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The Diary of a CEOThe Diary of a CEO

How discipline and signal-vs-noise build a millionaire plan

How ruthless focus on signal-versus-noise beats charisma alone; knowing your numbers and treating marriage like a balance sheet protects the millionaire path.

Kevin O'LearyguestSteven Bartletthost
Jun 30, 20251h 52mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:00 – 2:42

    Intro

    1. KO

      (instrumental music plays) That is the stupidest thing you can ever do.

    2. SB

      Well, what is the most important thing for someone who's just trying to grow their money?

    3. KO

      So, I learned this from my mother, and I actually built a whole company around it. Yeah, there she is. So...

    4. NA

      (instrumental music plays)

    5. KO

      I haven't seen that picture in a while. (laughs) Damn. I mean, what she did, the performance was extraordinary. And with that, she put my brother and I through college, she took care of her family when they fell on hard times. When I saw the results, I said, "That's it. That's how I'm gonna invest for the rest of my life."

    6. SB

      So, talk me through this. I want as much detail as possible.

    7. KO

      Okay. Let's start with this.

    8. SB

      Kevin O'Leary, a.k.a. Mr. Wonderful, is the self-made millionaire and investor... Who's built and sold companies for billions.

    9. KO

      There's a lot of people who don't like me for my bluntness. I don't care, because there's people that don't think ahead and find themselves mired in debt, but then pissing away money spending $28 for lunch. I mean, that's just stupid.

    10. SB

      What about the house?

    11. KO

      The mistake that people make is they buy too much house. Never let the mortgage and the cost of maintaining the house be more than one third of your income.

    12. SB

      How much does the person that you fall in love with have an impact?

    13. KO

      Are you kidding? It's everything. And I did some research, and most marriages can survive infidelity. They can't survive financial stress. But if everybody that's listening does this one thing, you will have over a million and a half dollars.

    14. SB

      Kevin, can anybody be an entrepreneur?

    15. KO

      No. Only a third of people can become successful entrepreneurs, because there's a couple of things that you must achieve to be successful. First...

    16. NA

      (instrumental music plays)

    17. SB

      Kevin, I'm gonna ask you to do something which is quite difficult, because I'd find it quite hard if someone asked me to do this. But before we get into the detail, can you give me a 30,000-foot view on your entrepreneurship and investing career? Just the, just the three bullet points that are most pertinent before we dig into those specifics.

    18. KO

      Every entrepreneur I've ever talked to, um, that finds himself where I am today has, has a defining moment where they are pushed into this path. It's, it's something they can remember, and they remember it in perpetuity. And I'll remember my moment, getting fired in an ice cream store. That simple. First day on the job, asked to serve and scoop ice cream, and, um, I did that all day, but when people sample ice cream, they get a taster and they take their gum out and they throw it on the floor. Somebody's gotta scrape the gum off the floor at the end of the day. I only took that job because I was very interested in a girl who was working in the shoe store, and I figured I could, you know, hang out with her afterwards. And, uh, I

  2. 2:42 – 5:10

    The Ice Cream Store That Changed My Life

    1. KO

      saw her waiting for me, and the woman who owned the store said, "You've gotta scrape the gum off the floor." And I didn't want her to see me on my knees with a scraper. Bad for my brand. (laughs) I was in high school. And, uh, she said, "No, no, you have to do it." And I said, "You know, you hired me as a scooper, not a scraper." She said, um, "How about you're fired?" And I didn't re- even know what that meant. And it was the defining moment for me, because I realized there's two kinds of people in the world. There's people that own the store and there's people that scrape the shit off the floor, and you have to decide who you are. And I'm not saying being an employee is a bad thing, not at all, but for me, um, it, it hit me. It just hit me.

    2. SB

      Kevin, there's a present for you. We give a present to-

    3. KO

      (laughs)

    4. SB

      ... all of our guests.

    5. KO

      Really?

    6. SB

      Underneath that black.

    7. KO

      Can I open it?

    8. SB

      You can open it.

    9. KO

      I just take this off? Oh, look at that. (laughs) You've heard the story. (laughs) That is exactly how it looked, except it was black gum, and that was exactly the tile. It was just like that Mexican tile. That's really freaking me out.

    10. SB

      So, you were asked to scrape gum off of Mexican tile?

    11. KO

      Yes, just like that. And in order to do that, you gotta get down on your knees and do it. And, um, I just couldn't do it. And I, and I, and, and then you know the rest of the story. I eventually could afford to bulldoze the whole mall if I went to, and we went back to meet her and thank her for her pushing me off the treadmill into that direction. And she was gone, there was a bodega there instead.

    12. SB

      You said there that you realized that there's kinda two people in life. There's the entrepreneur as the person that owns the ice cream parlor and there's the person that scrapes it off the floor.

    13. KO

      Yeah.

    14. SB

      That provoked a question to me which is, do you think anybody can own the ice cream parlor? Or do you think anybody can be an entrepreneur?

    15. KO

      No. I've tried to teach it, um, and I mentor it all the time to the CEOs that I work with. Uh, there are some attributes of people that can do this. A certain element of risk tolerance, uh, a certain element of focus, and then the other element, which I've really started to believe in of late, is karma. Luck. You need to be lucky. You need... It's like Napoleon was once asked, "Who are your favorite generals?" And he said, "My favorite generals are lucky generals, my lucky generals." And I'm starting to think that in life, um, particularly entrepreneurship, you look at the difference, the path of success and failure, and I, nobody's exposed

  3. 5:10 – 7:23

    Can Anyone Be an Entrepreneur?

    1. KO

      to it more than I am in terms of how many investments I've ma- I've made over the decades. I think if you want a percentage, and I teach these cohorts at Harvard, I'm an executive fellow there, I'm very proud of that work, you get a class of 120 people in a room, two thirds of them wanna become consultants, that's why they're there, and lead a life of mediocrity and never make a decision of consequence in their lives, and after 24 months, they are tainted with that disease forever. They'll always be good consultants, but they will never achieve greatness in any way. In life, only a third of people can become successful entrepreneurs, that's it, and the rest can be very successful employees, and there's nothing wrong with that. You can have a fantastic life. You won't be shackled to the, you know, the, the ups and downs of entrepreneurship, the challenge of it, how hard it is, but you'll never be free.And that's the debate. That's it right there. Do you want personal freedom? It's the only path. That's it.

    2. SB

      It's the only path?

    3. KO

      It is the only path. I mean, you can't... I, I've always said it's not about the pursuit of money, it's not about the pursuit of greed, you will fail if you do that, it's, it's the undying love of freedom.

    4. SB

      So that one-third of people that you say will be successful, they'll pursue their, their dreams, they'll build a business, whatever it might be-

    5. KO

      Yeah.

    6. SB

      ... do you think it's possible for us in this conversation to increase the probability of their success? You said you don't think you can, you can make someone an entrepreneur, but c- is there things you can do to increase their probability of success?

    7. KO

      Yes. There are a couple of things that you must achieve to be successful, and let me explain what they would be. And this is not some academic study, this is real data from real situations of real CEOs I've worked with, and learned from, because I used to work for guys like Steve Jobs and others in my career. Let me, um, let me give you one that I think's very important, and we'll start with this one. I used to work for Steve Jobs, uh, in the early '90s, making all of his educational software. I mean, it was just... Oh, there they are. My goodness, you guys do good research. Those are the kind of things that we did for him, you know? Yeah.

  4. 7:23 – 9:37

    What I Learned from Working with Steve Jobs

    1. KO

      Yeah, all of that. It's hard to find, those are CD-ROMs. But you know, i- in developing that software, we used to go quarterly, um, Heidi Rosen was there in the room, she still a, a very famous venture capitalist, and I would say, "Steve, you know, we gotta do some market research on Oregon Trail. I mean, it's a huge title, it's in 110,000 school buildings, we gotta do an update, it's gonna cost you 12, 15 million bucks. We wanna find out what the students want, we wanna find out what the teachers want, wanna find out what the parents want." Steve would say... And by the way, not a nice guy. Not a nice guy. He would say to a room full of people, "Kevin, I don't give a shit what the students want, or the parents think, or anybody thinks. It's what I want. They don't know what they want till I tell them what they want." And I said, "Steve, you sound like such an asshole. You have no idea what that sounds like." He says, "No, no. That's how it is, Kevin. Now are you making money with me? Are we, are you, am I your fastest growing OEM? Have we not been wildly successful and continue to be?" I said, "Yes Steve, that's true." He said, "Then fucking shut up and do what I say."

    2. SB

      That's how he would talk to you?

    3. KO

      100%. And here's what I learned. Look how wildly successful he was, but here's why. There's a concept that he understood that very few people focused on back then in the early '90s of signal-to-noise ratio. What was so brilliant about Jobs, th- that I tell every CEO now, and I don't care if you're an S&P 500 CEO or you're just starting a business, his vision of signal was the top three to five things you have to get done in the next 18 hours. Not your vision for the business next week or next month or next year, just the next 18 hours you're awake. You're going to get those three things, or those five things done that you have deemed critical for your mission. They must get done today. Anything that stops you from doing that is the noise.

