How I Made My First Million Dollars Part 1 | Ask Mr. Wonderful Shark Tank's Kevin O'Leary

i have an email here for this week's episode of ask mr wonderful uh rather interesting i think it's going to take us on quite a journey from yasmina yes mina hi mr wonderful i'm a huge shark tank fan i've been watching the show for eight years i've just graduated and i'm off to college and i think my first term is going to be a virtual one from my parents basement well yes mina that is the sign of the times there's no question about it she goes on to say my plan is to become an entrepreneur don't know what yet or which business sector yeah i get that life is life is like a box of chocolates you don't know when you're just going to school what's going to happen next yes mina so i get that then she says i don't think you've ever said on shark tank how you made your first million dollars can i be the one to ask you that what can i learn from that experience i understand if you don't want to answer but i would really like to know okay yes meena you're right i never have talked about that and maybe there are some interesting lessons to be learned there it's sort of like the journey you're starting now in some ways and maybe tell you about some of the mistakes i made which would be in some ways more valuable than just talking about success because i wouldn't want you to make those again and i actually feel that way about any entrepreneur that's had success that they would pass forward a path of least resistance so to speak maybe give you some ideas on what not to do here it is let's pick it up where you are i'm off to college so i tell my stepfather i really want to be a photographer or a rock star and he says you're nuts you'll starve to death doing that it's very very hard and it's very competitive and those are you know very binary outcomes because either you're a really really good photographer which i'm not sure you are to stay competitive in the commercial world and frankly i've heard your guitar and you got a long way to go well at least he was telling me the truth at the time but the point is college is where i went and and i decided even back then i thought well maybe i should try being an engineer because those guys seem to get jobs i don't know what i want to do so i enrolled in engineering engineering 101 also some psych classes because i wanted to meet some girls and at the time a very new cohort called environmental studies no one had ever heard of it at the time anyways i go to my first class of engineering whoa was that tough whoa whoa whoa whoa and i i wanted to party and i mean look i'm just telling you the truth so i didn't hang out in engineering too long and i spent my four years in psychology um and in in environmental studies in third year i meet this girl and we uh you know it's my first serious relationship and we move in together and she was rather artsy and she convinced me to go to night class in cinematography advanced cinematography you know i was into photography but i'd never worked with film before there was some complex technology it's not what it is today but it it was tough and i really got into it i was you know we were we're in we'd go three hours these night classes and then we'd film and then we'd edit and we'd talk about making film and i was falling in love but i was also falling in love with cinematography and the potential of what it could be and being a filmmaker kind of went into that artistic bent but boy that is not a place to to make money easily um but but here's what happens uh as i get into the film community i start meeting people that say look you know we've seen some of your camera work uh can we hire you as a cameraman we're doing an industrial shoot or we're doing this we're doing that doing some sports filming whatever we just need camera guys i'm learning the tools of the trade i'm learning how to be a cameraman i'm learning how to buy film i'm learning how to budget for a shoot industrial commercial you name it i'm a sound guy i'm a lighting guy i mean when you're that small you're doing everything and i'm just i was just learning how to do it and really loving it and working a lot you know going to school all day and then shooting all night editing on weekends when you're really passionate about something it's fantastic if you can merge that into your work because you don't mind working 25 hours a day and believe me i was it was it was incredible eventually i had an eight plate steam back which is an editing machine right where we lived and i was cutting film and processing and and mixing sound and you name it and then finishing off my degree so i graduate i get great marks in in in psychology environmental studies i go home and my dad says to me well how are you going to get a job with this the environmental stuff hadn't even happened yet and psychology tough you know unless you want to get into research you want to go do your phd not so easy he was right he's always right and so he said why don't you go get a business degree i know you still want to be a filmmaker and you want to be a musician and all this stuff and a photographer but why don't you get some tools some building blocks about business because really even if you pursue any of those you know disciplines you're still going to need some basic business so you can run your life so i applied i got in this is where the serendipitous nature of life the box of chocolate starts to happen i'm sitting down with the dean after i get accepted of the business school and i say to him dean listen um i'm going to spend 24 months here getting this degree and i bet you you have an ongoing need to recruit people from all around the world why don't you let me make a film about this experience i'm a filmmaker um i want to pursue a business degree but i know how to make films and i could hire a crew i could document this whole experience from the day everybody