LOST PINES, Texas–Instead of listening to pitches for investments, Mr. Wonderful has a pitch of his own on everything from where credit union leaders should be investing to the economy to AI to personal lifestyle changes, including an app they should download.
Kevin O’Leary, well-known for his role in the center chair of the television show Shark Tank, who is also a venture capitalist and investor, shared a wide range of insights during remarks to Catalyst Corporate’s Strategic Summit, beginning with how the world in which credit unions compete is different from where it was just five years ago.
O’Leary, who made his money primarily by founding and selling the software company SoftKey (later renamed The Learning Company) to Mattel for $4.2 billion in 1999, said the U.S. economy has been on a journey for the last 36 months, due in large part to the behavior changes driven by the pandemic. It’s those changes, he said, that have driven sufficient economic growth to offset political turmoil, tariffs and other uncertainties.
The massive shift to remote work, he said, was accompanied by incredibly fast development and adoption of technologies ranging from Zoom to home delivery apps to digital services that in about nine months, had educated “100 million people” on new ways to be efficient at both home and work.
Skipping the Middleman
For big retailers like Walmart and Target, the ability to skip the middleman distributor for many product sales boosted profit margins, with the broader market seeing direct-to-consumer sales growing to 52% of sales from 27% of sales.
“But wait, just like an infomercial, there’s more!” said O’Leary, drawing laughs. “When you sell directly to the consumer you also get the data…and all of a sudden you’re building a direct relationship with your customer…The first time they bought it was the first date. The second time they purchased it because their experience was good, that was the beginning of the an elopement, And by the third time, you’re married to me…That’s extremely profitable if you can maintain it. And then they become your advocate and start telling their neighbors.”
In short, said O’Leary, “This has changed everything for everyone, forever.”
Wicked Good Lessons
In a lesson that is quite applicable to credit unions, O’Leary said that what all of that creates is communities, and when people form communities, “something magical happens. It’s not about you. It’s about the brand and the expectations.”
To illustrate how the world has changed, O’Leary shared the story of the mother-daughter co-owners of Wicked Good Cupcakes in Massachusetts, who went on Shark Tank 16 years ago seeking an investment for a company that shipped cupcakes to buyers inside of glass jars. O’Leary said their cost of shipping alone was “insane,” and all of his fellow Sharks rejected their request for an investment, yet “they just kept talking.”
O’Leary said he finally agreed to invest $250,000 in exchange for a deal that once he got his money back he would also earn 50 cents per sale in perpetuity, the first-ever loyalty deal agreement on the show. (The daughter told the mother not to accept the deal because O’Leary was “evil.”) But with no other offers, O’Leary was soon an investor in Wicked Good Cupcakes. When the eight-minute segment appeared on Shark Tank, the company suddenly had 90,000 orders—and a shortage of Mason Jars.
Going Viral
Sales remained strong and then exploded when the daughter posted a video of an “dark” argument she had with her mother, and it did something that was new at the time—it went “viral.” Executives with Disney, which owns ABC on which Shark Tank airs, wanted the video taken down. “We’re selling 9,000 orders a minute,” O’Leary responded.
It was the beginning, he said, of the power of social media and brands. Wicked Good Cupcakes was eventually acquired by Hickory Farms.
The emergence of social media, O’Leary said, has flipped the script, and suddenly talented content creators and videographers are the most valuable asset a brand can have.
“Every seven days you know exactly what you paid and exactly what you made in gross margin based on the campaigns they ran for the 48-hour cycles,” said O’Leary, who employes numerous, highly paid content creators.
Real Kevin Vs. AI Kevin
Artificial intelligence (AI) has only driven greater attention and value in social media, according to O’Leary, who shared a video of a sophisticated AI studio in the United Arab Emirates in which he filmed a pitch for his watch company, and which also created an AI deepfake of himself that he challenged attendees to distinguish from the real him.
He touched on several other examples of how AI is significantly reducing costs, replacing everything from the time needed to conduct business analyses to extras in movies and films who are no longer needed.
In his case, O’Leary has made an investment in Fly Guys, a company that uses drones to conduct roof inspections of big box stores, a task that used to be done manually and slowly.
“What I wanted to show you here was the impact of AI and how fast it’s moving,” he said. “Why do you think the market is at an all-time high? Because it anticipates all 11 sectors of the economy are going to take and make use of AI to enhance productivity and increase margins….It’s going to displace a lot of people…but that’s not a bad thing when you make a whole industry more efficient, because prices will go down and we’ll be more competitive.”
Changing Gears
O’Leary, who said he has 54 companies in his venture portfolio, changed gears and shared examples of what makes some people more successful (sometimes wildly so) than others.
Under the category of “maintaining optimal personal productivity,” O’Leary addressed more personal issues, including diet, exercise, sleep, and the need to “constantly force yourself out of your comfort zone.”
O’Leary has become a disciple of measuring how much protein he consumes each day, saying most people under-consume protein.
“You want 1 gram for every pound of your weight,” he said. “Nobody gets that. None of us eat enough protein.”
Download This App
He urged attendees to download the app Yuka (seen at right), a free mobile app that scans barcodes of food and personal care products to provide a health impact score based on their nutritional value, additives, and organic status. O’Leary said he has no investment stake in the business.
“Scan any snack you’re about to either stick in your mouth or any food, take a picture of it and it gives you a score between 0 and 100. Do not put anything in your mouth that has less than 60,” he advised. “You do this and it will change your whole life in 10 weeks.”
When it comes to exercise, O’Leary said he is religious about biking and working out every morning, and he has begun using an Oura ring to measure his sleep quality.
Now Starring in the Discomfort Zone
O’Leary said he has learned from a female CEO who leads a company in which he invested that does pet DNA testing and which sold for $100 million that you “have to spend some portion of every single day outside of your comfort zone to exercise the brain. We’re all so used to doing what we do and we’re so comfortable doing it. We never step outside of our comfort zone—ever. This is a huge mistake. You want to try things you’ve never tried before.”
In O’Leary’s case, that includes appearing in an upcoming movie with Timothe Chalamet called Marty Supreme that will be released on Christmas Day and in which he has a significant role
“I highly recommend that whatever it is you thought you have wanted to do, go do it,” O’Leary advised.
One Response
Great read!!!