  5. 9:37 – 13:35

    The Secret Recipe for Success from Elon Musk and Steve Jobs

    1. KO

      So this signal-to-noise ratio to be successful for Steve Jobs was 80/20. 80 signal, 20 noise. And I knew that to be true with him because he would email me at 2:30 in the morning expecting me to get back to him, because back then we didn't have texts, it was all email. He was right. He was right. And the only other person that I've seen that has a higher ratio than that is Elon Musk. He has no noise. He does not deal with noise. He is 100% signal, 24 seconds of, you know, every cycle. I mean, the guy is just 60 seconds of every minute, 60 minutes of every hour, the 18 hours he's awake, it's all signal. And look what he's achieved. Now it's very awkward for him socially, because noise is dealing with your family sometimes, or noise is saying hi to a friend, or noise is, is, is listening to some doom scrolling on, you know, some social media app that just takes your mind, or maybe playing your guitar. But very few people on Earth, and if you go back in history, you're gonna find out that the geniuses of their time were close to 100% signal.

    2. SB

      And so I can really sort of summarize this for my audience, signal is the most urgent thing you should be focused on right now and noise is basically everything else?

    3. KO

      No, the goals you set for the, the, the wa- the, that you are awake, if you're gonna be awake 18 hours-

    4. SB

      Yeah.

    5. KO

      ... and you've determined that there's three things you have to get done, you're gonna get those done. No matter what it takes, you're gonna get those done. And you're not gonna let anything distract you from the three to five things. If you're a CEO and you achieve that, and you can get those done with 80% of your time based on that, you're extraordinarily successful. You are absolute- And you're a Steve Jobs, or you're an Elon Musk, or you're somebody... If you, if you even talk to Bezos, I don't know him personally but I've heard many interviews, like I knew, uh, uh, you know, I've, I've, I've met Elon just a few times, I spent a lot of time with Jobs, but they say the same thing. Bezos will not make a decision after 1:00 in the afternoon because he felt that the noise was too high. The signal for him was in the morning hours. It, this is a crucial aspect of success that, that I now understand to be the ability of, of, of... It defines a, a, a, an entrepreneur. A man or woman that understands the signal-noise ratio, that focuses on that, they'll be successful. The ones that can't, that get down to a 50/50 signal-noise, they'll fail. It's that simple. And it's a very simple concept.You know, you made one of your things today this interview. You're gonna get it done. You're gonna, all these people around and everything else, this is one of the th- three to five things you're gonna get done. I have five things today, I'm gonna get them done. I'll do the same thing tomorrow, and the day after that. And you have to decide how much signal you need to get those three to five things done. And for Jobs, it was 80%.

    6. SB

      What's the opposite of that? Sometimes looking at the opposite helps us to understand something. So the opposite of having, you know, what-

    7. KO

      Well, I hire managers and CEOs that have a balance in life between the discipline, the binary aspect of business, which is, "I make money, I lose money," and the chaos of the arts or some other pursuit, dance, painting, photography, collecting crystals, whatever it is that, that they, that they have that balance... You, you need, you need the yin and yang in your mind to make correct decisions. It doesn't mean it takes you off the signal. The signal is you gotta get stuff done. But how do you live your life? And so I spend a fair amount of my time practicing my guitar, or working with my photography, or my, my watch. You know, uh, uh, uh, tonight, very late tonight, I will meet a master watchmaker, and we will deal with the design of a new piece unique he's gonna make for me, and I'm gonna love that moment. That's gonna be something completely different to what I did all day long. And we'll start our journey together over the next two years to make this piece unique.

  6. 13:35 – 17:22

    The Importance of Having Balance in Your Life and Work

    1. KO

      And that's something that just takes me away from all the shit I'm gonna be dealing with today. And I also tell successful entrepreneurs, "In the same day, you will get a f-" And I've, this happened to me today. It happens every day. You're gonna get a call from some aspect of, of your, what you, you, you can call it your empire, whatever you want, where your, this company's going bankrupt. It's just gonna go bankrupt and you're gonna lose, I don't know, 10 million bucks on that deal. And that's a piece of information you're dealing with. Half an hour later, this actually happened to me today, one of my companies is going public. It's a 450X for me. The stock will get unlocked sometime i- in the fall. But how ca- how do you, how do you fit that together? Utter catastrophe, destruction, woe, loss, utter euphoria, half an hour later. That's, that's what my life is like.

    2. SB

      That's entrepreneurship. Obviously, on dif- a different scale for most founders.

    3. KO

      Well, the founders deal with the same thing. They get disastrous news, they lose a c- an account like a Costco or something if it's consumer goods or service, and they get something else. The, the, the ebb and flow is, is the management of expectations and your ability emotionally to navigate those ups and downs is part of what entrepreneurship is. But it goes back to the signal. It can't take you off the signal. This is what Steve taught me, "Yes, it's great news. Yes, it's bad news. But focus on the signal, O'Leary. Focus on the signal." That's it.

    4. SB

      Where does this analogy come from of signal and noise?

    5. KO

      It was his genius of u- of, of making it so simple. What are the three things you gotta get done today? What are they? What are they?

    6. SB

      How do you know what they are?

    7. KO

      (laughs) They will make themselves apparent. They will definitely make themselves apparent. They will make themselves apparent and you will realize, "I have to deal with that." You may have them set up from the day before. I actually still use sticky notes on my mirror, "Gotta get these three things done," and, or five thing, w- whatever it is. But then something else will hit. That's the skill of understanding, "Is that noise hitting me or is that signal?" There is the essence of the great entrepreneur, the great manager, the great leader. Is that signal or is that noise? What is it? That's what you're looking for. You're hiring somebody that can actually distinguish signal and noise. Because it could be noise. It could be irrelevant. You have to determine. Only you makes that decision. That's the key right there. This is what I teach entrepreneurs and engineers and this is the most important thing.

    8. SB

      It's that judgment of prioritization, but then the sort of force of execution to get it done.

    9. KO

      Can you interpret signal and noise? And can you keep the noise away from, from the things you gotta get done? That's one. The other, which is something that I've learned over the last five years, and this, uh, you might find this interesting, but most of my, uh, particularly the nascent startups, and you're, you're involved in the same format I am. You're Dragons' Den in England, I'm Shark Tank in the US. Uh, I, you know, you put up 500,000 or a million bucks into somebody's business, eight, eight outta 10 are gonna fail, maybe six outta 10, depend... You just don't know. And I love it when people tell me, "Oh, I, I know when I make an investment it's gonna work." (laughs) They are so full of shit. They, they ha- m- I'm talking about startups. They have no idea what's going to work and you won't know for five to seven years, which is why you need diversif- diversification

  7. 17:22 – 20:20

    8 Out of 10 Businesses Will Fail

    1. KO

      in the portfolio. But I would go as far to say now, you know, when I meet, um, venture capital firms and young analysts that work there and they think they're so damn smart, they've never operated a business, they know nothing. They have no idea what they're doing. They're gonna hope that one or two of their portfolio, uh, is gonna work out in seven years and pay for all the other mistakes. But the serendipitous nature of success in entrepreneurship is brutal. It is.

    2. SB

      So that, does that mean though that it's... I guess I was gonna say, does that not mean that it's highly l- luck? If investing's highly luck, entrepreneurship must be...

    3. KO

      Well, I said karma, you know? Uh, I call it karma. But you need executional skills. But here's another skill that I think we should talk about. Um, when you look at, at least m- my experience over decades of making these, uh, nascent, these early stage investments, these A round investments...Remarkably, and I've done them in all 11 sectors of the, of the economy, the majority of the successes five to seven years later are companies run by women. Why is that? W- why is that? And so, they don't know each other, they're in different sectors, they never meet each other. Why is that? And I have come to the conclusion, um, two things. They set goals that they can achieve, so that in the early stage of their businesses, they put growth rate targets like 15, 16% versus men at 30% very often. Men hit their targets 65% of the time, at least my portfolio and, and women 90 fu- plus per time, percent of the time, and that keeps the, the, the, the team very sticky. They wanna be part of a ... so they don't have a lot of attrition when they're small, they don't lose the head of finance, the m- marketing. That, that works. But they have another attribute, and this was pointed out to me by one of my female CEOs a few years ago to me, she said, "You know, Kevin, you talk too much. You talk too much. Um, you talk two-thirds, you listen one-third. Why don't you try reversing the ratio?"

    4. SB

      She said that to you?

