Kevin Harrington 00:00
He made as much money on all of those deals as he made on his own stuff. And God bless him, he turned my life around because we, all of a sudden, we were doing hundreds of millions of dollars in sales. And I was in my 20s. I mean, I was a kid.
Joe Hamilton 00:48
Joining me today on SPX is one of the nation’s foremost entrepreneurs who has been successful across the decades, asking on TV Shark Tank and numerous other endeavors. Kevin Harrington, welcome sir.
Joe Hamilton 01:09
Yeah. Well, I’m hoping learning some stuff from you because you got the knowledge. Okay, well, I want to start kind of going back. We’re going back. We’re going to ultimately talk about a new program that your foundation is on, which is going to be really interesting, as far as teaching young entrepreneurs, help them learn some of the Garner, some of the wisdom that you’ve gathered over the years. When you grew up, you were very entrepreneurial as a kid, as a teenager. And do you just remember entrepreneurialism being in your DNA from day one.
Kevin Harrington 01:09
Thank you, Joe, thanks for having me. Look. Look forward to fun session here.
Kevin Harrington 01:41
Oh, so actually, think there is some DNA there, because my father was an entrepreneur, and he came back from World War Two. He was a fighter pilot, and flew 160 some missions over there, and he came back. He’s like, What am I going to do? He’s like, own, my own business, right? Because he never, he didn’t graduate from college and but he was in the bar business, so he had restaurants and bars and nightclubs. And when I was a teenager, I started working for him. And so I was working literally a 40 hour week at a young age, because I would go after school, and then weekends, I would work lot hours over the weekends, Fridays and Saturdays and Sundays the whole weekend. And so I’ve worked a 40 hour week. And I’d say, Dad, my check was $36 after taxes, a buck an hour minus taxes. Okay. I said, you know, I feel like I’ve worked a lot more than what I got. And he says, hey. He said, You need to own your own business. So he really was my first mentor. And so I started when I was 15, a driveway ceiling business in Cincinnati, Ohio, and in the wintertime, it would get cold. If you had cracks in your asphalt driveway, the water would freeze triple the size of the cracks get nasty, and if you didn’t protect and beautify, your driveway just got battered and ugly over the longer you had it. So I’d knock on doors, and I learned a little trick, because the first time I started I was 15 years old, so I was on my bicycle, okay? And I’m like, I pull up on my bike, and people, is that your bike, son? I’m like, Yes. They’re like, Oh, well, who owns the company me? And they’re like, Well, okay, well, I didn’t make any sales, right? So I hid the bike in the bushes, went down the neighborhood, and I realized that if I didn’t have some credibility, I wasn’t going to get it be able to be successful. So I figured out if I could do one job in the neighborhood, super cheap, like, almost give it away, but have the ability then to get pictures before and after, put my sign across the driveway, and then knock on the doors and say, See that driveway over there? We did that one. How would you like us to do yours? Much different conversation. And literally, I got 15 of the 20. And these, some of these people had been slamming the door in my face, and it’s all about, how do you make the sale? And so I learned at an early age. I learned selling techniques. I learned that was that first tip that I figured out was because people didn’t want to do business with a 15 year old, right? So anyway, it was I started driveway ceiling, and then all through high school. I had to pay my way through high school, so I was using the profits to pay high school. Then I went to college, and I said, Well, wait a minute, I got to pay, you know, my I need, I need an apartment. I need tuition, books, meals, insurances, cars and all of that. It’s a lot of money. So I said, I can’t do this on just a part time summer business, ceiling driveways, because that you had to have nice weather. Said, What is year round heating and air conditioning? Okay, so I said, I’m going to start a furnace and air conditioning companies called it tri state heating and cooling. And I was able to buy that name, which had been in business 25 years, closed down. I bought. Name for $1 and was able to say established 25 years prior. So here I was, I’m in the heating and air conditioning business, and I had a lead source because I tested this before I started the business. I went to the courthouse and I got all the new homeowner transactions. If you just bought a new house, you got a phone call from tri state heating and cooling, offering you a free furnace cleaning as a welcome gift to the neighborhood. So we would send out somebody to clean their furnace, show them how to work the thermostat. And while we’re there, we’re like, Hey, this is an old, old furnace. Maybe you’d like one of these more efficient spark ignition furnaces that doesn’t have a pilot light that burns 24/7 right? I don’t know if you’re familiar with that, but we had a new technology furnace that was very efficient, and so I’d go to school all day long. My guys would be doing free furnace cleanings. But at the end of the day, I get to the office and oh, you’ve got eight leads to follow up on. Mrs. Smith wants a furnace. Mrs. Jones wants an air conditioning system. The husband over here wants a humidifier or an air cleaner, this or that. So I had great lead source, but I also was able to cut deals with subcontractors. So it was literally, it was a very lean and mean operation. It was me and a couple sales people closing the deals at night, and then the subcontracted installers, and I had some telemarketers, so I had less than 10 people, and we went from zero to a million dollars in business our very first year. And this is back in the 70s. So that’s the equivalent, really, of creating a $5 million business. And so that was a lot of fun. We were installing, you know, eight to 10 jobs a week. And I was 19 years old. I mean, it was crazy. And I was like, for carrier and Bryant and fetters. I was one of the top dealers in the city after being in business for 12 months. And why? Because I was installing air conditioning systems all winter long. Because if you bought a house in the winter, we still went out, cleaned your furnace and still went and pitched you a deal on an air conditioning system because it was off, you know, time. So that was a load of fun. But anyway, one day, after a few years of running the business, I realized it’s very labor intensive, and one day, I get a phone call. It was a friend of the family. I was installing a furnace for woman called Kevin. You got to get over here right now. Like, what’s the problem? She says, you’ll see when you get here. I go to her house. She’s 10 minutes away. She says, come on down in the basement. Go down in the basement. My installer is snoring up against the furnace, and there’s a half empty bottle of Jim Beam next to him, okay, with the cap off, okay. I’m like, Okay, I see what you’re saying. We got a problem. So I had no idea the massive amount of issues getting the right labor subcontractors, etc. So I ended up saying, you know, I can sell, but installing