Considering the guy has a 2004 Ducati Formula One motorbike parked in the corner of his office and the crumpled hood of a sportscar he totalled bolted to one wall, it’s hardly surprising to hear Robert Herjavec say that the secret sauce in any successful start-up is “traction.” You can have a great idea, smart people, the whole corporate package. But if the wheels of a fledgling enterprise are spinning in place, he says, you’ve got a problem.
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Believe it or not, the 50-year-old star of ABC’s Shark Tank (and formerly Dragons’ Den) knows a thing or two about running a business in neutral. A serial entrepreneur with a brain for tech, Herjavec made tens of millions in 2000 by selling Brak Systems, a computer security firm he founded in 1992, to AT&T. He later worked as a senior executive at a company that Nokia bought for $225 million. Savouring a prosperous early retirement, he bought a $10-million mansion, filled the garage with Ferraris and learned to race. In spite of his thrill-seeking hobby, he quickly grew bored. So, in 2003, Herjavec launched a data-security firm, confident it would gross $5 million within a year. As it transpired, The Herjavec Group (THG)’s first 12 months in business brought in a piddling $400,000; it took another four years to reach the $5-million mark. “That,” he admits, “is how wrong we were.”
Business owners should never delegate sales. Nothing happens until you sell.
Herjavec is remarkably clinical in his explanation of THG’s early miscues: he went in assuming the market hadn’t changed since he’d exited it in 2000. He wanted to sell firewalls, but corporate IT managers had become more preoccupied with email security and data-protection services. Ultimately, a client told Herjavec he was off target. “I just wasn’t smart enough to see it,” says Herjavec with unconvincing humility. “The hardest thing in life is to build a company from the ground up.”