Famous as a seven-season veteran on the US version of Shark Tank, Robert Herjavec has two lesser-known connections to Australia – his Dancing With The Stars partner-turned-girlfriend, Sydneysider Kym Johnson, and his plans to use us a base for Asia-Pacific expansion of his $160 million cybersecurity business.
The self-made immigrant Canadian is currently in Australia talking with ASX 200 CIOs about Herjavec Group, a managed security services group he founded 11 years ago, which now turns over $150 million Canadian dollars a year.
“You guys have just proved you know how to deal with sharks,” he jokingly contributes to the national Mick Fanning conversation.
Herjavec admits it would be harder to get meetings without the exposure afforded by seven years on one of the American ABC network’s highest-rating shows, considering his privately-owned company is still a minnow compared to competitors like IBM, Dell, AT&T and Singtel.
“But I’d rather have my 300 people, all focused on the one goal, than 100,000 people all over the map,” he says.
“When you get breached – and with your employees all interfacing with you now on three or four devices, you’re gonna get breached – we’re going to respond quickly and effectively.”
Ironically, Herjavec says the likes of Herjavec Group would probably do poorly at a Shark Tank pitch.
“Shark Tank is definitely entertainment first, business second. Products do well, especially consumer-oriented products, because Americans love to buy online so much, far more than Canadians do,” he says.
“But concepts and services, they don’t always come across so well.”
Herjavec’s most successful Shark Tank investment has been one of those consumer-oriented product plays: Tipsy Elves, an etailer of patriotic garb as well as ‘ugly and inappropriate’ Christmas sweaters.
“You can get three reindeers doing it, Santa peeing in the snow and so on” Herjavec enthuses.
Herjavec’s private investment company has estimated a 12 per cent internal rate of return for the 45 deals he has invested in during his time on the show, either individually or as a partner with other Sharks, most frequently fellow Canadian Kevin ‘Mr. Wonderful’ O’Leary.
Late in Season 6, Herjavec had the surreal opportunity to go into business with Pat Boone, the crooner of 1950s hits like ‘Love Letters In The Sand’. Herjavec made an on-air $5 million offer to buy into Boone’s ‘AirCar’ project, contingent on the company securing exclusive rights to make and distribute its compressed-air powered car across the US.
However Herjavec revealed to BRW that those rights could not be secured from the AirCar’s inventor, Guy Negre, and that the Hawaii-only licence that had been negotiated was not a compelling proposition.
“Franchises or licensing deals for me have always been a difficult investment,” he says. “Unless you’ve got full ownership of your product it’s difficult.”
Shark Tank might not reflect the typical entrepreneurial experience but Herjavec says its most valuable role is in demystifying business.
“Most people don’t succeed because they don’t know what to ask or how to ask it, and they’re afraid to ask it,” he says.
“I think Shark Tank shows that anybody be a successful entrepreneur, you just have to find that one thing you’re good at and work hard at it.”
In a sign of how well it’s educating its audience, Herjavec reveals that the seventh season of Shark Tank, due to screen in the US from September, moves beyond the straight equity deals that have been the series mainstay to date.
“In Season 7 we’re doing complex debentures, loans, royalty deals…when you consider that in Season 1 they told us we couldn’t use the word ‘valuation’, because they thought that would be too complicated for the average viewer, it shows you how we’ve brought the audience with us
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