is a whole different world. I’m going to sell this. And I sold the business, and then I sold the business. And I’m sitting now, I had cash from the sale. Was not a bad amount of money for young kid. And I went to a business broker, and business broker had 200 businesses for sale, and I’m looking at, I’m saying, Well, you got pizza parlors, delicate essence, flower shops, manufacturing, import, export, anything that I’m thinking about. But what do you have information wise? Oh, I’ve got the books and records, the financial statements, the tax returns on every one of these businesses. And I’m like, Well, geez, you got the leases. You’ve got the cost of goods, the this to that, the percentage, it was an education all unto itself. So I said, You know what I want to do? I want to be a business broker, because I had to drop out of college in the meantime, because I couldn’t, I had 25 employees and were doing, you know, a lot of business. So here I am a college dropout. And actually, after I sold the AC business, I had no business, no job, no nothing. And my mother was like, Kevin, I told you, you needed to finish college. Okay? And I’m like, Mom, I’m an entrepreneur, so I started business brokerage, and now I’m selling hundreds of businesses, but I’m learning a lot. I’m learning the mistakes that people made when they built the business. I would sell a business, the new owner would come in, and they take over. A year later, the new owner would call me, Hey, I got to sell this. I’m not making any money. Come in. I’d say, well, bring your financial statements, and I’d say, Okay, well, last year the company did 40,000 in advertising. This year you did none. He said, Oh, I don’t need that expense anymore. I just cut out all ads. Mike, well, guess what? That’s why your business dropped by $200,000 in sales. Like, dude, what are you doing? You can’t just open the doors and expect people are going to come in. So this is the early days of me becoming really I call myself a customer acquisition specialist. Okay. Well, it started when I was 15, knocking on doors. That’s how you acquire customers. That’s one way. Well, the other way is telemarketing. Right? Well, now it’s I then tell the story how I got into the as seen on TV business. But that was all about customer acquisition. Was as seen on TV. Put something on TV, get the orders, you’ve acquired the customer. So that really was the name of the game, Joe, because many people, it’s funny, because people would start a business and they think, oh, yeah, I’m just going to open the doors and people are going to come, but no, you have to market. What makes you different? Why should they use your dry cleaner, as opposed to the guy that’s a half a mile away that maybe is giving a better price or a better service, right?
Joe Hamilton 10:40
And that experience, what the initial unlock was for credibility is a precursor to just the power of celebrity and power of brand, which brings instant credibility or instant relevance and saves you that trouble of having to hide your bike and go through that because you have that. And then, before I get to some interesting things to talk about, as far as you basically did acquire customers in a way that you could just plug in product after product after product after product and keep that customer base. So you did the hard part first, and then, you know, plugged in the products afterwards. Yeah, but there’s some interesting ceiling driveways at 15. The restaurant business is notoriously labor intensive, a lot of pain, not a lot of love coming out of it’s really hard to make it. And people do the 80 hours a week just to make a few bucks. You know, I sold baseball cards because I collected baseball cards. How it didn’t sound like your your dad coming for me to fire pilot into the food business was, let’s say construction and trade minded. How did you at 15 decide that ceiling driveways was where you wanted to be?
Kevin Harrington 11:37
So when I talked to my dad, he said, You got to start a business. I said, What? He says that, I don’t know. Okay, so he just said, you got to do it, you know. So sometimes you get some good advice, but you need a little help. So I actually talked to a few friends, and I said, Look, you know, because there’s another part of the story I didn’t tell. When my mom, her father was a was a bank president, and my dad was an entrepreneur, and so we had banking and entrepreneurship, but my mom was like, I don’t want you to be an entrepreneur. I want you to go into banking. I want you to be a businessman, you know, and so, but when they bought a house, they bought a house in a nice neighborhood, but it was the cheapest house in the nice neighborhood, and then in this neighborhood, they built all these multi million dollar mansions, and all these big executives moved in. So the chairman of Kroger’s, and the chairman Kroger’s was a Cincinnati based company, chairman, CEO, and so his kids went to the same school that I did. And so when those kids were growing up, every Christmas, they were getting all these fancy presents. And of course, when one of my buddies turned 16, he got a, it was a $10,000 sports car back then, 10 grand. That’s like 80 grand today. So I’m like, did he pay for that? Or where did he get that? Oh, my dad got that for me. You know? Well, my dad wasn’t buying me anything for 10 grand. You know, he didn’t, didn’t have the 10 grand. So this is why I was motivated to be able to keep up with my buddies who were getting the stuff given to them. But I said, they can get it given to them, but I want to work for it, you know. So when I turned 16, I paid cash for sports car and so that was part of the motivation. But yes, it was when I mentioned that I wanted to be and start some kind of a business. To a few people. One of my friends said, hey, look, and he had failed in one of his years, so he was in the same class as me, but he was a year older and he was 16. And he said, Kevin, you’re going to need you know? He said, He says, I have a connection for you to a driveway ceiling company. And he says, it’s a great business. It’s easy, and I can get us a supply deal. So he said, but I want to be part of the deal, so I actually made him a partner. And also he was the guy I bought a truck. I said, at 15 years old, you can own a truck, but you can’t drive it, okay, so, but I had a 16 year old that could drive. And so now I had a partner, a connection to this, to the business, and a truck that we could get around, because we had had to pick 55 gallon drums of driveway ceiling stuff, because we were out doing, you know, eight or 10 jobs a week, and pretty successful little business, but you just kind of network a little bit back in the day, you know, today, when people think about starting a business, there’s hundreds of different things that they come up with. And there’s digital this, and there’s selling products over the internet. And, you know, the Internet gives you so many opportunities. We didn’t have the internet back in the in the 70s and the 80s, and, you know, so I had to get very creative, but it was more like lawn mower services, driveway, ceiling, labor, things, heating and air, those kinds of things. Home Services was something easy to start, but in today’s world, kids have many, many opportunities that we didn’t have back in the day.
