Driven

Robert Herjavec

• Publisher: HarperCollins Publishers
• Year: 2010
• ISBN:
  9781443404587
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

Robert Herjavec has lived the classic "rags to riches" story, from having $20 in his pocket to starting up technology companies worth hundreds of millions of dollars. Now the star of television's Dragons' Den and Shark Tank, this son of Croatian immigrants earned his incredible wealth by overcoming the odds with hard work and determination. On television, Herjavec bankrolls the best inventions and shoots down the best of intentions. Now, he's sharing his hard-won wisdom in one of the most inspirational business books of recent times.

In Driven, Herjavec shares the secrets that took him from his job waiting tables to growing his nascent technology company into a world-class conglomerate, The Herjavec Group. Herjavec's principles are as valuable in the living room as they are in the boardroom. Anyone can succeed, on their own terms, by following his sage but simple advice—if they're willing to take chances, to take control of their own future and to stay true to their own visions.

1
Know a Good Deal When You See It

The $200,000 cheque was on the table and we were ready to sign the deal.

Four bright young guys had achieved what thousands of entrepreneurs only dream of: they had obtained venture capital to transform their company from a struggling concept to a potentially major corporation, thanks to the cash that was almost in their hands and the expertise of their new partners, who happened to be all five panellists on the CBC-TV show Dragons’ Den. Including me.

The young men named their company JobLoft and their vision was sound: develop an Internet-based service to connect hospitality and retail-oriented companies in need of qualified people, charging a fee for the service. Instead of using newspaper advertisements or employment agencies, both of which are time-consuming and expensive, employers and prospective employees would connect through JobLoft. The founders wisely narrowed their focus to target firms with a 67-per-cent annual staff turnover, precisely the kind of companies interested in satisfying their staffing requirements quickly and often.

We liked the concept, we liked what they had achieved, we liked the prospects for growth, and we liked the four young men, all of them wearing orange ties, who brought the critical intangibles of dedication and enthusiasm to the mix. Jim Treliving, who launched and still runs Boston Pizza, and Laurence Lewin, whose La Senza chain of stores was becoming a dominant force in lingerie sales, were especially enthusiastic. Their participation alone would add a wealth of expertise in guiding the growth of JobLoft.

All five of us on Dragons’ Den agreed to contribute $40,000 each to the investment, buying 50 per cent of the company with the $200,000 total. Such unanimity among us is unusual, and a measure of the venture’s appeal. These guys making the pitch were good, and the Dragons were enthusiastic. Sounded like a win-win deal all around. So what happened?

Before the Dragons were to meet, sign the contracts and present them with the cheque, the young men decided to invite their silent partner—who happened to be their former business-school professor—to the ceremony. I suppose they wanted to share the glory of the moment with the person who, they believed, provided them with the inspiration for their business.

When the JobLoft partners arrived for the videotaped event, we didn’t know what to make of the middle-aged man accompanying them. He wasn’t dressed in the style you might expect for a serious business meeting. His worn leather jacket, open sport shirt and sandals hardly fit the mood, but we weren’t going to stand on ceremony, and when he was introduced as their professor we acknowledged his presence and got started.

For the first few minutes, the professor stood aside, watching and listening with an expression that suggested he was suffering from indigestion. Finally, as I finished reviewing the deal with the young men who had pitched JobLoft to us, the professor barked an objection. “I don’t like the business plan,” he said, and launched into a critique of the strategy we had just agreed upon.

Well, all right. A business plan deserves to be examined from every angle before implementing it, and we listened to the professor’s objections, most of them dealing with our proposed strategy to target employers over prospective hires. When we expressed disagreement with his concerns, the professor began questioning our academic credentials.

“Do you have a business degree?” he demanded.

What was his point? Is earning a business degree an assurance of success for entrepreneurs? Not really. I had successfully launched and managed companies dealing with Internet security and other computer-related aspects, but I achieved it without formal business training. Jim Treliving’s early business training included experience as an RCMP officer, a career he abandoned in favour of delivering pizza orders from his car, which also served from time to time as his office and bedroom. From that start, he built a billion-dollar corporation. How many business-school graduates can make the same claim?

As though emboldened by our lack of academic credentials, the professor grew more strident in his objections, and began insisting that the Internet search engine that would connect the job openings and the job seekers be designed to his specifications.

Jim, who had mentioned earlier in the meeting that he had flown to the meeting on his private jet, interrupted the professor’s harangue to say, “You know, I have no idea what you’re talking about.”

The professor fixed Jim with a scowl. “If you spent more time dealing with business instead of flying around on your jet,” he sneered, “maybe you would know the answer.”

I couldn’t believe the man’s arrogance. “Excuse me?” I asked, assuming he would express his point in a more polite manner.