    5. KO

      Yeah. Yeah. (laughs)

    6. SB

      (laughs)

    7. KO

      I'm very thankful, actually, 'cause I tried it. And, um, she's right. If you don't talk and you listen, you become f- far more effective as a manager or an investor in my case, by getting information that you weren't gonna get by talking. And so, if you go into a room ... I just did this a few minutes ago before I came here. I'm involved in a litigation and we decided to attempt settlement talks, which is why I was a few minutes late, and, um, you know, we knew we were going in there to settle, and it, it's long protruded, you know, a long, l- it's a long, long, long, uh, litigation. And I remembered her, uh, as we sat at the table like this, there were other people in the room, but the two, uh, you know, were across from each other. I just looked at him. I didn't say anything.

  8. 20:20 – 22:27

    The Importance of Listening in Business

    1. KO

      For a long time. A long time. And it gets uncomfortable and no one else is talking. You know, I'm just looking, and, um, maybe after 90 seconds, he blurted out something he shouldn't have said.

    2. SB

      (laughs)

    3. KO

      And I knew exactly what the price was right there. That was the end of it.

    4. SB

      You learn that as a podcaster. You learn that there's actually something going on in the silence.

    5. KO

      There is something going on in the silence, and it's, it's, it's the number that he was going to settle at.

    6. SB

      He showed his hand.

    7. KO

      So we saved ourselves two hours, you know? It's a, it's an attribute that many people can't do 'cause they can't stand the social uncomfort of it. I have no problem with it. I could sit here and look at you for 10 minutes, it wouldn't matter to me. And I've actually found it to be a very useful piece of information. It's not just the negotiating, but to listen to employees, listen to investors, listen to financiers, listen to alternative ideas to yours, and become more powerful from it.

    8. SB

      You're in the very business of people selling to you and pitching to you. We both sit on a, a similar show, um, where people come in and pitch to us. You're seeing, at times, 10 to 12 pitches a day. So you've developed this muscle over the last couple of decades now, almost this instinctive spidey sense of when an entrepreneur will be successful, at least in the context of securing investment. What have you come to learn about the f- the attributes of the ones that are successful? Is there, is there anything one can take from that?

    9. KO

      In the moment when that entrepreneur comes out onto the carpet in the context of Shark Tank or Dragon's Den even, they need the setup shot of the product with the entrepreneur, and they have a, in our case, a steady cam or a, a jib that comes down and shoots it. So, the, the stage director, Eric, uh, is his name, I worked with him for years, says to the entrepreneurs I've never met, usually it's a team or it's a family or it's whatever, three or four, two people, whatever, "Hold. Hold.

  9. 22:27 – 27:53

    What Are the Attributes of Successful Entrepreneurs?

    1. KO

      Hold. Don't speak. Hold. Hold. Don't mind the camera coming into your face. Hold. Hold." Maybe for two minutes. And I'm right there in front of them, I'm 12 feet from them, and I just look at 'em. Not smiling, not blinking, not frowning, just looking at 'em. And before they say a single word, I know if they're winners or losers. Just like that. (fingers snapping) And why is that? Why is that? When, and I'm right probably 99% of the time, maybe I get it wrong one out of a hundred. I doubt it though. You walk in a room, e- even though you've practiced, y- you know, you, i- in the context of, of Shark Tank, 20 plus cameras, a billion plus dollars in, in the five chairs there, you've been practicing for months your pitch, but it wasn't the real deal. Here you are, cameras are rolling, tape is running, you know you've only got so many minutes, this is your moment. And you're on national television, a hundred plus million people will see you in syndication, it's all in your mind, it's all in your mind, it's going through your head. Can you project who you are with your eyes and the way you're standing? Can you project your confidence? Are you looking at the ground? Are you looking away from me 'cause you can't stand me looking at you directly without saying anything to you? Or do you push back? Or do you say, "I'm gonna st- I'm gonna stake my aura, I'm gonna stake my ground here. I'm gonna show you I'm ready."

    2. SB

      (laughs)

    3. KO

      See what I'm getting at?

    4. SB

      Yeah. (laughs)

    5. KO

      And I can feel it. I can see that they're ready to do battle, they're ready to answer, they're ready to present, they're ready, ready, ready, ready, or they're not. And-I've taken that out of the Shark Tank. I see that every day in life. I see it. So you have to learn how to project yourself in front of your peers or who's, who, who you want to, you wanna lead or teach, or if you're a general or a preacher. That is maybe an innate, something you're born with or maybe you can learn that. I don't know, I don't care. But if you don't have it, you're gonna fail. And you're just ... That's before a word is spoken, you know, before the first word is spoken. And so then what has to happen? Then Eric says, "Go, you're on." And everybody's just sitting there looking at you. Can you articulate your idea in 90 seconds or less? Can you, whatever props you have or whatever you're gonna say, can I get the big idea right away? The ones that had that aura generally get there. 30 seconds later, I get it. I get what they're here for. I understand their product. Okay, that's good. Unfortunately, great ideas are a dime a dozen. I mean, there's millions of them. The next phase begins. This is after 90 seconds. Can you explain why you are the right person to execute on this idea and create a business from it? Because you know something about this space, you worked for a competitor, you've tried three times before and failed, you've figured out what you did wrong. What is it about you or your team that can take this idea and make it happen? Now we get those two things together, you can feel the aura of the room. The isotope is sizzling because you've de-risked a great idea, you got an operator in and they ... But then the third thing, this is the killer. (laughs) It's the killer. Uh, I've seen it so many times in real life and, uh, you know, Shark Tank's real life it is, but you gotta know your numbers. How big is the market? How fast it's growing? What's the gross margin? I mean, I've said this a million times to people. I teach this every day. How many competitors are there? When are you gonna break even? What month? If you get the first two right and you don't know your numbers, you deserve to burn in hell and I'll put you there myself. I mean, you wasted an opportunity for an entrepreneur that did know their numbers that could have been in that spot that I could have invested in. You don't know your numbers. I'd take you out behind the barn and shoot you. You should have brought somebody that understands the language of business because those three together are the definition of leadership right there.

    6. SB

      I've never heard someone talk about aura in entrepreneurship quite like that. And I was, I was just trying to, like, f- for the people listening that are either trying to figure out if they have an aura or to grow that aura, what does it, what does it look and feel like? Is it physically, is it shoulders back? Is it, you said it's eye contact or is it indescribable? And do you think you could c- take someone who doesn't have that aura in business and teach them it? Does business give you that aura?

    7. KO

      I think you can teach it. I certainly try and teach it to my children. Um, I try and teach it to my students. And the best way to do it is to look at yourself in the mirror sometime, you know, just what do you look like to yourself? You know, if you're gonna go make a presentation to take down a million dollar, uh, line of credit or something, you wanna dress the part obviously, but you're gonna walk in a room with, you know, a loan officer and maybe an assistant

  10. 27:53 – 29:58

    How to Grow a Business Aura

    1. KO

      and maybe one other depending on the size of the deal, and they have never met you probably and you're gonna have to project yourself in those seconds as you're walking up to shake their hands. What does that take? It takes an aura of confidence and it's in the eyes, it's in the way you're, you're standing, it's in how, the way you're dressed. It's, it's not a joke to be dressed for success. You know, it's, it's, um, it's, i- it's, it's something about presenting yourself and keeping your eyes focused on who's talking to you so that they know that you're absorbing the information, that you respect the information, that you're about to get into a narrative with them of respect, even though there may be disagreements. All of this is happening in the first 60 seconds and it's setting up for the rest of your life with that person. It could be who you're gonna marry, it could be who you're gonna work with, it could be your partner in business, it could be your banker, it could be anybody. It could be a soldier that's gonna give up, uh, their life for you. It's sort of who are you? That's it.

    2. SB

      Just closing off on the point you made about w- women being your most successful investments and the companies that have given you the greatest returns tend to be-

    3. KO

      Yeah.

    4. SB

      ... led by women. Does that mean that you focus on hiring women into executive roles?

    5. KO

      Yeah, and practically all women. Um, particularly Asian women. I am a, uh, you know this whole thing about DEI and all this stuff, I've always had diversity because I only hire on merit. I don't care if what sex you are or what you call yourself or what, where you came from or the color of your skin or what planet you were born on. I couldn't give a shit. Can you execute? And the way I hire people, and that's why I have such a diverse staff in my operating company, I don't hire you. I say, "Look, you sound good and you look great on paper, but that doesn't mean anything if you can't work within the team. So I know you want a job and you want benefits and all that stuff, but I'm not gonna do that. If you wanna be part of

  11. 29:58 – 33:19

    Hiring Women into Executive Roles

    1. KO

      my universe, you're gonna work for four to six months as a contractor at a much higher salary, 'cause you're not gonna get any stock options, you're not gonna get any, uh, benefits, but I just wanna see what it's like for you to work with all of the people that we deal with every day, all the lawyers, all the bankers, all of the, you know, i- i- the CEOs that we have investments in and, and your coworkers, because I don't..."... do 9:00 to 5:00 anymore. I do project-based work. I don't care where you live. We have people working in Dubai, Abu Dhabi, uh, England. I mean, everywhere, everywhere. And w- and you know, we meet, uh, we try and find an hour every week where we can see each other, but we're just constantly communicating using modern day tools today. But, you know, can you actually be given a mandate and execute on it? That's it. I don't care when you do it. If you have to get the financials out, let's say you're running in finance, you gotta get them out the 15th for taxes. I don't care when you do it, but if you miss the 15th, I care. So, I, I need to find out if those people can fit into that kind of an environment. Some of them make it, some of them don't. Some- sometimes we know right away after 90 days, okay, let's hire them, bring them in the team and, you know, let's give them the whole package. And sometimes after a month, we say, "No, it's not gonna work." Here's like, you know ... that's it. I think, I think more companies should do that actually. It's more like the Swiss apprentice system. They bring you into a lot like, you know, my stepfather is Swiss, I've been going to Switzerland for 50 years. So if you're a giant company, like a Pfizer or Nestle, you pull them out of high school at 14. You give them a job in the afternoon. They become an apprentice. They want to learn, they want to work, they wanna understand what it's like. And then you find the, the winners at, while they're still in high school. Then you give them summer jobs and then you bring them into the company. That's where I got the idea from. The Swiss are genius that way.

