J: Hey there, everybody. I am J Scott. I am your co-host for the Bigger Pockets Business Podcast. Back again this week with my lovely co-host, Mrs. Carol Scott. How you doing today, Carol Scott?
Carol: Doing so great, honey. Thank you. Guess what listeners? We have such a super great show today.
J: We do. We have an amazing show today. So I’m going to jump right into it. Today we have from Shark Tank, Barbara Corcoran and she’s going to walk us through a whole bunch of stuff. She’s going to start by telling us her journey into entrepreneurship. How she started a company back in, I guess it was the ’70s and later sold that company for many, many, many tens of millions of dollars and how she did that. And then how she transitioned from that into becoming a shark on Shark Tank. She’s going to tell us all about how she almost wasn’t a shark on Shark Tank, but she did something she needed to do to make it happen.
J: And then she’s going to take us through what entrepreneurs have to do in order to be successful and what she looks for in an entrepreneur when making an investment.
Carol: Yeah, and make sure you listen through to the whole entire thing because she’s not only going to tell you what she looks for, she has seen and worked with so many entrepreneurs along the way. She’s also going to be able to tell you the one single thing that she looks for to determine if, as an entrepreneur, you’re going to be successful. It really boils down to one thing. So make sure you listen all the way through.
J: Excellent. And for anybody that wants more information on today’s show, more information about Barbara Corcoran, don’t forget to check out our show notes at biggerpockets.com/bizshow13. Again, show notes at biggerpockets.com/bizshow13.
J: Okay, without any further ado, let’s bring on Barbara Corcoran. And let’s welcome Barbara Corcoran to the show. Hi, Barbara. How are you doing today?
Barbara: Nice to have you guys. Well, nice to have me.
J: It’s nice to have you.
Carol: It’s very nice to have you. Completely concur. And thank you again for being with us. We’re so looking forward to talking with you. We’re huge fans as are many of our listeners, of course. J and I feel like we are at least somewhat up to speed on the Barbara Corcoran backstory and what your early life was like, but there’s also a reasonable possibility some of our listeners might not be just as in tune and we would love to let them hear more about what your early life was like. And specifically, how that really drove you to be an entrepreneur.
Barbara: Well, I think when I moved out of my household at 18, I think I was already formed as a businesswoman, frankly. Because I had an ideal childhood that really taught me everything I was going to need in life, honestly. I had 9 brothers and sisters. We grew up in a two bedroom flat in New Jersey. My mother was a powerhouse. She was a phenomenal role model. She worked her ass off her whole life. I don’t think I ever saw her sleep until she was dead, actually. It’s kind of a weird thought, right? I’m going to take that back. That sounded weird. I don’t think I ever saw my mother sleep and my dad worked two or three jobs to feed his 10 kids.
Barbara: So we had the huge advantage of having phenomenal role models. I came out of that household with competition in my soul. I had to compete to get my parent’s attention. I had to beat out the other kids. I had a sense of humor that got me through the bad times and I had a job since the time I was 11. So I knew how to work hard. So I really just did an imitation of what my mother did in the household when I started building my real estate company.
J: What was that job that you had at 11 years old?
Barbara: Oh, it was a great job. I was a playground supervisor for the morning shift, 8:00 in the morning until noon, and I had to keep the town kids happy. Keep them entertained in the playground. But what I learned in that is how to do PR. I only had three kids and I knew the town was paying me. I thought I got to get a bunch of kids in here. And so I started serving breakfast. And most of the kids in my neighborhood didn’t get breakfast so I got like 40 kids within a week coming for breakfast every morning.
Barbara: And then I realized, these kids deserve a little attention. And I pitched a story at 11 to the Bergen Record in new Jersey and they sent a camera crew down to film the breakfast with Barbara. And I made the front page of the living section and then everybody in town treated me like I was a celebrity at 11 years old. I thought, “Wow, this feels good.” And I later used the same gimmick again and again to build my brokerage business.
Carol: That’s amazing. So at 11, you were out there recruiting. And you’re out there creating your own public relations initiative.
Carol: That was starting early. That’s awesome. J, you were going to ask something.
J: Yeah, did your brothers and sisters have the same entrepreneurial drive? Was it something that was fostered in the household do you think or is it something that was more your personality?