Joe Hamilton 14:54
Yeah, and what’s your you mentioned taking that sort of by necessity that partner you. Throughout the years. What is your take on having partners? Do you know only when necessary? Or do you think…
Kevin Harrington 15:08
So my partner, we were 50/50, partners, and he had brought the supply connection, so that was valuable, but I did all the sales. And then when we went to do the actual install of the product. This guy wasn’t good, okay? Because I said, Look, I’m doing the sales. I want you to kind of be the head of the application, right? And so I’m watching him, and he’s slopping stuff all over him. Give me that squeegee. So it turned out I was doing all the sales, and I was doing all the install, and he would just drive and watch. And so after a couple of years of that, years, yeah, I made it two years because he had, again, the supply. But by that point, I was done with his supplier, who was very expensive. I found another supplier, and then I just said, Look, I’m just going to do this myself. Okay? Because I do all the work. I do all the sales. Thank you. It’s been nice being in business with you. So he kept going and I kept going, but we had two separate companies then after a while, and we’re still friends to this day. I mean, this is 50 years later. You know, he’s still alive in Cincinnati, and I, I see him every now and then, we talk about the beginning days when we were partners, and then we split up, and his sons, to this day, still operate a driveway and blacktop ceiling business in Cincinnati, Ohio.
Joe Hamilton 16:28
That’s amazing. So as you bring young entrepreneurs kind of under your tutelage, do you recommend they have partners?
Kevin Harrington 16:35
That’s a very good question. This is what I recommend. I don’t recommend that they just out and out on the front end, give away half the company, like I did. What I recommend is this, because, you know, as I run through airports, people will chase me and stop me. Kevin, one thing, I’m a young entrepreneur. Give me one piece of advice, okay? And if I only have one thing to tell somebody, I say, if you’re going to start a business, if it’s your first business, you need to surround yourself with experts. Create a dream team of advisors. So what I call is creating a board of advisors, get some people that can counsel you, that can mentor you. And I was a young entrepreneur, and I was able to connect with older people because they’re like, Kevin, you’re doing a million dollars a year, and your first year in business from zero. And I mean, when I went to carrier to start my heating and air conditioning business, you know what they told me? They said, kid, you’re 19 years old, you have no credit, you have no capital. But why would we make you a carrier dealer? And I said, because I’m going to be your biggest dealer overnight, and they’re like, Okay, great. Well, this is what they did. They made me buy all my product through one of their other larger dealers, and he made a markup on everything, and they said, We’re not going to set you up as an open account. And so after three months, I was doing as much volume as the other supplier. Was because we were selling 10 jobs a week. And so they said, Hey, we’re going to go direct now. And I went right to the top as one of the top carrier dealers in the city. And so I was getting good advice. I owned 100% of that company. I didn’t need any partners, but I was utilizing some mentors, and in the Cincinnati, I had a lawyer that mentored me. I had another advisor. It was invaluable. The advice I got from these guys on how to setting up the corporation. Is it a sole proprietorship? Is it a corporation? Is it LLC? Is it, you know, all these kinds of things that I needed to do, getting trademarks and things like that also. And so I say, surround yourself with experts. And let’s put it this way, I help and I do it. I’m on advisory boards and Main Boards about 25 different companies. The main boards are a lot tougher and more exclusive. And I don’t do you know. I’m on NASDAQ boards, New York Stock Exchange boards, penny stock boards. But you know, those can be very time consuming. I mean, when I was on I joined Celsius, the energy drink company. It was a penny stock, 10 cents a share. And I’m like, is this stock ever going to be worth anything, right? Well, yes, it became worth a lot at one point. But the bottom line is, is that when you’re doing all of these kinds of things, it’s good to have some advice from people that have been there and done that.
Joe Hamilton 19:28
Yeah, it seems in the in the VC world, early stage world, you know, I’ve seen rubrics where they score investments and one founder is a negative, they actually take points off two to five seems to be the sweet spot. And once you get over, like 4567, and up, then they take they start to discount again. But it definitely seems like in the traditional VC world that single founders are seen as a negative.
Speaker 1 19:49
Yeah, because when you do it the first time, you’re going to make a lot of mistakes. I mean, when I open, we eventually transitioned. I was a business broker selling 1000s of businesses. US and and then we got into franchises, and we had the franchise America show, and we were sell, literally selling 1000s and 1000s of franchises and existing businesses. A lot of fun. But I then started putting them on television. And so one night, I had ordered cable television. I’m at home watching the 30 channels, you know, because I don’t do you remember, before cable, we had four or five channels, and then cable hit and in the early days of cable, it was 30 channels, not 500 like we have today, but you had discovery and ESPN, MTV, etc. And so I’m going through all 30 channels, and I’m like, Oh, wow. 24 hours of sports, awesome movies, HBO, yes. ESPN, sports, HBO, MTV, music, CNN, news. I get to the last channel there’s nothing on. It was discovery. And so I called the cable company. Said, What’s wrong with discovery? I thought that was a great channel. Oh, it’s a new channel. They only have 18 hours a day budget. They don’t have a budget for 24 hours. And I said, So what’s happening with the other six hours? They said, Oh, we just put bars up so you know that there’s no programming. I’m like, oh, okay, can I come talk to you? And I did, and that’s when I started putting businesses for sale on the local cable channel. It was the own, your own business show, and I’d have a dozen business you know, hey, do you want to own your own business? You want to be an entrepreneur? Own a pizza parlor, own a delicatessen, own a flower shop, tune in to the own, your own business show on Channel 30. It was Discovery Channel in Cincinnati, Ohio, and we started selling businesses, generating leads, right? And then I said, Wait a minute, if I can sell $100,000 pizza parlor, can I sell a $20 Knife Set? Can I sell a Tony Little fitness product? Can I sell a Jack LaLanne juicer? And I said, Yes, I can. And that’s what we started doing, infomercials for products, and that was the transition. This was in the early 80s. I sold the heating and air business. They