This CEO sold his last company to Nokia for $225 million. Now he's aiming for a billion-dollar business. Here's how Robert Herjavec went from penniless Canadian immigrant to Ferrari-racing celebrity.
If you recognize this man, it's likely from the TV show Shark Tank, on which he analyzes and invests in companies alongside real-estate agency entrepreneur Barbara Corcoran, HDNet owner Mark Cuban, and branding expert Daymond John. But Robert Herjavec isn't just an on-air personality; he's also a serial entrepreneur who founded and runs the fastest-growing technology company in Canada. Herjavec—whose family arrived in Halifax after escaping the former Yugoslavia when he was 8—is a master of exits. He sold his first venture to AT&T; his second was purchased by Nokia for $225 million. And to think: He didn't even want to be an entrepreneur. Inc.'s Christine Lagorio spoke with Herjavec about his unique entrepreneurial path, his investment strategy, and his recent cameo on a celebrity gossip show.
How did you get your start in entrepreneurship?I got fired! I was one of those guys who never wanted to start their own business. I never saw myself as a leader. I saw myself as a great No. 2. I just wanted to do a good job and make a little more money every year. That was around 1990. You know, today there are entire Harvard courses in entrepreneurship, but back then, you only started a company if you had to.
And look what you got yourself into. Right? My first company was with Warren Avis, who started Avis Rent a Car. I remember getting $60,000 [as a payout when leaving the company]. I was 25 years old. I said to my wife, "I'm really happy, but I'm really sad, because I'm never going to make this much money again." It was the biggest check I'd ever seen.
Now you're a multi-millionaire. How'd that happen?I built the next company and sold it to AT&T. Then I took over one in Silicon Valley, called Ramp, and that we sold to Nokia. Then I was a stay-at-home dad for three years. My current company, The Herjavec Group, is the best one yet. It's an IT integrator. We do computer security and information storage for enterprise and government. We're like a mini IBM.
Do you have an exit strategy in your back pocket?No, I'm not selling this one. Not for a long, long time. I'm really inspired to build a billion-dollar company. The hardest part is building the vehicle to get you there. Now we're up to 160 people. Nine years ago we were three people. We did $52 million in Q1 this year.
Now you do a lot of TV, including investing in start-ups on Shark Tank. What does your company do when you're gone?Oh, I'm definitely still running it day to day. I'm there every day. I was at my desk at quarter to 5 a.m. today. I used to do the show in the States and in Canada, but now I just go to film Shark Tank for about 20 days, and have a team of people do work on the investments after we get them going. The most valuable resource I have is my time. Every minute counts.
Do you do more investing on-air or off?I used to do a lot of investing off the show, when I was semi-retired. But now I do more on the show. I think the best investment is in yourself, and I'm running a living, breathing, high-growth company. Once you get to $100 million, the scale of everything becomes different. For me it's like racing a car. The bigger you are, the harder it hurts when you hit the wall. You have to think sooner because you are going so fast. When you are little, you can show up one day and make a big change. But when you have 160 people, it's harder.
What are some of your favorite small companies to watch right now?My absolute favorite investment from last season was in ChordBuddy [a clip-on guitar-playing aid]. Part of it is that he's very successful. Before he came on the show he was selling two or three units a day. We hit more than a million in sales. It's a great success story. I never call [ChordBuddy creator] Travis [Perry] without hanging up with a smile on my face. I think sometimes when you are a ray of sunshine, it makes it better for people to do business with you. I'm also very attracted to people who love their business, and who are great operators.
You don't invest in tech companies in general—should we take that as a sign of a start-up bubble? No, definitely not. Twelve years ago in the Internet bubble, those companies had the same valuations as some do today, but they weren't bringing in any money. Plus, I do my investing on the show, and we don't have tech on TV, because, well, that would be boring. We're not a business show that's on TV, we're a TV show that happens to be about business.
So, you did something the other day that not a lot of VCs have done: made a cameo on TMZ.Yes, I did! I own a Ferrari race team, and we race all over North America. It's kind of like business; if you move fast, sometimes poo-poo happens. I had gone around a corner, and had just done a fast lap, and I should have lifted the throttle. So I crashed. Just like in business, you have to know when to lift off.
What advice do you wish you'd had when you were younger?I always say "I wouldn't have done anything differently." But honestly, I guess if I had to do it again, I would have dreamed bigger. I never dreamed I could build a $100 million company. I just happened to build a $1 million company that became a $5 million company, and so on. But I never dreamed bigger, because my dad worked in a factory, and my mom was a receptionist, and I didn't know anyone who had made a million, or anything at all like that.
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