    2. SB

      'Cause you're sort of mitigating the risk, I guess. You're taking less of a, a risk on this.

    3. KO

      No, but you're also finding out if their, their DNA is going to fit with your ... I mean, I want my team to make a ton of money. I, I just, I want them to be successful. I want every person to be proud to work with the other and, and just, w- w- w- we're almost invincible. We're so damn good at what we do. You have the same thing here. You, you don't have people that don't work for you well. You get rid of them. You whack them. I'm more just formal about it. Boom, you're gone.

    4. SB

      With, with the investments that you've made, how many investments, how many offers have you done on Shark Tank now? Probably like 800?

    5. KO

      Oh, just, we don't, we don't even count it anymore. We look at the portfolio rolling over five to seven year period.

    6. SB

      A lot.

    7. KO

      I'd say a lot. And I, and the thing is, the th- what I've learned is you get a, you get an exit like a BASE Paws from five years ago or something. Anna Skaya, remarkable woman.

    8. SB

      That was the, the cat DNA thing.

    9. KO

      Cat DNA thing. I mean, nobody saw that coming. I thought that thing was a joke. Um, I was so wrong. I mean, that's the whole point. And, and she, she had the highest IRR in, in, I think in the whole format's history. Nobody's made ... Her, she was around for 36 months, and taken out at such an extreme number in all cash that there was an NDA signed between Sony and the, and the pharmaceutical company. I can't even tell you what it was. It was extraordinary. It was extraordinary.

    10. SB

      Was it nine figures?

    11. KO

      Believe me, it's a tough NDA because the, and I understand why they did it.

  12. 33:19 – 36:10

    Successful Entrepreneurs from Shark Tank

    1. KO

      They didn't buy it for the cat DNA testing. They bought it for the data.

    2. SB

      Mm-hmm.

    3. KO

      With, AI didn't really, wasn't emerging then. It existed, but it wasn't ... with the data they have now, they can develop products for animals that are extraordinary in terms of feeds and medicines.

    4. SB

      Yeah.

    5. KO

      And nobody had that much data on the 110 million cats in America because she got it all during the pandemic. Thousands and thousands and thousands of, of, of, you know ... it was, it was never about, it was, it was a data company. It's like my son telling me when he got his internship at Tesla, "Hey dad, it's not a car company. It's a data company."

    6. SB

      Mm-hmm.

    7. KO

      "Buy the stock." I said, "I'm never buying the stock. It's a joke, it's so expensive." He said, "You're an idiot. It's not a car company."

    8. SB

      (laughs)

    9. KO

      So I bought the stock and he was right. It became my most successful investment. I, I, I had to keep selling it down to 5%. Uh, my cost base is zero on Tesla now.

    10. SB

      Fucking hell.

    11. KO

      Yeah, before it split. And he worked there for five years.

    12. SB

      One of the personas that I have that watches this show a lot are young people, not always young, but that are on the sofa thinking about being an entrepreneur. And they talk about it a lot, you know, they, they come up to me in the street and tell-

    13. KO

      Two-thirds will never do it.

    14. SB

      Two-thirds will never do it?

    15. KO

      The, you, you might as well do it when you have less burdensome risk like a mortgage and a family. You might as well do it in your 20s. You're gonna fail the first time, maybe the second, maybe the third. You only need one success. You know, I had plenty of failures and I've, I still have failures. I mean, it's just, you know, that one I, I talked about this morning, uh, it's, you know, when I, I, uh, you know, I, I t- I said to the largest shareholders as, as, I was in the car and your assistant was, you know, uh, looking at me in the limo. I was telling the other two shareholders, "Listen guys, it's, it's a binary decision. As soon as I get out of this interview, we're gonna make a decision."

    16. SB

      On what?

    17. KO

      This company's going bankrupt. So-

    18. SB

      Oh, on the bankrupt company?

    19. KO

      Yeah, the, yeah. And so if we wanna save it, everybody's gonna have to pony up X million and, um, we're gonna own the whole thing. We're just gonna own it all. We're gonna, we're just gonna do a cram down round at a fraction of a cent and own the whole thing. You wanna do that or you wanna let it go bankrupt? You guys choose." I'm one-third of it, so it's gonna have to be, you know, two against one. And I'll do whatever they want because that's how I am. But it's, you know, you wanna get yourself in a position in life that I think most CEOs understand this, you are going to have bad outcomes. There are going to be bad outcomes. But never put yourself in a situation where one bad outcome defines who you are. I mean, for those shareholders, they're gonna be unhappy. But then I got the call on the IPO (laughs) those shareholders are gonna be very happy. They're gonna make 400, 400X.

    20. SB

      Mm-hmm.

    21. KO

      So it, and that was one of my deals. And so it's sort of like ...

  13. 36:10 – 37:47

    No One Outcome Defines What You Are

    1. KO

      learn to live with the idea that you are going to fail. You're going to lose money by taking risk. Will it change relationships permanently? Maybe. But if they're, if you're respected and you're honest and you're transparent, probably not.I think there's a lot of people don't like me for my bluntness. I don't care. I think a lot of people respect me for my bluntness. They may not like me, and you know, it's sort of, um, it doesn't matter because the only people that really matter to me are probably my 20 closest friends and my family.

    2. SB

      Do you think if you hadn't worked with or known Steve Jobs you would be a different person?

    3. KO

      A hundred percent. Steve changed my life. There's no question. (swallows) I didn't like him, but... I feel so bad that he, he didn't have to die that way. He just wouldn't go with the modern medicine at the time, is my view. Guy was a friggin' genius. (swallows) He was so smart in terms of keeping on track to get, getting stuff done, and look what he achieved. But he was difficult. Difficult. 'Cause he wasn't always right, but he was right so much that the mistakes just didn't matter. And I thought, you know, the people that spent enough time with him, uh, know what I'm talking about, um... You know, it occurred to me,

  14. 37:47 – 42:13

    Steve Jobs Changed My Life

    1. KO

      uh, 'cause I know Wozniak too, not as well as Jobs, but they really needed each other. They really needed each other. Because Woz understood, he was, he understood what the... Let me draw an analogy here for you. I think it's a good one. Take the situation going on right now with NVIDIA, AMD, to a certain extent, Intel, um, maybe Broadcom, where policy makers in Washington have decided that we can't sell those chips to countries like China or Russia or whatever the list is of adversaries. That's bad policy. And here's why. What I learned from, from Jobs was... The ch- the computer, the chip is the queen bee. It's, it's the, it's the queen bee. But it has no value without the honeybees which are the programmers around it that form a community that spend all of their energy writing code that works with the queen bee, which is the chip, that pushes out its influence because every coder that becomes familiar with that firmware, that Wozniak computer, writes to that platform, is part of the honeybees. Jobs understood that. He said, "I've gotta get every honeybee writing for the Mac, writing for the OS of Apple." It's the same with the NVIDIA chip. We need to sell it to everybody, every, even adversaries, because within that country of Russia or China is some genius kid, you don't know who he is or she is, that's gonna write the next piece of firmware or advance AI from the queen bee, the chip, the American queen bee. The minute you shut down a market and you don't s- your adversary sends their queen bee in, which is Huawei, we can't let that happen, because I don't think the lawmakers understand what Jobs understood. You create the hive with the queen in the middle. That's the chip. You convince every bee around to make the honey, which is the software and is the AI in this, in this case. You make it off that chip, and when you advance the chip again, everybody knows how to take that set and stay within the American chip that you're advancing. Maybe you keep the one generation behind, maybe, maybe that's the policy, but you don't ever let an adversary put their queen bee in the middle of the hive. You see what I'm saying?

    2. SB

      Of course, I mean-

    3. KO

      And that is what Jobs did. That was the war between Gates and Jobs, on the OS, on the operating system.

    4. SB

      Yeah, I was thinking about the app store and, yeah, ecosystem.