started the business brokerage, and then I didn’t have to sell the business brokerage, because it was just cash flow, and I kept it going. But I then started the infomercial industry, which started in the early 80s in Cincinnati, Ohio. You Yeah, so what was the driving force? I mean, obviously you understood selling. You understood advertising. You were doing it for the AC, heating, cooling business. You were doing it to advertise the business you had for sale. Got a lot of experience seeing other people advertising. So a from a show standpoint, from a entertainment hook, you know, how intentional were you about that craft and how much did you think about that? Or was it just a straight attention arbitrage opportunity that you saw cheap attention plug in? So in the beginning, we didn’t know what it was going to be, because we said, you know, went to the cable company and I said, Look, you’ve got all this downtime. Let’s figure out what to do. I’m in the business, brokerage business. So we said, they said, Well, look, why don’t we shoot a show? You host it, and you put some of your business owners on they talk about their business and generate leads. I said, Okay, so let’s see. So this is the deal they cut for me, because what happened is, when cable first launched, the city of Cincinnati required the cable operator who got an exclusive contract. Okay, we’ll give you an exclusive under one condition, you build a studio for local entrepreneurs, and then you create one channel for local entrepreneurs. It’s called local access, and you have to give the studio to let them use it at the cheapest price as possible, and then give them best access to that airtime on that local access channel. And now a lot of people don’t realize this here in Tampa, Florida, my cable operator, for example, I get frontier channel 47 on either frontier or spectrum. I have two homes, one spectrum, one’s frontier channel 47 is local access you’ll see high school football games and local entrepreneurs doing stuff on there. So I said, Look, I want to do a 30 minute show. Give me a price. So they came back with a quote. We’ll we have the studio. You come in and you bring all the talent. And so we’re going to three camera shoot. We’ll film it, we’ll edit it. We’ll put music three camera, the audio, the filming, and then we’ll air it 30 times on the down time channel discovery. Okay, so they’re going to give me 900 minutes of air time, 30 times 30 and then they’re going to film it. What’s the cost? All in, $800 okay, so I said, I’m in. I said, that includes the production. I thought that was the airtime budget. No, that’s all in. I bought the $800 package. We did $26,000
Kevin Harrington 24:50
in commissions of sales of businesses off of that $800 block. I said, I’m in a new business now, because we were generating leads out of like two bucks a lead. Instead of 30 bucks a lead, and because I used to run in the newspaper, now I’m running on television. Plus these business owners were like, Hey, I love being seen on TV, right? So that was the transition, was I went from selling businesses really generating leads on for the sale of businesses. I had a sales department. I was a broker, and I had 14 salesmen. So I said, now I need products. So I started going to the trade shows. I went to the Chicago houseware show, the Philadelphia Home Show, this to that one day, I’m watching this guy hit a knife in his hand. He’s cutting through a Coca Cola can, through a muffler, through a pair of sneakers. And I’m watching. I’m like, What the heck is this guy doing with the knife? It’s the Ginsu knife. He said, right. And so I had never heard that before, but by the time he was done, he’s like, the Ginsu is 1995 and I’m like, that feels a little expensive. And he says, But wait for the first 10 people a second. Ginsu absolutely free. Two for 1995 But wait, there’s even more for the first 10 people, six free steak knives, a paring knife, a bread knife, 10 knives, 20 bucks, and he says, I only got 10 sets. So, yeah, he’s only got 10 sets. 110 sets. Anyway, I bought a set of knives. So did everybody else and a bunch of them. But I get talking to the guy, and his name was Arnold Morris, and Arnold, I said, Arnold, that pitch was just unbelievable. I said, You made all this money. Says. He says, kid, what do you want? You’re bothering me. I’m busy. I’m like, you know? I’m like, Yeah, but I got an idea for you, how long you been doing this, Arnold. He says, Oh, I’ve been doing this for 15 years. I said, the gin zoo knife, same thing, same pitch. Yes, how many weeks a year? Oh, I’m in Philly this week. I’m in Iowa State Fair next week. I do 40 to 45 weeks a year, the same words all day long. I said, What if you could film it once? And instead of in front of 10 people, I take it to 10 million people on television. And he said, what he said, I he says, If you can do that, let’s shake hands right now. We have a deal. And we did. I paid him 50 cents on everyone sold. We sold 10s of millions. I mean, it was just unbelievable. Arnold made a fortune. And so then Arnold said, Kevin, when you were at that show, did you see Billy Mays, the Oxy clean guy? Did you see Wally Nash? Did you I’m like, No, I you know, he says, If I bring you all the other people, can I get a little commission on their deals too? I said, Absolutely. We signed a contract. He made as much money on all of those deals as he made on his own stuff. And God bless him, he turned my life around, because we, all of a sudden, we were doing hundreds of millions of dollars in sales, and I was in my 20s. I mean, I was a kid, and so it was just a total game changer the infomercial business. We really mean to this day, I’m known or called the inventor of the infomercial, which, you know, is kind of an interesting title, because inventing is more about products, but we kind of invented a new business format of reaching customers. But what were we doing, customer acquisition, okay, and we were the experts at that. Wow, just logistically. Then, how are you fulfilling those orders? That’s a lot of knives. I mean, this guy was just carrying a case around to right? So this is where it got a little more challenging, okay? Because this is what I found out the company that Arnold was buying all of his knives from a little company in Toledo, Ohio called quick cut. And quick cut was part of a bigger company that was owned by Warren Buffett. So here I am selling Ginsu knives owned by Warren Buffett. Okay? And so we had to get phone centers, fulfillment centers, customer service centers, banking, credit card processing, all of that stuff. So I had to order product in bulk. I’d order 10 to 20,000 knife sets at a time. They’d ship them to my warehouse. We would take the order on the phone, the order, then we’d print out the phone. Center would print out a label, ship it over to our fulfillment center. Fulfillment center would slap the label on it, ship it, and then if it got returned, they were able to process the return so we could issue a credit now that in the US worked pretty good, because you got a box, it comes into fulfillment, put