Kevin O’Leary Talks Boston, Shark Tank, Wine, and Deflategate
Kevin O’Leary only wants the best. So when the waiter at Taj Boston arrives at our table, O’Leary doesn’t look at the wine list; he simply tells the young man that he wants the finest bottle of chardonnay in the house. It’s a Wednesday afternoon and O’Leary is decked out in his patented black suit and black tie. Earlier in the day, the investment mogul delivered a speech in the Financial District, and soon he’ll head to L.A. to start filming the eighth season of ABC’s Shark Tank, which premiered in September. When our waiter returns, he’s holding a 2015 bottle of Jordan. Almost on cue, Mr. Wonderful stares him down as if he’s a contestant on the show and turns on that signature charm: “That is your best chardonnay?”
Do you consider yourself a Bostonian?
Here are the facts: I’m an Irish citizen. I’m a Canadian citizen. I moved down here in ’92 and had my kids here. I spend 181 days of the year in the U.S., and when the weather gets good in Canada I go back there. But I also live in Geneva for a period of the year. I live in L.A. for three months. So I’m all over the place. But Boston is a really special place for me, particularly down here, because I like the Common. I can walk across that park and raise 100 million dollars. Think about it. There’s no town like Boston.
How often do people stop you on the street and pitch you ideas?
Every day, but I tell them right away, “Don’t pitch me.” The rules of Shark Tank are that we can’t see the deal before it airs and [contestants] have to sign a deal saying they didn’t ever pitch a shark. We’ve had situations where people have walked onto the set and some shark says, “You talked to me last week, you’re off.” There’s a big misconception that we know about these deals beforehand, but we don’t.
Is Shark Tank the ultimate racket, given that you’d be doing the same thing if the cameras weren’t around?
Yeah, it’s crazy. But here’s the difference: The real game of Shark Tank is zero customer acquisition costs, and the best model is [Hanover-based] Wicked Cupcakes. The company was not making any money and nobody had ever heard of it. The cost of them acquiring a customer online was higher than the value they got from selling cupcakes. But they got on Shark Tank, their customer acquisition costs went to zero, and their business increased tenfold.
Speaking of baked goods, in one recent episode you tore apart a gluten-free pancake mix. Is your beef with gluten-free foods or with the trend of gluten abstinence?
There’s a lot of bullshit in that market. A food product that tastes like shit is going to fail on the market. That pancake stuff was like eating sand, and it was absolute shit. We make gluten-free cupcakes at Wicked. We spent two years getting it right so it didn’t taste like shit. It was very expensive and we had to have a gluten-free kitchen to do it. But I think that market is overblown—it’s a bunch of people thinking they can lose weight by eating gluten-free. It’s not true.
If you were a fledgling entrepreneur, would you pick Boston again or head for the West Coast?
I’d put Boston up against Silicon Valley any day. There’s a trillion dollars in a square mile here. What always attracted me here is the talent pool. You’ve got MIT for engineers and Harvard for business leaders. I mean, it’s just jammed with talent.
Could there be too much talent, or perhaps too much young talent?
No. You want seasoned managers and you want really strong talent coming in. You want both, and you’ve got both here. The problem with Boston is the costs are insane. It is one of the most expensive cities to operate in in the world. So a lot of our families are out in Waltham or farther out—and then you’ve got to drive in this insane traffic every day and start shifting your hours just to accommodate the insane traffic.
Have you ever been tempted to buy an NBA team just to mess with fellow Shark Tank star Mark Cuban?
No, because in the NBA you don’t make money operating teams; you make money selling them. So you’ve got to sustain losses even when you’re winning, and I don’t like losing money. So the premise is you buy the team for, let’s say, $600 million, and a decade later it’s worth a billion. That’s the investment thesis. It’s been working so far, but I think at some point the law of large numbers is going to slow it down.
So what do you splurge on?
My guitar collection is pretty amazing. I mean, there’s a lot of stupid money in those things. I used to be a shareholder in Fender, so when I got on Shark Tank, I convinced Fender to build two Shark Tank guitars. There are two serial numbers, 001 and 002, and I own them both.
Do you cringe when you see someone playing a rare guitar?
No. You have to play them or they lose their soul. I have all my guitars hanging up in one of my offices—they’re all in tune and I just pull one down and I play it.
If you were an actual shark, which species would you be?
Great white, for sure. I don’t mind eating small stuff. I’m okay with that.
You’re a huge Patriots fan. How did you handle the news of Brady’s four-game suspension?
I was insanely pissed. And I wanted him to appeal it right to the Supreme Court. The whole thing is bullshit; everybody knows it.
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