This Mistake Cost Me $1 Million!

There you are with your opportunity. You've beat the odds, and you don't know your numbers. Set goals you can achieve, and watch things happen, because people want to work in a winning. It's like playing for Brady; nobody wants to leave the team.

There is no business without cash flow. You might be able to last for a couple of years borrowing money, getting more investors, but if you don't have cash flow, you're going to zero. Everybody's a fan, right? Thank you! Thank you! You know, you're probably my favorite shark. I mean, your style is just much, much more truthful, honest. Like, there's no business here; there's no cash flow—I'm out of here.

So I like that. How many of you like him as the favorite? Thank you! Thank you! You know, I think in business, it's not like many other things because there's no gray zone. Either you make money, or you lose money. Pick one, and I know which side I want to be on. That's the way I look at it; that's the way I treat you.

Kevin, how important is money to a business? Because these most—how many business owners here? Okay, and how many of you work for a business? Okay, so talk about money being important and talking about it as though it's important.

The way I look at it is the reason that people pursue entrepreneurship is not about the greed of money; it's about the pursuit of personal freedom. Everybody in this room wants to be successful, and in entrepreneurship, the way you define success is you make money. Then, eventually, there comes a time in your life when you wake up and you say, "I'm rich. I never saw it coming!" Yeah, and I could do whatever I want, and most of the time what people do is work even harder because they like what they do.

That's what entrepreneurship's about—it's setting yourself free to spend your time, your day, in the things that you want to do. The great part about it is nobody can tell you what that is; it's only you. That's the whole deal right there.

What was your first score? My big—my first business was actually a television production company called Special Event Television that made all the intermissions for the hockey games in the Original Six teams: Detroit, New York, Boston, Philadelphia. We used to run around shooting hockey players during the week, and then we'd send it up to the satellite for the games on Saturday nights. That business was really successful, and I sold it, and I realized, "Wow, this is great! So you start a company, and then you sell it. Why don't I do that again?"

And that's what—would you sell that company for? Oh, it wasn't that much. I think we started it, you know, with ten thousand dollars I borrowed from my mother, and I had to pay her back, of course. Then we sold it for something like four million, and there were only three of us. But at that time, that's the first time I ever had any money at all, and I just plowed that into the next deal, and the next deal, and the next deal. And then one day, you know, we started the Learning Company. It was called Softkey in the beginning, and we sold that one for four billion dollars.

I remember the day that happened for—what? 4.2 billion? I mean, yeah, it was. But I have to tell you guys something that I'll never forget: the day, you know, there were ten founders in that company and we'd all been together since the garage. The next morning we were in Boston, and the lawyers came over, and we closed the deal, and we signed it. I looked at everybody and said, "What do you want to do? I mean, we're all stinking rich! What do you want to do?" And they said, "Why don't we just go back to work? We don't know anything else!"

And that's exactly what happened. So how long ago was that? How old were you? That was back, you know, 20 years ago, and since then I've had some great successes and some catastrophic failures. That's the nature of entrepreneurship; you just don’t know. But back then, I was an operator. I actually, you know, operated the business. I don't do that anymore; I'm an investor. I like to think that I can provide, you know, guidance to my CEOs about the things not to do because I've made plenty of mistakes.

I think that's what experience is; you really kind of want to make it the path of least resistance because not all businesses are going to work. I know that. So, you know, I'll try a great idea. But the difference is, and you know this, executional skills. There's a million great ideas out there, but the ability to execute on it and do it really hard.

So what is the differentiator between the person that can execute and the person that doesn't pull it off? Because I know you just had this experience with the 54 countries through COVID. But how can you look out in that audience and say, "Hey, who here can execute, and who is just an idea that will never happen?"

Well, let me give you some data which you may find interesting because I've been doing this for almost 20 years now. The majority of the money I've made in companies that I was part of founding and then were operated by another CEO—the majority has come from companies run by women. Now, like, I'm not trying to start gender warfare here; I'd give money to a goat if I could get a return; I don't care. But you have to ask yourself, what are they doing that is making these outcomes?