Barbara: I think it was fostered in the household because if you’re going to be an entrepreneur you have to thrive on competition or you just don’t make it. So we all competed. We all competed with each other for attention. Also in my family, my dad worked for somebody his whole life, usually two or three people at the same time and hated every minute of it. He would quit his day job regularly and he would quit it because actually he was fired for insubordination. He would tell his boss to shove the job up you know where, where the sun don’t shine. That was his famous line.
Barbara: So we saw a man who really should have worked for himself his whole life, but couldn’t afford to. And as a result, 9 out of 10 of his kids became entrepreneurs. All successful.
Barbara: No, it was definitely fostered in the household, without a doubt.
J: That’s amazing. That’s fantastic. So let’s jump ahead a little bit. You leave the household at 18. Eventually you start a company that … I don’t want to put words in your mouth, but I think-
Barbara: You can do that. No problem.
J: But a company that kind of put you on the map at least as far as the outside world it appears. You started the Corcoran Group which was your real estate brokerage.
Barbara: Yes, of course.
J: Can you talk to us a little bit about what led you into the brokerage business and what your original motivations were? Were you starting a company that you could eventually exit or were you starting a company that you just were looking to make some income? What was the back story behind the Corcoran Group?
Barbara: All well … much too sophisticated for what really happened, all right? I was working as a waitress at the Fort Lee Diner. I was 21 and a customer walked in and one look at him I knew I was going to be losing my virginity within the week, honestly. And that was Ramone Simone. And Ramone Simone became my business partner. He offered $1,000. He said, “You got a great personality.” And so my first business was not the Corcoran Group, it was Corcoran Simone Company with an accent, you know? He said he was from the bass country. He was drop dead gorgeous, had olive skin, black hair, shady glasses. Just the kind of guy a girl at my age wanted.
Barbara: He became my 51% partner. To shortcut that to the Corcoran Group, he announced one night as I was making pasta for his three children and I was their mom and I was the mom at work, the mom at home. And one night he walked in and I was making that pasta, that steam was coming up my face. I thought, “Boy, do I look pretty right now.” He said, “You know, I’m going to marry your secretary.” And that was the beginning of the end of the first business. I just couldn’t believe it.
Carol: Oh, geez.
Barbara: You know, he said take your time moving out. I took about a minute, grabbed my toothbrush. I was the hell out of there. And it took me about six months and then one day I just walked in to him and his new wife, Tina, my old secretary and I said, “We’re ending this business today. We’re going to chop it up like a football draft. You pick the first person, I’ll pick the second.” We had 14 people and I separated my seven people after about four minutes. And I said, “Guess what? We’re moving on Monday.” Ahh, where we moving? It’s a surprise. Because I didn’t know where the hell I was going to be moving. But that was the beginning of the Corcoran Group. And I named it the group because I knew I was going to need the help of everybody there to make it. We had very little resources, didn’t know where I was going.
Barbara: But that actually became the beginning of a huge success on the heels of that rejection. And you know what I have learned working with so many sales people all these years that that’s often the beginning of the best things, bad turns. You know? And that was the Corcoran Group. So it wasn’t a conceptual idea. It wasn’t anything but a dream because for some reason I had a dream that first day of business that I was going to be the queen of New York real estate. I just had that dream. And it was helped by Ramone on that day when I went out of the office when he said you’ll never succeed without me. I knew I was going to be the queen of New York real estate as sure as I knew my middle name was Ann. You know?
Barbara: That really helped me through the tough times that happened again and again in real estate. Because it’s a cycle market. You go up. You go down. You starve. You make money. But I always thought of those words and I always thought of my dream and I never have varied off those words of that dream for a second. And that really got me to the finish line. I have no doubt.
Carol: Yeah, right from the get go it sounds like you had an amazing motivator and that kept you moving. It sounds like you said you had seven of the 14 that you had from the Ramone Simone group? Is that accurate?
Barbara: Yes, of course.
Barbara: We each took seven. Yep.
Carol: And they were all on board and ready to go and did you vary in your business at all from the Ramone Simone group? Did you change your whole trajectory? Or did you keep doing what you were doing and build upon it just to keep the momentum moving?
Barbara: Well, we had a rental company. I quickly switched it to sales because by accident I had a referral to myself as a salesman because I sold every day as well. That was a mistake. Union Carbide sent me an engineer to buy an apartment. We had nothing for sale. We had rentals. That’s what we did. We needed the cash, the quick cash of rental income coming in. You know, you get paid the day you rent it. That’s good.
