Profile: Robert Herjavec Race to the top Robert Herjavec started life in North America as an immigrant child who struggled to fit in. But with extraordinary drive and visionary thinking, he’s speeding toward cybersecurity domination words Shelley White_ photography Finn O’Hara 46 Exceptional July-December 2013 47 Profile: Robert Herjavec W hen Robert Herjavec was 12 years old, he came home to tell his mother about a particularly miserable day at school. A Croatian immigrant who struggled with the transition to his new home in Canada, Herjavec had been picked on by the other kids and was feeling sorry for himself. “It’s one of my most vivid memories,” says Herjavec. “I was sitting there and complaining to my mother in this tiny little kitchen. At the time, my dad used to walk to work because he wanted to save the money from the bus fare. He came home and stood there as I was talking, then he looked at me and said, ‘Never complain.’” That instruction would become a guiding principle in Herjavec’s life. “It really, really stuck with me. You’ve got to just keep going,” he says, recalling a seminal moment that sparked his immense drive and extraordinary path to success. The serial entrepreneur and cybersecurity mogul is the mind behind The Herjavec Group (THG), Canada’s largest IT security company, with annual sales of US$155m. He’s the best-selling author of Driven and the recently launched The Will to Win. And he finds time to act as one of the ”sharks” on the popular US TV show Shark Tank, where entrepreneurial hopefuls attempt to persuade accomplished millionaires to invest in their companies. Last year, he was named EY Entrepreneur Of The Year® in the Ontario, Canada regional technology category. It’s a long way from his humble beginnings, as an 8-year-old fleeing communist Yugoslavia with his parents, who only had a suitcase and US$20 between them. “Sometimes you need to know when to let go of the steering wheel” 48 Swimming with sharks “The biggest influence on me was probably my dad, who was a really, really tough guy,” says Herjavec. “Starting your own business is really hard, … [but] whenever I feel down on myself I always think, ‘This is nothing.’ My dad was in jail [for speaking out against Marshal Josef Tito’s regime], left the country at 37, came to a country where he knew no one and swept floors. I mean, that’s hard.” Herjavec didn’t head straight toward entrepreneurship. He graduated from university with a degree in English literature and political science and worked in an eclectic array of jobs (waiter, retail salesman, TV field producer, collection agent) to pay the bills. When he found himself under-qualified for a job selling computer components, he offered to work for free to gain experience and, at night, waited tables at an upscale restaurant. Sensing the burgeoning tech industry could be his path to wealth, Herjavec soaked up all the knowledge Herjavec, above, stands next to the smashed-up hood of a Ferrari that he crashed. He says that having grown up in poverty, he was “always absolutely, blindly driven” When Robert Herjavec was tapped in 2006 to be one of the millionaire investors on Canadian TV show Dragons’ Den, no one predicted it would become a phenomenon that would capture the zeitgeist. “The ratings were awful at the beginning,” he recalls. But one economic downturn later, Herjavec became a bona fide celebrity on the now wildly successful Dragons’ Den, and then on Shark Tank, the hit US version of the program. As entrepreneurship has become more popular, so has the show. “I love the fact that these people have this moment in front of us, that life gives you those opportunities,” says Herjavec about the show’s contestants. “If you want to do something great in life, push yourself to find those moments that make you uncomfortable and just a little bit scared.” Things can get heated on Shark Tank. After all, the panel of “sharks” — including Herjavec, Barbara Corchoran, Mark Cuban, Herjavec tests a product on Shark Tank Lori Greiner, Kevin O’Leary and Daymond John — are potentially investing their own money. Herjavec says what infuriates him most is business owners who aren’t in command of their facts. “I get irritated at the ignorance of some people who think getting money from us is the end result,” he says. “We did an investment one time with the other sharks and we asked the person, ‘What are you going to do with the proceeds?’ We were expecting them to say they were going to drive down costs or hire salespeople, and the lady said, ‘I’m going to buy a new car,’ so we were like, ‘Whoa!’ “We shoot 12 hours a day and 20 to 25 days in a row, and I worry, ‘Why am I here? Why am I not at work?’ Because I really love my business.” Herjavec has ended up with some lucrative deals, though, his favorite being Travis Perry’s ChordBuddy, a device that helps people learn to play guitar. “I really believed in him, and it worked out great. We went from a business that was generating US$100 a day to US$4.5m now. It’s unbelievable,” he says. When it comes to deciding which contestants will get his investment, Herjavec says it’s not just about that million-dollar idea. Personality counts too. “At the risk of sounding arrogant, of all the sharks, I think I’m the best guy at running and growing a business,” he says. “So I always think I can help others if they have the raw basic personality skills. The right entrepreneur can make an okay idea a great business.” Exceptional July-December 2013 49 Profile: Robert Herjavec Treasured wisdom: “Every day, someone wakes up with the sole intention of kicking your ass.” See page 52 for more advice from the judges of the US National Entrepreneur Of The Year Award he could. In 1990, he launched his first company, BRAK Systems, on a shoestring out of his basement. Over the next 10 years, he grew the business into Canada’s biggest internet security software provider. “I was always absolutely, blindly driven,” he says. Herjavec went on to sell that company for a reported US$100m to AT&T and a second company to Nokia for US$250m. He then briefly retired, spending three years with his wife, Diane, and three young children in their sprawling mansion in Toronto’s exclusive Bridle Path neighborhood. But two successful ventures did not quell Herjavec’s famous drive, and he founded THG in 2003. THG’s office in North Toronto speaks of its founder’s bold spirit. Two of the four walls are floor-to-ceiling glass, with a spectacular view of the city below, and Herjavec’s large office is filled with