0:00 That is the stupidest thing you can ever do. What is the most important thing for someone who's just trying to grow their money? So, I learned this from my mother and I actually built a whole company around it. Yeah, there she is. So, I haven't seen that picture in a while. 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 going to invest for the rest of my life." So, talk me through this. I want as much detail as possible. Okay, let's start with this. Kevin Oly aka Mr. Wonderful, is the self-made millionaire
0:46 and investor who's built and sold companies for billions. There's a lot of people don't like me for my blindness. 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. What about a house? 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 1/3 of your income. Now how much does the person that you fall in love with have an impact? 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. Kevin, can anybody be an entrepreneur? No. Only a third of people can become
1:31 successful entrepreneurs because there's a couple of things that you must achieve to be successful. First, listen to my regular listeners. I know you don't like it when I ask you to subscribe at the start of these conversations. I don't like saying I don't like it being in there. None of us like it. It's frustrating. Do you know what's also frustrating? It's also frustrating when I go into the back end of the YouTube channel and I see that 56% of you that listen frequently to this podcast haven't yet subscribed. And so many of you don't even know that you haven't subscribed because I see in the comment section you say to me, you go, "I didn't even realize I didn't subscribe." And that actually fuels the show. It's basically like you're making a donation to the show. So that's why I ask all the time because it enables us to build and build and build and build and we're going for the long term here. And it listen, if this is your first time listening to the Diary of a CEO, you don't have to subscribe. you guys,
2:16 your first one's free. But if you've watched this show before, you're freeloading now. So, all I'd ask you is if you've seen this show before and you like it, help me, help my team here. Hit the subscribe button and we'll continue to build this show for you. That's my promise. Thank you to all of you guys that do subscribe. Means the world to me. Let's get on with the show. [Music] Kevin, I'm going to 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. Every entrepreneur I've ever talked to um that finds himself where I am today has has a
3:03 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 got to 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 saw her waiting for me and the woman who owned the store said, "You've got a script to come off the floor." And I didn't want her to see
3:48 me on my knees with a scraper. Bad for my brand. 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 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 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. Kevin, there's a present for you. We give a present to all of our guests. Really? Underneath that black Can I open it? You can open it. I just take this off. Oh, look at that.
4:34 You've heard the story. 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. So you were asked to scrape gum off a Mexican tile just like that. And in order to do that, you got to get down on your knees and do it. And um I just couldn't do it. And I and I 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 you off the treadmill into that direction and she was gone and there was a bodega there instead. You said there that you realize that there's kind of two people in life. There's the entrepreneurs, the person that owns the ice cream parlor and there's the person that scrapes it off the floor. Yeah. That provoked a
5:20 question in me which is do you think anybody can own the ice cream parlor? I do you think anybody can be an entrepreneur? No. I've tried to teach it. Um and I mentor out 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, particular entrepreneurship, you look at
6:05 the difference, the path of success and failure, and I nobody's exposed to it more than I am in terms of how many investments I may have made over the decades. I think if you want a percentage, you know, 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, twothirds of them want to 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
6:50 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. It's the only path. 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. So that onethird of people that you say will be successful. They'll pursue their their dreams. They'll build a business, whatever it might be. Yeah. Do you think it's possible for us in this conversation to increase the probability of their success? You said you don't
7:36 think you can you can make someone an entrepreneur, but is there things you can do to increase their probability of success? 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 is very important. We'll start with this one. I used to work for Steve Jobs 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.