Barbara: In sales it’s a slow process. You have the board approvals. You have three, four months you work with the customer. I couldn’t afford that. But suddenly, there I had an accidental customer and I sold him within three days. He had three days to buy. And I took that cash, that closing, right away, like a month later and I knew it was sent to me by the heavens. And I put that money down on hiring my first salesperson to sell. And that was Norma Hirsch, she was a dynamo. And bam, she had a sale within a month. I took that money and hired another salesperson. And I worked that formula for the rest of my life and that’s how I was able to build the company to 1,000 people. Just spare cash over my overhead. If I could add up to supporting one person for one month, do the ads for them, pay for their phone, I would just boom, put it down and hire another person.
Barbara: And that’s about as sophisticated as my financing ever got, but that’s all you really needed.
Barbara: You know, do you have the income coming in and could you afford the overhead going out? That was about it. And that was exactly what built the entire business over the 10, 12 years I built it.
J: It’s funny. I hear that story over and over again, a combination of serendipity, you’re moving along in your business and your life and something just kind of falls in your lap, combined with your own motivation and-
J: Yeah. But moving forward despite that fear.
Carol: [crosstalk 00:11:36]
Barbara: Yeah, yeah, yeah.
J: I mean, there are a lot of people who would say that that opportunity for the sale offer for Union Carbide comes along and nope, that’s not my business. Go find somebody else. But you embraced it and you said let’s see what we can do with it. And so it was that combination of the serendipity with your embracing it.
Barbara: Yes, of course. Well more than embracing it, if you were in the taxi cab with me that day you wouldn’t have thought I was embracing anything. You would have seen a girl bull shitting her way through the day to make sure he didn’t get to another broker who actually had sale listings. So that’s why I discovered my best pitch that I used for the rest of my life in sales. Today is a day of investigation. I’m going to educate you the entire day. We’re going to see every neighborhood in New York. I’m going to tell you what prices are so that you have seen everything before you decide what you want to focus in on. And this young engineer loved it and I cabbed him all over the city hoping to God I wouldn’t run out of cash, honestly.
Barbara: But I cabbed him all over the city and you know what I learned and is still true in New York? I had no idea what prices were, it wasn’t my gig. But I looked at the sideboards as I went down blocks of what the garage rentals in Manhattan were and whatever the monthly rental was was the same cost for a one bedroom apartment which is still the same, by the way. So I said, “In this neighborhood, one bedrooms sell for $45,000.” Next neighborhood you know, “In this neighborhood, one bedrooms sell for $62,000.” Yeah, because it was $62 a month for rental. And you know what? It really is a reliable barometer as to values in New York City because garage rentals are really real estate spaces if you think about it.
Barbara: So he didn’t know what was happening, but by the second day he was educated and by the second day boom, he was on my hook big time and I had my sale.
J: You just had to stay one step ahead.
Barbara: Yeah, yeah, yeah. A little bull [inaudible 00:13:15]helps out a lot in business as you know.
J: That’s awesome. So at what point did you decide I’m going to turn the Corcoran Group into something that I can exit? It’s not just going to be a stream of cashflow for me. I mean, at some point did you say I’m going to sell this business at some point and did you have to change the way you were operating the business when your exit strategy for the business changed from making cashflow year after year to I’m going to exit? Or did that just come naturally?
Barbara: Three things happened and they happened in the same month. One was I was doing the Corcoran Report which put us on the map in publicity over the years, with my partner, Esther Kaplan, one night. We were seeing how many listings we had compared to our competition. And so we were late in the office one night producing the report and I was doing the body count, so to speak. We use to, “How many one bedrooms do they have? How many one bedrooms do we have?” That’s the only way you can really size up where you were relative to your competition.
Barbara: We both realized in a split second we were number one. We had more one bedrooms, two bedrooms, three bedrooms, east side, west side, downtown, uptown, than any other firm in New York. And I realized I really was the queen of New York real estate. So, the reality of my god, we actually hit the goal I had. Also, I just had a baby, Tommy, and I went through seven years of in vitro which was probably the largest struggle of my entire life. And I had just had a baby and I [inaudible 00:14:34]and cornered between being a great mom to Tommy and being a great mom to my thousand salespeople. And I felt pulled all the time. And I thought, “You know what? I’m going to be a great mom.” And we decided that day we would sell the business. It was sold within two months. That’s about how much thought went into the whole thing.
