Cold Hard Truth: Learning From Dragons Den’s Kevin O’Leary On Business, Money And Life Part 4

September 19, 2011

Initially, a venture like an employment website would no doubt be capital intensive as the software would have to be tweaked, event with the founders doing much of the startup programming.  They would need to hire many more highly skilled programmers domestically who often make 6 figure salaries (forget about outsourcing something like this overseas).  So this business would need to have some serious cash reserves to really get rolling and that’s what these angels investors have in spades.  Nowadays banks will not touch new small businesses (especially dotcom startups) with a ten foot pole.  

With internet based businesses a great idea whose time has come soon spawns many copycats.  So being among the first to market and fast to market often decides who will be successful and who won’t be.  For instance, Groupon was the first to make it big amongst the Deal of the Day/Deep Discount type websites.  Currently there are over 500 competitor websites including 100 in the US alone.  Launching in 2008, Groupon was founded with $1 million in venture capital.  Only a year and a half later the company was valued at $1.35 billion.  Forbes Magazine recently stated that Groupon is “on pace to make $1 billion in sales faster than any other business, ever”.

I’ll quote some words of wisdom from Kevin O’Leary’s book “Cold Hard Truth: On Business, Money & Life”:

“Time is a scarce commodity.  It is the true universal currency because you can’t invent, manufacture or buy time.  And not a day goes by when I don’t lament that fact.  Therefore, I have no time for people, places, or things that waste it….

I received a pitch from a smart-sounding sales guy about launching O’Leary Funds in India.  It was an interesting proposition, but midway through the conversation, obstacles began to surface in my mind … I realized that the hurdles we’d have to overcome were too high …. I interrupted the pitch and told the sales guy that, for now, expanding into India was not a viable plan … He asked me if we could still book lunch, if only to lay the groundwork for a possible future collaboration.  I said no, we wouldn’t be meeting for lunch.  He implored me.  I said no again.  There was an uncomfortable pause … he thanked me and got off the phone.

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