meet each other right through the learning in the class what they're experiencing is as the time goes on and and get you the inside story of what it's like to pursue you know a business degree in such an intense program because mbas are tough like you burn a lot of hours you work every day of the week and he said let me take it up with with a few of the faculty see if i can get you know people to i'll raise the flag see if anybody's interested and i said one other thing it's going to cost about 50 grand and so i have to hire people to where i have to i get lights i gotta get camera guys sound guys i gotta edit the thing i gotta rent equipment here she said let's wait on the budget let me just find out if anybody's interested two days later and when i'm just starting the program he says there's a lot of interest but you're gonna do it for thirty thousand i said done one of those deals and that was the beginning of a really remarkable experience because i also said to him dean i can't do the full program and shoot a film for two years you got to cut me some slack give me a couple of credits on this and mark the film based on its merits and what others say about it and how it is for you as a tool to recruit so if it's really a crappy tool then i should get a very low mark and if it's a really good film you should score it highly just like any other class in my participation we did that deal and i went to work and i shot that film and it it was a crazy experience but when it was over 24 months later the film was a unique insight into what the program was about in a way no other person could have done it it's tough anything worthwhile is tough i think that if it wasn't tough our students and our alumni wouldn't be very happy because it would have been a wasted couple of years the big thing that you acquire as the year progresses is the ability to uh determine what the key issues are and what's extraneous to the the problem it was a fantastic tool for for recruiting they showed it to everybody that's going to come to that school and send it all around the world i got a huge score in it and i graduated like top of my class or right up there i can't remember what the deal was but i did well now having shot that film i'd hired a crew and i said guys why don't we form a company together we're really good at this let's form a company and there was a guy named dave thomas who's an incredible writer went on to do stuff in sports television works with neil young now all kinds of interesting stuff he's a great documentary maker and producer and just thinks in a different way and another guy named scott mckenzie who was you know more focused on the actual production and and i and i was into the you know i wanted to use my business tools and i wanted to budget and i wanted to do stuff and be a cameraman and and then we were really good at it was called special events television and the way we created value in television to create value you have to create a unique format like friends the show you've heard of that's a format somebody owns that format nobody else can make friends because they own the format we went into sports television we created sports formats bobby orr and the hockey legends was one of them we we had a huge sponsor one of the food companies we did a show called the original six where we got retired hockey stars from the original six teams detroit boston you know etcetera new york they played each other and it was wildly successful we made television out of it and then we had a gold mine hit don cherry's grapevine remember don cherry that eclectic coach with bobby orr in boston he was fantastic on television he had a dog that he brought on he was a great interviewer the format caught on fire the company took off we were selling the shows each week we were broadcasting them everywhere and i looked at my partners and i said wow look at this no longer it was i think it was only two years later we got bought out it was my first transaction and i went this is good this was an incredible experience we started with nothing and we created this company it was worth hundreds of thousands of dollars each towards the end i had enrolled in a night class with a computer called an osborne computer it was the first portable computer ever made it was a cpm operating system and i met this guy named john freeman john had designed a program that drove hewlett-packard plotters now when you're in television you're always making all these graphics it's very expensive very time consuming titles we'd have to get them printed and there wasn't any you know digitized technology at that point but john learned how to take a a multi-pin hewlett-packard plotter which was an x-y axis pen driven by a computer and do graphics for a giant oil company he worked with he was an executive there and he showed it to me at the you know and this is right after we'd sold special in television and i looked at it and said john every guy that buys a plotter from hewlett-packard is going to want one of these software packages let's form a partnership and i'll market this stuff and you'll write the code and i will fly all around the world and convince the plotter companies to bundle that software with their plotters he said well but i can't give up my job i got a family out of kids i said look you write code all night and weekends i don't have a job i just sold my company and i remember sitting on the red chair in my living room we were trying to name the company and we called it soft key s-o-f-t-k-e-y soft key software products john and i that was the beginning of a journey john writes the code we packaged it up our first product was called key chart every product we made had the key in front of it because we really grew the business but i i flew down to san diego where a woman named mary zoller was running the plotter division and i put on a show i said mary you've got to bundle this i'll