8:22 Yeah. Yeah. All of that. It's hard to find. Those are CDROMs. But, you know, in developing that software, we used to go quarterly. Um Heidi Rosen was there in the room. She's still a a very famous venture capitalist. And I would say, Steve, you know, we got to do some market research on Oregon Trail. I mean, it's a huge title. It's in 110,000 school buildings. We got to do an update. It's going to cost you 12, 15 million bucks. We want to find out what the students want. We want to find out what the teachers want. Want to find out what the parents want. Steve would say, 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 what the students want or the
9:08 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 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 shut up and do what I say." That's how he would talk to you. 100%. And here's what I learned. Look how wildly successful he was. But here's why. There's a concept that he understood
9:54 that very few people focused on back then in the early 90s of signal to noise ratio. What was so brilliant about Jobs that 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. So this signal to noise ratio to be
10:39 successful for Steve Jobs was 8020. 80 signal, 20 noise. And I knew that to be true with him because he would email me at 2:30 in the morning, expect 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, 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, that's very awkward for him socially because noise is
11:25 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 could go back in history, you're going to find out that the geniuses of their time were close to 100% signal. 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. No. The goals you set for that the the weight the that you are awake. If you're going to be awake 18 hours. Yeah. And you've determined that there's three things you have to get done. You're going to get those done. No matter what it takes, you're going to get those done. And you're not going to let anything distract you from those three to five things. If you're a CEO and you
12:11 achieve that and you can get those done with 80% of your time based on that, you're extraordinarily successful. You are absolut and you're 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 in many interviews like I knew, you know, 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 an entrepreneur, a man or woman
12:57 that understands a 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 going to get it done. You're going to all these people around and everything else. This is one of the three to five things you're going to get done. I have five things today. I'm going to 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%. What's the opposite of that? Sometimes looking at the opposite helps us to understand something. So the opposite of having you know I hire managers and CEOs
13:43 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 ying and yang in your mind to make correct decisions. It doesn't mean it takes you off the signal. The signal is you got to 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, tonight, very late tonight, I will meet a master watch maker, and we will deal with the design of a new piece Unique is going to make for me. And I'm going to love that moment. That's going to be something completely different to
14:29 what I did all day long. and we'll start our journey together over the next two years to make this piece unique. And that's something that just takes me away from all the I'm going to be dealing with today. And I also tell successful entrepreneurs in the same day you will get a and this happened to me today. It happens every day. You're going to get a call from some aspect of of your what you you call it your empire, whatever you want, where you're this company's going bankrupt. it's just going to go bankrupt and you're going to 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 going public. It's a 450X for me.
15:15 The stock will get unlocked sometime in the fall. But how can 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. That's entrepreneurship obviously on a different scale for most founders. Well, the founders deal with the same thing. They get disastrous news. They lose an account like a Costco or something if it's consumer goods or service and they get something else. the the the eb 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
16:02 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 Liry. Focus on the signal. That's it. Where does this analogy come from of signal and noise? It was his genius of of of making it so simple. What are the three things you got to get done today? What are they? What are they? How do you know what they are? 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. Got to get these three things done and or five things whatever it is. But then something else will hit. That's the skill of understanding. Is that noise
16:48 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. It's that judgment of prioritization but then the sort of force of execution to get it done. Can you interpret signal and noise and can you keep the noise away from from the things you got to get done?
