all the time. And you’re right. That’s one of the great things about being on TV, is you get to be…and meet people who are ultra-successful. I mean the last person I really learned a lot from was Kevin Plank, the founder of Under Armour. Amazing story.
Yesterday, I had a great meeting with Norm Pattiz, who started a company called Westwood One, where he consolidated all the radio stations across the U.S. I mean to me, I’m always a student of learning, and success, and what makes people tick. I did an interview last night with Larry King, and I found it fascinating. Like I found it fascinating. In fact, halfway through the interview, he said to me, “Stop it. I’m interviewing you. You’re not interviewing me.” But I couldn’t help myself. You’ll find this interesting. I said to him, “Larry, of all the successful people you’ve interviewed your whole life, if you had to pick one word to describe them, what would it be?” And he said, “Driven.”
Nathan: And do you believe you get your drive from where you’ve come from? Because I knew you grew up on a farm, you’ve come from nothing. You said also that your father was a massive influence in your life.
Robert: Yeah. I think my drive comes from…I think you’re motivated either by fear, pain or pleasure. And my motivation definitely comes from the avoidance of pain. Mark Cuban and I had this talk on the show one time, and he used to say, you know, when he was 12 years old, he knew he wanted to be ultra-wealthy. And I always admire that, for him to have that level of vision, because when I was 12 years old, I just didn’t wanna be poor. What I’ve had to learn along the journey is you’re not…at one point, you’re not poor anymore. You can get by. You don’t have to worry about making a paycheck or paying you’re rent.
And now, you know, we try to shift into the pleasure part of it, which is building a great brand, and building a sustainable business.
Nathan: I’m curious. You’ve often told the story about how your mom…and this is a good segue into your book, your new book, “You Don’t Have to Be a Shark,” that had just come out. You once…I’ve heard you talk about that your mom sold a vacuum cleaner for $500 when you were a kid, and that was seven weeks’ salary. Why do you refer to that story?
Robert: I think it was really prolific for me because it taught so many things about sales, good and bad, and really understanding the language of business. I mean some salesmen took advantage of my mom because we didn’t know any better. And I think it really hit home for me. It was really traumatic because we couldn’t afford it. My dad was trying to save money for, you know, buying a house, and here we are, seven weeks’ salary into a vacuum cleaner. I mean it was crazy, and it really upset them. But for me, it was really an epiphany. If you don’t understand the language of business, if you don’t know how things work, and if you can’t make a certain amount of money in North America, you’re gonna take advantage of. And to me, it’s being taken advantage of. And I realized I better go out and make something of myself, make a certain amount of money to take care of the people that I love. I don’t…who wants to be taken advantage of?
Nathan: And yeah, look. I’m sure there’s many stories like this where sales guys, they just…yeah, they’re just sharks. So could you tell us about your new book, “You Don’t Have to Be a Shark”?
Robert: Yeah. It’s…I talked to…did you ever read a book called, “How to Swim with the Sharks and Survive”?
Nathan: No, I haven’t.
Robert: It was written by a guy named Harvey Mackay. So he…you know, I read his book when I was a young kid. And Larry King put me in touch with him yesterday because I always wanted to meet him. And it’s interesting. You know, the purpose of the book is you don’t have to be a shark, but you have to learn how to swim with them. And it really comes down to sales. You’ve got to learn sales. Sales is everything in life. If you can’t sell yourself, you’re gonna have a hard time getting ahead. Because in seven years of doing “Shark Tank,” that’s the one thing we’ve really learned is people are definitely afraid of sales. They’re afraid of rejection. They just think they can’t do it. They think they have to be that vacuum cleaner salesman guy — you know, pushy, or sleazy, or lying, or whatever the case might be.
And you know, I wrote the book just so anybody can learn sales and you don’t have to be that in order to do sales.
Nathan: Because I think, generally, when you’re selling, sometimes it can…or if you…the thought of selling to people. People don’t wanna be sold to, so it can feel kind of like a negative feeling or you know, something that’s holding you back. How did you get over that fear of selling?
Robert: Just by doing it wrong. I think that everything I’ve learned, I’ve done wrong, learned from it, and did better the next time. For me, the hardest thing about sales was rejection, because people in sales, they know a lot to you. And you go through this phase where you think, “Oh my gosh. It’s me.” But you realize, sometimes the product just doesn’t fit or it’s not the right opportunity. And I learned that the best way to do sales is to try to qualify and not waste your time.
Nathan: What are some practical tips for being a good sales person, not being a shark?
