Transcript of How Kindness Became a Billion-Dollar Business Strategy with Daniel Lubetzky

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Com/moneyrehab. That's J-O-I-N-B-I-L-T. Com/moneyrehab. Make sure to use our URL so they know we sent you. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.

It's time for some money rehab. Is kindness an asset or a liability in business? Well, Daniel Lubetsky says it's an asset, and he would definitely know. He founded Kind Snacks and built it into a multi-billion dollar business while always keeping the namesake top of mind. And as the great poet Rihanna once pointed out, kindness can be mistaken for weakness. But that hasn't been Daniel's story. He's shown a lot of strength while being kind and building his company. For example, during Kind's history, he bought out a PE firm for $220 million in order to maintain his leadership. Today, he gives us the behind the scenes of that story, and we also talk about the difference between being nice and being kind and how he's supporting other founders through his firm, Camino Partners, and on Shark Tank. I am so excited to say, Daniel Lubetsky, welcome to Money Rehab.

I'm excited to be with you because you and I knew each other way back when we were a young kid.

You were a young kid. Where did we meet exactly?

I seem to think it was a dinner. Am I right or wrong?

I think the dinner was after the interview. You came on my early morning show on CNBC. Super, super early. I think so. Anglewood Cliffs.

So you're saying you interviewed me and then you invited me to dinner or we just met at the dinner randomly?

I think I interviewed you. This is what? 15 years ago at this point?

15 or 20. When did you start?

I was right after the financial crisis at CNBC. So 2009. I think we had you on the show. We were pitched Kind, and I was like, I love Kind.

I do remember when you came over and we hit it off there.

I think your PR pitched us. At the time, Kind wasn't the cool, sexy thing. I grew up in LA, so I went to these small natural food stores, which I'm sure you know all of them. There was like, Mrs. Gooch's before it was Whole Foods. There was another really small Mom and Pop near Fairfax.

Erwin was a one-store operation. For sure. It was a disheveled thing. It was not a cool thing. Erwin was this really granola-y place, and it was real, but it was a one-store shackling, a real natural store. It was not like the CNBC and silly thing that it is now, which is cool, but it's very different.

I can't wait to hear what you think about it.

I like it. I enjoy it, but it's like a CNBC in place now. It's not like back then, it was like just people in their neighborhood needed healthy snacks.

Like healthy, crunchy granola people.

Now it's like-Better merchandising today.

For sure. I just give them my wallet every time I go there, no matter what. It's like crazy. The prices are crazy.

The merchandising is very good.

But I saw Kain early, early, early, 100,000 years ago when you're like, I'm sure, didn't have mass distribution. You said you discovered Kain. I as a consumer. I loved it. When we got pitched for the show, I hosted a super early morning show on CNBC. I told my producer, I'm like, I'm a big fan. I think this is a great company. This is going to be a big company. I should have invested. You should have given me shares in the company. My God, I should have said, Come on this show.

At that point, after that CNBC thing, everything started working. But 2009 was a very important year for us. It was when our growth started going from like this to like this. But the predominant reason-Coincidence? Maybe. But also what happened that year is we started sampling. Because I know you have a show about money, and I can fast forward, if you don't mind. What I was doing right, and then I'll tell you what I was doing wrong, is that I wasn't wasting money because I had no options, I had no money. But what I was doing wrong is I created, instead of a resourceful culture, a frugal culture. I was not spending any money. I saw sampling as a cost center. We had an $800 budget in 2008, $800 budget for sampling. It was samples that we gave to the salespeople to give to the buyers, not to mortals that want to just eat the product. We finally realized that for every kind bar that we gifted, people would fall in love with it. We sold within... It was crazy, the ROI. Within weeks, people would buy enough product to justify our free sampling, and they would tell others.

It was like word of mouth. It was excitement. People were very excited about the product. We started sampling. We went from an $800 budget to an $800,000 budget in 2009. Things started just growing. Then within a few years, our sampling budget was $20 million. We were giving $20 million in free kind bars. Every kind bar paid for itself because people would become part of the family and start telling others about it.

Then you went on CNBC with this lady.

This lovely, smart woman that talks about money.

I'm so happy to see you. I didn't know if you would even remember me because you came in, you're like- I remember you perfectly and very fondly, except I didn't remember where we first met.