Remember, these are multiple sectors I'm talking about: insecticide companies, gym equipment companies, commercial kitchens. We have a wireless charging company. I mean, they're all different, and yet the outcomes—women are better. Why? So, we did some research; we said we got to figure this out because why don't we find out what the great companies are doing and share it with our portfolio companies that aren't doing so well?

What we discovered was, rather interestingly, if you look at women-run companies and you look at—because you have all the data—what do they forecast for sales in a quarter, what do they achieve, and then look at the ones run by men. In the case of women, they achieved their goals quarterly ninety percent of the time. Okay, ninety! In the case of ones run by men, sixty-five percent of the time. But the men had sales targets thirty percent higher.

So they were really doing what I call the testosterone stretch—really saying, "Let's go for it!"—and only hitting at sixty-five percent of the time. Now, why would that manifest itself in a difference in cash flow? You got to ask that question, right? Here’s why: in a company where the whole team consistently hits goals, the culture becomes very sticky, and nobody wants to leave. There's no staff turnover, there's no disruption in revenue, there's no disruption in accounting compliance. The team is stuck together.

In the ones where they only hit their target sixty-five percent of the time, there’s a lot of unhappiness and angst, particularly in the sales force, and there's staff turnover that's much higher. So when we put this new policy in place—you set targets that you hit—we did this three years ago now with all the companies. I don't care if there's no growth in your target, but if you hit the target, we started to save lower turnover, and now, in the companies that were not doing well, cash flow is up eighteen percent.

That's something you should—if it's the only thing you remember today, what I'm talking about: set goals you can achieve and watch things happen, because people want to work in a winning. It’s like playing for Brady; nobody wants to leave the team. The guy just keeps winning Super Bowls. That's it.

So the cash flow is just another winning indicator for you because I hear you talk a lot about cash flow, and I know it's really important to me. So why, and why is it important for the audience to measure it?

Let me be clear about cash flow: it's the only thing I care about. Okay? Because there is no business without cash flow. You might be able to last for a couple of years, borrowing money, getting more investors, but if you don't have cash flow, you're going to zero. It's that simple, and I think you have to face that reality as an entrepreneur. Cash flow is the blood of business; if you don't have any blood, you're dead.

So you might as well look at it that way—respect it for what it is—realize that's the only way. People say, "Oh, that's not true; what about this, what about that?" And I say, "Whatever you're talking about is irrelevant if you don't have cash flow."

So then how does Bitcoin relate to that conversation?

So Bitcoin—I mean, look, I was not a Bitcoin guy until very recently. I bought some in 2017, but the regulator was not. And I'm in many companies that are regulated; you know, I've got an ETF business, I have a lot of FinTech businesses, and the regulator was very much against even talking about Bitcoin on TV. As soon as the regulators opened up in Canada, Switzerland, Australia, England, they even have ETFs in Canada, and they're about to get them in Switzerland.

Now, three—three to five, there are two more just filed today, so it's only a matter of time before—I’ll tell you a really interesting story about this because I only came out three weeks ago, and I said, "Look, I've bought a three percent weighting in Bitcoin." I'd already had a bunch—three percent. So I have a rule about investing: I never let a single stock become more than five percent of my portfolio. I never let a sector, like energy or technology, become more than twenty percent. This includes real estate. I once had real estate up to thirty-one percent of my portfolio because I love real estate. Obviously, it's going through some changes on the commercial side but not residential.

My point was, when I disclosed that I'd gone to three percent Bitcoin, I never anticipated this would happen. All the companies we invest in are sustainable companies—in other words, we believe in a zero carbon footprint. We think people care about that. That's why in all of our companies, that's what we do, and my staff in my operating companies and in my own holding company are all of that ilk of that age where they care.

The first thing I started to get were hundreds of phone calls from people—investors of mine, companies that my CEO saying, "These coins you own, were they mined in China?" I don't know! "Were they mined in a way that wasted electricity?" I don't know! And all of a sudden I started saying to myself, "I better get to know," because people care about that on Bitcoin.