do it for 12 a unit she just laughed at me at least she was honest she said kevin i'm the number one plotter on earth everybody writes code for me what do i need you for maybe you should talk to some of my competitors and it was one of those you know how your phone makes that bing when a message comes in and that's exactly what i did all the japanese all the german everybody else that was trying to compete with hewlett-packard the number one plotter i said what if you bundled my software with it and you got free software maybe that's a competitive edge and boy did that work we sold millions of copies of key chart millions bundled with all these different plotters that were on the market and in the end i think we're only getting 12 cents a copy but we were making a ton of money and we just kept going and going and going now here's i think when my first million comes in i started getting calls from everybody because it was the beginning of the dot com era and they wanted to invest in my company and i called up john said john what do you want to do buddy and he said look i'm just happy with graphics you know you want to make this thing huge why don't you buy me out and you go on your journey i said i'm cool with it john i think john's pretty happy guy because he took some cash he took some stock and i'm cool with that too he was he was a founder of softkey software products and we just kept going we did dozens of products we went to a trade show called comdex and we just got bigger and bigger a bunch of private equity guys invested in it and then one day um a banker came to me and said why don't we take softkey software products public i said why'd you work with the finance guys put a deal together and i'm happy to take it public now i'll never remember the morning we went to the exchange i woke up in the morning and i looked at myself in the mirror and i i saw the stock was trading from the night before and i looked at the stock price the number of shares i had and he went [ __ ] i'm [ __ ] rich it never hit me until then and when i talked to entrepreneurs today it's always the same they always say the same thing they say i didn't think about the money my point is it was never about the money when i talked to entrepreneurs today that had the same experience from like their basement to to that huge liquidity event they don't even think about it it's the journey it's the passion for the business that's what got them going that's what got me going that was my first million dollars it was way more than a million but the whole point it was binary it was like zero and then a lot this whole entrepreneurial journey most people i talk to they have this unique moment in their lives when this happens and for me it was when i was in grade 11 in high school and i got my first job and and i when i teach these days i always tell this story but i'll tell it to you now i wanted that job because the girl i was interested in in high school was working at the shoe store across the mall and this was an ice cream store and they were looking for a scooper and so i took the job and the first day i was there the owner was a woman said to me you know when you give the little samples out of ice cream on little sticks people take their gum out and they throw it on the floor and this this store had mexican tiles beautiful tiles and the gum was you know got stuck on them and it turned dark it looked ugly day was over you know i shut all the ice cream bins down and i was ready to get back on my bike go home and she said to me um scrape the gum off the floor you can't lay before you scrape the gum off the floor and i said well and i knew that this girl was watching me from across the mall because if we're going to check out and you know go get a soda or something together i was really looking forward to it and i said to the owner i can't he hired me as a scooper i'm not a scraper i'm not going to get down on my knees because i didn't want a girl across the hall to see me on my knees scraping gum and she said no you're an employee you're going to do exactly what i say this is magoo's ice cream parlor this was magoo's ice cream parlor was right here the counter was right here and she said you're fired get out of my ice cream store but within minutes i was on my bicycle on my way home in utter shame in shock that she had that kind of control over my life changed my life forever i have never ever in my life worked for someone again ever no one has ever had control over me ever and never will and that's when that's another one of those moments where the lights go off and i realized in life there's two types of people there's the people that own the store and there's the people that scrape the [ __ ] off the floor and you kind of have to decide which one do you want to be and i'm not dissing being an employee there's nothing wrong with that that's a different life if you want that security that's cool and you can be a great employee and i've talked about that before but i didn't want to be an employee i didn't want someone to have that kind of power over me i never wanted that ever again and and she was the reason i owe her so much that she twisted me that day to and i never had a job i never had a full-time job again in my life i only worked for myself from that day on that was the beginning of my entrepreneurial journey so yasmina if you have found that you know i'm answering your question you have to have that catharsis you have to make that decision you're going to take that path from entrepreneurship and it's not for everybody but if it's in you you'll know so i say to every entrepreneur that's starting their journey or contemplating it do not go after entrepreneurship out of the greed of money you will never find it it's a passion for personal freedom and the only way you're going to make your first million dollars and this is a material challenge is you have to solve a problem