a label on it, ship it out, okay, and the product’s good. Ginsu worked great. But one time we had a product coming in from China was electrical, and 30% of them never worked. So you plug it in and, oh, what’s wrong? Okay, so, oh, my god, massive customer service problems, right? So you’d run into different issues with different things, but I’ll tell you where it got. Very, very sophisticated. Joe was so I had a library of infomercials. And this is 1989 Nine. So we’re going back a few years. Had 150 infomercials, and all of them had gone like this, bell shaped curve, huge success. And then on the backside, just like I said, just like a movie, when a movie comes out, it’s getting big traction, it’s in all the theaters. And then what happens? You’ve either seen it or you haven’t, but it’s it’s done. And then what do they do? They go international. And so I said, Wait a minute, movie guys, they go to Europe. They dub that movie into dozens and dozens of languages. So I said, where do they do all of this? Oh, it’s called the Cannes Film Festival, where they go can France and the movie companies take out a booth, and then the TV stations and movie theaters from all around the world walk the show to buy content. And so I said, You know what? I’ve got content. I got 150 infomercials, but mine’s different. When a TV station buys a movie, they buy it, they pay for it, because that’s how the movie makes money. They sell the rights into the local market, and they, every time you air it, you’re going to pay X amount of dollars, and then they have to sell the advertising around it to make a profit. Well, what was I doing? I had a show that generated cash. I said, I will pay you to run my programming, and everyone we were the talk of the show the very first time we went. We’re in Cannes, France. I got a 10 foot by 10 foot booth. Across from me is Rupert Murdoch sky channel. He’s got, it’s a million dollar booth. But I go over and I talk to them, and they said, Rupert’s gonna want to talk to you, because he goes dark at midnight on a bunch of his channels. I think we could probably put your shows up after midnight. So we got into Rupert Murdoch, and we got sky channel, and then we got into a RT Arab Radio Television, five channels of 20 countries of distribution in Arabic. So we were we take the Tony Little infomercial, dub it. We didn’t need to dub it in England because it was English, but dub it in Arabic, dub it in German, dub it in Spanish, dub it in boom. And we did a dub for 1000 bucks. So we were able to take a library, dub it and then run it in the local markets and have a whole new life of action. And in some cases, these shows just took off, and we were doing massive sales. We did more sales outside the US than we did inside the US with the same infomercial. So we uncovered the global aspect of infomercials. Now, the reason I mentioned all of this because you talked about fulfillment, and how did you do all that? Well, it got crazy when we went to Europe. Let me give you an example. We’re on Sky channel. We’re up. It’s on satellite, so we’re running all over Europe, 16 countries, but Rupert Murdoch is really only focused on the UK. Sky channel. Was a UK channel in English, and we’re running in English all our infomercials and but I’m getting calls from Germany and Austria and Italy and France and Spain and Copenhagen and all over the European market. And I called them up, and I said, guys, I said, I did 2000 orders over the weekend for all the channels, but half of them came from outside of England. And they said, Oh, yeah, we’re on satellite all across Europe. In fact. Do you want to reach all those people? I said, Yes, well, guess what? When the video track goes out, there’s one video track across all of Europe, but we can lease you audio tracks for the local market. So this is 1990
Kevin Harrington 33:39
I’m a kid going into Europe, running hundreds of 100 plus infomercials all across Europe. But in Germany, they’re listening to it in German. In Holland, they’re listening to it in Dutch. In Italy, in Italian, in Sweden and Swedish, and all these local markets. But then I had to put fulfillment centers, phone centers, in the local language, in the local markets. So I ran my infomercials and but I had to run around all across Europe. It took me about six months, but I went country to country to country, setting up phones, fulfillment, banking, everything, because at the end of the show, The Show ran again. It was one video, so I had to put 16 phone numbers if you live in Germany, call this number if you live in Holland, call this number if you live and because they then talk to someone in German, and they talk and then we had a fulfillment center in Germany that shipped it immediately, right to the consumer. So overnight, became a global company running Europe, Latin America, Arabic Asia, etc, licensing and selling our products in the local languages all around the world. Wow.
Joe Hamilton 34:53
I mean, this feels like a precursor to both Amazon and home shopping network.
Kevin Harrington 34:58
We were in business. Long before Amazon. I mean Amazon, I think Amazon started five or six years after we did, yeah, and we were long before QVC, HSM was starting around the same time. But yeah, we were definitely ahead of the curve.
Joe Hamilton 35:14
And somewhere in there, the brand, as seen on TV, emerge, yes. And so talk about why that sort of lumping together made sense. Probably, I’m assuming some kind of distribution into physical stores?
Kevin Harrington 35:24
Yes, yeah. So as seen on TV became when people ran their shows and then they talked to Walmart and Target, and Walmart would say, Well, how do we let people know that this is the one that’s been running on television for the last year? Oh, we’re just going to put as seen on the one you saw on TV, right? So we did it. And funny thing, everyone started using that logo as seen on TV, but nobody applied, and it was in such massive use, nobody could actually own it, okay, but I said you can’t own the trademark, but what about the.com so I owned, as seen on tv.com, and that was the big kahuna. I mean, we had 2000 products doing millions of dollars a month without advertising one dime. And so it was an awesome asset. Someone had owned it. I acquired it, paid fair amount of money for it, because I knew that just looking at the numbers, it was going to be doing some massive sales for many, many years. So I owned as seen ATV Inc, and at seen atv.com and we ran that for years and years and years, all over the world, different languages, different currencies, etc. And it was an awesome business.
Joe Hamilton 36:43
At the end of the day, you know, you think about the Ginsu knives. It’s a pitch in a brand is what you’re actually selling, right? Because the knives are somewhat, I mean, you might be able to change them out, and nobody would know the difference on the actual physical knives. So as you started to, you know, from a first principles standpoint, look at what helped why you chose a product. You know, what made it work? What was sort of your rubric for figuring that out?