But our memories and our minds play so many tricks on us. One of my other things that I have is I had a beaten up car that I drove it from law school to New York, and I used that car to deliver all of my products from the back of my truck. Because I would park it on the streets, I couldn't afford to park it elsewhere, it would get hit and the trunk was not working. I closed it with duct tape. When I wrote a book, Do the kind thing. In 2014, I wrote about that car and I talked about how I was riding my red Cougar and parking it in my friend's fancy house in the Hamptons when I would visit with a duct tape and the parents were very nice. He's like, That was very sweet that you mentioned that, but your car wasn't red. I'm like, What? Your car was black, you idiot. I'm like, Holy shit. Because my first car, or my second, my first car was a broken Crown Victoria that was $400, but it broke down and my dad was like, Okay, I'm going to help you out. But my first car was a used red Cougar that I used for many years while living in Texas.

Then I moved to Stanford to go to law school. I'm there three years with that black car, several years with the car in New York, and then I sell it and many, many, many, many, many years go without a car. For some reason in my mind, I remember the car as being that red car. It's incredible what The Nelson Mandela effect.

Yeah. What is that? There's certain things that our mind tells us were true, like the red car that wasn't, and we convinced ourselves of that. People see the monopoly guy with a monicle, but he doesn't have a monicle. And there's certain things- He doesn't have a monicle?

You're freaking me out, woman.

But regardless of where we met, I have always felt so fondly of you. We've been in touch over the years on email. Your book came out. My Five books came out, all these things. Only five? I'm such a loser.

Five books. That's impressive.

But I always really just remember how you make people feel, how you've always made me feel, how I I know from all the interviews that you've done since our first one back in the day, that everybody just thinks you truly are the embodiment of being kind.

It's a very dangerous thing to live up to, and I don't think it's true. I do think that I aspire for that, and that's good enough. I try to do my best, but I get upset just like everybody else. I make mistakes like everybody else. But I try my very best to live the way my parents would have wanted me to, the way my dad would have wanted me to do it. My mom's still with us. She wants me to be a joke. No, just joking. My dad's not with us. I said the way he would have wanted. But I think it's a lot about just striving for that, because if you strive for that, then you actually... We did a survey at Kind, and it was fascinating that 90% of the team members felt that after joining Kind, they were happier and had become kinder themselves. It was not something we set out to do, but when you're thinking about making Kind a state of mind and You become what you live. You live the experiences. We become a product of our little interaction. If every day I'm opening the door for my team members and I'm looking at people's eyes and I'm trying, I'm going to be a very different that if every day I'm just shutting the door on people.

You become a product of those tiny interactions.

I think you're doing great. I think a lot, and I talk about on the show a lot, the difference between being nice and being kind. What do you think the difference is? Because the way I think about it is the nice thing to do is telling people what they want to hear, but the kind thing to do is telling them the truth, but with kindness.

A hundred % in the context of life and work, a person that is nice is polite, but a person that is kind is honest. I'll take the latter a thousand times over the former because you're nice. Sometimes you're nice and you're actually harming a person. For example, when you are in a job setting, and literally this happened to me a week ago when one of our team members was not performing. And not one, but two people that she interacts with noticed that and were very unhappy. And the situation got out of control. They almost wanted to let this person go. And I said, Well, have you given that person feedback? And both are really good people, but they didn't have the strength to be kind and provide that person feedback. I am 100% certain about this, that it's a bigger problem with the workplace that people are too nice rather than that they're jerks. Of course, they're jerks, but there are a lower number of problems than the people that are too nice and because they don't want to hurt other people's feelings, cause harm to their colleagues and deprive them of the giftful feedback.

It's very important to be kind, not to be nice. A person that's nice doesn't cause problems, but a person that's kind has to stand up to solve problems. A person that's nice is not a jerk, but a person that's kind stands against jerks. A person that's nice is not a bully, but a person that's kind stands up against the bully. Kindness requires the strength of being a protagonist, of having an agency over your life. You can be nice and be passive and just be polite, but to be kind, you need to be part of it.

Yeah, it's easier It has to be nice. I have a co-host who sent me a clip of him on TV, and the nice thing to say was like, You did amazing. Congratulations. It was awesome. You're so good. But the truth was, I thought he could use some feedback. It took extra time to be kind and to give him constructive feedback.

Because that person might not receive that feedback well, and then you're putting yourself out there. It does take a lot of strength.