So now my new thing is I'm starting to invest or buy miners myself, and I'm going to just take that virgin coin, and that's the only coin I'm going to own: is it sustainable? Is it mined in a country that doesn't have sanctions on it or abuses human beings like China does? This is the new thing.

Grant—on Bitcoin, you sound much more loving than—than you.

I'm Kumbaya, baby! I'm getting this humanity! I'm totally Kumbaya because I've learned the customers—that it's not a marketing scam anymore. If you're not sustainable, if you don't adhere to what customers want, as a consumer—like one of my companies is called Blue Land. It's trying to get rid of fifty million plastic bottles where cleaning fluids are put in, and they crystallize the cleaning fluid and you use a reusable glass bottle.

They ship it to you, and there's a crystal, so you get your detergent, whatever it is, crystallized. That thing started—it was a Shark Tank deal last year—zero sales. It's doing eighty million a year now! Wow! That tells you customers give a—!

So how important, with what we just printed in cash? I think twenty-one percent of all the U.S. dollars were printed last year. Looks like they're going to load up on another level—how important are real assets going forward?

Well, they're real important. I mean, you know, I think you got to start thinking about things like real estate. There's a reason Miami real estate is up forty percent in the last eighteen months or something because it's a hard asset. Did you mention real estate? I own plenty; don't worry. But I've trimmed back a bit on office commercial—I’m waiting to see how that works out—getting more into the residential side. You know, that's a good revenue.

You know, I don't have to tell you this—like, you're the guy. Are you talking about apartments?

Yeah, yeah! This guy owns every apartment in Miami! Like, he's the landlord, basically.

No, listen, you have to have had a fantastic mark-to-market run on your real estate. It's got to be amazing!

It's been just ridiculous.

And then what happens now with everybody coming down here in the residential, the home price is going up forty—it’s just going to push into renters. I'm one of those guys; I've been living in a condo. My wife is shopping for a home; she comes back with sticker prices that I want to throw up on my shoes! Like, yeah, the stuff is insane!

Yeah, it's crazy, but that's the market, and do you think that continues?

Yeah, I do. I'll tell you why. We're going to print 1.9 trillion dollars; we're going to put it in a helicopter and we're going to just shower it down on the people. Now, you can decide if that's good or bad, but that's happening as we speak. They just signed it into law in the last forty-eight hours, so that's inflationary.

It will be; there's no question. So where does that inflation show up? Is it going to show up in job salaries? No, it's first going to show up in financial instruments. You're going to see the ten-year probably go to percent before the end of the year. That itself is not catastrophic, but it will cause some volatility in the markets.

It'll continue to accelerate home prices because people would rather own a hard asset than cash when it's being printed. I mean, it's not like working!

So when that happens, when the treasury goes up, and then when housing prices go up, that means fewer people can actually buy that house because their salaries—you didn't mention salaries yet.

So the tenure doesn't affect real estate until it gets past three percent. I don't think that's happening anytime soon, so you got a ways to go before that occurs. It doesn't even affect stock prices until it goes back—you have to think of it: when does it become competitive? When do you make a decision: "I'd rather own a treasury than a stock?" That's around three percent; that's when it starts to happen.

So we've got some time to go here, but there's no question that it's going to be a different kind of market; it's going to be a little more volatile. You've got the whole Bitcoin phenomenon; you saw a piece of digital art sell last night for sixty million dollars. The guy that made it, you know, he just—I can't even repeat what he said. He couldn't believe it! This is just something he made on a computer that somebody paid sixty million dollars for! That's because that person thought this digital code is worth more than the worthless dollars being printed, so I’d rather own that.

So do you understand what an NFT is?

I don't understand what it is.

What it is, is an image that he basically made over four thousand days of pictures of himself and other things, and he stitched together in the cloud on the blockchain. The reason that matters is there can only be one of these images; you can't copy it. It's locked and loaded, and what's amazing about it, if the guy that bought it sells it again, because it's on the blockchain, he gets a royalty because he's the original creator! This is going to happen in music too; blockchain changes everything. When you write a song and you get ripped off, it can't happen again because when you sample the song, the blockchain goes with it, and they automatically pay you the royalty! It's amazing what's going on!