    5. KO

      It's the same thing. It's exactly the same thing, and so, so when I see this policy now, I go out of my mind. I mean, the first thing I do is get on a plane and go to Washington because AI is so important for all of the investments I've made. I do not want to be putting Chinese honey into my companies at all. It's that simple.

    6. SB

      So for that person that's stewing over their ideas now, if they had just a couple of minutes with you, and they, and they asked you the question, "Kevin, I'm about to start this business, I'm about to go on this journey of trying to go from zero to something in my life, is there anything else that I need to know as I set up- p- p- on this sort of next 10 years of my life? I'm 21 years old." What, what are... 'Cause I think every entrepreneur has like their principles. You t- you talked about one which is the signal versus noise thing. Are there any other foundational principles that you think are conducive with success... (swallows) that you might have learned?

    7. KO

      Yeah, I mean, I've, what I'm t- telling 21, 21-year-olds now is look, go work for 24 months in a sector you love, that you're passionate about, even if they don't pay you. Go in there and be an apprentice. Um, if you're that passionate, you're gonna be able to convince some manager to go work for free in there. You're just, they're gonna recognize your passion and they're gonna bring you in. Do that first. Most

  15. 42:13 – 43:50

    The Second Most Important Step to Success

    1. KO

      young entrepreneurs say, "Nah, nah, I don't wanna work for anybody." I said, "Yeah, you do actually. You, you do wanna work for somebody. You wanna just understand how all the cogs move, just 24 months." And after that, launch. The first one will probably fail. You can start with your parents giving you 10,000 bucks or whatever it is, friends and fam-But w- you will have the baseline knowledge of your industry, you will know who the participants are, you will understand how it works, and you'll have a h- much higher probability of success. But the key is to launch y- sort of in your- er, in your mid to early 20s, because you need to burn a few years failing, and, and that, that matters.

    2. SB

      On the point of h- how to lead people, when people hear about Jobs' approach, they sometimes assume that you also have to be an asshole. And this is the, this is the conflicting thing, because the world has changed since Jobs was in a leadership position. Things have gone a little bit more soft, shall one say. Have you seen all, all types of leadership win out in that regard? The direct, you know, signal-focused, kind of brash approach, but also the kind approach?

    3. KO

      I don't think kind works, I think respect works. I, I, I've... The same number of assholes are out there being successful now as they were back in the '90s. Um, it doesn't matter, um, whether you're an asshole or whether people like you or not. I mean, people get so stuck on this stuff. It, it, it's ... The team you're building are not your friends, they are the team you're building to execute on a mandate.

  16. 43:50 – 47:01

    The Different Types of Leadership

    1. KO

      Your customers come first, they're more important, and then, of course, the employees and how are they respected or not? There are people that work for me I don't like. It doesn't matter, I respect them, I respect their ability to execute, and that above all is the most important thing. If you start getting into interpersonal relationships, you will fail, because you may have to fire that person one day. People that hire family take huge risk. Nepotism's a horrible disease. It's, it's, uh, some of the greatest, uh, private companies on Earth never let the kids run them, they just put them on the board and they hire professional management. That's how they keep wealth multi-generational. Think about Tetra Pak, for example. People may not know that name, but it's a massive, successful company. IKEA. I mean, you know, it's sort of you have to learn those lessons. It's, it's, um, it's about respect in both directions. It's not about likability, or softness, or some social met- metric. It, it really isn't. And trying to redefine leadership that way b- because it's on trend is not gonna work. (paper rustles)

    2. SB

      I started my first business at 12 years old, and then I started more businesses at 14, 15, 16, 17, and 18. And at that time, what I didn't realize is that being a founder with no money meant that I also had to be the marketeer, the sales rep, the finance team, customer service, and the recruiter. But if you're starting a business today, thankfully there's a tool that wears all of those hats for you, our sponsor today, which is Shopify. Because of all of its AI integrations, using Shopify feels a bit like you've hired an entire growth team from day one, taking care of writing product descriptions, your website design, and enhancing your products' images. Not to mention the bits you'd expect Shopify to handle, like the shipping, like the taxes, like the inventory. And if you're looking to get your business started, go to shopify.com/bartlett (cash register rings) and sign up for a $1 per month trial. That's shopify.com/bartlett. (paper rustles) What about finding ... The definition of the word company is group of people. So in terms of finding great people, is there anything that you can offer to entrepreneurs that are listening about how you've done that and what you've learned over time, the mistakes you've made with assembling your group of people?

    3. KO

      Yeah, hiring them without testing them first. I made that mistake.

    4. SB

      So, so you now test them first? Um-

    5. KO

      Yeah. Just 'cause someone says they can execute doesn't mean they can. I mean, it's, of course when you're in an interview, you're not gonna say, "I can't execute." You know, you're looking at their past, you're saying, "This looks terrific, looks like you can fit in," but it's on a piece of paper. They haven't been road tested, they haven't b- been put in a situation where they have to make individual decisions that, that have consequence. The people you want are able to make decisions that have consequence. Good, bad, good consequence, bad consequence, you don't know yet. But they have to have, be able to make that decision on their own without calling you up, because you gave them that mandate. Maybe you put a set of parameters, "You can spend a million bucks, no more, without calling me." But whatever it is,

  17. 47:01 – 48:03

    How to Find Great People for Your Business

    1. KO

      I don't wanna hear from them, I just want the outcome.

    2. SB

      What about resilience and hard work? How, how much does that matter to you? 'Cause I know you said y- they can work when, you know, they, as long as they get the job done, but are you trying to figure out if they are a bit of a psychopath in terms of hard work? If they're possessed, obsessed?

    3. KO

      I don't find the ones that are psychopaths hard worker actually the most successful. It's not the case. I find the ones that are eclectic people, that have other pursuits that are nothing to do with the business they're in, that do crazy stuff, you know, maybe it's riding motorcycles in the desert, I don't know. You know, these are the examples-

    4. SB

      Yeah.

    5. KO

      ... I'm just using 'cause I'm living with them. And say, "Look, I've gotta go and ride a bicycle across the, the desert." "Okay. How many days you gonna be gone?" "I don't know, maybe three." "Okay. Is anything that, that is immediate?" That tells me that if you look at, if you look at the year's outcome from that person, you're gonna find that they probably outperformed. You, you, you want, you want,

  18. 48:03 – 49:29

    People with Balanced Lives and Diverse Interests Tend to Be More Successful

    1. KO

      you want the eclectic ones. You want the ones that are not just robots working. It, it's, it's gonna be cheaper to get a robot, if you want a robot. I'm gonna buy those too when they come available. But I want people that have creative and unusual solutions that, you know, just think outside of the box. It's, it's really interesting that way.

    2. SB

      The other thing that, um, everybody wants to hear from you about is how to keep and grow your wealth. Because you know, making...... wealth. I kind of understand through the lens of entrepreneurship, take a big bet, um, hopefully have an exit or, you know, draw a dividend, or make profit from a company you started. But in terms of what you did and your relationship with your money, what is the most important things for someone to understand who's just trying to grow their money? Who wants it to become-

    3. KO

      Yeah, yeah, no, I learned this from my mother and I actually built a whole indexing company around it. When I was very young, I found out something, uh, that, um ... So she, um, was fiercely independent. She was one of three daughters, uh, of Lebanese descent, my Irish father, my, my original father, biological father, was Irish. She didn't ... Yeah, there she is, Georgette. So ... (crying)

  19. 49:29 – 52:08

    Your Personal Relationship with Money

    1. KO

      I haven't seen that picture in a while. (crying)

    2. SB

      You're okay.

    3. KO

      She was very independent, and she never, ever wanted a man to control her life so she started at an early age when she was working for her father, they paid the girls, the family all worked there, and she worked in the accounting department and billing, but she got paid cash. And so she'd take 20% of that cash each week and she would put it into two asset classes; stocks that paid dividends, large cap stocks and telco bonds. Seven year telco bonds paid about 6.5 to 8% back then. She bought the long bonds, and she had that portfolio for 55 years.

    4. SB

      Wow.

    5. KO

      Um, she never spent any of the principle, only the dividends and the interest. She put my brother and I through college, you, you know, she took care of her family and her sisters when they f- fell on hard times. But her rule was very simple. No more than 5% in any one stock or bond of the portfolio, and no more than 20% in any one sector ever. Ever. So when a stock ran up past five, she'd sell it down. This is not genius; this is just diversification. And when she passed and I, I was the older brother and I saw the portfolio, 'cause the lawyer said, "Listen, you gotta come down here. You're the executor of the will." And I said, "Yeah, but you know, my mother was middle class." He said, "No, you gotta come down here." Um, she kept her accounts secret from both of her husbands. She wanted her own independent money. And back then you could do that. And, um, damn, I mean, what that portfolio did, the performance was extraordinary. It was beyond any hedge fund guy or anything.

    6. SB

      Mm.