Robert: I think the first thing is you gotta listen more than you talk. That’s the big one. People think you have to…people don’t wanna be sold today. They wanna be educated. The other one is before I teach you to sell, I have to teach you who to sell to. Qualify. Always try to qualify who the right prospect is. The third one is motivation. You gotta understand what motivates the other side in anything. When people come on our show, they always tell us how good their business is. They tell us how they’re gonna make money, how the business is gonna make money, but then they don’t tell us, the investors, how we’re gonna make money. You always gotta understand what the other side wants out of it.
And then, you know, the final point I would say is, make it simple. People getting bombarded with information all day long, they don’t want big, long, complex stories. They want it to be simple. Have your value proposition down to a few key critical words that you can say in 30 seconds or a minute.
Nathan: I see. And when it comes to the companies that you invest in on “Shark Tank,” what do you look for? What do you do to qualify those people?
Robert: Well, we don’t get to qualify them. That’s the first thing. You know, we know nothing about them. On our show, things get edited into about seven to eight minutes when you watch the show on TV, but in reality, the average pitch is in front of us for over two hours.
Nathan: Oh, wow.
Robert: Yeah. Sorry. The average pitch is an hour. The longest pitch was two and a half. The shortest was 40 minutes. And we know nothing about them. And when I say nothing, we don’t even know their name. They come out, and we just ask questions. And so you’ve really got to…you don’t get chances to qualify, but you get to learn a lot. And what I’ve learned after seven seasons is always invest in the operator. A great entrepreneur, who really believes in what they’re doing, can make a so-so product great. And a bad entrepreneur can even take the best product and make it really bad and ruin it.
And so I try to look in…always in the operator. Bet on the…you know, we always say, “Bet on the jockey, not the horse.”
Nathan: Yeah. Okay. Now that you visit…you mentioned to me you visit Australia a lot. You would know that horse racing is really big here.
Robert: It’s huge. Another thing I learned is Kim and I…Kim and I went to the Kentucky Derby, and the custom at the Kentucky Derby is people…women wear these big hats. Like Kim wore a crown because in Australia, the women wear crowns to the derby, which I didn’t know.
Nathan: Yeah. I can’t really comment on that, Robert, because I don’t really pay much attention to the female fashion, but it’s really big. It is massive. Like we have like spring carnivals, one of my favorite times of the year.
Robert: Yeah. It’s great. I had a great time.
Nathan: So when it comes to…you said you invest in the person more than the product or the service or the idea. What sort of qualities does that person usually have? Is there any rules that you stand by when you’re investing in that person?
Robert: You know, I think that the big thing that I always look for is the ability of that person to sell themselves. I mean I think if you can’t sell me on you, you’re gonna have a hard time selling a product or anything else. And so it’s funny because we usually make up our mind on somebody in the first couple of minutes, and everything that happens after that either supports that opinion that we’ve already prejudiced ourselves against, or something extraordinary has to happen for us to change our mind.
And so it’s, you know, how people come out, how they speak, the cadence of their voice, how confident they are. And then it all kinda leads from there. You know, if someone is really confident, and you know, humble, and they don’t know their numbers, we’re gonna help them. Somebody comes out, and they’re cocky, arrogant, and they don’t know their numbers, we hate them. And we see that on the show all the time.
Nathan: I actually saw somebody, like a mutual friend, I saw was on a recent episode. And it was kind of funny, but I don’t know how much of it is drama and how much of it is real. His name is Maneesh Sethi from Pavlok. Like I don’t know. Like it looked like it was a pretty…a lot of drama with that episode. Did you guys really dislike him?
Robert: What was his product? It sounds familiar.
Nathan: Yeah. It was the watch that shocks you. It trains the habits. And he said to Kevin.
Robert: Oh, yeah.
Robert: He just robbed us the wrong way. You know, we’re pretty opinionated. We sit there 12 hours a day. We’re cold, we’re hungry, we’re miserable because we all have big businesses to run. You gotta stand out. And I remember him. He was…he had a very controversial product, and I think Mark really didn’t believe in it. He had a massive valuation. And so that always makes us skeptical. You know, when you come out…I think it was like $15 million. He had very little in sales, but he thought his company was over $15 million.
And so we’re very…we get our backs up against that because we always think, “Are you just there to try to take advantage of the show?” You know, get some free publicity. Because you don’t have to close a deal once you make it or just by getting on the show. And we’re not. I mean I’m not there to waste my time. I’m not there to be a TV star. What people don’t realize about us is we’re not TV reality stars. We’re business people that happen to be on TV. And some of it is drama, for sure, but at the end of the day, we’re trying to make real investments and make real money.