Barbara: I shouldn’t though, mention one thing. For the first time in my life, I had a million dollars in the accounts. I always was wondering how I was going to meet my bills. Suddenly we had surplus money. I couldn’t spend fast enough to open another office or hire another dozen salespeople. The money got ahead of us. I thought, “Oh, this business actually makes some money. Could you imagine? Maybe somebody will pay for this.” And so somebody did pay the 66 million, thank God. And I had another stroke of luck because I signed the contract on the Friday night before 9/11.
J: Oh wow.
Barbara: On Monday the world-
Carol: No kidding.
Barbara: Yeah. So it was just serendipity yet again, but I did insist that all those attorney and accountants stay in that room. They weren’t going home to their kids in Westchester. And I’m not usually that way. I’m usually very nice. Like no, they can’t get this deal signed up? No, they’ve been at it all day long. They’re not going home until they sign the deal. That’s what I directed and they didn’t go home until it was signed. Thank God because on Monday I would have had nothing in my hand.
Barbara: So it all worked out kind of fine. Also, fast. Like a rollercoaster. I boombeda boom, you know?
J: So Barbara, was there ever a time … because in this industry, in the brokerage industry, and you know this as well as I do, a lot of companies don’t go that sale exit strategy. They go the franchise route. They go the expanding and more brokerages under management. They expand to different states. Was there ever a time that you considered a different exit strategy than just selling out the company and moving on?
Barbara: Not for a second. And maybe it was because I was too simple minded. One, I’m a control freak definitely. I like to be in control of how the flower look in the pots outside, the exact color blue of the logo. I could really go nutso on detail. So I couldn’t imagine relinquishing that amount of control. I had 9 offices, that was enough for me. Also, I didn’t want anybody messing with my name. I was too personal about it, you know? Perhaps that would have been in hindsight a very productive way to go, but I had 66 million dollars whereas the year before I had like $80 in my account. And like, what difference would if I sold in 10 years … a lot of people say oh, if you had held on for another 5 years you could be a billionaire. I’m sure that’s the truth. I had a machine that was a money maker. I’m sure the guys who bought it are billionaires because of the business.
Barbara: But you want to know something? What else was I going to do if I had more money? It wasn’t my god. It never was. I just wanted to see if I could have my dream come true, you know?
Carol: And you did.
Barbara: And then I was busy doing my next dream which is raising my kid which was probably a lot more satisfying, believe it or not, to my ears than even building the business.
Carol: I absolutely believe that. We’re parents of two little boys and I can absolutely believe every second of that statement, for sure.
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Carol: So, you did achieve your dream. You did become the queen of New York City real estate. You made 66 million dollars in your exit when you had almost nothing a year prior. And you had a son to raise, right? So you did what you set out to do and there had to be a next step from there. What did you decide to do? Did you do other things while you were raising your son? Did you focus 100% on Tommy? Did you try other things simultaneously? Take us to the next step.
Barbara: I was determined to be a full time mom and, of course, there’s a lot of hours in the day. So I signed up for a pasta course on how to make better pasta sauces. And I realized by the end of that two hour course that I was going to go nuts. So I sat down and wrote a book on how I built the business, crediting my mom throughout because she really deserves the credit. And then I realized I was no good without being a somebody other than myself. And I decided I had to start another business. And I decided to go into media business as a TV personality. And it was good timing because the world was falling apart in real estate and bad news, as you know, prints. So I was on The Today Show again and again and again on how to survive the real estate market. How to do, how to find a good deal, how to avoid a bad one, blah, blah, blah. And I did that for a number of years and then Shark Tank came calling.
Barbara: That’s how I got on Shark Tank. Just out of the blue. And then I got the job. I signed the contract. I was on the way to Hollywood and then they told me they changed their mind. And then I did exactly what I always do best. I handled the rejection fighting. And I wrote a potent email to Mark Burnett who owns the biggest studio there who was going to be my boss, I thought, and told him he had made a mistake and he should invite both girls out to compete for the one lone female seat because they hired another woman. And it was a persuasive, short email and he succumbed. I told him I was flying out on that plane. I would show up. And that’s exactly what I did and he let me compete for the seat and we won it. Thank God. I won.
Barbara: Other than that, I wouldn’t have been on Shark Tank for the last 11 years. I’m sure I would have done something else, but what a ride that has been.
J: Did you expect from the beginning that Shark Tank would be the phenomenon, the pop culture success, that it’s been?
Barbara: I’d like to say yes that I’m a genius. No. But I did know it was a damn good show. That’s about as much as I knew about it because the camera guys, who were filming it, every time we took a break kept talking about the deals, debating about the deals. And camera guys usually don’t do that. You almost sometimes wonder if they’re even alive or breathing. They just sit there on the camera. But they were fully engaged and I thought, “This is a good content. These guys like this shit.” And I thought that the show would do well.