How do you Just think about it in the workplace. Let's say I'm that person that needed feedback. I wasn't performing, I wasn't turning my stuff in on time. You're the boss because you have to run an organization at the end of the day. How are you giving me kind feedback?

Just to be clear, when I was starting, I was messing it up completely. But over years, I realized that creating that kind culture is what made us win. We had the best product, I think, in our industry, just like in the finance industry, cash is king, in our industry, product is king. Cuin. Cash is queen. But in our industry, product is queen. We have to make sure that you have the right product. But if you really want to win, you need to have the right culture. To have the right culture, you need to have a hardy debate, a comfortable place where people can speak up. One of the biggest dangers today is that people are afraid to speak, and that just fosters mediocrity. You have to be able to create a culture where people trust each other to provide feedback. It should be constructive feedback. The way we taught our team and the way I tried to teach myself is the sandwich technique. You start by giving people some positive affirmation. Never lie. Don't ever just throw away something that's not sincere because then they don't trust you.

This is the complement sandwich.

The complement sandwich. But start with something that's authentic. Share something that makes a person-Positive. Something you have to be able to find one thing that you respect in that person that they're doing Well, remind them that. Then provide the feedback about where they can do better and explain, frame it as intended to help them. Then you can close with how that's going to help strengthen and make them stronger. That's the fundamental framework for giving people I did.

Have you ever considered another name for the company early on? Or is it always kind?

From Kind? We have the weirdest, silliest names. When you look back, I have that piece of paper, I need to find it, but it's crazy how lucky we got because all the other names were very descriptive. It was like healthy snacks, like fruit and joy, fruity night. We had fruit, not the lights, the light of the times, like fruitalicious, nuts in the World. They were all very variations of descriptive-Literal. Fruits and nuts. It reminds me when my son, you have a young kid, but when my son was three or four years old, we bought him a fish, and He happened to be orange-redish color. He's like, What do you want to call him? He's like, Red. I'm like, Okay. Then he got another fish, and what are you going to call him? White. He was white. Then we had a fish that had red dots and white. I think he called them. That one's going to be called Red White. That was the level of mastery of our naming. Then that year, my dad passed away. It was a very, very tough year. But Sasha hair, who was my director of marketing at the I were playing with a name that could have human adjectives that could describe the three pillars of our product, which eventually became kind to your body, to taste, but it wasn't to your world, something that was healthy, tasty, and socially responsible.

But when we were thinking about it. I had my dad front of mind. What's interesting about my father is he was in a concentration camp in the Holocaust. He survived the war. He was 15 and a half when he was liberated by American soldiers. And in spite of all of what he went through, he was very, very much, he really was, the kindest person you could meet. He found a way to see everything through a positive prism. We were inspired by his example. We named the company Kind after him.

Better than fruit and nut.

Yes, better than fruit and nut.

Early on when you were starting, what were you doing for funding? You had an $800 sampling budget. You were completely, literally bootstrapped like your car.

Yeah. Well, earlier on, it was even worse because I finished law school. Thanks to my parents, they helped me pay for my education, so I didn't have much debt. I had a little income because I had run some businesses on the side while in high school and in college and also as a legal associate. I had probably a small amount of money. I used that to start, and my father gave me $100,000 loan, which helped me enormously. Then I got- What year is this? This must have been... I started Peaceworks in '93, and so probably 1994, '95. I was able to repay the loan. I was very proud. But the company, Peaceworks, was going sideways. For 10 years, I was barely surviving with the Peaceworks things. I didn't know what I was doing. It was a concept of using business to bring Israelis, Palestinians, Jordanians, Egyptians, and Turks together Eventually, we had ventures all over the world where using business to bring people together to have commerce, shatter stereotypes, cement relationships, that was a concept of Peaceworks. Using free markets to bring people to work together because they have a vested interest in profiting and succeeding together.

But I was doing everything wrong, Nicole. The first brand was called Moshe Pupik and Ali Mishmunkin's World Famous Gourmet Foods. I thought it was a genius name that people were going to laugh so much about, but they just were paralyzed. They couldn't repeat it. They just walked away.

As someone who remembers Yiddish so fondly, I appreciate it.

Moshe The putpick is like a name of a character. People joke that it's a joke.

But the Pupik is a belly button.

