- One of the friendliest Dragons, Ro bert Herjavec arrived from Croatia with virtually nothing. To day his company is worth more than $100 million.
- Breathing fire into CBC’s popular Dragons’ Den are host Dianne Buckner (front) and (left to right) Kevin O’Leary, Jim Treveling, Arlene Dickinson, Robert Herjavec and W. Brett Wilson.
Fame came as a result of a hit Canadian TV series. But fortune sprang from a more unlikely source—getting fired. Today, 21 years after taking a leap of faith and risking it all, Robert Herjavec finds himself in the fast lane...in more ways than one.
By Ted McIntyre Photos By Darren Whear
There’s a huge painting hanging behind the desk of Robert Herjavec’s office in Mississauga—the canvas consumed by the dust and smoke of the various violent encounters it depicts, with the exception of an equestrian in full red riding apparel on a white horse, attempting to navigate the fray.
“The piece is called Conflict by Canadian artist Andrew Morrow—I love his work,” explains Herjavec, the thoroughly engaging star on Dragons’ Den and its American counterpart, Shark Tank. “I saw it and bought it right away when Morrow wasn’t as big a deal. It depicts conflict through the ages, all the way back to dinosaurs. It reminds me that there is always conflict, and the best way to deal with it is to be mentally and physically strong, and to be prepared. I really believe in the famous words of Sun Tzu: ‘Most battles are won before they are ever fought.’”
Few have anticipated the future and prepared for it better than the 48-year-old Herjavec, who founded an online security software company, BRAK Systems, in 1990, then sold it less than a decade later to AT&T for a reported $100 million. He then took the position of VP of Sales with RAMP Networks, which Nokia subsequently purchased for $225 million. More recently, The Herjavec Group (THG) has remained one of Canada’s fastest growing technology companies since its founding in 2003, and currently stands as the nation’s largest IT security provider.
The spoils of such success include a palatial 50,000-squarefoot estate in Toronto’s posh Bridle Path neighbourhood, a yacht, six golf club memberships and a vast stable of leased luxury automobiles, including a Mercedes SLS, an Aston Martin, a pair of Rolls Royces and two Lamborghinis.
It’s those latter two pursuits, in particular, that get Herjavec’s motor running. He has teed it up with Donald Trump and recently played Augusta National Golf Club, while his company is sponsoring a Ferrari 458 Challenge Race Car as part of the 2011 Ferrari Challenge Trofeo Pirelli race series. Combining amateurs and seasoned novice drivers at some of the most challenging race tracks in the world, the series will be making two Canadian stops, the Montreal Grand Prix (June 10-12) and the Toronto Indy (July 8-10). Car #007 of THG/Ferrari of Ontario team will be driven by Herjavec himself, a former competitive driver.
Fame and fortune, as always, provide opportunity.
BIZ: I hear you played the home of the Masters, Augusta National, a few months ago.
RH: We played with the Premier of British Columbia, Gord Campbell. It was his last official day in office. An Augusta member can only have three guests at a time, and the other guests were still at the course when Gord arrived early. So when I got there, I see Gord waiting at the gate. He said, “I’ve been here for two hours—they won’t let me in.” As great as you think Augusta will be, it’s better. It was so perfect, not a blade of grass out of place, that when I went to flick the ashes from my cigar, I actually opened up a zipper and flicked them into my golf bag instead!
You’ve also had the chance to play with “The Donald.”
I had a chance to hang out with Mr. Trump when we played his course in Westchester, N.Y. He’s much bigger than he looks on TV. He has a bit of a funky golf swing, but I can’t talk since I swing cross-handed!
You took up the game because of business.
I started golfing 15 years ago. I’d been pestering the CEO of a big company for a meeting. And finally the receptionist calls: “Good news Mr. Herjavec. He has an opening a month and a half from now, on the Friday at 2 p.m. Someone in his foursome cancelled, so I put you in.” There was this long pause at my end of the line, and she said, “Oh, I’m sorry. I just assumed you played golf.” And I said, “But of course I do.” So I hung up and went out and bought a set of clubs, went to a practice range, and that was it.”
Your parents emigrated from Croatia in 1972 to escape Tito’s communist rule. You didn’t exactly have a silver spoon in your mouth when you arrived here.
We had very little money. Mom was an office worker, my father a millwright/mechanic in a factory—blue-collar guy.
What was your first job?
Delivering the Globe & Mail in Toronto.
And now you’re famous. How many times a day do people stop you to make a pitch about a business idea?
A lot. Maybe four or five times.
Dragons’ Den provides big breaks for entrepreneurs. What was your big break?
Hold on, I’ll show you. (He grabs a framed one-sentence letter hanging in his office that indicates he’d been terminated for cause, effective June 15, 1990). My big break was getting fired. Diane and I had just gotten married. The day after I came back from our honeymoon, I walked in the office and all my stuff was in a box and this letter was on my desk. My boss said I’d been taking money out of accounts, or some other crap like that. But then he asked me to stay as VP of sales because he wanted to make his son the president. I was 28 and out of a job. I ended up going into business with another guy, a real estate developer. I never wanted to own my own business because I’m way too conservative. It seemed too risky. But that was my big break. I would never have started my own business if it weren’t for that.
Even those who get turned down by you guys are getting valuable advice, since you might be saving them from wasting more money.
