7 Lessons from the “Shark”
“Finding opportunity is a matter of believing it’s there.” ―Barbara Corcoran
My husband and I have a friendly competition. The rules are simple. Read a book a week, and aim to only read books that you would re-read. One of the first books I finished this year was Barbara Corcoran’s excellent autobiography, Shark Tales. The Shark Tank investor has some fantastic stories and underlying principles that are applicable to every entrepreneur and intrapreneur out there. Here are seven of my favorite takeaways!
1. Everybody Wants What Everybody Wants
“The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it…” ―Thomas Sowell
Drumming up scarcity with a touch of wonder and excitement was one of Barbara’s secret weapons in real estate. We see companies using this method all the time, whether it’s countdown deals to force the customer to act quickly or “limited quantity” ads, this strategy is time-tested. Humans can be horribly lazy, and sometimes fear of missing out (scarcity) is the only way to inspire action. Barbara created scarcity in many ways, including when she was hiring by stating, “Only one desk available” in her help wanted ad, and while trying to offload 88 apartments that hadn’t sold in 3 years. To sell the 88 apartments, she had to create scarcity, a sense of wonder, and increase demand from buyers. So, she kept the property details a secret from the potential buyers and her employees! In the meantime, she made sure to make statements like, “I’m a little concerned that we might not have enough to go around,” and, “This is not a sale open to everyone and it will not be advertised,” and, “The sale is limited to one per customer.” On the day of the big sale, she released the address and apartment information to her employees and had a line down the street with more buyers than apartments. Even the guy who got the last-choice apartment came out happy when he saw a long line of hopeful buyers who had to be sent away.
2. Internal Competition Can Kill a Business
“If everyone is moving forward together, then success takes care of itself.” ―Henry Ford
Establishing an environment where employees collaborate (instead of competing) is one of the most crucial components when starting a business. We’ve all worked around those people who want to hoard their knowledge, shortcuts, excel spreadsheets, codes, or tricks of the trade to make sure that everyone around them has to learn “the hard way.” Those types of environments can make teams fall apart and prevent companies from realizing their full potential. To prevent this internal competition, Barbara set up a company listing policy that required salespeople to post all new listings in the office files within one hour of getting the property. This rule set them apart from the “every man for himself” practices that went on at other firms. It prevented employees from hoarding the best properties for their special customers and hiding them from their “competition”(aka, their coworkers). It definitely may take more resources to build a workplace where everyone has the appropriate incentives to collaborate, but the rewards are worth it. Establishing an environment of collaboration is what propelled The Corcoran Group to dominate the New York real estate market.
3. Organization is Key
“For every minute spent organizing, an hour is earned” ―Benjamin Franklin
Barbara’s first business in real estate ended with her parting ways with her ex-boyfriend and business partner. Instead of letting this set her back, she used it as a setup for an even larger opportunity. She took stock of all her experiences with the previous business and wrote down what worked and what didn’t work. Organization was one large area that the old business was surely lacking. One certain days, the employees would be scrambling around trying to find a floor plan or apartment listing while their customer was waiting impatiently in the lobby. To fix this, she formed a color coding system from day one to differentiate the real estate listings (studio apartments on white cards, one bedroom apartments on yellow, etc..), and set up a system to keep a sufficient amount of floor plan copies in each real estate listing’s folder. Next, she set up stakes and incentives for her staff to make sure they abided by the new rules (“..no one will receive listing credit if the new apartment is written on the wrong-colored card.”). By investing her time up front to create organized systems and best practices, she was able to build a well-oiled machine that paid off in perpetuity.
4. Compensation and Customer Insights Are All Around You
“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” ―Sam Walton
Every interaction with a customer provides valuable insights into the business, and can be used to build compensation structures for your company. After splitting ways with her ex-partner, Barbara decided to deploy a more data-driven commission structure for her new employees. She created a new form that went with each commission sheet her agents completed that asked detailed questions about how that person made the sale. “How did the customer find you? What’s the age of the buyer? Are they single or married? Were they referred by someone?” Commissions were not paid unless the questions were carefully filled out. The rigorous practice might have been annoying to her agents at first, but it led to more sales and predictive knowledge about their customers that they had never previously had. Customer data is always surrounding us, but sometimes we have to look at our current processes to figure out a way to extract the knowledge.
5. Fake It ’Til You Make It
“No one can make you feel inferior without your consent.” ―Eleanor Roosevelt
Barbara noticed in the newspapers that many real estate companies were being quoted for releasing different market reports. So, she gave herself permission to write and publish, “The Corcoran Report.” At first, she only had 11 data points to go off of, and calculated the average apartment sales price in NYC for her first official report. Some people (including her employees!) gave her a hard time about releasing such a simple report with such sparse data, but it didn’t matter. She gave herself permission and got started. Soon, reporters began calling to hear her opinion and thoughts on the market. The Corcoran Report went on to become a key piece of intelligence for the real estate community and was consistently featured in the New York Times. When getting started, many people feel like a fraud. They feel nervous to publish their book, write a new article, speak up at a company meeting, or create wireframes for a new app. But just remember, you’re not alone. Every great person that has succeeded before you has experienced those same thoughts and feelings. All you have to do is start, and be willing to learn and improve along the way.
6. Your Employees are Always Watching
“The mediocre teacher tells. The good teacher explains. The superior teacher demonstrates. The great teacher inspires.” ―William Arthur Ward
The fastest growing companies with the hardest working employees often have one thing in common: they all see the long and hard hours their founder(s) are working. Employees notice and share everything. During the stock market/real estate crash, Barbara had to take on a second job while continuing to lead her company through the storm. She worked a crazy amount of hours and funneled all of her after-tax income back into her company to keep it afloat. When her employees discovered this, they became inspired and banded together to help the business pull through. Real leaders inspire through action, and your employees are always watching.
7. Never Let an Opportunity Slip Away
“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” ― Winston S. Churchill
Opportunities don’t chase or close themselves. It can be tempting to reach out to someone once and then never follow up. Oftentimes, when we put ourselves out there, self-doubt can creep in: “Why should I even follow up? They said ‘no’ or didn’t respond which also means ‘no.’ I should save myself the embarrassment and move on. I don’t want to look desperate!” If you’re going to succeed, you have to eradicate that inner-voice and the habit of giving up way too soon.
When Barbara landed the opportunity to be on Shark Tank, she signed the contract and prepared to move to Hollywood. But right before she was about to move, she received an email from the producers saying they had decided to hire another female shark, and they wouldn’t need her. At first, her mind went into overdrive with doubts, insecurities, and sadness. But of course, she didn’t accept their answer. She wrote them a well-crafted email that suggested that both women sharks be invited for the tryouts, and reiterated to the producers why she’d be a great fit for the show. “No” doesn’t always mean no. Many times it’s just the starting point for closing the deal.
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Also, I’m always looking for the next book to read, so let me know if you have any recommendations! :)