    7. KO

      55 years. When I saw the results I said, "That's it. That's how I'm gonna invest for the rest of my life." Exactly the way Georgette did. No more than 5% in any one stock ever, no math- no matter what it is, and no more

  20. 52:08 – 56:07

    The Power of Investing Long Term

    1. KO

      than 20% in any one sector with the exception of real estate, which is a very large part of what I have in net worth. And I, it's a- it's a third, so that's broken the rule but there's reasons for that and I'm very happy with that portfolio. But, um, that, if sh- if y- if everybody that's listening to this does that, they will maintain and grow their wealth. But it's, people bet, they make big bets. They're just, they think they're so damn right, they put half their net worth into one sector or one stock and they get wiped out. That's what happens.

    2. SB

      So would your mother pick the stocks herself or would she invest in an index fund or-

    3. KO

      She indexed.

    4. SB

      She used ... So, okay.

    5. KO

      Even, even back then, you know, they didn't have ETFs, but they had mutual funds that said their own- the only stock in this mutual fund i- is doesn't have any debt and it pays dividends, you know, whatever. They were very rudimentary back then. They were just collections of stocks. I think she had like thir- 28 names or something like that in the portfolio. But if you looked at them, they were really boring large cap names, but they were (laughs) sectorially diverse. There wasn't 10 sectors back then, there was only, the- there wasn't 11, there was 10, so they didn't have real estate as a sector. So, but, you know, I looked at it saying, "Wow, these are really boring."

    6. SB

      You learned a lot about money from your early upbringing, right? From your, that early context.

    7. KO

      Yeah, because what she said to me was, "Look, you know ..." I, I even do this today with, wealthy people call me up all the time and say, "Look, um," you know, they get divorced, this really ha- I, this, a very wealthy woman got divorced recently and she said, "Look, I, you know, divorcing and ..." She was a billionaire. She was divorcing, she was more, multi-billionaire, and so she said, "Look, I, I, I'm getting everybody's calling me up, um, to be my advisor 'cause I'm separating from my husband. It's all his guys that did all the management of our family wealth. Would you be my advisor?" I said, "No, I don't do that. Um, but you know, I can, I can just give you some basic advice and you can hire people to stick on the mandate." And I gave her Georgette's strategy, but she, I, I had her do something else too. I said, "Let's get a piece of paper. You're a billionaire. Let's put everything on this piece of paper on the last 90 days that you've spent on whatever the hell it is. I don't care. And let's put on, no computer, no spreadsheet, on this, let's look at all the income that you've made off your portfolio as it stands now, whether it's gold you have or land or stocks or bonds. Let's just ch- do a ch- a gut check on..."... do you outspend yourself? She said, "Why would I give a shit?" I said, "Wouldn't you like to know how much money you're burning living your lifestyle the way you live it? Just out of interest. Maybe you have enough for the rest of your life, but maybe you want to give some of it to your family one day or, or give it to charity. Wouldn't you like to know?" Because one of my rules is never outspend yourself on any 30 or 60-day cycle, ever.

    8. SB

      Ever?

    9. KO

      Just ever. I don't have any debt, so, so I'm very careful about that. And we went through this little thing. She freaked out. She was pissing away money, just bleeding hundreds of thousands of dollars a week. I mean, I don't care how rich you are, you don't wanna be stupid. And I said, "Does that shock you? One of two things has to happen. I mean, you're, you're losing millions of dollars a quarter." Like, why? Why? Like, you don't, you ha- you've had nobody restrict what you do with your money? 'Cause you're gonna have to sell stocks at some point or sell gold or sell land to keep this up. And are you really that happy? Like, what are you, what's all this shit you're buying? Like, what is all this crap that you don't need? It was an eye-opener for her. So I'm, my point is most people don't do that exercise. I don't care if you're only making 56,000 a year or 68, the average salary.

    10. SB

      So are you

  21. 56:07 – 57:05

    Don’t Outspend What You Earn

    1. SB

      in the camp that you shouldn't spend money on the small things like the coffee? If you don't need it, you should make the coffee at home. Is that kind of-

    2. KO

      I, I just, I can't stand it when I see kids that are making 70 grand a year spending $28 for lunch. I mean, that's just stupid. It's just, think about that in the context of that being put into an index and making eight to cent, eight to 10% a year for the next 50 years.

    3. SB

      What's an index for someone that doesn't know?

    4. KO

      So, okay. I mean, y- you know, I even have, I even built an app for this purpose just so I could, uh, there's many apps out there. You don't have to use mine. Mine's called Beanstox. But you just allocate 15% of your salary and it automatically puts it into two buckets, some stocks and some bonds. The stocks are ETFs, exchange traded funds that just track the S&P 500 very simply. Mine's a little-

    5. SB

      The S&P 500 is the top 500 stocks.

    6. KO

      Yeah, and, uh, so it's just, you know, people tell me, "Oh, I can beat the S&P. I can pick stocks." They're so full of crap. Not over the long period they can. So it's better, you might as well just own ETFs.

  22. 57:05 – 59:48

    Small Financial Mistakes People Make

    1. KO

      I have a version of the S&P that I designed with other people that strips out all the crappy balance sheets, but that's just me. You can just buy the index that you want, you know, the ETF. And then you pay low fees, and then over time it appreciates, and then if you buy some Treasury bills or w- uh, fixed income, you get that. You should have less of those when you're young and more of them when you're older. That's just diversification. But you, y- you know, the best test, I do it with my kids' friends too, go into a closet. Go into your closet and look at how much shit you have you don't wear because you either bought it 'cause you thought you were gonna wear it and never wore it or wore it once, and you end up wearing 20% of your portfolio all of the time and 80% you, you pissed away. I mean, that's really stupid. And so for a young person, a young woman or man, don't do that. Start putting ... A- just buy the m- minimum stuff. And another thing I learned from my mother, this is interesting 'cause I saw it happen at her death, she, you know, would buy two Chanel jackets a year, really expensive Chanel jackets, r- handmade Chanel jackets. I do business with Chanel because of, you know, the legacy of my mother and the whole Coco Chanel thing and watches. I love those guys. And her theory was this will never get old, and it never did. A classic vintage Chanel jacket from the '50s that's well kept is worth a fortune today. The classic. It still wears beautifully. They're so well made. So she wouldn't buy crap. She'd buy really good stuff, but a little, just small amounts of it. And over the years, she built up this portfolio of amazing clothing and w- uh, and when she died, the women in, in our family had a cat fight over her portfolio. Unbelievable.

    2. SB

      Is that in part why you have so many watches? I've noticed you have a watch on either wrist right now.

    3. KO

      Yeah, I'm pretty big in watches. I mean, but, but watches to me, every piece I have marks something in my life that was important, a deal, a child, graduation, um, you know, something, every piece. I've got a lot of watches.

    4. SB

      How many have you got?

    5. KO

      Uh, I don't even say anymore 'cause of the insurance policy I have. I got a lot.

    6. SB

      Do you invest in s- y- you're talking about your, your mother's investing strategy and one of the things you said is she invested in dividend stocks.

    7. KO

      Yes.

    8. SB

      What is a dividend stock? And should I be investing in dividend stocks?

    9. KO

      Yeah, I mean, you know, a company, if it's profitable and it's operating its business plan is working and it's growing market share, at some point says, "I'm gonna distribute some of the success of our profits to our shareholders." That's a dividend. And so they send that cash to you and you can either redeploy it, r- uh, in other ways or live off it or whatever. Many tech stocks until recently did not pay dividends, but now the behemoth

  23. 59:48 – 1:00:14

    Why Do You Wear Two Watches?

    1. KO

      tech stocks do pay dividends because the demand of an aging population is, "I need to eat." And so, "I like to own the stock for growth, but I also wanna get some of the profits." And so dividend-paying stocks, uh, used to be, you know, utilities, uh, but not so today. Every s- every sector has dividend-paying stocks, so I prefer to own dividend-paying stocks, div payers. And then I also own fixed income products. I also own crypto now and I own alternative assets like gold and watches. My watch collection's

  24. 1:00:14 – 1:01:57

    Invest in Dividend Stocks

    1. KO

      actually done quite well even though there's been a correction. There's volatility, but I have some watches that have, you know, I bought for 200,000 are worth over a million today.

    2. SB

      Crypto. So are you still bullish on crypto as an investment?