So you think the artists then will go more the digital way?

I think because he’ll get paid every time he trades. Look, you could have bought a Picasso, but instead you bought this. Think about that; that's pretty crazy! I mean, look, it is what it is; it was a real trade; it was a real U.S. dollar trade. Everybody bidding was under forty years old, and they were all big Bitcoin guys.

If you have sixty million bucks, it's because you bought a ton of Bitcoin eight years ago. Would you tell somebody that's done that, though? Like, let's say somebody was in Bitcoin at five hundred bucks and they're sitting at fifty-seven thousand today. Yeah, when does a guy get off that train?

Here's the decision you got to make. This is advice that's served me well, and my mother taught me this because, let me tell you an equivalent story. A few years ago, my son, who was an electrical engineer, was interning at Tesla. I was about to go on to halftime report on CNBC, and Tesla was downgraded that day before all the splits. It was trading at two hundred thirty-six dollars, and Trevor said to me, "Dad, why don't you own some Tesla? I worked there as an intern." And I said, "I want to short that stock. It's such a joke. It's a car company trading at a ridiculous price."

He said, "No, you're the joke. You don't understand what Tesla does. I work there; it's not a car company; it's a data company. Every time a car drives a mile, it goes back to the server and it tells the resolution of that road gets better and better and better, because every mile a Tesla drives, it goes into the database of mapping for autonomous cars."

I thought, I didn't know that. He said, "No kidding! You have a ton of money; why don't you buy some of this stock?"

Because I don't have any money! So just before I went on the air, I took my phone out and I bought a block of the stock in my personal account—not our ETFs; I just bought it. Then I forgot about it. One day I opened up the thing, and I was up like a thousand percent, but it was way more than five percent of that portfolio, so I started selling it and selling it. It kept going up, and I kept selling it, and selling it.

So you're selling enough to get back down to five percent?

Yeah! I mean, it only recently corrected, so I bought it back up to five percent, but my cost base is zero. It doesn't matter what happens to Tesla now; I made a ton of money on it. That's the trick with Bitcoin: you keep it at whatever you decide.

I like five percent; right now I'm at three. If it goes past that, I sell it down. My mother taught me this game; she said this way, you never cry the blues; you always have cash flow. That's it! You can't go broke if you have cash.

So the biggest mistake you've ever made, is there a big one that stands out?

Yeah, I've made a few seconds. I remember once; I'll never forget this one. It breaks my heart; it hurts me now just to think about it, you know, because I cry like a baby when I lose money. But a friend of mine started a company; I gave him two hundred fifty thousand dollars, and he had a forecast—it was a real startup. I felt great; I'll do it. I wasn't a hundred percent into it, but he was a friend—it's mistake number one.

Mistake number two was sixty days later he comes back and says, "Look, I need another five hundred thousand to make this work," and my gut told me right then, "Don't do this! Do not do this!" It doesn't feel right. Maybe you have some stress with your friend, but five hundred thousand is a lot of money.

Anyways, I didn't listen to my intuition; I gave him the five hundred K. He went to zero ninety days later. That's seven hundred fifty thousand—please, a moment of silence for that money! Because I killed it! I killed that money! I killed it! And I'll never, ever, ever do that again!

So I don't let emotion get in the way. You see it on Shark Tank all the time. I don't care about your feelings; I care about your money. You know, if you're going to cry, you think I'm bad? Wait! A little—real world gets a hold; he'll rip you to pieces. I mean, that's the way I look at it.

What would be the best advice when somebody comes on Shark Tank? When they're walking through there, like do you know? I mean, I know a lot of that you guys—you have some time; it is TV, right?

Yeah, but if they were really coming here to pitch you right now, what is there one or two pieces of advice?