Barbara: But you know, we got calls every second, third month from the network saying it was being canceled because it’s hard to get traction. It took us three years before we had any viewership. They were constantly moving our space. It was just tough because we just got negative messaging constantly. Sorry guys, it’s over. Sorry guys, it’s over. It never got over. It just got bigger and bigger once we went past that three year mark.
J: Okay. So this is a great segue. A lot of our listeners are budding entrepreneurs. They’re entrepreneurs who are looking to grow their businesses, potentially raise money. So I’d love to pick your brain a little bit about how you look at entrepreneurs, how you decide who’s going to be successful, who’s not going to be successful. Who to invest it, who not to invest in. So, can we go down that road?
Barbara: Yes. It’s a pretty short road you’re going down because I do have a formula and I work it and it took me about three years, honestly, to develop it working on the show. Because I wasn’t aware that choosing great entrepreneurs was exactly what I had done my whole life in choosing great salespeople. You have a salesman come in with no sales background, you don’t know what they’re made of. You don’t know what they’re capable of. You think they’re going to be on a commission basis and that’s cool. No, that’s not true. They have a $48,000 a year overhead that you’re paying for if they don’t make money, okay? So the risk in building a brokerage firm is choosing the right people and I was great at it. I knew how to spot talent. I could smell it through my nostrils a mile away.
Barbara: But when I got on Shark Tank it was all different business. I’m like, “What do I know about the computer business? What do I know about hardware? I don’t know anything.” So I kind of spent three years faking it, doing the best I could. And then one day it just hit me, this is like choosing sales people. And that’s the magic ingredient on all these entrepreneurs, they got to be able to sell. If you can’t sell and persuade people to buy a product, to work for you, to follow your lead, to buy into your idea, it’s all sales, sales, sales. If you can’t do that and to give you my money. Give me your money, that’s a sales job.
Barbara: And so once I realized I was hiring salespeople, I just looked at the same traits I looked in all my superstars that I built at the Corcoran Group. They were the reason I had a successful firm. They were the reason the firm was successful. So I asked myself, can they sell? Easy to tell on Shark Tank. Anybody at home could tell. Are you persuaded to really like them and want to buy? Some of the entrepreneurs on Shark Tank night will make $50,000 in sales. Amazing. But I have entrepreneurs that make four or five million in sales. Why? They know how to sell and the guy at home’s ordering this stuff right away.
Barbara: So they have to sell and then I spend the rest of the time entirely trying to figure out how good they’re going to be when the shit hits the fan. Because inevitably if you’re building a business, that has to be a specialty. You have to get past all the disappointments, all the obstacles, all the stuff that gets in the way. And so I’m trying to size the person up. You know, on the show we have 45 minutes to an hour and a half to size people up. When you see it at home, you’re seeing eight minutes, six minutes. But we have a lot of time to ask some personal questions. What else did you do? How did your parents feel? I try to get into their head, okay? Maybe not the best TV stuff, but great investment stuff I ask for.
Barbara: And then I buy into the people. I don’t really care what the business is as long as it makes sense, solves a problem, pretty easy litmus test and somebody’s willing to write a check. That’s all you need to have a business. That’s pretty simple. 95% of the businesses that come on Shark Tank have that. But I’m looking for the salesman/entrepreneur who will get past failure. That’s it. If I got him, I got a winner and I’m going to make a ton of money. And all of my successful businesses are exactly those people. Not the ones that have a business plan, that have this, could talk the lingo. I never buy into those fancy people. You always lose your shirt. Spend your money, burn rate, all that crap. It’s like, “Oh, burn rate, you know that word? I’m out.”
Barbara: Another one, pivot? You’re pivoting? What happened to the last guy’s money? Did you pivot away from it? Yeah, we did.
Carol: Can’t trust that lingo. Can not trust it.
Barbara: So I keep it pretty simple. Lots of lingo out there, lingo turn off. I go like, yeah.
J: It’s interesting. You answered that question about what you look for without ever mentioning a product, without ever mentioning financials, without ever mentioning a business plan. It’s purely about the person or the people and their ability to sell. And that’s fascinating.