Belly button. Ali Mishmunkan means Ali the Impossible. There was a whole story about the characters, and I was so in love with my own stories, but people were Moving on. That's why eventually, we just named it Kind, which is four letters. We nailed it. But during the Peaceworks years, we were struggling a lot. I was able to eke out a profit, but barely. I had a $24,000 salary for 10 years in a row. It was very hard. It was hard to make ends meet and to make payroll. I was sweating every month to make payroll. It made me work those extra hours to sell those extra cases of sundried tomato spread in order to be able to make payroll. So, yeah, it was bootstrapping like crazy in the early years.

Then in 2008, can you tell us the story of the PE fund that came in? Because this is so badass. That's what you did.

We agreed to sell to them a minority steak, and they were good partners the first several months. Then afterwards, they got greedy, and they tried to force me out of my own company. I don't know if you know that story. I I had kept it to myself. I couldn't talk about that. I felt very traumatized by that. But they tried to push me out. After six months, they said, We want you to name one of our investors and partners, the CEO, and you will be a minority shareholder. I'm like, Well, that's not the deal I did with you. The deal is I'm the CEO, I'm the founder, I'm the entrepreneur, I'm going to run it, and you guys are getting a minority stake. They're like, No, we think that if you run it, it's not going to work out. We want to buy you out. I said, That's not what I bargain with you. They're like, Well, if you don't do that, we're going to take all of our people and take them I had to go back because they had introduced me to people that I had hired. We're going to destroy you and you're going to go out of business.

I couldn't sleep for many, many days because you also almost feel like, Oh, my God, are these people that they introduce me, Trojan horses that are going to harm me? I eventually consulted with a lot of friends, and they're like, Call their bluff. We'll replace them. We'll buy them out. I told them that, and I I called my team, and one of them actually carried through and left with them, but everybody else stayed. The private equity firm also changed their mind and said, You know what? The two other investors are going to leave, but do you mind if we buy their steak? I made the mistake of saying, Fine, I should have known that when people act that way, I should have just bought them out. But at that time, I felt so intimidated by the whole thing. I was like, I just want stability. We agreed to keep them on board. They bought their other partner shares. Then four and a half years later, they wanted to sell the company. I had made the mistake to have a clause, giving them the to shop the company around at year five. I thought five years before that if any entrepreneur is here where there's so many cameras, this is a really cool studio.

Thank you. But if When the entrepreneur is listening, try to keep your options open because you never know what you're going to want to do four or five years from now. I had agreed that we would sell the company or shop around the company in five years. I changed my mind. I had climbed that This little hill and I saw a higher mountain and I wanted to keep going. They're like, No, we want to shop around the company. No, I want to keep running it. We agreed that I would buy them out, but it was very hard. They drove very hard. They got 17X in the course of four years, plus dividends, because we were cash flow positive. We were making money every year. They got a crazy return within four years, 17X plus dividends, so maybe more. We bought them out. But it was hard because they had put in $16 million. I needed to find $227 million to buy them back.

How did you do it? Bank loans?

Bank loans. It was a calculated risk because I had a lot of information about the company's well-being. So did my investors, but they had a fund and they wanted to get out because they had a five-year time frame and they wanted to put a win in their There's very often misalignment between funds and entrepreneurs because the entrepreneur might want to continue growing, but the fund wants to bring their success to be a reality. They have five-year timetables to be able to create value for themselves, get their fees, and then raise more money. The way they make money is by raising more money. That was not my incentive. We We had enough intelligence to get a sense that there was a potential for things to turn out right, and fortunately, they did. But there was a six-month to a year period when I was sweating a lot. I think the theme is that I'm sweating a lot, but it was a very tricky period. The other thing, Nicole, is that when I met you, I wasn't sleeping.

Neither was I, by the way. I was doing a show at four AM.

I don't know if you remember, if you look at pictures of me in that era, I looked like a racoon or like a phantom because I was sleeping 4-6 hours a day. Today, I have the benefit of… I finally conquered insomnia, and I think I'm a genius because I finally, after 44 years of insomnia, I sleep seven hours, eight hours a day, and I feel amazing. But it's also a luxury because I didn't have that back then. Back then, A, I had to work 16, 18 hours a day to just make things work. But B, when you're an entrepreneur, the highs are high and The lows are low and you're on this roller coaster and the emotions take you over. During those episodes, you're not sleeping. I don't know if I had developed the skills that I developed now to sleep. I don't know if I would have had them because back then, it was a little bit more of a survival mode.