the toys and trappings of a successful tech tycoon. A motorcycle is perched in one corner of the room near a custom-made Fender guitar emblazoned with the Shark Tank logo. On one wall is a bookcase full of trophies and awards, while another is dominated by a huge painting of a shark suspended in a glass tank. There’s also the smashed-up hood of a Ferrari that Herjavec crashed while motor racing. With his passion for racing taking him to tracks around the world, Herjavec was recently named the Ferrari Challenge Series’ “Rookie of the Year.” He says it’s yet another way he pushes himself to succeed. “As life gets easier for me in many ways, I try to continue to make it hard. Car racing is the ability to control your emotions in the middle of a hurricane. “Every time we start a race, there’s always a part of me that says, ‘What am I doing?’” he continues. “People think courage is the absence of fear, but I think courage is the ability to work through the fear.” One fear Herjavec faces with THG is being able to stay ahead of the curve in the ever-challenged field of security technology. THG provides secure content management solutions for large companies, from email security to intrusion prevention to database security. In an era where security breaches can affect millions of consumers, anticipating the next hack is essential. Left: The Ducati motorcycle in Herjavec’s office is testament to his passion. As he becomes more successful, racing provides another way for the entrepreneur to test his nerve and learn when he can “let go of the steering wheel” 50 “People think courage is the absence of fear, but I think courage is the ability to work through the fear” “This is the only technology that, the minute it’s invented, someone in the world wants to break it,” he says. “When someone invents a new phone system, nobody goes out and tries to break it — they try to make it better. “But as soon as someone invents a better way to do online banking, someone’s trying to hack it. So that fundamental challenge never goes away. You’ve got to be on top of this stuff all the time.” Customer service is also a cornerstone of THG’s success. Herjavec says building a thriving business isn’t necessarily about coming up with bigger, better, newer products all the time; rather, it’s knowing how to provide value for your customers. “People misunderstand value,” he explains. “People want big, bold ideas and it’s very rare that you’ll invent a better mousetrap and make a million dollars. When we started out, we were selling the same product you could buy from 20 different people, but we were still different. We would answer the phone on the second ring. Every one of our competitors had automated voicemail. We always answered it live. “Value comes in the nooks and crannies of your business that aren’t sexy, that aren’t exciting, that are really mundane. That’s where the opportunity is.” When it comes to how he motivates his staff, Herjavec says being a visible presence in his offices is of huge importance. “A long time ago, I read a saying, ‘You can never see the CEO too much,’” he says. But as an “action-driven guy,” THG’s leader says he can sometimes create crises where they don’t exist. “When our business is doing well, … I feel there should always be something I need to fix,” he says. “So what I do now is try to step away from the business during these periods. Sometimes you need to know when to let go of the steering wheel.” THG continues to expand its reach through acquisition and by moving aggressively into infrastructure, servers and storage. Herjavec sees the company growing to US$250US$500m in revenue in Canada, “but we have to go to the States; the market’s just so big,” he says. No matter how far the business goes, Herjavec can never forget where he came from. “I say to my wife, ‘If I had told you 10 years ago that we would be here now, would you have believed it?’ and she says, ‘Not in a million years,’” Herjavec reflects. “And we always think about the future and wonder: ‘What would be extraordinary 10 years from now?’” Viewpoint Navigating choppy waters of change Colleen McMorrow, Partner and Canadian Strategic Growth Markets Leader, Ernst & Young LLP The test of exceptional entrepreneurship is the ability to work through fear and make breakthroughs in tough times. No entrepreneur can afford to be complacent, nor be afraid of the rough seas of change. Since the financial crisis took hold five years ago, entrepreneurial strategies have had to evolve. Companies that want to thrive in this “forever changed” operating environment need to focus now more than ever before on four key areas. Customer reach You can’t grow without customers. Meeting customers’ changing and diverse needs depends on knowing who they are, where they are and what they want. Think global and go where the customers are. There is no comfort in the growth zone and no growth in the comfort zone. And put technology to use. Innovations in services and operations are as important as product innovations in meeting future consumer needs. Innovation must be embedded into the very foundation of a company’s business model. Cost competitiveness High wages and the costs of doing business, as well as significant new regulatory burdens on various sectors, are set to impact profit. But cost-cutting initiatives have already been exhausted for many, so where do they go from here? This new environment calls for nimble workforces to replace cumbersome bureaucracies, low-overhead marketing to replace splashy campaigns, creative and non-traditional systems of financing to fuel growth, and risk-taking tempered by circumspection. Operational agility Many companies see room for improvement in bolstering productivity within their operations. Entrepreneurial businesses taking advantage of productivity opportunities that currently exist — whether in talent, advanced technology or structural changes — can position themselves to seize opportunities during volatility that their slow-moving competitors cannot. Stakeholder confidence Maintaining strong stakeholder relations is an important part of business and, for many entrepreneurs, an important part of securing financing for growth. This is especially important in today’s market. Telling and selling the growth story and meeting expectations are more important than ever before. More information For more information, email [email protected]. To learn more about opportunities for entrepreneurs in Canada, visit ey.com/ca/eoy Exceptional July-December 2013 51