Nathan: And I’m curious. Of all the investments you’ve made in the past seven seasons, do most of them turn out or how do they end up?
Robert: Most of mine turn out. I’m pretty careful about investing in the right person and the right idea. I’ve never had one go away. I’ve never had one go bankrupt. I’ve had a couple close down, but we got a return on our investment on it. I have a couple that are struggling that I worry about, but you know, like I always say, I’ve never had one fail. But I’ve got a couple on life support. But overall, you know, I think we have about a 12.8% return. So that’s pretty good.
Nathan: Yeah. Wow. And I’m curious. The ones that are struggling, why is that?
Robert: I would say, if I had to pick a commonality, it’s adaptability. Great business founders have the ability to see the wall before you hit it, and they adjust. Like I always look at one of my best investments is a company called Tipsy Elves. If we would have stayed just doing…their original product, and their only product, was inappropriate ugly Christmas sweaters. If that’s all we still did today, we would be in trouble. But they expanded. Now we make, you know, ugly college sweaters, and we make Fourth of July t-shirts. And they make ski onesies and stuff like that.
I think that’s what founders do. You know, great founders have the ability to zig and zag. They’re adaptable.
Nathan: So is that what you were kinda doing with the Herjavec Group right now? You mentioned to me around how you’re taking the brand globally. You’ve just set up on offers in Sidney. Are you always…how many years are you thinking ahead? Do you set goals and work your way backwards? I’ve been told many multi-millionaires they…and billionaires, they think like years and years and years ahead. And they actually trace their step backwards. Is that how it works for you?
Robert: Not really. I mean I think we have a long-term ambition. But in tech, long-term is three years. Somebody once asked me. They said, “What’s your five-year plan?” And I was like, “Oh my god. I can’t even fathom that.” So we have a three-year vision, but we try to be focused on execution on a quarterly basis.
I think it’s important to know where you’re going, but in tech, it can be difficult. We have a short-term vision and a long-term goal.
Nathan: I see. And what is your long-term goal for Herjavec Group?
Robert: Well, I think we believe that the cyber security market, it continues to grow. We see it going through a phase of hyper-growth. And so we know the fundamentals in our industry are good. We know that we’re positioned well. And at this point, we’re actually the largest privately held company in our space in the world, and we’re competing with IBM and massive, massive companies. So that’s really good. It’s really good when you compete against really big people.
Nathan: And you have an extremely fast growth rate. What is fueling that growth, do you think, besides having, you know, great product, great service?
Robert: Well, I think the first one is you gotta be in the right market. It’s very difficult to grow outside of the growth of your market.
Nathan: And then what else? Because there would be…like you said, like how do you compete against these big players?
Robert: Well, you’ve got to add more value. I think that’s the first thing is we try to be more flexible, add more value, have a competitive value proposition. You know, I always…I try not to compete on price against larger players in our space because we sell to large companies. We’re selling them security. And security is a high-touch, high-value proposition. I always think people want more security than a lower price necessarily. But you can’t just charge more money. You have to add more value.
Nathan: I see. And what else is fueling the growth?
Robert: Our dogged determination. We really like to win. We look at the world now, and we think, “Somebody is going to take advantage of this space. Why can’t it not be us?”
Nathan: I see. And how do you breed that kind of dogged determination and culture in your company? Because that’s not easy.
Robert: It’s funny. It took us a long time to figure out what we’re good at and what we’re not good at. And I think that’s one of the things that we are really good at is we know what works for us. We like to grow, we’re very competitive, and we’ve always been like that. And we try to find people who like to compete. In our industry, if you don’t like to compete, you’re gonna have a really hard time. And so what we’ve learned over the years is we tend to do well when we hire people for their character as opposed to their experience. When we hire people for their experience and they don’t fit in with us, culture is the hardest thing to hire for. And now, we hire people for culture.
So we have a lot of former athletes, we have some former Olympians. Well, you’re never a former Olympian, as I’m told. You’re always an Olympian. We have Olympians on our team, that kind of stuff.
Nathan: Yeah. Okay, I see. And I’m curious around leadership. This is something that I’m actually going through now in my company because we’re starting to hire a lot of staff. And it’s difficult. And I know many of our audience are going through this transition now from founder to CEO. I’m curious. What advice would you have for people that are scaling up, are hiring, are a first-time CEO? What lessons would you give?
Robert: In terms of growing quickly?
Nathan: Yeah. In terms of growing quickly, and managing and leading people. Because it’s very difficult, especially when you’re a first-time CEO.