for somebody and if you solve that problem for one person and it's a similar problem that millions of other people have that's the core of what a business is entrepreneurs see problems find solutions and that's how they create a business businesses are always solving problems for people so your first job if you're pursuing your first million and i've said this many times it's not easy to make a million dollars i've said it's virtually you know the most difficult task on earth because you're basically starting a business and it doesn't happen overnight and then the first five million is next to impossible and the strange thing but maybe you know intuitively makes sense is building wealth past that is about investing it's about you know you make your first million as an operator and then you become an investor now today i am an investor and i must say that i've learned a lot on the road you know just the journey i've had i've had a chance to be pitched ideas from thousands of people thousands and i have learned something to be true there are three elements that are involved in every single presentation that's successful in getting finance and if you're an entrepreneur you're trying to make your first million usually you need to raise capital somewhere even if it's some friends and family so i want you to listen to this advice because these attributes aren't found some of the time they're found all the time and it's really about communications that's what it is it's about communicating the opportunity and making people understand it because if if you can't explain where you want to go no one will follow you so i recently had the opportunity to talk to the students at mendoza at notre dame about this and i want you to listen to what i said because i i think it kind of summarizes a very important step and remember it doesn't determine the outcome of the business this is just trying to raise capital to get started which sometimes is the hardest part i have a thesis i'll tell you what it is what are you watching when you watch shark tank you're watching the pursuit of freedom is there anything more noble than creating your own wealth and setting yourself free no that's what shark tank's about it's the essence of personal freedom it's not about getting rich it's about achieving something for yourself that is unique to our society and capitalism personal freedom and that's why i'm here today i want to talk to you about that that's what matters that's what creates everything that's great in america is the ability to start a business from scratch in your basement whether it's a cupcake or a group book or thousands of other ideas create a business worth millions of dollars employ hundreds of people provide for your family yourself their families and all the good things we enjoy from capitalism which is freedom now there's a lot of sacrifice involved i'm speaking to those of you in this room that want to become entrepreneurs so let's try and learn something from the shark tank experience i want to share with you other than funny pictures like this three common attributes to all of the deals that got funded on shark tank versus all the ones that didn't this does not speak to the outcome of the businesses it speaks to those entrepreneurs that are able to sit in front of investors or stand there and actually get their money and i want you to realize that there's a huge opportunity to understand something unique here because in each of these three cases they were present in one hundred percent of the deals that got funded over thousands of presentations but in every case these three attributes were there and why i'm bringing it up now is i know some people are going to be up in front of me in just a few minutes and i want them to hear what i'm saying here because maybe they want to modify their presentations a little bit all right number one in one hundred percent of the cases the deals that got funded the entrepreneur was able to articulate the vision in 90 seconds or less the idea was so blindingly simple that you could understand it in a minute this is a cupcake we put it in a jar we ship it to people for 6.95 i get it this is a groove book i carved a groove in it so i can ship it at the price of a magazine i get it see what i'm saying all right 100 of the cases 90 seconds or less number two in every case the entrepreneur usually a team or 80 of the time were able to articulate why they were the right people to execute the business plan what credentials what confidence what experience why were they able to take an idea and turn it into a business very important present in 100 of the deals that got financed now this is far more sinister this last point because in front of me multiple times i have seen deals that are now like an isotope sizzling the first two are present sharks are fighting everybody wants in and then this happens in one hundred percent of the time the people got financed they were able to answer every single question about their business model and their numbers with perfection when you're sitting listening to an entrepreneur and you start to ask them how much market share do you need to break even what's your margins how large is the market how fast is it growing who's your number one competition how much free cash flow you think you'll make in the first three years if you can't answer those questions or you make a mistake or you seem lost you're screwed this is really important this last one's a killer and i want you to remember that because i tell entrepreneurs today if you're not good with numbers bring someone who is it's incredibly important if anybody ever asks me about mendoza i'm going to say the wine is excellent anyways thank you i had a great time and go irish

Channel: Kevin O'Leary

Views: 1,625,414

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Id: 7drvFEh_T80

Length: 25min 38sec (1538 seconds)

Published: Mon Jun 08 2020