    3. KO

      I am actually, but people get crypto confused with its real potential. Um, uh...Let's talk about digital payment systems, because what's about to pass first, we are days away from this happening, is the GENIUS Act, which is actually the Stablecoin Act. It's- it was just passed by the Senate 48 hours ago. It's going back to the House. I, I actually worked on that bill two years ago. So if that bill passes, it's really nothing to do with speculating on crypto. It's a new form of payment. So if I wanted to order a watch in, uh, from Simon Brit, who's somebody I buy watches from, he's a master watchmaker, right now I have to take US dollars, I've got to get through a know your client, uh, prerogative. Um, I'm treated like a criminal by transferring $100,000 over. Turn it into Swiss francs, takes about a week. I get screwed for about 200 basis points in the whole thing. If I, if he accepted USDC, which is actually a c- a, a stablecoin backed by the US dollar, just went public, very successful IPO, I was a shareholder in that company too, that's one of my best IPOs in, in the last two years, the transaction would happen in less than a second and the fees would be 100th of what the costs are right now. So it's a digital payment system. The price doesn't s- s- it's not, there's no speculation on it. It's backed by the US dollar, treasury bills. So it's sort of a new form of, of digital payment. That's different than Bitcoin, which is a speculation. It's if you believe in Bitcoin, you think it's a digital gold and you

  25. 1:01:57 – 1:04:32

    Are You Bullish on Crypto?

    1. KO

      live through the volatility. I believe in both. I believe that, that crypto will be the 12th sector of the S&P in some period of time because it provides productivity to all 11 other sectors. So the way I own it is I own the exchanges. My exchange, uh, in one called WonderFi up in Canada just got acquired last week or two weeks ago by Robinhood. I'm happy 'cause I think Vlad, who runs Robinhood, is great, and n-now he's got a million plus accounts in Canada, in a market that he'd never participated in. But the point is, this is never going away. It's gonna stay forever. So how do you participate? You can buy some Bitcoin just like you can buy gold, buy it in an ETF or actually own it yourself. You can buy the exchanges. You can use, um, you know, you can buy Circle stock now, it's public. You can... Circle makes USDC, you can buy USDC in, in an account and make 4.1% interest on it right now. So there's a lot of ways to participate, but yes, I'm here to stay. But I've grow- I've grown up, I was around during the period where the crypto cowboys lived, and, and I survived that all, and I even testified in front of the Senate and the House and whatever else the testimonies were during the, the tumultuous period, and most of those guys went to jail.

    2. SB

      Your portfolio in terms of Bitcoin allocation or crypto allocation, what is it now?

    3. KO

      It's at about all in, uh, we, we marked to market last month, it was 19.1%.

    4. SB

      19.1%

    5. KO

      Yeah, I have to keep it under 20. It's a sector, so... But remember, in that is the cryptos itself.

    6. SB

      Okay.

    7. KO

      The Bitcoin, the USDC, and the shares of the infrastructure companies like Circle and everything else. I've got, you know, it was a very successful IPO.

    8. SB

      One of the first things most people do when they get a bit of money, usually from their, their job, is they get a mortgage on a house, because we're kind of taught as we grow up that the best way to make or the-

    9. KO

      Yeah.

    10. SB

      ... the, the, not maybe the best, but the most obvious way to create wealth is to buy your first home.

    11. KO

      Yeah. There's a very basic rule for that, and I understand it and I did the same thing. But what I made sure again, for my mother was never let the mortgage and the cost of maintaining the house be more than one third of your income. One third of your income. If it's more than one third, you bought too much house. So it's better to buy a house that's maybe it's only going to be 1,900 square feet to start in a neighborhood that you may not want to stay in for the rest of your life, but start to accrue the benefit of real estate from that point of view, learn how to manage it, maybe you rent part of it out or whatever, but it can't be more than a third of your income. The mistake that people made and they're starting to suffer from it now is when money was so cheap,

  26. 1:04:32 – 1:09:35

    Why You Shouldn’t Buy a House

    1. KO

      mortgage, mortgage rates were under 4%, they were 3.2% some of them, they bought massive houses, and now they're running into having to refinance those houses at much higher rates, more than 7%, and it's becoming 60, 70, 80% of their income. They're screwed. They bought too much house. So it's about making sure that you can manage that and also you want some diversification. Yes, a mortgage is okay, particularly if you're having a family because you're going to pay rent or you're going to pay a mortgage, one of the two, but you want some diversification and just starting to build up that investment account for when you retire so that you have something to live off. If you only put aside 15%, if you're, you're making 70,000 a year and you put 15% aside from when you're 25, you'll have over a million and a half dollars if you just invested it in the stock index, in the S&P 500. That's what, that's what history has told you.

    2. SB

      In what timeframe?

    3. KO

      Your whole career. I mean, you're going to be 65, you're 25. 65. You just stick with that protocol-

    4. SB

      Mm-hmm.

    5. KO

      ... and you'll watch it grow. You'll watch it grow. You go up and down as the market goes up and down. Some years it'll go flat, whatever. But it's the people that don't even think ahead and find themselves at 45 mired in debt, including a mortgage. You want to get rid of your mortgage in your 40s.

    6. SB

      Most people's primary investment asset is the house they buy. Is that smart?

    7. KO

      Yes, it is, but it's also the debt they own. It's a primary asset. How much debt does it have on it?

    8. SB

      Mm-hmm.

    9. KO

      It's only the equity value is the asset. So if you're buying a house that's too big and it's, you've only put down 10% and it's 90% mortgage, what do you really own? You really own the 10% at whatever price it is. Sometimes housing goes flat for a while. It's, it's okay, but it's not okay if it's too much house.

    10. SB

      If you're a 25-year-old and you're on that 70K that you talked about, and your objective was to make money, you don't have kids, you don't, you're not in a relationship-... would you buy a house?

    11. KO

      No. No, I wouldn't because why do I need a house if I'm only, unless I'm renting as an income property? I'm buying a house 'cause I'm getting married, I'm gonna raise a family. I need a house. I mean-

    12. SB

      Is that the, the use case for buying a house, you think?

    13. KO

      I think it is. B- b- people, s- but and it's not, there are many people say, "I l- I love real estate. I'm gonna buy three houses. I'm gonna rent them out." That's a different business. And I know people in their 20s that do that. In fact, they're successful. That's all they do. And so that, their job is to find houses, buy them, fix them up and rent them, and they manage that geographically tight portfolio. It happens a lot in student housing, for example. Got a good friend who's involved in student housing, he's very successful. He just focuses on one aspect, buildings that rent to students, and he manages it. And he, you know, raises a family, he's successful, but that's one thing he does. That's not the same as saying, "I'm gonna buy a house 'cause I'm, I just got married and I'm gonna raise, I'm gonna have a child in the next 24 months." Then you should have a house. But if you're, j- you said to me, "I'm single, I wanna make money," I wouldn't buy a house. That's not the number one asset class, I think. I'd get a diversified portfolio and just ride the pony with that for a while until I meet that special person I'm gonna, you know, raise a family with. And then, I have a little nest egg I can work with. I mean, wealth creation comes down to one word: discipline. That's it. The ability to look at something and say, "I'm not gonna buy that. I'm gonna keep that money working for me." Not many people have that discipline. Wealthy people have that discipline. You meet them later in life, you realize when they were young and had nothing, even the ones that were employees their whole lives that are now financially free, had the discipline to say no. There's so much stuff you don't need, and you should never buy a watch unless you can afford it. Ever. Go in debt for a watch, 'cause people hear this stuff and say, "I'm gonna buy watches like Larry with red bands." No, you're not. That's why I wear watches now that cost under $500 to show kids, you wanna get into horology, you don't have to spend, you know, $50,000. Here's a, here's a Timex for $265 that looks beautiful. Get that.

    14. SB

      You said, uh, you know, don't buy the house until you meet your partner, et cetera. How much does the person that you fall in love with have an impact on your finances, your money, your chance of success, in your view?

    15. KO

      It's everything. Are you kidding? I mean, it's, it's everything. If you read, I mean, think about this. Y- you need to find somebody, if you're an entrepreneur, so that's for the, we're talking about the third now that wanna go on the rocket ship ride. You better find somebody that's willing to tolerate the fact that you're never home for the first 10 years. They're gonna raise a family by themselves because there's no balance in life. That, that idea of balance is complete bullshit. I mean, it's just bullshit. You have to work so hard to compete globally these days in every sector. You're gonna work your ass off, and it's not gonna happen over, I mean, Anna Skaya did it in three years, but she had worked much harder previously. It was not her first deal, but she was just lucky. I mean, sh-

    16. SB

      Was this the cat DNA?

    17. KO

      The cat thing, yeah. I mean, she- sh- she- she- she, but she's, you know, she's, she's

  27. 1:09:35 – 1:14:07

    How Much Your Relationship Impacts Your Finances

    1. KO

      working again. She's back where, she wants to work. I mean, that's what happens. You never stop working. But the thing is, that partnership, and this is what people don't get about marriage, marriage is a business. I know people go nuts when I say that, but it's a business. And the first child you're gonna have is money. It's gonna be the first child, and it's gonna sit at the table with you every day as it's there, it's sitting there. If you don't have money, you don't have a marriage. I mean, the reason people get married is to form a form of financial stability so that they can afford a family, and you have to figure out, you know, I'm, I'm, I've been with my wife a long time and we've been separated for a couple of years, but, uh, you know, family's very important to me, so I, we got back together again, and we, and you know, our daughter got us back together and we're very happy we did it. But it's, we make financial decisions together. We, we always check in. You know, anything that's material, you know, if we're gonna do a renovation or something, and, and I respect her for that. I have a lot of respect for her because she doesn't just spend mon- We didn't have any money when we started. We had nothing. And so, that's why a great marriage can work, because you build it together, you really care about it. You care about your family, you also care about what you, you've created in wealth. And I consider my money her money, like 'cause, 'cause she was the family that let me go and do this stuff. Now, I don't have the same relationship with our kids that she does because she raised them, but that's the thing you give up and you have to give something up, that's it. You can be a great father, great provider, but you're never gonna have the closeness that she had reading them stories when they were young. I wasn't there. But, uh, you know, the outcome has been good. I think everybody looks at that and says, "All right. That's great." But my mother never believed in entitlement, and so I don't believe in it either. I'm not gifting my kids a ton of money, you know? I, I want them to launch and they've done that successfully. They gotta, they gotta work, you know? They gotta do their thing.