Kevin Harrington 37:10
On picking a product and making it work? Yeah, so picking a product that became the art of the deal, okay, that’s almost like picking a movie. You know, what book would you want to produce a movie on? Right? It’s you got to know what the hot buttons are. But basically, we focused on consumer goods. So products and we focused. We didn’t do financial products. There was a bunch of guys in the early days that did get rich quick stuff, we stayed away from that. Then there was other guys that were doing beauty, we stayed away from that. We were doing gadgets. We were doing kitchen products, knife sets, mixers, blenders, choppers, grills, you name it. And then we got into fitness. But we started developing a checklist of things like Ginsu was very demonstrable, cutting the can and doing the muffler and the sneakers into this, into that, and then taking the paring knife and making, taking an apple and making a bird out of it. It was very demonstrable. But so it was visual, it was demonstrable. And then we said, well, you know what? It’s sort of, there’s like a magical transformation occurring here too. And so, like with Tony Little, when we started doing fitness, I said, Tony, why do you think this product is going to be successful? And he opens his drawer, and he pulls out this file, and he had 30 testimonials of people he had before and afters of 30 people that had been his patients, his clients, whatever you want to call it. And they had lost 80 pounds, 50 pounds, 60 pounds, 100 pounds, 20 pounds, whatever what. But we had the the magical transformation. So we found that certain things, I mean, when Billy Mays was doing OxiClean, he showed you this dirty you saw, like a washing machine that was clear. It was glass and it was dirty, and he would add OxiClean and just move it around, and the water went clear. It was like, Oh my God, that’s what it’s doing to the clothes, right? So it’s like, Give me something visually transformational. Solves a problem and solves it in a unique fashion. So we create a checklist of things. I have a 10 step thing that I kind of it all just happens in my mind when I’m taking pitches. In fact, you know, you mentioned Shark Tank earlier, when I finally got the call from Mark Burnett and got on Shark Tank, Mark said, what is it? What kind of things are you going to be looking for? And I said, I’m a product guy, and if there’s a transformation, then that’s a big thing. That’s that’s a plus. There’s one thing that I will say, though, because we thought we were experts in picking products, and I’ll never forget, one day we were filming a product, and we had just really high hopes for it, thought it was going to be a Grand Slam. And a couple days before the shoot, a guy calls me and said, Look, I got this. The thing, and would you be interested? I looked at it. I thought, You know what? What are you doing on Thursday? He says, What do you mean? I said, Well, I’m filming Thursday from 9am to 3pm if you got there too, we’ll set you up and we’ll film from three to five your spot. Okay? So he said, really? I said, Yeah. I said, I’ll finance it. I’ll do it. I’m already there. So we said, Okay, well, you know, my team is like, why do you jam us with another deal? I said, Look, we know the first one’s going to be a hit. Let’s see if we can pull two out of two, right? Well, guess what? The first one bombed, the second one did $280 million in sales, and we did a two hour shoot. Cost $3,500 to film it. It was called the hand hammered Chinese wok. And it was the hand pounded wok that had ridges that when you’re cooking, not everything just slides down to the bottom and cooks all at the same time. If your vegetables cook sooner, the meats need to cook longer. You roll them up on the sides, and it’s holding it. Those ridges would hold the food. And it was a cool concept, and that hand hammered walk just went off the chart. So we failed two out of three times. So I just want to, I just want to say, folks, this is not 100% business. I mean, in fact, if you fail two out of three on average, I could go 10 for 10, lose, right? Lose 10 for 10 before I’d hit number 11, so now I’m one for 11. You eventually get it the one out of three. But you know, it doesn’t mean that you do two that don’t work, the next one’s guaranteed to work. No, you still might do failures all the way down. So anyway, we learned a lot, and picking products was credit.
Joe Hamilton 41:37
And was there ever a time when you could diagnose? Did you ever give give a second shot to products where you died?
Kevin Harrington 41:42
Yeah, few tweaks. So what we did, and this is why I live in St Pete, Florida now, and I have for 32 years. 32 years ago, had just sold one of my businesses. I got a phone call from home shopping network. They said, Kevin, you’ve been doing all these billions of dollars in sales. Why don’t you come and do that with our top people. I said, Well, who do you have? We got Frankie Avalon, Suzanne summers, we got. I said, What does Frankie Avalon have? He’s got a product called zero pain. It’s a $20 pain relief product. He’s selling it on Hsn. It’s doing well, I did the infomercial. We sold 8 million bottles of zero pain. Okay, so Suzanne summers, the thigh master, you know? So bottom line is, HSN called and said, and I said, You know what I use HSN for? It’s at testing grounds. I can put somebody on, like a Frankie Avalon, a Tony Little a Suzanne summers, if it doesn’t work, I’m not going to do the infomercial. If it pops, if it pops on HSN, that’s my focus group. I mean, HSN was the world’s largest focus group, and gave us a chance to test our products. We could test price points, we could test all kinds of stuff. So we put Tony Little on in the first segment he would do on a new product. Let’s say he’d sell 100 pieces, then they’d put them on a second time. Second time he’d sell 150 the third time, he’d sell 200 by the fourth or fifth time, he was up to 500 units, 5x what he did on the first one because he was learning how to pitch it. He was getting call ins, and they’d ask, does it do this? Oh, I forgot to say that, yes, it does that too. And then he would incorporate that into his next pitch. So we would use HSN as a testing grounds to develop the pitch, develop the price points and create the most powerful pitch ever.
Joe Hamilton 43:33
And how much did the deal structure evolve from day one to day n? Where you mentioned the Ginsu guy? You gave him 50 cents for everyone you sold. Did you experiment with having equity in the underlying production companies? Ever did you just always do a straight commission? You know? How does for the deal structure evolve?
Kevin Harrington 43:49
We did all kinds of different things, but so, you know, I said the 50 cents was to the talent right? In the early days, when we hired producers, we just paid them a fee, and it was good, because I could pay someone 10 grand one time, Arnold, I had to pay forever because he’s in the show. But the producers, they got smart, and the good ones said, Look, I’m going to produce the show, but I want a 25 cent kicker on everything you sell, because I’ll bust my ass to give you a home run show. And so producers we started connecting with because we’d hire a producer and they give us a show that we’re like, Hmm, not very good looking. I don’t think this is going to work. We test it. It bombed. Like, let’s go back to that same producer we use. So, oh, well, yeah, I’ll do your shows, but I want a quarter a unit. So these producers started making millions and 10s of millions, and then we would partner with them. Sometimes, in fact, some of the guys in the business were acquiring production companies, and we acquired some production companies along the way, yes, but the bottom line is, is that if you had a product that had a good pitch, and you had the proof of that pitch on, like a shopping channel. Then you were ahead of the game, because you not only had a good product, it was manufactured, but it also had been tested and tested to work on a shopping channel. Now, all we had to do was go and reproduce that as an infomercial and take it to the masses.