He swung to face me. “You heard me,” he snapped. “You guys should feel lucky you’re making this investment in the company.” Then he added: “Let’s be honest. It’s only $200,000, and that’s not a lot of money to any of us.”

“You know,” I replied as I reached for the cheque, “maybe the problem is that I can still remember when $200,000 was all the money in the world.” I held the cheque in the air for everyone to see. Then I tore it up and dropped the pieces on the table. “If it’s such a small amount of money,” I suggested to the professor, “why don’t you put it in?”

As you can imagine, this distressed the young men who, a few moments earlier, had anticipated using the cash to expand their business. Now the cheque lay scattered like confetti on the floor, and access to industry contacts and experienced support that would have been available to them through Jim, me and the other Dragons had vanished.

I took no pleasure in tearing up the cheque. Like every other investment I made, I had planned to earn a profit from my share. But I felt two lessons had to be learned in this situation. Lesson One: you don’t bite the hand that feeds you. Venture capital is simply too difficult to obtain, especially when it’s accompanied by a sincere interest in helping entrepreneurs succeed. Lesson Two: Do not assume that every business idea you have is worth a million dollars on its own. Because it is not. Life is more complex than that. In addition, do not believe that academic training, as valuable as it might be in the right context, is more valuable than practical experience, especially when it involves launching, building and managing a business.

I felt for the young men who watched the investment money vanish after they had worked hard to acquire it. They had demonstrated the qualities that all successful entrepreneurs possess, including vision, determination and sufficient energy to make their concept a reality. What they also had, and didn’t need, was a so-called silent partner who couldn’t remain silent and keep his outlandish criticism and arrogant attitude to himself. Academics such as their professor may be good at delivering theory, but theory itself has no value, and using it as a weapon to shoot down practical experience is unacceptable. If the professor was going to influence the value and potential return of our investment, either he or our investment had to go. He appeared to be a permanent fixture. Our cash wasn’t. So it was gone.

Experience Comes with a Price

Unlike the professor, whose views appeared to be rooted exclusively in academic concepts, mine were shaped by practical experience. As a university graduate, I have great respect for scholars and academics. And as a guy who built substantial family assets out of my determination to succeed, I recognize the limits of academic theory. Without the ability to visualize a goal and believe it will be reached, nothing of substance will be achieved. Not by anybody. Not at any time. Not in any place.

Here’s the good news: the young men who made the mistake of bringing their know-it-all business professor along for the presentation were young enough to learn from their mistakes. And, as I’ll demonstrate a few times on the following pages, we often learn more from our mistakes than from our successes.

By the way, their company, JobLoft, managed to grow and enjoy some success after I tore up the cheque, and it was later sold to a larger competitor, generating, I expect, a satisfying capital gain for the founders. The company may have grown faster and bigger with our injection of cash and reservoir of experience, but the event didn’t destroy their dreams. Not by any means. Good for them.

If I had written this book before the incident involving the torn cheque and the challenging professor, the young men who launched JobLoft might have chosen not to bring their professor along to the meeting. They would, I hope, have recognized that they possessed everything they needed to become successful entrepreneurs: a clear vision, a viable opportunity, an effective business model, a determination to succeed and, for a few moments at least, a substantial amount of cash from a group of interested, experienced and supportive investors.

They had, but didn’t need, an academic who instead of influencing aspects of their business insulted the source of their badly needed investment capital. Looking back at that event, I wish I had made two important points to the young men, points I cover in this book.

The first would be to emphasize that $200,000 in investment cash for companies whose founders had yet to prove themselves in the down-and-dirty pit of business represented a rare opportunity. That kind of capital, provided by people who both materially and emotionally wanted to see the venture succeed, does not fall into everyone’s lap each day. I believe they understood this point. As a result of my actions, they also learned that money—and the support and interest of investors—can be as fleeting as a leaf in the wind if things don’t go well. Money travels to two places: to where it is wanted and appreciated, and to where it is likely to return with an acceptable profit.

My second point would go beyond the need for cash to the true motivation for becoming an entrepreneur in the first place: the overwhelming, often obsessive desire to bring a vision to life. This desire is so powerful that it cannot be diverted or diluted even by an awareness that the odds of success are against it, and it is not enhanced with dreams of enormous wealth that the venture may generate.

Successful businesspeople retain a quality most others not only lack but often fail to comprehend, and that’s the unrelenting drive to convert a vision into reality. They are driven to realize this goal in a manner that appears to defy logic among others who lack this drive. The rewards make it all worthwhile. No true entrepreneur seriously regrets the sacrifice made to realize his or her dream. The decision has always been worth it, whether measured in dollars or in degrees of satisfaction.

I have gathered my personal experiences and observations in this book. I hope you find them enlightening and entertaining, whether you are driven to achieve the same level of success achieved by me and other inhabitants of the Dragons’ Den, or are simply attempting to understand the motivation that powered them.