17:35 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 particularly the naent startups and you're you're involved in the same format I am. You're dragon stand in England. I'm a shark tank in the US I you know you put up 500,000 or a million bucks into somebody's business. Eight eight out of 10 is going to fail. Maybe six out of 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 going to work. They are so full of They have I'm talking about startups. They have no idea what's going to work. And you won't know for 5 to seven years, which is why you need divers diversification in the
18:22 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 going to hope that one or two of their portfolio uh is going to work out in seven years and pay for all the other mistakes. But the serendipitous nature of success in entrepreneurship is brutal. It is. So that does that mean though that it's I guess I was going to say does that not mean that it's highly luck? Investing is highly like entrepreneurship must be well I said karma you know I call it karma but you need executional skills but here's another skill that I think we should talk about um
19:07 when you look at at least my experience over decades of making these uh nasent these early stage investments these around investments remarkably and I've done them in all 11 sectors of the the economy the majority of the successes five to seven years later are companies is run by women. Why is that? 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 target 65% of
19:53 the time. At least my portfolio. and women 90 f plus time percent of the time and that keeps the the the team very sticky. They want to 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 it 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 twothirds, you listen one third. Why don't you try reversing the ratio?" She said that to you? Yeah. Yeah. [Laughter] I'm very thankful actually because I tried it and um she's right. If you don't talk and you listen, you become far more effective as a manager or an investor in my case by getting information that you weren't going to
20:39 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 long it's a long long long uh litigation and I remembered her 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 I just looked at him. I understand for a long time, a long time. And it gets uncomfortable
21:26 and no one else is talking, you know, just looking. And um maybe after 90 seconds, he blurted out something he shouldn't have said. And I knew exactly what the price was right there. That was the end of it. You learned that as a podcaster. You learn that there's actually something going on in the silence. There is something going on in silence. And it's it's it's the number that he was going to settle at. He showed his hand. So we saved ourselves two hours. You know, it's a it's an attribute that many people can't do because 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
22:13 to be a very useful piece of information. It's not just a negotiating, but to listen to employees, listen to investors, listen to financeers, listen to alternative ideas to yours and become more powerful from it. You're in the very business of people selling to you and pitching to you. We both sit on a similar show and 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 the attributes of the ones that are successful? Is there is there anything one can take from that in the moment when that entrepreneur comes out onto
22:58 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 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. 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 them. Not smiling, not blinking, not
23:44 frowning, just looking at them. And before they say a single word, I know if they're winners or losers. Just like that. 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, even though you've practiced, you you know, you 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
24:30 minutes. This is your moment. and you're on national television, 100 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? Because you can't stand me looking at you directly without saying anything to you. Or do you push back? Or did you say, "I'm gonna I'm gonna stake my aura. I'm going to stake my ground here. I'm going to show you I'm ready." You see what I'm getting at? Yeah. And I can feel it. I can see that they're ready to do battle. They're ready to
25:16 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 take. 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 you want to you want to 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 going to fail and you're just that's before a word is spoken it before the first word is spoken. And so then what has to happen? Then Eric says, "Go. You're on." And
26:04 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 going to 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 dime a dozen. I mean, there's millions of them. The next phase begins. This is after 90 seconds. Can you explain why you're 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
26:50 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, when you get those two things together, you can feel the aura of the room. The isotope is sizzling because you've derised a great idea. You got an operator in and they But then the third thing, this is the killer. This is the killer. I've seen it so many times in real life and Shark Tanks real life it is. But you got to know your numbers. How big is the market? How fast is it 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 going to 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.
27:36 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 take you up 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. I've never heard someone talk about aura in entrepreneurship quite like that. And I was I was just trying to 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 take someone who doesn't have that aura in business and teach them it? Does business give you that aura?
28:23 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 going to go make a presentation to take down a million-doll line of credit or something, you want to dress the part, obviously, but you're going to walk in a room with, you know, a loan officer and maybe an assistant, maybe one other, depending on the size of the deal, and they'll have never met you probably, and you're going to 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
29:09 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 but 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 that 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 going to marry. It could be who you're going to 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 going to give up their life for you. It's sort of who are you?
29:57 That's it. Just closing off on the point you made about women being your most successful investments and the companies that have given you the greatest returns tend to be led by women. Does that mean that you focus on hurrying women into executive roles? Yeah, I'm 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 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
30:42 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 going to do that. If you want to be part of my universe, you're going to work for four to six months as a contractor at a much higher salary. because you're not going to get any stock options, you're not going to get any uh benefits. But I just want to 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, the CEOs that we have investments in and and your co-workers because I don't do 9 to5 anymore. I do projectbased work. I don't care where you live. We have people working in Dubai, Abu Dhabi, uh England.