Joe Hamilton 45:16
Makes sense? So you identified, and we do. We’re getting a little short on time, so I’ll make sure we get to the foundation stuff. But it’s so curious. Actually, there interesting things to talk about. You know, you obviously had a sweet spot where you were the first one in, kind of the whole blue ocean thing, right? And then obviously people caught on, realized they could do this. Competitors came in, a lot of them in different areas. Can you sort of map the trajectory of, hey, this is amazing. Hey, it’s getting tougher. And at some point the Internet came online. You mentioned you got the domain. Did you slide in there early as well? And did understanding the late night affordable attention turn you on to always looking for affordable attention throughout the years?
Kevin Harrington 45:50
Yes, in fact, so discovery. I mentioned I had six hours of open time I went to the National discovery because I started just local discovery in Cincinnati, Ohio. When I went to the National channel, I said, Look, you guys got that six hours of just worthless time, right? And they must agree, because they’re not running anything on it, right? And I said, I want to buy it. They said, well, make us an offer. So I said, I’ll give you 1000 bucks a day. And they ultimately agreed. And so it was found money for them, but for $365,000 I own six hours a day 365 days a year on Discovery, it was 68 bucks a half hour. Now that in the third year that generated $28 million in sales for $365,000 media cost. And so when that contract expired, they sold that block for $30 million from 365 so the competition was coming, right? But what I was always doing, and this is why I said, Wait a minute, discovery is an 18 hour day channel. Nashville network was 18 hours. Also I got six hours on Nashville lifetime was a 22 hour a day network. I got two hours on lifetime. I got six hours on Bravo. And that’s when I said, Wait a minute. That guy, Rupert Murdoch, is launching sky channel. They go dark at midnight. Sheik Salah camel in Jeddah. Saudi Arabia goes dark at midnight, comes on at 6am he’s got five channels. I went to Saudi Arabia, made a pitch, and boom, we launched all our infomercials on 30 channels. So my goal to build the business was getting more media distribution in every country I could. We had Japan. We had media deals in over 100 countries eventually. And so we were running hundreds of infomercials in over 100 countries, in dozens of languages, dozens of currency. So it was a little bit of a complicated business. And logistics were a little crazy. But by that time, we had 500 employees public company on the New York Stock Exchange, and we were rolling like a son of a gun. It was an awesome feeling.
Joe Hamilton 48:02
You had a lot of notoriety for Shark Tank, I think probably took it to another level. So talk about the Shark Tank bump and how life changed after the show
Kevin Harrington 48:11
Shark you know, it’s funny. It didn’t happen overnight Shark Tank, because the first season Shark Tank was on, I would be running around, and people would say, Hey, are you on some kind of a fishing show or something, something to do with sharks? And I’m like something to do with sharks, yes, but it’s not fishing, okay? It’s a business show. Well, how is Shark Tank A Business Show? Well? And when Mark Burnett explained it to me, it was simple, Kevin, these inventors and product people, they get three minutes to pitch, and they’re going to come out, take their three minutes, and you have three minutes to make up your mind whether you’re going to invest and I said, that’s what a shark does. He said, That’s what we call Shark Tank. The sharks get three minutes to make up their mind. I said, well, then I’ve been a shark for 40 years. He said, What do you mean? I said, I go to the house where show the hardware show, the fitness show, the beauty show, the golf show, the Toy Show. And what do I do? I take pitches at every one of these shows, and I decide in three minutes whether I’m going to buy, whether I’m interested in investing or not. And he said, Wow. He said, Do you mind auditioning? And I said, No, let’s go. So we went in the other room. Hour later, I’m taking pitches and doing this and that. And they said, we’ve done two dozen of these for shark potential audition to be a shark. And they said we have not seen anything like that because I had been what’s the average order value, what’s your customer acquisition cost? What’s this? What’s that, if I give you the 100 grand, what’s the use of proceeds? They’re like, wow, these are all the hot buttons that we need to understand. You’ve got them all because you’ve been doing this for 40 years. So they called me shortly thereafter and said, You are the first shark we’re picking because you’ve you’ve been doing this a long time. So the audition went well, I guess, right. And what happened? It took a couple years, and then I did the pilot, and I did the first 100 and. 75 segments of Shark Tank. And then Mark Cuban came on, and we started splitting the seat. And Mark really wanted to be a shark. Okay? And meanwhile, in the early days of Shark Tank, the projects weren’t very good. And all the sharks will say this, I’m not being nasty, saying, Oh, they were terrible deals, but they will all tell you the deals sucked in the first couple of years, because, like, I gave a lady 500 grand for her half of her business. She closed the doors in six months. She is like, and another guy got 150 and another one this. And Barbara lost money. I lost money. O’Leary lost we’re like, What the hell is this all about? I finally, because I looked at the show as I’m an investor, Cuban, realized, hey, he doesn’t need to invest, but he just wanted the bump on the brand also. So I was getting a bump. I got the bump. I said, You know what time for me to move on? Because I, by the way, I was taking all my time on deals that didn’t make any sense for I mean, I’ll explain it this way. Mark Cuban did 85 deals, spent $35 million and I say, if you took those 85 people the deals and forget Shark Tank, have them walk into his office and pitch him what they pitched on Shark Tank, he probably wouldn’t have done one of those deals. Right? Is he going to put 100 grand for 10% into someone’s company that has no sales and they’re looking to get off? I mean, no, I mean, but on Shark Tank, he does, because that’s the format. So he finally said, Uncle, I’m done. I can’t take any more, because I’ve got all these people that are calling me on a regular basis asking, hey, when am I going to be a millionaire mark? Because I was getting the same thing, you know? It’s like, Hey, Kevin, you invested. And the lady that closed the doors down, she’s like, she thought, Oh, well, Kevin will give me another half a million. And I’m like, No, I won’t. I don’t put good money after bad, you know. So anyway, what happened is I started getting calls to people would say, Hey, will you come to our college? Will you come to our business? Will you come? We have a conference we’re doing. We have an annual convention. I was speaking at the housewear show and the hardware show and the fitness show, all the shows. Then I was speaking at corporate events, and I spoke at I went to Auburn two or three times, and I did dozens of universities, and of course, here in Tampa, UT, USF all, you know most UCF in Orlando, et cetera, but I was doing over 100 speaking events a year. I’ve written 10 books. And so that was all part of like, Hey, Kevin, you’re a shark. You need to write books, you need to speak. You need so I hired agents and got into the business of really, kind of working my brand so to speak, right? And so it’s been an awesome feeling and experience over the years to be, I mean, Shark Tank is the number one business show in the history of television. It’s on the air for 18 seasons. It’s in 100 countries. I’m the original shark. There’s only one, and so it’s pretty cool to have the position that I have. And hey, I’m not shooting new shows anymore. But the reality is, is that, you know, I don’t have to invest in deals I don’t want to invest in. Okay, so although I will tell you, there were some pretty cool deals on Shark Tank, though, when people ask me, what are some of the biggest winners, like scrub Daddy that did hundreds of millions of dollars, I mean, it’s unbelievable some of the successes. So Shark Tank did drive some big brands home. Yeah.
