Kevin O’Leary, aka Mr. Wonderful on ABC's Shark Tank, shared some straight talk with a business crowd Friday morning: Pay your head of sales very well, focus on customer service above all else and “business is war.”
O’Leary's keynote speech opened an all-day Innovation IT Conference & Expo that Miami-based TigerDirect held for 1,200 business people before its big Tech Bash for about 17,000 tech-hungry consumers at Marlins Park Friday night.
But before getting into some business advice in the Park's Diamond Lounge, the Shark — yes, the mean one — shared some stories and case studies about the hit show that brings in 9 million viewers weekly. Look no further than the wild success of Wicked Good Cupcakes to see evidence of the Shark Tank Effect. And did you know the fastest growing demographic is girls, age 9 to 18? Not sure what that says but it's interesting.
What are the shared attributes of companies that got funded on Shark Tank? In every case, the team could articulate the opportunity in 90 seconds, the investor said. They were also able to persuade the Sharks they were the team to do it (that takes more than 90 seconds.) But No. 3, he said, and the one that pushes a lot of founders out of contention: They know their numbers.
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Speaking of numbers, he told the audience of business people that he's not worried about the country’s extended bull market. He sees the evidence of strength in the S&P 500: “Record earnings, record dividend increases, record stock buybacks, record reduction of debt, unprecedented cash flow never ever seen before and only trading at 14.8 multiple.”
Now onto the straight talk: “The customer always comes first and service always trumps price,” he said. “If your customers are very happy with their service, you can raise your prices 15 percent without losing them — I’ve done this time after time. … Customer service is the whole deal."
He had several tips for sales people including this one: Spend 10 percent of your time researching your market. Stay on the cutting edge.
O’Leary said when he is looking at companies to invest in, he most wants to meet the head of sales. “Sales people know more about the companies than CEOs all the time.” He learns all he can about the business from the sales people, “and when I am finished with that, then I go have dinner with the CEO and if that man or woman knows less than I do I know who to fire.”
Some people may not agree with him, but he thinks the the person who should make the most money in a company is the head of sales. “If you don’t have sales, you don’t have a business,” he said. “Once I have 51 percent (of the company) … we change the entire grid on sales, with no lid on what they can make.”
His next point has gotten him into some heated arguments at business schools. What’s that?
“I believe business is war. … The DNA of a business is to make money for its shareholders, it’s not to solve all the problems of society, it’s not for charities, save the whales,” he said. That can all come later — after the shareholders have been rewarded, he said.
“I tell my companies this: I want you to burn down [competitors’] market share, crush them, steal their customers and bring them back to me.”
Now that’s the Mr. Wonderful we all know and love.
Find coverage of TigerDirect’s Tech Bash Friday night on the Starting Gate blog here. Follow @ndahlberg on Twitter.