The Billionaire Mindset: Robert Herjavec on Risk, Wealth & Scaling to $1B

SCS (Intro):

Welcome back to Billion Dollar Moves, the show where we surface the real stories behind unicorn founders and funders shaping industries across the globe. Today we're sitting down with none other than Robert Herjavec, renowned entrepreneur, investor, and fan favorite Shark Tank judge. From humble beginnings in a small Croatian village to becoming one of the world's most recognized business figures, Robert’s story is one of reinvention and boundless ambition.

Starting with no money, no connections, Robert built his first company out of his basement in Toronto, scaling it into $1 billion business with over 1100 employees worldwide. Along the way, he mastered the art of turning risks into rewards, selling companies to giants like AT&T and Nokia, and becoming a self-made multi-millionaire who epitomizes the power of relentless determination.

This special episode, brought to you by Monsha’at, Saudi Arabia's authority, dedicated to empowering SMEs and fostering entrepreneurship; was recorded during Biban 2024. I was proud to be part of where innovation and opportunity took center stage. Join us as Robert shares candid lessons on building wealth, navigating risk and leverage in global markets. 

This snippet is perfect if you're dreaming of your first million or your next billion. I swear Robert's insights will inspire your own billion dollar moves. Let's dig in.

SCS: 

We're going to start with opening remarks first, first impressions. I know we have 13 minutes here, but first impressions on Saudi and the entrepreneurial spirit that you see right here. 

Robert Herjavec: 

Dynamic, exciting, makes me feel young because I'm very old. This entire region is young and not just in age, but in thinking.

And there's, there's an energy here that makes you believe. Anything is possible because the world around you is changing every day. I find it very inspiring. 

SCS: 

Alright, so I'm loading up some questions here. First question. How has your perspective on wealth and risk evolved since starting out? 

Robert Herjavec: 

My perspective on wealth is filtered by my upbringing, which was poverty. I grew up in a little village with dirt floors with an outhouse. So when you come from poverty, you want wealth, but you don't know what to do with it. 

So my impression is you need to make a certain amount of money to take care of your family, but you can use wealth to create great things in life.

SCS: 

For entrepreneurs from Saudi Arabia aiming to reach Western markets, what are some critical strategies for success? 

Robert Herjavec: 

I can very much relate to entrepreneurs from Saudi because I started my company. I started a company in Toronto, Canada, out of my basement, and I built it into a billion dollar business with 1100 employees all over the world.

The biggest mistake I made, I made two mistakes starting from Canada. One was cultural. I was too humble about my product, about my services. Americans are so proud of what they build. Whether it's good or not, they scream it from the rooftops. Canadians are like, we have a great product, please buy it.

Americans are like, woo! Buy my product. So that was one thing I made. If you want to go global, you gotta tell the world. Second, I didn't expand quickly enough. As you said, you have to have boots on the ground. If you want to go to America, you got to have an office in America. You want to go to the UK, you got to have an office in the UK.

People tend to think you can do it all online. You can't. 

SCS: 

What is the most underestimated approach to build a $1 million versus $100 million business?

Robert Herjavec: 

In my old neighborhood, we used to have a dinner once a month. And I lived in this neighborhood with very, very wealthy people. At the time, I was probably worth $500 million dollars and I was the poorest guy on the block. And one day at dinner, we asked that question.

And the wealthiest guy in the room started a company called Nova Pharm out of Canada. It was a big pharmaceutical company. It got sold for $10 billion to an Israeli firm. Anyway, I asked him, a hundred people walk in the room. Can you tell out of those hundred people how many are going to be millionaires and how many are going to be worth a hundred million dollars?

And his answer was I can tell you the 15 to 20 people out of a hundred that are going to be worth a million dollars. And the reason is simple. They work hard, they show up on time, They have incredible discipline, all those basic skills that your parents taught you. Be respectful, be nice, all of those things.

But I can't tell you who's going to be worth a hundred million because you need a certain amount of macro conditions. You have to have a little bit of luck. 

SCS: 

How has your background, starting as an immigrant, influenced your view of leadership? 

Robert Herjavec: 

Immigrants always have a chip on their shoulder. Two ways. One, you never feel like you're good enough and you're constantly looking for approval.

And the more approval you get, the better you want to be. And so, I think my background as an immigrant has always forced me to do better than the person next to me. Not that I think I'm better, but I've always felt I needed to work harder and prove myself more. 

SCS: 

This is a question from the audience. I would like to further my career, but I don't know what I should be passionate about.

How do you choose an idea to double down on? 

Robert Herjavec: 

It's a great question. When you're young, you don't know what you're passionate about. Uh, when I was 19, I wanted to be a film director and I produced the Winter Olympics for Canada in 1984. I was the youngest producer ever at an Olympic event. So think about that.

I'm 19 years old. I produced a winter Olympics. I thought I was going to be the next Martin Scorsese. And then I couldn't get a job. I was literally unemployed and I couldn't pay my rent. And my roommate had a doctorate in computer science and he applied for a computer job and he didn't get it. And I talked my way into the interview and basically worked for free for six months and learned coding and application.

And guess what? I hated it. I hated it every day. But you know what I really loved? I loved paying my rent. But after six months, I loved programming. I loved computer security. And I actually became the most Googled person in the world on cyber security. So when I was 19, if you would have asked me, was I going to build a cyber tech business?