Robert: You know, I think it’s really hard, but you’ve got to look at in terms of creating a greater team. I think a lot of entrepreneurs, when they’re small, get very frustrated with that and think…you know, I can’t tell you how many times I’ve heard entrepreneurs say that the best business is a business without employees or you know, the best employee they have is themselves or that kind of stuff. And I’ve never really thought of that. I’ve struggled with hiring people, but I’ve only seen it as an integral part of growing and getting scale. And as you grow your business, your greatest quality has to become the ability to build the people around you, and get everybody pointed in the same direction.
Nathan: I see. And how do you get people to do their best work?
Robert: Well, first of all, you have to hire people that wanna do their best work. And you have to have a common goal, and you have to lead people. I think people today wanna be led as opposed to managed. So I think you’re just…you’ve got to be constantly giving them the direction, motivating them, and you’ve got to be the top sales person in your company. People wanna be led with vision and passion and purpose. Nobody wants to go to work and say, “Oh, it’s just a job.” Even though it may be just a job, they don’t wanna feel that way.
Nathan: Yeah. I see. Just a few more questions for you. I’m just going to say, when it comes to “Shark Tank” and pitching, do you have just some…you know, a couple of pointers and advice for people that are going out and pitching their product or service?
Robert: A couple of things. One is never forget the first thing you’re selling is yourself. Make it simple. Don’t overcomplicate it. Have a value proposition that’s easy to explain, but understand the motivation of the people that you’re pitching to. You know, we went to Silicon Valley last week because we’re thinking about maybe bringing in some investors, that kind of stuff. And one of the things we did is we always try to understand what the exit plan is and what the motivation is for the other side.
Nathan: Yeah. What’s in it for them, how can they get a return.
Robert: Yeah. Because everybody’s got to be on the same page. The mistake that people make is they try to bring an investor in, and that investor’s goal is not equal to theirs. They may wanna grow the business, keep it for five years, and somebody just wants to come in for a quick return.
Nathan: So I’m curious. You said you went to Silicon Valley. Is this to raise capital for Herjavec Group?
Robert: Yeah. Just to talk to various people, see what’s happening in the valley.It’s always good to be in front of a lot of people.
Nathan: Yeah, really. That’s interesting. So what’s that like…like, you know, I guess a TV personality and a known shark on “Shark Tank,” you know, a hit TV series and you know, very well-known entrepreneur, to speak to some of these guys in Silicon Valley?
Robert: Well, there’s…you know, the thing about being a shark is there’s always a bigger shark in the water. I mean we’re meeting with some of the biggest VC companies in the world. They’re not sharks. They’re whales. And I don’t care how good a shark you are, a whale can squash you without even thinking about it.
Nathan: That’s a great attitude to have. Awesome. Well, look. Two more questions. One, do you believe that you always need to raise capital to build a successful business?
Robert: No. I don’t believe that at all, but I think you have to have access to cash when the business needs it. That might be a line of credit. That might be your credit card, but cash is the life blood of your business. So if you’re not gonna raise capital, you better have a really great relationship with your bank in terms of a line of credit. And I think the only time you should bring an investor in is to help you grow faster. You know, as an owner and a founder of a small business, your biggest payback is equity. Try to hang on to it as much as you can for as long as you can.
Nathan: That’s great advice. And also, when it comes to, you know, growing a company, running it, when do you know when to give up, and when do you know when to keep going? Do you ever give up?
Robert: Absolutely you should give up when you’re not growing. I mean I think in our world, it’s really easy. You either grow or you die. We don’t have a choice. So if we don’t grow, we’re moving backwards, and we’re going out of business, is how we look at it. There’s a great saying by Andy Grove, the guy who ran Intel, “Only the paranoid survive.” And I’m not sure if that applies just to technology. I think it applies to everything. And we’re very paranoid. But you know, sometimes in the business, if your market’s dying and people are eating away your market share and you don’t wanna do it anymore, there’s nothing wrong with giving up and starting again. But I’ve never done that. I’ve always been able to adjust to changing markets.
Nathan: Awesome. All right. Well, look. Last question. And that’s where’s the best place people can purchase your new book on how to be, I guess, a good sales guy without coming off sleazy, and how to sell yourself without being a shark?
Robert: Online. Amazon and any store, in Barnes & Noble, anywhere books are sold.
Nathan: Awesome. All right. Well, look. Thank you so much for your time, Robert.
Robert: Yeah. I appreciate it. Thank you.
- Learn more about Robert on his website
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- Check out Robert’s book: You Don’t Have to Be a Shark: Creating Your Own Success