31:31 I mean, everywhere. everywhere and and you know we meet 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 got to get about 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, 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 going to work. Here's like, you know, that's it." I think I think more
32:18 companies should do that. Actually, it's more like the Swiss apprentice system. They bring you into a lot like, you know, my stepfather's Swiss. I've been going to Switzerland for 50 years. So if you're a giant company like a Fiser 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 want to 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 because you're sort of mitigating the risk. I guess you're taking less of a a risk on this. 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
33:04 want every person to be proud to work with the other and and just 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. With with the investments that you've made, how many investments How many offers have you done on Shark Tank now? probably like 800. We know we don't even count it anymore. We look at the portfolio rolling over a 5 to sevenyear period. A lot. Like a lot. And and the thing is the what I've learned is you get a you get an exit like uh base pause from 5 years ago or something. Ankaya for remarkable woman. That was the the cat DNA thing. The cat DNA thing. I mean nobody saw that coming. I thought that thing was a joke. Um I was so wrong. I
33:51 mean that's the whole point. and and she she had the highest IR 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 sign between Sony and the the pharmaceutical company. I can't even tell you what it was. It was extraordinary. It was extraordinary. Was it nine figures? Believe me, it's a tough NDA because and I understand why they did it. They didn't buy it for the cat DNA testing. They bought it for the data 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
34:36 extraordinary in terms of feeds and medicines. Yeah. 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. 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." So, I bought the stock and he was right. It became my most successful investment. I I had to keep selling it down to 5%. My cost base is zero on Tesla now. hell. Yeah. Before it split and he worked there for 5 years. One of the personas that I have that watches this show a lot
35:23 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. Twothirds will never do it. Twoirds will never do it. That 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 going to fail the first time, maybe the second, maybe the third. You only need one success. You I had plenty of failures and I I still have failures. I mean, it's just, you know, that one I talked about this morning. It's, you know, when I I you know, I I said to the largest shareholders as was I was in the car and your assistant was, you know, at 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 going
36:08 to make a decision. This company's going bankrupt." Oh, on the bankrupt company. Yeah. Yeah. And so if we want to save it, everybody's going to have to pony up X million. And um we're going to own the whole thing. We're just going to own it all. We're going to we're just going to do a cram down round at a fraction of a cent. Going to own the whole thing. You want to do that or you want to let it go bankrupt? You guys choose. I'm onethird of it. So it's going to 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 want to get yourself in a position in life. And 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,
36:56 they're going to be unhappy. But then I got the call on the IPO. Those shareholders be very happy. They're going to make 400 400x. So it was one of my deals. And so it's sort of like learn to live with the idea that you're going to fail. You're going to lose money by taking risk. Will it change relationships permanently? Maybe. But if there 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 blindness. They may not like me and you know it's sort of um it doesn't
37:42 matter because the only people that really matter to me are probably my 20 closest friends in my family. Do you think if you hadn't worked with or known Steve Jobs you would be a different person? 100%. Steve changed my life. There's no question. 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 was my view. Guy was a freaking genius. He was so smart in terms of keeping on track to get getting stuff done. And look what he achieved. But he was difficult.
38:27 Difficult because 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 know what I'm talking about. Um, you know, it occurred to me, uh, because I know Waznjak, too. Not as well as Jobs, but they really needed each other. They really needed each other because W 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,
39:13 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 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
40:01 its influence. Because every coder that becomes familiar with that firmware, that Bosnjak computer, writes to that platform, is part of the honeybees. Jobs understood that. He said, "I've got to 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 going to write the next piece of firmware or advanced AI
40:49 from the queen bee the chip the American queen bee. The minute you shut down a market and you don't, 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.