I'll give you some good advice on this one. First of all, I'm going to tell you something really strange that's happened to me. I've been doing this for 15 years. When they come out and they have that moment where they're sitting on the carpet, I'm right in front of them—like they're right in front of me—and they can't say anything because there's a guy with a steady cam, which is a camera that goes around them. That's that opening shot, and that takes about two minutes. You don't see any more than ten seconds of it, but they can't say anything, and the floor director is saying, "Don't say anything! Don't move!"

And the guy with the steadicam is going around, and they're just nervous as hell. I'm right in front of them, so I just look at them; I just look at them. I swear to you, I can tell right then, without hearing anything about their product, just looking them in the eye, the way they look back for those two minutes—winner, loser, winner, loser! Just the aura!

I'm not kidding! I'm not kidding! I really—because they can't avoid my stare; I'm the guy right in front of them, and I'm just grilling them.

What do you see? What do you see?

Do you know the confidence in their eyes? The ability to take the hit? To be in that stressful environment—twenty-six cameras, all those lights, you know, these entrepreneur sharks looking at them—and not to just fold like a leaf falling off a tree; just like almost a pushback vibe.

That is the presence you need as an entrepreneur. You need to project, "I'm here to kick ass; I'm here to—I don't care what you ask me; I have an answer for it, and I am ready to do business with you." You can tell this is something you should almost practice in front of the mirror. You have to have an aura of confidence—an aura of confidence!

Remember, even if you're in doubt, even if you're in doubt, you must project, "I'm confident! I am ready! Whatever hits me, I'm here for it!" That's what I see in the window.

Do you think that the seller in this case—because they're selling to you—should have a specific target or be open to all five players?

You know, that goes to valuation, but I'll tell you an interesting study a British professor did. He convinced Shark Tank is owned by Sony, all right? They have it on in twenty-three countries. He went to Sony and some of the producers said, "Would you let me study the unedited tape?" because I have a theory that there's a common string between the winners and the losers.

And here’s what he found, and I totally agree with this: the deals—so this is something you should remember for whenever you're doing as an entrepreneur. It doesn't matter if you're in Shark Tank; this applies to everybody. Can you articulate the opportunity in ninety seconds or less? All of the companies that got funded in all twenty-three countries in multiple geographies, in multiple languages, all were able to say, "Here's my idea in ninety seconds or less!" In most cases, less than sixty seconds.

You know, "Hi, I’m Sarah; I crystallize detergent, and I eliminate the plastic bottle, and I ship it to you to your home, and we don't waste plastic." That's like seventeen seconds—I get it!

Okay, so that's number one. Number two: if this takes longer than ninety seconds, what is it about you that married to this great idea can execute? Did you work in that business before? Did you work for a competitor? Has it been in the family? Have you failed before, and now you know what you did wrong?

So explaining why you are the right individual and team to execute on the idea. Now, when those two come together, you can see it in the unedited tape that all of the—you know, the sharks in every country sit up and they go, "Oh, I’m—you know, I have a great idea, and I have executional skills, so my risk is mitigated; I think I'm interested."

But here's the killer—the last one—number three: you have to know your numbers. How big is the market? How fast is it growing? What are the gross margins? What's the break-even analysis? You have to be able to answer those questions. You know, in the case of Shark Tank here stateside, if you don't know your numbers, I will personally put you in hell myself.

Because you—you deserve to burn in hell because you've made it—you have made it past fifty thousand applications; only maybe three hundred get considered; only two hundred twenty tape, and one hundred eighty air. There you are with your opportunity!

You've beat the odds, and you don't know your numbers? I mean, of course, you're—so at that point, are you looking at the person more than the idea? Like, how much is it person and how much idea? If there was a ratio?

Well, I'd give seventy percent to the person, thirty to the idea, because I won't invest in hot sauces. There are a million hot sauces; there's always a hot sauce every year. "Hi, my—this is my family recipe for a hot sauce." Who gives a—? Like there's no way you're ever going to make money trying to break into the hot sauce market when it's already completely saturated.

Yeah, so that whole opening thing about, "Oh, my mom's doing this." The whole story at the beginning? You don't care about any of this story, right?

