Editor's note: We asked noted entrepreneurs to reflect on what they wish they'd known starting out. Kevin O'Leary is most well-known as an entrepreneur and celebrity investor on Shark Tank.
O'Leary launched SoftKey Software Products from his basement in 1983. When sales took off, he started to buy out his competitors, including Mindscape and the Learning Company. In 1999, he sold SoftKey to Mattel Toy Company for $3.7 billion. It was one of the largest deals ever in the consumer software industry.
Shortly after, he started O'Leary Funds, a mutual fund company, and has since launched O'Leary Fine Wines and the O'Leary Financial Group. While he's got plenty of projects to stay busy, O'Leary is still an active shark on Shark Tank, the ABC hit show that earned him the nickname "Mr. Wonderful."
Here, O'Leary reflects on his failures and triumphs--and what he wishes he knew if he could start it all over again.
What's the most important lesson you've learned about being an entrepreneur?
You have to listen to that inner intuition. My biggest mistakes were ones where my gut said "no" but I just said, "screw it, I'm going to do it"--and I lost millions. But every time I've listened to my intuition, it's been right. And when I've ignored it, it's been very painful.
[Intuition] is a gift entrepreneurs have, and they have to listen to it. You can get advice from mentors, but at the end of the day, it's your call. You have to listen, and if you don't hear it, your compass is off and you have to find that mojo again.
You go through many hardships as an entrepreneur. Which ones were the hardest, and taught you the most?
There are also interpersonal lessons in life. I was an operator at many of the companies I worked in--particularly ones I started with college friends. As those companies grew, I had to make changes and break up long-term friendships for the sake of efficiency.
The business always comes first, and I've had to make tough calls. I've breached some very long-term relationships, but that's just the way it is. I've fired friends--you will do that in your life if you're an entrepreneur. That day will come, and if you can't do it, you're not fit to be a leader.
What was the best advice youreceived in your early years?
I had a mentor who once said that in life you're going to face some incredibly tough days with really difficult challenges. And when those days hit, he said, you must stay focused on the original objective of the business. So even if something horrific just happened, it's just noise. Don't listen to that noise.
I've always, always remembered that. There's a tremendous amount of noise in today's world--constantly barraging you--and great entrepreneurs can filter all that out of the equation. And you have to be able to focus and find a way to achieve your objectives for that day, that week, that quarter, even as noise comes piling into the equation. You have to learn to live with that ebb and flow, good and bad news as it cycles through.
What hurts entrepreneurs the most?
Here's the one I find that really hurts entrepreneurs a lot: They don't know their numbers, which is the language of business. If you don't know your numbers, you better have somebody with you who does. You're going to have to know the answers to questions like what are your gross margins, how many competitors do you have, how fast is the market growing, is there an international market? People want to know that you understand the business you're in, and the market you're competing in.
How should young entrepreneurs educate themselves?
The best thing you can do is go work for somebody else for 24 months in a field you really enjoy. Go see how it works. I worked for the network shooting sports television all across the East Coast for three years before I got into the software business, but I was definitely learning working for some giant companies.