Barbara: Well last season on Shark Tank, two clowny guys came on to the set. Two brothers called Comfy Brothers. They had two products hand made. They have a sweatshirt blanket. They had held them up. They had them on. They took them off. They wanted us to wear them. They had a jingo, Comfy Brothers, Comfy Brothers. They were whoa, whoa, whoa. Nobody made a bid. I said, “I’ll buy it. [inaudible 00:27:57]30 business bank, done. I liked the guys. I’ll get these guys for sports. What do you think is happening right now? They have 88 million dollars in sales in a year. They’re worth a fortune. The worst business idea I’ve ever heard. They had no idea how they would make it, what it would cost, what they would sell it, who would buy it. All they had was two homemade little blankie things and a jingle. But these guys, I loved them. Something in my gut said these guys are hot.
Barbara: Now they could have gone over, you know rode into the sunset and never see them again, right? But the deal was signed and it’s been the most successful business I’ve ever invested in. Go figure. That has nothing to do with logic. That has to do with those guys right there singing their song and believing it.
Carol: That’s great. That was really all it took. So they are one of your greatest success stories, if not your greatest success story.
Barbara: They are. Period.
Carol: They are, simple as that. Do the vast majority of the entrepreneurs that you invest in, kind of after the show what has happened? Do they keep the momentum going? Or have you seen some of them fade out? Is that something that is predictable I guess from the beginning? And how do you deal with that?
Barbara: Well you don’t know for sure in the beginning and that’s the truth. But seven out of ten do not make it. Three out of ten do. And the three that make it usually make it very big. And the ones that don’t make it, sometimes stay in business five or six years. They’re out of business, they just don’t want to admit it.
Barbara: You know, it takes a certain courage to quit and say I failed. So they keep it going like languishing on the vine, you know? But I think I missed your real question. You said, what was the gut of that question? Yeah, one-
Carol: The gut of the question is is there a way that you’re able to predict and you actually did get to that. You said you never quite know. Is there more you wanted to add?
Barbara: Yeah, I want to add one thing. I do know three, four, five months hence easily, no doubt in my mind.
Carol: Really. That quickly.
Barbara: When I sign a deal with someone, I put the entrepreneur on a beautiful framed picture. They hang all over my office, okay? Beautiful, okay? And then I’m waiting for this one faded day when something goes wrong. The product came in wrong, it wasn’t made right. The guy never delivered. You took the people’s checks, you have no pro- … something goes wrong. Big time. They’re off the high of Shark Tank with easy sales and now we’re going to test what the person’s made out of. And all I do is I shut my mouth and listen to what they think about it.
Barbara: The minute they are a victim in any way like it wasn’t my fault, rah, rah, rah. I have learned over the years at Shark Tank that those people will never succeed. I could talk to them until the cattle come in which I’ve done in year one, two, three. Like, “Come on. Get yourself together. Let me tell you your way out of this.” Forget it. They might listen and get souped up, but next week they’re the same old person again. The defeated person. So the minute I hear even that intonation of blame, victimization, not like I’ll get even. That’s what I’m waiting for. I’ll get even. I’ll show him. Then I turn their picture upside down so I don’t spend any time with her ever again.
Barbara: I mean, I’m nice. But I’m not going to spend any time because I know these people are never going to succeed. Victims don’t succeed in life, it’s as simple as that.
Carol: You know. You’ve done this and you’ve been acting in a completely opposite frame of mind since age 11. Well, probably since before age 11, but with that first job at age 11 you’re like I’m going to take not only complete ownership, but people aren’t going to tell me what to do or how to do it. I’m going to go way far above and beyond that and just completely kick ass.
Barbara: Well, I like your rendition. I’m not sure I was that good, but I like your rendition. I’ll go with that.
Carol: We’ll work with that. Awesome.
J: Yeah. One of my favorite sayings in this business is take all the blame, give all the credit.
Barbara: Oh boy, a good manager does that.
J: And I’ve found that people that have that attitude will build the teams of people that will help them succeed.
Barbara: So it’s who you want to work for always, right?
Carol: That’s right.
J: So can we take a little step back? So for those people out there that are starting to build a business, they are thinking I need money to build my business or they’re growing a business and they think is now the right time to go after investment, what’s your advice to them? When is the right time to start looking for money versus keeping all the equity yourself and just kind of bootstrapping.
Barbara: It’s not really a question of keeping all the equity to yourself or your willingness to share. I find that that’s never an issue really with people. I mean, maybe because of my experience on Shark Tank. If you get too greedy as an investor, people kick back and don’t do the deal. I’ve learned that, right? But I’m just a believer that you shouldn’t get investment money. Kind of funny coming from me and that’s what I do for a living.