That's just—do I care what your dog was called in high school? What—do you know that you were on the cheerleading team? I mean, what does that have to do with the investment I'm looking at? I mean, that's just—no. I know, but it's such a waste of time for you. You should be spending your time explaining to me why I'm going to make a ton of money!

That's—you know, I was a cheerleader; that's great, but how do I make money off that?

Yeah, like—yeah!

So is that person—that personality that we see on TV, like was that development? Was it "this is me now and that's me then," and I don't change my personality?

My mother taught me something really great that I didn't really put a lot of value on early in my career, but it's a very simple thing: always tell the truth, and you'll never have to remember what you said, right?

And what—it's—and it's very hard to do that. Most people want to please others by not telling them the truth, but that kills you in the context of Shark Tank because it makes you go on a stupid business. I'm the only one that says your business sucks; it's going to zero; you shouldn't do this; you should come up with a better idea.

And then they're crying in front of me.

Have you been wrong on any of those, where you said, "No way"?

Grant, I'm never wrong!

There you go! What's your mama tell you about me?

I just—I’m just saying, listen, at the end of the day, other investors will also choose, and the real market will choose too. But it's very interesting that entrepreneurship—really you have to be able to take a few hits; you're going to fail.

Makes you better; makes you stronger; gives you callous. When you play guitar, you want that callus; you want to get that. You know, you need that in business too.

And once you're an entrepreneur and you're—you're—you're infected with that bug, you want to stay an entrepreneur. It doesn't matter if you fail a couple of times. I would much rather invest in someone that's felt the sting of failure.

Anyways, I can't stand the arrogance. If somebody walks in and says, "You know, I'm twenty-six years old; I've never done anything, but give me a valuation of ten million dollars." What? No! I'll let Barbara do that!

So you're—you've mentioned your mom three times, yeah? Like, who had the most influence on you—mom or dad?

Well, my original father died when he was thirty-seven; he was an Irish guy, a sales guy. And my mother—what's that?

How old were you?

I was like six.

Okay, yeah, it was really tough. And my mother remarried, and my stepfather was going to University of Illinois in Champaign-Urbana. I lived in Champaign-Urbana for Bottom-Field High School.

Won't forget it; there is no colder place in February on earth than Champaign, Illinois. I can tell you that! I love the place, but I won't be going back there in the winter ever again.

But the whole point is then he took a job with the United Nations, and we started traveling: two years—Cambodia, Tunisia, Ethiopia, Cyprus. You know, every two years, a different country. And that was a huge eye-opener for me because in every country, there's expats; there's an American community there; you kind of get to know them, and we just kept moving.

And it really ended up being quite a ride. That's sort of—you know, that’s—you can't—you don't know what makes you learn the things you learn, but that was it for me.

Yeah, you—I read this article about you had some—and it’s the meanie of money—I'm not—the—there were some personalities around money or there was five—you know what I'm—yeah, I know what you're talking about. Tell me about that; I thought it was really interesting.

Yeah, you know, it's—we didn't plan any of this, by the way, we had a—

Yeah, I know; it's called five minutes stream of consciousness, which is always the best.

The essence of that is the idea that, you know, I guess the best way to put it is when you form a relationship with a significant other in your life, it's very hard to put it up this way because it's so euphoric when you fall in love, but actually you're starting a business is what you're doing.

You're starting that business to mitigate your risk the rest of your life because you're going to build a family. And what I'd like people to think about is—because I did a lot of research in this. I've written three books on men, women, and money—the number one reason that people divorce has nothing to do with infidelity. Most marriages can survive infidelity.

The reason they divorce between five and seven years, and fifty percent of these marriages fail, is financial stress. And what happens is one of the pair does not have the same objectives financially as the other. In other words, maybe they outspend; maybe they have huge credit card debts; they don't care.

But if you're not in sync with each other about money, it ain't gonna work. And that's what I try and talk about—you have to treat it like it's the third person in your marriage; you got to treat it with respect. The money—the money!