    2. SB

      I've heard you say before that the most important financial decision you'll ever make is who you'll marry.

    3. KO

      Yes.

    4. SB

      Why?

    5. KO

      Because think of the geometric loss of wealth. Every time you get divorced, you pay the woman that you divorced, or man, and you pay the government a third often through capital gains and liquidation because you can't separate all the assets without liquidating them sometimes. So, you've got the government sitting there.

    6. SB

      Mm-hmm.

    7. KO

      You've got the other spouse sitting there. This is the stupidest thing you can ever do. It took your whole life to, to actually create this nest egg. Could be, you know, you're 45 or whatever, you've, you've got a comfortable life, and all of a sudden, you don't like your wife or husband? Think about that for a while because you are going to wipe out up to two-thirds of your wealth. You better really like somebody else a lot. And frankly-Sometimes it's not the other person that you're divorcing, it's you. You're the problem. If you're getting married for the third time, you're a guy or woman, it's not them, it's you. There's something wrong with you, and you should probably not get into another economic union. You should probably just date till you drop dead because it's stupid. Marriages are tough. I mean, they're tough. Anybody who's been married for more than 20 years knows exactly what I'm talking about. But they have, they accrue more benefit than, than, you know, anything. So if, as lo- if you're happy 51% of the day with your wife, stay with h- him or her, husband or wife. Y- that's very important.

    8. SB

      How often do you think divorces are a result of money issues?

    9. KO

      Well, you may be shocked at this. I wrote a book, um, about this, and I decided, uh, Men, Women, & Money, a long time ago, 10 years plus, right? There it is. And I did some research and I, I, uh, went to meet some of the top, um, divorce lawyers in North America, in New York, in Boston, and other cities. And I said, "Look, I r- I wanna kind of do a pie chart of the reasons for divorce that seem, 50% seem to end in divorce within five to seven years." Every one of them, they didn't know each other, said, "It's not infidelity. Nothing to do with it. Most marriages can, uh, survive infidelity. They can't survive financial stress." And so what happens invariably is you fall in love, but you didn't do any due diligence on that person's spending habits or their financial history because

  28. 1:14:07 – 1:16:55

    The Shocking Link Between Money and Divorce

    1. KO

      la amore is so wonderful in the early days. You didn't do any diligence on their family or them or their brother or bankruptcy in the past or whatever it is. And then you get married and, you know, the euphoria starts to wear off, and you notice that the other is outspending you, just buying a lot of stuff beyond your means, and that starts the first friction. And then the credit card comes in with $100,000 on it at 23% interest and another purse was bought or whatever the hell it is, and you're, you're starting to sink because you may have married somebody who can't stop spending. This is just a typical... There are people that can't, have no discipline. They just can't. They gotta have the boat, they gotta have this, they gotta have that, and they pressure their other to say, "Look, I wanna keep up with the Joneses next door," even though they may only each have a salary of 100 grand each. Can't do it. And they have kids and they're trying to put them through college. That's divorce. That's why almost 90% of, of unions break up is, is, is that classic financial pressure. And divorce gets them out of that mess because they can no longer spend on your credit card anymore, but it's a horrible way to go. So I, you know, I'm, I'm an investor in a company called HelloPrenup that does divorces for, uh, does, um, uh, prenups for women, and prenups forced during the euphoric period, diligence. It's that simple. You're gonna find out if that person has a financial problem going into the marriage. They have to disclose their financial background.

    2. SB

      So you talk about these five love languages of money. The mooch, someone who won't pay for anything.

    3. KO

      Right.

    4. SB

      Should I date someone like that?

    5. KO

      It's a warning signal. It's a problem.

    6. SB

      It's a problem so-

    7. KO

      Or they don't really want you for companionship, they just want you for financial support.

    8. SB

      The spendaholic, someone who always offers to pay for everything to appear popular and successful.

    9. KO

      Bad warning sign. Huge. I mean, that is an, that is insecurity measurable by cash outlay.

    10. SB

      The loafer, someone who has no ambition and drive for money.

    11. KO

      Avoid with extreme prejudice.

    12. SB

      (laughs) The thief, someone who steals.

    13. KO

      You can have no tolerance for that.

    14. SB

      And the meany, a balanced spender who lives within their means.

    15. KO

      Love that. Marry a meany. That's it. That's, that's the, those are the marriages that last an entire life. That's it. That's what you're looking for. That's great advice right there. Whatever the book costs, that's, that's the best value right there.

  29. 1:16:55 – 1:21:36

    The 5 Love Languages of Money

    1. KO

    2. SB

      (laughs)

    3. KO

      And then ask yourself, "Am I dating one of these or not?" You know? You know, you should talk about money on the third date. Think about a date, think about dating. First date, "Oh my goodness, this is a really interesting person." Um, or not, then there's never a second date. Second date, "I want to learn more. I'm really interested." You're going into a third date, there's something going on. There's something going on. You both wanna meet again. That's the first time you should say, "Look, I know this is crazy, but we're here together a third time because something's going on here, and I'm just wondering, what are your long-term goals? I mean, it's not about our marriage or anything else, other than we're having a great time, but what are your ambitions? I'm really interested in you. I'd like to know what you think." And the, maybe the woman says or the guy says, "What are you checking me out?" You say, "Yeah. Yeah, I'm really interested in you." It's a form of finding out if the connection... Y- you know, I, I should be a, a marriage counselor. That's what I think. I mean, it's j- it's really... Dating is, is the, is the dance, but it should involve exploring where we're going financially.

    4. SB

      For many years, you've probably seen this iPad sat in front of me. You've probably wondered what's on it, and I'm gonna tell you today because they're now our show sponsor thankfully. It's an app called GoodNotes, and it's where I store all of my research, all of my information, but also where I take notes in real time when the guest is speaking to me. I love this app because it's so dynamic, but also because of this new feature, which is called Ask GoodNotes. It's basically my AI companion. I can search the 200 pages sometimes of notes and information that I have in front of me in just seconds. I can type into the Ask GoodNotes feature, "What was the name of Kevin's mother?" I'm speaking to Kevin O'Leary on the podcast. He starts talking about his mother. I have a couple of seconds to figure out what she's called so I can ask him a question about her in a polite way, Ask GoodNotes looks through all of my notes, responds back to me.... in seconds. If you're someone that loves taking notes, but your notes are a mess and you can't read your own handwriting, i.e. me, I think Goodnotes might be the solution for you. And Ask Goodnotes, which is their new AI feature, might just be the tool that turns you into an organized person. That's certainly how it feels for me. So I asked Goodnotes if they would give my listeners a 30-day free trial to try it out, and they've given us one on iOS and Mac. So if you wanna use that 30-day free trial, go to goodnotes.com/doac, or sign up now for your yearly subscription for just $9.99 per year. That's $9.99 per year. Go to goodnotes.com/doac. (paper crumpling) I've built companies from scratch and backed many more, and there's a blind spot that I keep seeing in early stage founders. They spend very little time thinking about HR, and it's not because they're reckless or they don't care, it's because they're obsessed with building their companies, and I can't fault them for that. At that stage you're thinking about the product, how to attract new customers, how to grow your team, really how to survive, and HR slips down the list because it doesn't feel urgent. But sooner or later, it is. And when things get messy, tools like our sponsor today, Justworks, go from being a nice to have to being a necessity. Something goes sideways and you find yourself having conversations you did not see coming. This is when you learn that HR really is the infrastructure of your company, and without it, things wobble. And Justworks stops you learning this the hard way. It takes care of the stuff that would otherwise drain your energy and your time, automating payroll, health insurance benefits, and it gives your team human support at any hour. It grows with your small business from startup through to growth, even when you start hiring team members abroad. So if you want HR support that's there through the exciting times and the challenging times, (keyboard clacking) head to justworks.com now. (keyboard clacking) That's justworks.com. (paper crumpling) One of the big, uh, protagonists in the story of many things we've discussed, money, investing, building businesses, now is this thing called artificial intelligence, which you mentioned earlier.

Episode duration: 1:52:40

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