41:35 Maybe you keep them 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? Of course. I mean, and that is what Jobs did. That was the war between Gates and Jobs on the OS, on the operating system. Yeah. was thinking about the app store and yeah, 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, go to Washington because AI is so important for all the investments I've made. I do not want to be putting Chinese honey into my companies at all. It's that simple. 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
42:20 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 on this sort of next 10 years of my life? I'm 21 years old. What what are because I think every entrepreneur has like their principles. You you talked about one which is the signal versus noise thing. Are there any other foundational principles that you think are conducive with success that you might have learned? Yeah, I mean I' what I'm telling 20 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 going to be able to convince some manager to go work for free in there. you're just they're going to recognize your passion and they're
43:08 going to bring you in. Do that first. Most young entrepreneurs say nah nah I don't want to work for anybody. I said yeah you do actually you you do want to work for somebody you want to just understand how all the cogs move just 24 months and after that launch the first one will probably fail. You're going to start with your parents giving you 10,000 bucks or whatever it is friends and family but 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 much higher probability of success. But the key is to launch sort of in your in your mid to early 20s because you need to burn a few years failing and and that that matters. On the point of how to lead people, when
43:53 people hear about Jobs's approach, they sometimes assume that you also have to be an 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. I don't think kind works. I think respect works. I I the same number of are out there being successful now as they were back in the 90s. Um it doesn't matter um whether you're an or whether people like you or not. I mean people get so stuck on this stuff. It it's
44:42 the team you're building are not your friends. They are the team you're building to execute on a mandate. 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. Nepatism is 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
45:28 keep wealth multigenerational. Think about Tetrapac 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 med metric. It it really isn't. And trying to redefine leadership that way in because it's on trend, it's not going to work. I started my first business at 12 years old and I started more businesses at 14, 15, 16, 17, and 18. And at that time, what I didn't realize
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47:01 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? Yeah. Hiring them without testing them first. I've made that mistake. So So you now test them first. Just cuz someone says they can execute doesn't mean they can. I mean, it's of course you're in an interview, you're not going to 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 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
47:48 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 parameter. You could spend a million bucks no more without calling me. But whatever it is, I don't want to hear from them. I just want the outcome. What about resilience and hard work? How much does that matter to you? Cuz I know you said they can work when you know 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? I don't find the ones that are psychopaths hard work are 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
48:35 riding motorcycles in the desert. I don't know. You know, these are the examples I'm just using because I'm living with them. And say, "Look, I've got to go and ride a bicycle across the the desert." Okay. How many days you going to be gone? I don't know. Maybe three. Okay. Is that anything that is it immediate? That tells me that if you look at if you look at the years outcome from that person, you're going to find that they probably outperformed. You you you want you want you want the eclectic ones. You want the ones that are not just robots working. It it's it's going to be cheaper to get a robot if you want a robot. I'm going to buy those too when they come available. But I want people that have creative and unusual solutions
49:23 that you know just think outside of the box. It's it's really interesting that way. 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've 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 yeah know 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's one of three daughters uh of Lebanese descent My Irish father, my my father,
50:10 my original father, biological father was Irish. She didn't Yeah, there she is. Geette, so I haven't seen that picture in a while. Okay. She was very independent
50:56 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 would take 20% 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 and a half to 8% back then. She bought the long bonds and she had that portfolio
51:43 for 55 years. Wow. Um she never spent any of the principal, only the dividends and the interest. She put my brother and I through college. You know, she took care of her family and her sisters when they fell on hard times. But her rule is very simple. No more than 5% in any one stock or bond of the portfolio and no more than 20% in anyone 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 because the lawyer said, "Listen, you got to come down here. You're the executive or will." And I said, "Yeah, but you know, my mother was middle class."