Yeah, that's the whole idea of treating it like a vertical you have to deal with. And great marriages that last thirty, forty years, you find that stability, you find that a team because, you know, let's face it—I mean, I've been married over thirty years; I love my wife, but it's not the same as when I met her.

You know, it's a whole—we've gone through the whole thing together; we've been separated for two years, but we have a family, and that’s a business; you know?

And I don't give money to my kids, and they're really pissed at me, but I don't care! They're going to have to go figure it out for themselves. But I did guarantee them if they ever have children, I'll pay the full freight from birth to last day of college, because that's what my mother did to me.

Fourth time, his mom had a big imprint on—she hated entitlement. She hated an entitled kid!

Yeah, she couldn't stand rich kids that had their—because when I graduated, I didn't know she was going to do this to me; she said to me that day from college, "Listen, Kevin, the dead bird under the nest never learns how to fly."

And I said, "What? What does that mean?"

She said, "No more checks!"

And I said, "You can't do that; I don't have a job!"

She said, "Oh yeah! I've paid all the way to this day—you've burned a lot of cash of mine, and now you're on your own! Now go figure it out!"

And I had a tough couple of years, but when I finally was, you know, successful financially, I built a trust that was designed based on her wishes—a birth-to-last-day-of-college generational skipping trust.

And my kids were four and seven. I went home that day; that was on the Learning Company exit. I basically took half that dough and stuck it in that generation skipping trust, and I went back and said to Trevor and Savannah, and they were four and seven, "This is how this trust works." And they went, "What?"

Anyways, many years later, when my son was failing in high school, he came to me one day and said, "Dad, you know, one of his friends had a trust. He said, 'How does my trust work?'" I said, "Well, if mom and I go out for dinner tonight and we get run over by a truck, you don't have to worry because it's going to pay for you to finish high school because it doesn't look like you have the marks to get into college, so you don't have to worry about that."

And he said, "Okay, what happens after that?"

I said, "Well, I'm dead, and you have no money because this trust only works until you finish school."

And he went, "Are you kidding?"

I said, "No, it's written in stone, and it's run by a bunch of guys that I don't even know—that's the deal!"

He went, "You must be kidding!"

I said, "No, I'm not kidding! The dead bird under the nest never learns how to fly," is what I told him.

And it was—it must have been the darkness that he felt, the uncertainty, the abyss that he faced.

So you want him to go to college; you insist he went downstairs, and he cracked the books from that day on. He's now working at Tesla as an engineer; he became an engineer. I thank my mother for that; that was her idea.

How important is—when you look at something, how long are you spending to make a decision on it—is it fast?

Yeah, a lot of due diligence. I have a lot of experience now, and I feel I live by that intuition. I'll tell you a story that I'll never forget and I—and I told you I now guest lecture at places like Harvard and MIT and Temple Notre Dame. I love doing it; I love doing it.

And I always tell them this story because I remember it. I don't—I remember nothing from my MBA! I went—my dad said to my stepfather, "You are so—all you did is take, you know, classes in art and psychology, and you just wanted to hang with girls in university, and now you don't know anything; you're going to starve to death!"

And I went, "Uh, he has a point there!" So I went to business school for two years, and in the last day there were eighty-six people in my class, and to my right, the guy that I've been sitting beside for two years—Barry was his name—in comes this guest lecturer, last day, and he just looks at us, like, for about a minute, and didn't say anything.

It was a weird vibe in the room; you could hear a pin drop. And he finally says to us, "You people think you're so damn hot. Here you are—MBAs—that you're going to go out there and make it happen, and everybody can't wait to see you because you know so much!"

And he said, "You know, you haven't done anything!" And I lean over to Barry and I say, "What an a**hole this guy is!" And he went on to explain that the reason you become valuable in life is you do something, you achieve something, and you get experience doing that.

But you're worthless until you get that done! It doesn't matter what you learned in school; it matters what you do! That's why many, many successful people never go to college; it doesn't matter. It's really hard to make something work in business.

And I thought to myself, "This guy is such a d**k!" Now fast forward thirty years; that guy is me! I just said that to a—this week! I did the—virtually, I did it virtually. I gave the speech to the Harvard graduating class, and I said the same thing.