2
Appreciate What It Takes to Succeed

Whatever mistakes the young men behind JobLoft might have made, I admired them for having a dream and taking the initiative to make it a reality. On that basis alone, they were in the minority.

Most people look for security when it comes to choosing a career. They like the idea of knowing what they will be doing from 9 a.m. to 5 p.m. each working day and how much they will pocket from their paycheque each month. They value two or three or more weeks of paid vacation every year and the hopeful prospect of having steady employment all the way to their retirement years, whenever those arrive.

That’s understandable, and I respect and value those who make that choice. But it was not my choice, nor is it the choice of people who appear on Dragons’ Den in search of funding. No matter how badly conceived and poorly presented their ventures may be, I admire them for their determination to take risks and their preference to play the role of entrepreneur over that of employee.

The word determination may not quite do the job. During the economic downturn of 2008-09, anyone who chose to launch a new business had to be more than determined; they had to be almost insane. Yet people insisted on starting new companies, exploring new ventures and generally tossing aside the appeal of job security in favour of entrepreneurial success.

They weren’t insane, of course; they were passionate about achieving their dream, and that’s the line that separates them from everyone else. The very best of them will not only succeed in establishing a business and generating a profit from it, they will learn to adapt as the business evolves into something more established and vibrant, responding to changes in the economic environment. That’s a difficult transition to master.

While the entrepreneurial spirit is most evident (and essential) among those who choose to launch their own business, it also represents a valuable trait in those who prefer to work within an existing corporation. Every successful corporate executive I have encountered shared the same entrepreneurial essence, the same drive to grow a business to the limits of their—and its—capacity, as me. How can you not admire that? How can you not believe that it is the essential core of success in a free-enterprise society? Striving to succeed in business according to your own talents and vision is a trait we should all value and promote in our friends, our families and especially ourselves.

My admiration for people who share this point of view was behind my decision to participate in Dragons’ Den. I’m not there primarily to generate profits from the investments that I and other Dragons may agree to make. We’re there to encounter real businesses with real cash flow and real ideas that can’t get funding somewhere else. It’s a great format for entrepreneurs to learn and possibly get funding. It’s also a way of supporting the value of small businesses to the North American economy. Most people are aware that small businesses create the majority of new jobs. Events over the past few years, especially those concerning the antics of Wall Street and some of the more outrageous examples of unchecked greed and false values demonstrated by giant corporations, have underlined the importance of small businesses and the people who risk everything to help them succeed.

The Essential Companion to Passion: Communication

One of the least acknowledged essentials to success in business is the ability to communicate your concepts effectively to a wide range of people, including investors, employees and customers. No one is likely to surpass or even match the passion you feel for your venture, but the more of your vision you can transfer to these groups, the more likely your business will succeed.

Communicating your vision effectively differs from salesmanship or financial analysis, especially when dealing with potential investors. If you can’t get me excited about your concept and its prospects, you face more than just the challenge of convincing me to hand over my money as an investment; you’ll likely face the same challenge of convincing customers to hand over their money for your product or service.

That’s always in the back of my mind, because I won’t be running your company for you. You’ll be doing that, and using my money to generate profit.

Think of all the different qualities involved: the ability to identify a business opportunity, the vision to shape it into a profitable venture, the passion to accept the risk involved in pursuing it, and the talent to communicate both the vision and your passion to others. That’s a rare combination. With them, there is still no guarantee of success. Without them, however, there is no possibility.

3
Be Who You Are, Not Who You Think You Are

None of us on the panel of Dragons’ Den set out to become performers on network television. We’re all businesspeople at heart, geared to make decisions in relative privacy among partners, colleagues and customers. What are we doing discussing business in front of millions of strangers?

As much as we may try to deny it, we’re performers of one kind or another. And we have difficulty turning down a challenge. The show also teaches us things that we can apply to business and to life. We learn about other business ventures, about the impact of culture and technology on the economy, and from time to time we learn something about ourselves as well.

“Nobody Tells Me to Be Quiet!”

I arrived at my office one day in 2006 to find an envelope containing a DVD and a note from a man named Stuart Coxe, a producer at CBC-TV. His note invited me to call him after watching the DVD.

The disk contained an episode of the BBC-TV Dragons’ Den, which, as I write this, has been produced in more than thirty countries around the world; the U.S. is the only place where the same concept is given a different name.

I had not heard of Dragons’ Den before viewing the DVD. I enjoyed watching the show, but the note and the video left me confused. Did they want a cash investment from me? If so, I wasn’t interested. The show was entertaining, and I could understand its potential as an audience builder, but I had little interest in backing any show-business venture. The series had yet to air, and while it appeared to be a hit internationally, having been launched in Japan in 2001, there was no assurance it would build an audience in Canada. As a result, when I called Stuart the following day, I may have been a little abrupt. Despite this, Stuart asked if he could drop into my office the follo...