I would have said, no way, tech is boring, I want to be on TV. You don't know what you want, it will find you, but you've got to try different things when you're young. 

SCS: 

This may be a common question, but you've been on Shark Tank for almost 21 years. What is the most unexpected lesson that 21 years of Shark Tank has taught you?

Robert Herjavec: 

The biggest lesson I've learned from Shark Tank in America, because it's different in every region, our show runs in 54 countries. In Portugal, I'm a huge star. It's incredible. The show runs everywhere. Biggest lesson I've learned is leverage the platform of the show. 

So in America, the business of America is consumerism.When people in America see a product on our show, they go and buy it. immediately. The American consumer is triggered for instant gratification. The Canadian consumer waits to see it in the store. And then when they see it in the store, then they think about it, and then they see an ad for it, then they buy it. Americans see it once, they'll buy it right away. So the biggest lesson I learned was, invest in things that people watching at home are gonna buy. 

So, in the second season, we had these three guys come on the show, and they were making, one was a doctor, a dentist, and one was a lawyer. And they didn't want to be a dentist and a lawyer anymore.

So I'm not making this up. They googled businesses to start. And one of the businesses to start was ugly Christmas sweaters. Yes, this is a thing in America. So they made inappropriate, ugly Christmas sweaters. Like, you know, reindeer dancing in the snow, Santa peeing, like stupid, silly stuff. All the sharks were out, except me.

And I was thinking, why am I on this show? This is such a stupid idea. And then I said, do you guys have any sales? And they were doing $600,000 a year. And I said, how much do you sell the sweaters for? They said $80. So how much does it cost you to make them? They said we bring them in from China for $9 landed.

I said, I'm in. I bought 15 percent of the company for $200,000. We'll do $165 million this year. 

SCS: 

$165 million this year? For ugly sweaters? 

Robert Herjavec: 

It's not just sweaters. That's another lesson. People misunderstand what the core of their product is. So they started with sweaters, things went really well, and then three years later, sales flatlined.

So we had this big meeting and I said, I said to them, you guys are missing the point of your product. You're not about ugly Christmas sweaters. Your product is fun. So why don't we make fun ski outfits and fun St. Patrick's and Independence Day. And so today, 36 percent of our revenue is actually ski outfits, really bright, fun ski outfits.

You have to know why consumers buy your product. 

SCS: 

And this is probably a common one as well. How many of these actual companies do you invest in from the show? 

Robert Herjavec: 

So, in general, about 50 percent of the things we invest in actually go through.

When the show started, the reason they didn't go through was because… in our first season I invested in a company and we asked them for their financial statements. I'm not making this up. The guy sent us a shoebox of receipts. That was his balance sheet. He had no income statement, no balance sheet.

Those are the kind of business we used to get. We don't get that anymore. So now, people realize that if you get on the show in America, you get about 12 million dollars worth of advertising. And sometimes people wake up and they're like, oh my gosh, I sold 20 percent of my business, and they don't want to close the deal.

And we can't force them to close. 

SCS: 

Yeah, so that's a good question actually. This is another one. Are the deals made on Shark Tank actually good deals from an entrepreneur's perspective? 

Robert Herjavec: 

It depends. It's up to the entrepreneur, right? Everybody, you never know. Like, I built one tech company, I sold to AT&T, I sold another business to Nokia.

I owned a hundred percent of it. Had no outside funding, nothing. My last business I ran for 15 years, I got it to About $450 million in sales, I owned 100 percent of it. And I was really proud of that. And then, for a bunch of reasons, I sold majority stake to an equity firm, and in three years, I got it to a billion dollars.

So, which was smarter? Spending 15 years owning 100 percent of something at $450 million? Or getting a great partner and getting to a billion in three years? I think it depends where you are at what stage. And I think it also depends on your personal situation. When you build a business, there's only a couple of reasons to sell your business.

And one of them is, if the money will change your life. So if you build a business, someone wants to buy it for a million dollars, and you've got a mortgage, and you've got a family that needs money, you should probably sell your business. If you have money, then you can keep going longer. 

SCS: 

And for this last question, of course I had to pick this one.

So apologies if I didn't pick your question. But this is from a young woman who's in the audience who asked, and of course, you know, the work that I do investing in women founded companies, where do you see the opportunity for women led innovation? 

Robert Herjavec: 

You know, that's one thing that really impresses me about this region, that the rest of the world has so wrong about Saudi, Saudi is so empowering to women and the power of women and celebrate women entrepreneurs, and women in the workplace and women as a force of change; that in the rest of the world, they don't see that. 

I think that will be one of the biggest changes of the world's perception of Saudi over the next 10 to 20 years because people are still so backward. But the minute you get here, you realize the respect and the admiration and the drive of female entrepreneurs in this country is incredible. 

And I think today, especially in Saudi, you can do anything. Women innovation. Women in tech. There's no barriers anymore. And look at the pace of change in the last five years. Look at it in the next five. 

SCS: 

And with that, what a word to end on. We are so excited about the potential of entrepreneurship in the kingdom.

Congratulations to all of you who have started on this journey. And as Robert always says, start small, but dream… 

Robert Herjavec: 

Dream big, play fair, have fun, make a lot of money. 

SCS: 

Alright, and with that, Robert Herjavec.