And I said to them, "I hope you guys sitting wherever you are in all these countries are thinking, 'What a d**k I am,' because then I've done my job! One-third of you are going to fail; you're just not going to make it, even though you have a hot MBA—who cares? The world’s gonna chew you up and spit you out; they don't care!"

And the truth is I don't remember a single thing about any of what I learned in those two years, except the people like Barry I sat beside were now bankers all over the world, so I talk to them all the time. And that guy—he taught me an important lesson; it humbled me.

So when you're looking—like if you're going back to college today, would you be going for the education or would you be going for the connections?

Connections! You know, that really pisses off—they keep inviting me back to guest lecture, and I always say the same thing: you're not going to remember any of this crap! But all the people that are sitting with you that you worked with for two years—the connections, that's the why you do it! Because you're not gonna remember!

So when you're going into a room, Kevin, even today, like, are you looking to make connections with people in this audience here, or should they be looking for how do I connect and do business?

Business is all about connections. Business is all about respecting people, trusting people. That's why this idea of lying to people—I mean, put it in the context of the marriage. Like, the research I did on divorce when I wrote the first book—when you have a relationship of trust in business or in marriage with somebody, it's very powerful because they trust you, and they're willing to give you the benefit of the doubt.

When you get caught in the lie or you get caught cheating in business or in a relationship, you lose fifty percent of the equity of that relationship forever. Forever!

And so it would be better if you cheated on your wife to get up in the morning, get out of bed, and call her up and say, "I just cheated on you; I just know that I made a huge mistake."

It will alter the relationship, but at least she'll trust that you told her the truth. You're weak in that moment. People never do that, and they destroy their relationships. In business, it's worse. Once you lose trust with somebody, once you do something that was dishonest with them, word gets out real fast, and you can never get it back.

What is the—give him a big hand for being here, by the way! Okay, thank you! He could be doing other things today. Two more questions, sure.

Number one: why did you agree to do this? Like, why do you do things like this? Do you like this?

I really—I think there comes a point, and I'm very fortunate; I don't need any more money. I need to keep what I've got because I use it for all kinds of different purposes, including investing in companies all the time.

But I really enjoy giving back! I like to share my experiences. You may not agree with them; you may not agree with some of these things, but it’s food for thought. That's why I spend more and more time guest lecturing because I know things that these kids don't know, and I want them to be successful.

I'm all about entrepreneurship; I'm always trying to get entrepreneurs to be successful because the backbone of the American life is the entrepreneur that takes risks and builds businesses and creates jobs! And I want to be part of that! That's why I fight so much against waste and government, but that's a different story.

It's sort of this is a time now to recover from this pandemic and kick ass again, and I think this country is going to come out of this thing on fire; it's going to be fantastic!

What is the term—what does the term "10X" mean to you?

10X?

10X. It's an accelerator! It doesn't mean money to me; it means you're going to be ten times better at whatever you're doing! That's what I ask people to do. I say, "What can you do to accelerate? What can you do to be better at what you do?"

People that can perform, that have consistency of performance, are all 10Xers, and I'll tell you a practical reason. Think about it: in sales, if I can find—and these days I hire a lot of women because they're fantastic salespeople.

And the reason I love them for what they do is they actually hit their targets. They hit their targets! And why that matters to me is if I know they're going to bring two million in that quarter, I can allocate the capital properly.

So a salesperson that can actually deliver consistently is worth gold!

Because you’re allocating Bitcoin!

Yeah, whatever! You know, I’ll pay my employees in Bitcoin if they want it; that's fine with me!

But it's sort of a really interesting dynamic to talk about consistency. 10X means you're a performer and you're growing and becoming better, and you're enhancing your productivity—that's what it means to me.

If you liked that video, wait till you see my next one! Don't forget to click right over here and subscribe! I want you to have a different mindset when you purchase things for yourself, and let me give it to you in a lesson that I learned from my own mother, and I've told this story countless times, countless times, countless times.