Race to the top

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 colleen.m.mcmorrow@ey.com.
To learn more about opportunities for entrepreneurs in Canada,
visit ey.com/ca/eoy
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