There’s a fine line between insanity and genius. Only the person walking that line can make that call. We’re just a signpost along the way. That’s why the show is so great, because when does an average person have the chance to stand in front of five people with that level of experience? Just to get your idea sanitized by us is tremendous feedback. Most times you hire a consultant or a government business development guy who’s never worked in the real world. Also, the show is so popular that they figured out that by just getting on the air your sales go up 60-70 percent immediately following the episode.
What’s some of the preparation that goes on behind the scenes that we don’t appreciate as a viewer?
I think the reason the TV show works is that it’s very real. We never meet the people until the day of the show. Thousands apply to be on the show each year. There’s a cross-country tour. It comes down to a couple thousand that they actually see, and from that, there are about 300 called into the studio, and of the 300, we see about 250, and of that group, about 90 get on the air. The rest are splices. There’s a lot of prep work we don’t see beforehand, but then there’s a lot of work that we have to do afterward, a lot of due diligence and follow-up. Some of it takes a while.
Any great success stories?
It’s a hard question. The time frame for reality in business is long, but the time frame for TV is short. The best investment was probably on the U.S. show, Shark Tank: Grease Monkey Wipes. They were looking for $14,000 for 40 percent equity in the business for portable, individually packaged wet wipes, made with non-chemical all-natural cleaning ingredients to quickly remove most grease and grime.
Do the producers intentionally bring on people they know will fail?
These people are real. Our money is real. But it’s a TV show that happens to be about business, and not the other way around. So sometimes you see people the producers think will make for good TV. Having said that, sometimes they bring out people they think are absolute wingnuts but end up having a good business. On the flip side, a lot of times they’ll bring out a sure thing, and we look at it and say, “That’s the worst idea I’ve ever seen.”
It’s got to be difficult to pitch your life’s dream in front of all the bright lights and cameras and people.
It’s so intimidating. You have to walk down those stairs, and the lighting is right on you. And then we are very, very impatient. We film for roughly 20 days, 12 hours a day. Trust me, near the end we are getting a little punchy. We don’t want to be there in the studio. And we film in the spring, when I’d rather be out golfing. In the States, they don’t let us talk until people finish their pitch. In Canada, if we’re getting punchy, we sometimes don’t let people get their ideas out.
What was your expectation when you first started on Dragons’ Den?
I think the other Dragons would say, “We thought we’d find a great investment.” But I think the reality is that to be on TV, you have to be a little vain. I expected I’d see myself on TV and my daughters would think I was really cool. After six seasons, the vanity part goes away pretty quick. It’s work, but it’s also fun. What I really enjoy about it now is the human element of it. This is the best country in the world. We did this “Going Back” show, and I came here with nothing. Every now and then on the show you’ll see someone who’s on that journey. Or maybe you’ll meet someone who isn’t even pitching a product, but says that my story inspired them. That, for me, is the shining light.
Have any presentations turned violent?
We had a guy with 20 friends who wouldn’t leave. We had to call security. They thought we hadn’t given them the time of day. But the first time we really felt uncomfortable was last year, when we had someone who was very aggressive. But I’m pretty nice on the show, so 99.9 percent of the time when people meet me, they’re very nice to me. I wouldn’t want to be Kevin walking down the street alone, though! (laughs)
Was there ever a product you folks shots down that you thought afterward might actually be a good idea?
There was a product called Holy Crap—organic breakfast cereals. It seemed silly at the time, but as I think back on it, I wish I’d gotten involved in it.
It must be tough to book five Dragons simultaneously.
They always say the hardest part of the show is getting five really busy people to cut 20 days out of their schedule. Some of us think it’s crazy. And the American show is another 15 days. It’s a lot of time.
I assume the TV show has helped facilitate your other business ventures?
The show helps us in business because it’s brand recognition. From the media perspective, it’s been a dotted-line journey: The Canadian show led to the U.S. show, which led to my new book (Driven: How to Succeed in Business and in Life), leading to another show. From a business perspective, our company has gone from three people to 100 people, and from $400,000 sales to $60 million in seven years. This is our fourth straight year among the Profit 100 Fastest Growing Companies in the country.
What’s the best business decision you ever made?
Getting into the internet security business. I used to have a Ferrari, and I moved into this neighbourhood and went over to my neighbour’s house—one of my good friends to this day. Every penny I saved was to buy this Ferrari. So I invite my neighbour over, Richard: “Have a look at my Ferrari.” And he said, “That’s beautiful.” Then we walk over to his house and he has two. I said, “Wow, how hard was it for me to be able to buy one! I couldn’t imagine owning two.” And he said something that has stuck with me to this day: “Become great at something. If you’re great, the money will follow.”
At the time, we were in the very large general computer business. I realized I couldn’t be great at it, because there were so many people who are better, bigger, stronger and who have been doing it longer. So I picked a niche, which at the time was just starting out, called cyber security. This was the early 1990s. I mean, half the people didn’t have the internet, which was one of the major obstacles to selling internet security. So I said, “That’s my niche. I’m going to be the best at that.” I didn’t realize it would be an industry 18 years later. Nobody knew that. So that element of it was luck. But getting into it? That it was a good decision. We’re still growing today because the internet security business is growing faster now than it was back then!
But it couldn’t have been an easy decision. You risked your life’s savings to get into this sector.
It was all or nothing. I had two mortgages on my house. Credit cards. We burnt the ships. There was no going back.
And now it’s twenty years later. Have you a developed a secret to success?
It’s not about being hot or dramatic, it’s about execution and the million little things that you have to do every day. Sometimes the difference between success and failure is just getting off the floor one more time.