52:29 He said, "No, you got to come down here." Um, she kept her account 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 55 years. When I saw the results I said that's it. That's how I'm going to invest for the rest of my life. Exactly the way Georgia did. No more than 5% in any one stock ever. No ma no matter what it is. and no more 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 that's a
53:16 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 she if 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 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. So would your mother pick the stocks herself or would she invest in an index fund or she indexed? She used it. So okay, you can 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 is doesn't have any debt and it pays dividends, you know, whatever. They were very rudimentary back then. They were just collections of
54:03 stocks. I think she had like 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 sectorally diverse. There wasn't 10 sectors back then. There was only there there wasn't 11. There was 10. So they didn't have real estate as a sector. So, you know, I looked at it saying, "Wow, these are really boring." You learned a lot about money from your early upbringing, right? From your that early context. 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, this is a very wealthy woman got divorced recently. And she said, "Look, I you know, divorcing and she was a
54:49 billionaire. She was divorcing. She was more multi-billionaire." And so she said, "Look, I I'm getting everybody's calling me up um to be my adviser because I'm separating from my husband. It's all his guys that did all the management of our family wealth. Would you be my adviser?" 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 that stick on the mandate. And I gave her Geette 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
55:34 portfolio as it stands now. Whether it's gold you have or land or stocks or bonds. Let's just do a 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 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. 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
56:21 hundreds of thousands of dollars a week. I mean, I don't care how rich you are, you don't want to be stupid. And I said, "Does that shock you? One or 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 you've had nobody restrict what you do with your money because you're going to 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 do you what's all this you're buying? Like what is all this crap that you don't need? It was a 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. So, are you in the camp that you
57:07 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 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 8 to 10 8 to 10% a year for the next 50 years. What's an index for someone that doesn't So, okay. I mean, you know, I even have it I even built an app for this purpose just so I could There's many apps out there. You don't have to use mine. Mine's called Bean Stocks, 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.
57:52 Mine's a little The S&P 500 is the top 500 stocks. Yeah. And so it's just, you know, people that 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. 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 what 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 you know the best test I do with my kids friends too. Go into a closet. Go into your closet and look at how much you have you don't wear because you either bought it because you thought you were going to
58:38 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 just buy the minimum stuff. And another thing I learned from my mother, this is interesting because I saw it happen at her death. She, you know, would buy two Chanel jackets a year, really expensive Chanel jackets, 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.
59:24 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'd built up this portfolio of amazing clothing. And when she died, the women in in our family had a cat fight over her portfolio. Unbelievable. Is that in part why you have so many watches? I've noticed you have a watch on either wrist right now. 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. How many have
1:00:10 you got? I I don't even say anymore because of the insurance policy I have. I got a lot. Do you invest in You're talking about your your mother's investing strategy, and one of the things you said is she invested in dividend stocks. Yes. What is a dividend stock and should I be investing in dividend stocks? Yeah, I mean, you know, a company if it's profitable and it's operating and it business plan is working and it's growing market share at some point says, "I'm going to 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 in other ways or live off it or whatever. Many tech stocks until recently did not pay dividends. But now the behemoth 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 want to get some
1:00:55 of the profits and so dividend paying stocks uh used to be utilities uh but not so today. Every 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 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 that are worth over a million today. Crypto. So, are you still bullish on crypto as an investment? Yeah, 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're are days away from this
1:01:40 happening, is the Genius Act, which is actually the Stablecoin Act. 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 Simone Brit, who's somebody I buy watches from. He's a master watch maker. Right now, I have to take US dollars, I've got to get through a know your client prerogative. Um I'm treated like a criminal by transferring $100,000 over, turn it into Swiss Franks, takes about a week. I get screwed for about 200 basis points and the whole thing. If I if he accepted USDC, which is actually a stable coin 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 the last two
1:02:26 years. The transaction would happen in less than a second and the fees would be a hundth of what the costs are right now. So it's a digital payment system. The price doesn't it's not no speculation on 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 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 up in one
1:03:14 called Wonderfy up in Canada just got acquired last week or two weeks ago by Robin Hood. I'm happy because I think Vlad who runs Robin Hood's great and 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 going to stay forever. So how do you participate? You can buy some Bitcoin just like you can buy gold, buy it 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 g I've grown up. I was around during the period where the crypto cowboys lived and and I survived
1:03:59 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. Your portfolio in terms of Bitcoin allocation or crypto allocation, what is it now? It's at about allin. Uh
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