Joe Hamilton 53:34
I think it’s fair to say, even though your time on the show ended the whole process of receiving pitches, you have turned into a business underneath your brand?
Kevin Harrington 53:41
Well, yeah, and there’s another reason why CNBC cut a deal to run all the reruns. So all of my shows and I did 175 segments, all of those rerun every six weeks on CNBC. So I’m in a cycle on CNBC for the last 10 years. I think it’s more than think it’s last 15 years that they just keep reading. So people will call me and I get a phone call from my 50th reunion. High school reunion was recently, and one of the guys had texted me, hey, I’m looking forward to seeing you at the 50th and by the way, I saw you on Shark Tank the other night. Next time when you’re filming, will you tell O’Leary? I said, Hello. You know he thought I was it was filming a new segment, right? That segment was filmed 12 years ago. Okay, so all of the segments I shot are in rerun mode on a global basis, which then prompts people to reach out.
Joe Hamilton 54:36
And you have people that travel to you on a regular basis to be mentored and to learn from you.
Speaker 1 54:42
I get 2000 pitches a month, still from people coming to our company saying, and there’s a reason why shark tank gets 200,000 inquiries a year. They can only take 300 to go on the show. They have 199,700 people that get a turn down. And what are they? They’re upset. It. What do they do? They go on the internet and they find who are the other sharks. Oh. Kevin Harrington, boom. All of a sudden, if they have a product, I’m getting an email, and that’s, I mean, I have a couple of full time people that do nothing but process our increase. Wow, yeah.
Joe Hamilton 55:15
Well, I think that’s a good segue into the same mentoring, the same knowledge that these people come to you for and travel to you for you have infused into your foundation. Yeah, you just did a bit of a pivot with it that’s really turned into something neat. Can you talk a little bit about getting a new executive director, some news folks and the program.
Kevin Harrington 55:40
Thank you, Joe. So as a entrepreneur that I’ve had a few exits, one of the products I didn’t mention is I got involved with the Celsius company, and I was part of the launch team 13 years ago, when that company first really started. They had a 10 Cent stock and a couple million bucks in sales, and we took it to $12 billion and we went from 1000 locations to 450,000 locations around the world. So I like being a product guy, and so I said, You know what? I’ve had great successes. I’ve had 20 products that did over 100 million, and I’ve had a couple billion dollar products, one that’s done over 10 billion, and I’m going to mentor entrepreneurs, and I’m going to focus on young entrepreneurs. So I started a foundation, the Harrington Foundation, 501, c3, nonprofit, and it’s entrepreneurship for the youth and entrepreneurship for the military. So my first year, we did a deal with junior achievement, and we built an entrepreneurship hub at junior achievements headquarters in Tampa, Florida. And so 27,000 high school students went through the Kevin Harrington entrepreneurship hub last year. That’s pretty cool. And so the hub looked like a shark tank if it had chairs and pitching, and we taught the kids how to pitch. And so that was year one, and we had a lot of fun. And so we had a big golf tournament at the Pelican golf club. And after all of that, we said, you know, the only challenge that we had, and we also did some events over at MacDill Air Force Base, but the only challenge was these kids from high school. It was a one day experience over Junior Achievement, and it’s like there was no follow up and no real meat on the bones, like, who started a business who became successful? So we’ve kind of morphed the program into, we’re picking between 25 and 50 entrepreneurs, and we’re going to put them through an eight week rigorous entrepreneurship program, and we’re going to teach them all of the aspects of not only getting a business started, but executing and having customer acquisition and so our goal is to create a little entrepreneurship factory and just spit out on the other end, entrepreneurs making money and building sales and building networks. So and Wendy latori has taken over as the new executive director, Bill LaTorre, her husband, it was a doctor. He’s passed away now, but Bill was in our original Tony Little isolator show as the doctor that recommended you buy this product. So I met Wendy, 30 some years ago here in Tampa, and she’s an awesome, very connected woman in the marketplace, and she’s helping me build the foundation. So I have my son and my brother and my niece involved in the foundation, and it’s about entrepreneurship for the youth and for the military. And you know, we have a really robust program that we’re executing here over the next six months.
Joe Hamilton 58:37
That’s wonderful. And I will trying to get Tim over your brother, to play some pickleball. I used to love playing tennis with him, but yeah, I don’t think he’s come over to the dark side yet, but hopefully he will.
Kevin Harrington 58:42
He does play a little bit. So we got to get him over here. This is, this is an awesome facility, and what a great place for you to hang out and do some business. So thanks for having me today, Joe. It’s fun to be here.
Joe Hamilton 58:57
We are recording at St Pete athletic. Thanks to those folks for their letting us use their great podcast Studio. Yeah. Thank you so much, Kevin. I knew that we’re a lot and interesting stories, and I feel like we’d go another hour. Maybe we will someday.
Kevin Harrington 59:07
There’ll be plenty of stuff to talk about in three months even. So let’s look at it. Okay?
Joe Hamilton 59:11
Wonderful. Kevin Harrington, thanks. Appreciate you.
Kevin Harrington 59:13
Thank you, Joe. Take care.