Barbara: I believe that you should bootstrap it as long as you possibly can. And not even so far as keeping the full equity for yourself, but because when you’re bootstrapping you’re hocked out on your credit cards, you don’t know how you’re going to make ends meet, you learn how to juggle. Juggling is a talent that you’re going to need in building a business. You learn how to juggle with your money. And more importantly, you take one dollar and get ten dollars worth out of it because every penny counts.
Barbara: The minute you get the next guy’s $10 it’s a totally different thing. That guy, it’s his $10, he’s used to investing losing money. Hey, you need more money? You start to get sloppy. Also, what else happens is you start to serve two gods. Not just the god of how do I get this damn baby up and running and out of preschool so they can stand on their own two feet? You’re not thinking that way. You’re thinking how do I get this and explain why I’m not doing it fast enough and how do I get more money because I built it too fast and how do I fuel it? It gets complicated.
Barbara: You know, business is not a complicated game. It’s simply a game of what do I got and how do I get people to buy it? That’s about what it’s about. But when you enter the heavyweight know it all guy who wants to give his good advice and blah, blah, blah, it gets complicated. It gets complicated. You’re like especially if you got a little pizza parlor and a lot of these people have little pizza parlors that are going to go nationwide. You know? You know I spend a lot of time with my entrepreneurs. A lot of time squeezing their head in. Just taking my hands and squeezing them out. Don’t get a big head. You’re not Napoleon yet. You’re just a little guy scrapping to build a little tiny business.
Barbara: And Shark Tank can do that to someone with quick sales. But I’m not a believer in even getting the funding unless you absolutely know you have a runaway horse who’s out of the barn, you can’t contain him, he’s brought back 50 other mares for company and you go, what am I going to do? Then you need an investor. Yeah. But a lot of people, I would say 95% of everybody moves too fast and welcomes the outsider in which is like a wolf in a … I guess I’m into animals today. Like a wolf in a hen house. I’ve seen more investors ruin my businesses, big investors come in from the side, Mr. Know it alls and everybody starts listening to them. They’re not there in three years when the business is demolished.
J: I love that. And to step back just to make sure it wasn’t lost in that whole answer. You basically said something that I love. Business is about two things, create a great product and sell it.
Barbara: Yeah, that’s about it.
J: And really at the end of the day, people over complicate what business is. Obviously, there are a lot of details there, but at the end of the day have a great product, be able to sell it.
Barbara: And they go to what’s your burn rate.
Carol: And let’s pivot out of it. Great. Well this was all excellent information. I would love to move to the part of our show now that we call four more. So we’re going to ask you four questions and we’d love for you to answer them just rapid fire style. The first thing that comes to your mind, answer it and we’ll go through them.
Barbara: Oh, a game. I love games.
Carol: Oh, good. You’re on then, it’s a competition. So we’re going to ask you the four questions and the more will be where we can find out more about you.
Barbara: I have to qualify one thing. Any right or wrong answers?
J: No right or wrong answer.
Carol: Of course not.
Barbara: Oh good, good, good. Everything’s right. Okay.
Carol: Okay. I’ll ask the first one.
Carol: All right. Excellent. Okay, your first question and answer the first thing that comes to your mind. What was the worst job that you ever had and what lessons did you learn from it?
Barbara: Posting temperatures at Holy Name Hospital as a nurse’s assistant. I was dyslexic. I never did math well. I reversed the numbers and every time a patient died in the cancer ward the night before, when I came back to work I thought I had killed them. It was just terrible. I’m sure I didn’t, but I thought my … I got out of that job in about a month. Yeah. Without being fired, refreshing.
Carol: Okay. Go ahead J.
J: I’m going to take the next question. Is there an opportunity that sticks out in your mind where you’ve said no to something and in the end you determined that was either the best decision you could have made or the worst decision you could have made?
Barbara: I don’t know if I’d qualify as best or worst, but I did say no to something two months before I sold the Corcoran Group. A woman came to me who owns 12, 13 offices in the Hamptons and said, “I really want you as my partner. I’m willing to sell this to you.” Whatever, the amount as $30,000 or something. She was tired of it, wanted out. And I said, “Nah, I’m thinking of getting out. I’m on the exit frame of mind, but I really appreciate it.” Well, right after I closed the business, the [inaudible 00:36:49]company bought that business for I think it was 40 million dollars.
