Robert Herjavec’s family fled political persecution in the former Yugoslavia when he was 8 years old, arriving in Canada with one suitcase. From those humble beginnings, he founded and sold two technology companies before turning 40 and is currently a television personality – or “shark” – on the hit show “Shark Tank,” spending the majority of his time in Los Angeles. Although he’s most known today as an entertainer, the 53-year-old Herjavec remains a businessman at his core, still active as chief executive of his Toronto cybersecurity firm, Herjavec Group. He recently spoke with the Business Journal about how companies can make successful acquisitions, industries he never imagined he’d invest in and how Los Angeles is actually a better city for business than some people think.
Question: Herjavec Group has grown largely through acquisitions. We’ve seen a lot of M&A activity around Los Angeles recently. How can companies make the right deals – and maybe more importantly avoid the wrong ones?
Answer: Acquisitions are difficult. I think the statistic is that 85 percent of them don’t work. We’ve done nine acquisitions in the last eight years and they’ve all worked with varying degrees of success. I think we’re very clear about what we want from an acquisition. A lot of people make acquisitions hoping for growth, and I always say hope isn’t a great strategy. We’re either after a specific customer base or a specific product. And we have reasonable expectations and a good team to execute. The one thing I’ve learned is that you can grow organically – and we do – but if you want to get somewhere quickly, acquisitions are a great strategy.
Big businesses are paying more and more attention to cybersecurity given some of the high-profile breaches, but many mom-and-pop companies might not be following suit given their limited resources. Should they?
We deal with larger-scale enterprises, but I think if you have a presence online today, you’ve got to be protected. I compare cybersecurity to having a burglar alarm for your house. Maybe if you don’t have a lot of stuff to steal, you don’t think you need one. But I think you’d still want to protect yourself.
You recently moved to Los Angeles. What are some of the most pleasant surprises you’ve had so far?
It’s a very vibrant business community. There’s a large amount of Fortune 500 companies in the Southern California area, which a lot of the rest of America doesn’t realize, and there’s a great educational base to draw technical talent from. There’s a reason Silicon Beach is becoming a high-tech powerhouse. It’s a great place to live, it’s a great place to work and there’s a great base of talent.
I’m sure one thing you don’t love about L.A. is the gridlock, especially given your passion for auto racing. As a newcomer, is it really that bad?
People in L.A. complain about traffic a lot, but I live in Toronto the other part of my time, and the traffic there has become awful. In Toronto, you just never have meetings at certain times of the day. But the traffic here has been bad for so long, everyone here just knows that and there’s nothing we can do to change it. It’s just part of the environment that you have to adapt to. But I do love the canyon roads. I’m a big car guy, but I’m also a big motorcycle guy, and those are some incredible roads to ride on.
You’re here because of a TV show, but how can local businesses better get the message across that it’s not just an entertainment industry town?
I think it’s hard, because the rest of America sees us as Hollywood. But it’s just a piece of what L.A. is. L.A. is a vibrant, bustling business community and I think that there’s a permanency to doing business in that environment versus that of Hollywood. Hollywood is very glamorous and very attractive. A very small amount of people find success in that industry, but the vast majority does not. But I don’t think we’re doing a good job getting the message across that L.A. is very good for business.
What are some lines of business you invested in because of “Shark Tank” that you would never have thought you’d be involved in?
I never thought I’d be involved with Christmas letters or paddleboards or food products, but I am and I love it.
You mentioned food products. We’ve seen a lot of deals around here recently involving food companies. What about the food industry seems to draw so much investor interest?
There’s just a lot more companies in the space. Everybody needs to eat. Also, I think we all think we’re experts on food because we all consume the products – not like paddleboards. Unless you paddleboard, you probably don’t have an opinion. But everybody seems to have an opinion on food products, so they get people excited.
Is your ornery “Shark Tank” co-star and fellow Canadian Kevin O’Leary, aka “Mr. Wonderful,” the same person in real life as he is on TV?
He’s not as nice in real life. (Long pause.) I’m just joking. Kevin’s a great guy. He’s brutally honest, which I admire about him. I think we all wish we could say the right thing at all times but we don’t. And Kevin’s just brutally honest. You need a dose of reality at times. And Kevin does a good job of delivering that.
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