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 As the first blog entry got exhausted. My second book |
| Evolution of Love Part 2 |
| He sold them a company losing $100 million a year. They paid him $4.2 billion. Then sued him. He kept the money Kevin O’Leary was 19 years old. Working his first job at an ice cream store in Canada. The owner wanted him to scrape gum off the floor. Kevin looked around. Saw a girl watching. Said no. Got fired on the spot. Rode his bike home. Told his mother what happened. She looked at him and said, “When you work for somebody, you have to do exactly what they say.” Kevin made a decision right there. “That was the last day I ever worked for anybody.” Everyone thought he was being dramatic. A teenager throwing a tantrum over scraping gum. “You’ll need a job eventually.” “You can’t survive without working for someone.” “Welcome to the real world, kid.” He didn’t listen. Here’s what Kevin knew that everyone else missed: Working for someone meant following their rules. Building something meant making his own. The ice cream store wasn’t the problem. Being told what to do was the problem. So he decided he’d never put himself in that position again. Fast forward. Kevin’s father had died when he was seven. Alcoholism. Divorce. Gone. His mother Georgette ran the family clothing business. Worked hard. Saved money. What Kevin didn’t know? His mother was secretly brilliant with money. She invested a third of every paycheck. Large-cap dividend stocks. Interest-bearing bonds. Built a substantial portfolio. Nobody knew. Not even Kevin. She never told him. Never showed him. Never mentioned it. He only found out after she died. When her will was executed. Turns out his mother had been building wealth the whole time. Quietly. Systematically. While working full-time and raising two kids alone. That lesson hit different once he understood it. By the time Kevin got to university, he wanted to be a photographer. His stepfather George shut that down fast. “You’ll starve. There are too many good photographers. Pick something practical.” So Kevin got his MBA instead. Graduated in 1980. Started a TV production company. Special Event Television. Made sports shows. Sold his share for $25,000. Now he had some money. Not much. But enough to try something. 1. Kevin started SoftKey Software Products. In his basement. In Toronto. His mother lent him $10,000 to get started. Combined with the $25,000 from selling SET, he had $35,000 total. The plan? Convince computer companies to bundle his educational software with their hardware. Simple. Direct. No manufacturing required. He started building. Making deals. Growing. Then he got his first big investor. Someone ready to put in $250,000. That money would change everything. Scale the business. Hire people. Expand distribution. The investor was ready to sign. Documents prepared. Check ready. One day before signing, the investor backed out. Gone. No explanation. Just gone. Kevin was stuck. Needed the money. Had commitments. Had deals pending. No backup plan. No safety net. Just the $35,000 he’d already invested and a basement full of inventory. Most people would’ve quit right there. Called it a failed experiment. Gone back to working for someone else. Kevin didn’t. He kept building. Kept making deals. Kept convincing companies to bundle his software. And it worked. By 1993, SoftKey was trading on Nasdaq. Revenues hit $110 million. There was just one small problem. The company lost $57 million that year. But Kevin didn’t care about traditional profitability. He cared about growth. He started acquiring competitors. Aggressively. Hostile takeovers. Cost-cutting. Consolidation. 1. Kevin acquired The Learning Company for $606 million. Changed SoftKey’s name to The Learning Company. Kept buying. Kept consolidating. By 1998, The Learning Company had revenues of $800 million. It also had an accumulated deficit of $1.1 billion. Meaning it had lost over a billion dollars total. The company was hemorrhaging money. Accounting was questionable. Multiple auditors raised red flags. Industry analysts called it a house of cards. Everyone knew the numbers didn’t add up. Then Mattel called. The toy company. Maker of Barbie and Hot Wheels. Their CEO needed a win. Stock price was sliding. She saw educational software as the future. December 1998. Mattel agreed to acquire The Learning Company. Price? $4.2 billion. Nobody could believe it. A company losing hundreds of millions gets bought for billions? Even the Center for Financial Research and Analysis warned Mattel. Said they weren’t doing proper due diligence. Said the acquisition was dangerous. Mattel didn’t care. Deal closed May 13, 1999. Kevin became president of Mattel’s new digital division. Weeks after the deal closed, The Learning Company’s real numbers came out. Mattel expected $50 million in profit. Got a $105 million loss instead. The next quarter? $206 million loss. Mattel’s stock dropped from $17 to $11.69 in one day. Wiped out $3 billion in shareholder value. Three billion. Gone. Kevin got fired six months into his three-year contract. November 1999. But before he left, he sold all his Mattel stock. $6 million. Plus a severance package. $5.2 million. Total take: $11.2 million. In 2000, Mattel sold The Learning Company for $27.3 million. A company they’d paid $4.2 billion for just one year earlier. Business Week called it one of the worst deals of all time. Shareholders sued everyone. Including Kevin. Accused him of insider trading and misleading investors about the company’s financial health. Mattel paid $122 million to settle. Kevin walked away with his millions. Started investing. Started building new businesses. By 2006, he was on Dragons’ Den. By 2009, Shark Tank. Today? Net worth over $400 million. All because a 19-year-old refused to scrape gum off a floor and decided he’d never work for anyone again. Here’s what most people miss about Kevin’s story. He didn’t build a great company. He built a company that lost over a billion dollars. But he understood something nobody talks about. You don’t need a profitable company. You need a company someone else wants to buy. Mattel wanted growth. Wanted market share. Wanted the Learning Company brand. Kevin gave them exactly what they wanted. Made it look good enough. Got them to pay billions. Was it ethical? Questionable. The lawsuits say no. Kevin says yes. But here’s the reality nobody wants to admit. He sold a money-losing company for $4.2 billion and walked away rich while Mattel lost everything. That’s not luck. That’s understanding what buyers want and giving it to them. What job are you staying in because you’re afraid to work for yourself? What business are you not starting because you think it needs to be perfect? Kevin got fired from an ice cream shop and turned it into a life philosophy. Never work for anyone. He borrowed $10,000 from his mother and lost a major investor the day before signing. He built a company that accumulated over a billion dollars in losses. He sold it for billions anyway. Because he understood something most people don’t. Success isn’t about building the best company. It’s about building the company someone wants to buy. The market doesn’t reward perfection. It rewards timing and positioning. Stop waiting for your business to be profitable before you think about an exit. Stop thinking you need years of positive cash flow to be valuable. Find out what buyers want. Build that. Sell it. And never, ever scrape gum off anyone’s floor. Sometimes the worst deals of all time make millionaires out of the people who sell them. Because when you know how to position what you’re selling, profit doesn’t matter. The story does. Think Big. |
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