J: Wow. Oh my gosh.
Barbara: I should have said just a minute, let me-
Carol: That’s hilarious.
Carol: For people trying to raise money for their ventures, what’s the worst advice that you tend to hear?
Barbara: Worst advice to an entrepreneur from an investor?
Carol: You got it.
Barbara: We got to build this thing big. You’ll get stuck with building and it’s the wrong call and you’re always in trouble. Yeah. It’s the entrepreneur that decides what they do with the business. You know, it’s interesting. With my entrepreneurs, I always know when I have a good one the first time I meet with them after the sale closes because they’re listening to what I have to say, what I would do with the business, and then they’re ignoring me. I always know I have a loser who’s got a big yellow pad writing down everything I say and asking me qualifying questions. And what else? And what else? And what else? They’re taking careful notes like that, the entrepreneur is going to be out of business soon. Great entrepreneurs don’t listen. They do what they want to do. It’s a part of the personality trait.
Carol: Wow. I like that tip a lot!
J: Love that.
Carol: Great entrepreneurs don’t listen and instead do what they want to do. That’s gold right there.
J: They do what they think is right. Yeah. That’s awesome. Last question, Barbara. What’s something that you’ve splurged on that was totally worth it? What does Barbara Corcoran splurge on?
Barbara: Does it have to be current or in the past?
J: Any time.
Barbara: The single best money I ever spent was the first year I actually made a profit. I made almost $60,000 at the Corcoran Group and then we had a recession and I lost so much money. But that year I went out and I bought my mother and father a new car. They never had a new car. I bought my mother a blue Pontiac convertible and my dad a Lincoln Continental, his dream car. And I had my Uncle Richy drive it down to Florida where they were and deliver it with ribbons on. I still think back at that and I think it’s the single best thing I ever did for my parents. The single best thing I ever spent money on my entire life. Nothing ever measures up against that.
Barbara: And I’m so happy I had that one slice of time to do it, boom, slipped it in. So nothing … I mean, I can pretty much afford whatever I want, but it’s not about affording what you want the power of that which is the power to say I want it, I’ll take it. It’s really the satisfaction you get after you buy it. That’s what counts. And nothing even comes close to that. I think I glow on that at night and it puts me to bed most nights, that thought again. And that was like 30 years ago. I’m still high on that stupid one thing.
Carol: As you should be for very good reason. Okay, that’s awesome. So here’s the more question. Where can our audience find out more about what you’re doing and connect with you?
Barbara: Well, certainly check out my podcast, so Business Unusual your listeners should check it out. If they like what you’re digging for, they’ll like what I dig for as well. We’re kissing cousins, really in a way.
J: Go on Apple iTunes and search for Barbara Corcoran or Business Unusual and subscribe right now.
Barbara: Okay. Good pitch. Thank you.
J: Barbara, thank you so much for this. We really appreciate you being here. The advice you’ve given is invaluable. Your story is amazing and just thank you so much.
Barbara: And you know what else? I’m going to copy everything you did today. You’re no longer unique in your podcast. I’m going to do a knockoff on it first thing tomorrow morning.
Carol: Uh oh.
Barbara: I’m thinking of getting a blonde wig like that.
Carol: Definitely [inaudible 00:40:03]
J: Well, the say imitation’s the sincerest form of flattery. I don’t think I could ask-
Barbara: Okay. And I’ll find a bald guy somewhere I’m sure. Bye. Thanks a lot.
J: Thanks so much.
Carol: Thanks so much. Have a great day.
J: Wow. That was an awesome show. What did you think, Carol?
Carol: Loved it! Loved every minute of it. Especially loved though how she really broke it down into the simple formula that to be a successful entrepreneur number one, you’ve got to be able to sell and number two, you got to be able to face adversity. That is just such a great summary of what makes you successful as an entrepreneur and I loved it. It’s really simplified.
J: Yep. And if you have to add a number three there, I loved her point about as an entrepreneur, don’t necessarily listen to what other people tell you. Do what’s in your gut and do what you think’s right because more often than not you’re going to know your business better than everybody else.
Carol: That’s right. Just stay true to you.
J: Yeah. I really loved her. I loved the fact that she was so authentic and so real and just great stories.
J: Alrighty. Do we have anything else before we end this show?
Carol: Let’s wrap it up.
J: Okay. She is Carol. I am J.
Carol: Now go face your adversity today. Have an awesome day, party people.
J: Thanks everybody.
Carol: Bye. See you next time.
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