Of course. I would ask you the key to sleeping or to cure insomnia, but I am assuming it's correlated with also exiting the company.

The one that I cannot perfectly answer for is all those things. I do think that it's too easy for me to say that I developed it and that that's great, because if you have those worries, I do think it's going to make it harder for you to get quality sleep. But there are things you can do. The most important intervention, far and away, is go to sleep at the same time and wake up at the same time. It is insane how powerful it is. For many years, I told myself that that was not me, that my My wife goes to sleep at 10: 30, wakes up at 6: 30 every day. I looked at her and I'm like, That's not me. That's just not my personality. I'm too creative. Bullshit. If you train yourself, your body eventually learns. It just takes a while. You have to be patient with yourself. It doesn't happen the first day you do it. It might be weeks. But if you keep going to sleep at the same time and giving yourself some time and waking up at the same time, eventually your body learns. It is amazing. I actually did a video, if you go to my Instagram, on the top 10.

In my opinion, it's one of the more important videos that I've done, and it has only got 10,000 views, which I think is regretful because it's-Let's boost it.

Let's go. But also, Daniel, let's be real. Part of it was exiting your company.

Honestly, I cannot be 100% certain that if I had done the 10 things that I'm encouraging people to do now, that it would have worked when I was like, If You lose an account, if you have all of your net worth and kind, and all of a sudden, one of your key accounts kicks you out and introduces a copycat love.

You're not putting your mask on and being like, Night, night.

Yeah. There should be the humility to accept that entrepreneurs don't have the luxury to try to sleep eight hours. I didn't have the time. One of the things that I used to do is I used to stay up till I finish catching up with my inbox.

Your Inbox Zero?

Not today. But back then, I never was Inbox Zero, but if it was unread, I got through every night. But sometimes I would stay up 11: 00 PM, 12: 00 midnight, 1, 2, 3, 4: 00 AM in the morning, just going to Inbox Zero. I didn't know that was a term, but that took a toll. The problem is that when you go to sleep at different times, your body doesn't get good quality sleep. It's not just that you get less hours, it's also that the quality of sleep goes down.

I was a disaster. I went to work at 1: 30 in the morning.

I don't believe that for a second because you look like you. I don't know. We can't compare pictures. I look like a rat. That's not true.

You look exactly the same.

Like a phantom of the Opera Raccoon.

What How do you tell entrepreneurs about private equity deals? Because you hear so many disasters.

I think the most important thing is now that I'm an investor, I always thought that the entrepreneurs are the good guys and the investors are the bad guys. The truth is more complex. Everybody's driven by their own narratives of who they are, and everybody's a human being. But the more decisions that everybody makes, everybody rationalizes to be consistent with their decision. You need to look at the body of work, look at the person in totality, and look at their reputations, and understand who you're getting in bed with. Because odds are that... And by the way, hit it out of the park. My problem with My private equity partners happened in spite of the fact that Cain was their best performing company, and they still did those things. After they got the biggest return in history, within three months, they had invested in three competitors and given them our playbook. It was really annoying.

But imagine if things- That's a very kind way to say what you really think about it.

No, but there were things that I learned from them. I also, to be honest, there were things that I learned from my partners that helped me get to where I got. It's a complex reality. But the truth is that for the most part, product company companies are doing this for a reason, which is a market reason to make money. You need to really understand what their motivations are. I think the most important thing is align incentives. First, look at the integrity of the people, and then second, try to align the incentives. Then you have a better chance that things will go well if you find people that are good people grow, and the incentives are aligned so that as they grow, you grow. Very oftentimes, the incentives that are negotiated are misaligned, and that creates a lot of problems.

When did you decide to get out completely? Because you're out financially, not emotionally, I'm not sure.

Last December, I sold my final stake in kind. But it was not something I decided last December. It started in 2017 or late 2016, early 2017, when we brought our strategic investor to invest in kind, and they wanted to eventually acquire kind. I decided at that point that it was worth doing it. It's a tough, tough, tough decision for an entrepreneur to do.

Do you feel like it was your baby? A lot of entrepreneurs talk about their baby, like they personify it.

It still is my baby. First of all, the company The way that acquired Kind Mars has done a good job at preserving the kind promise, meaning the ingredients are the same, the product is the same, and I'm very appreciative of that. Still, for an entrepreneur, it's very hard to see your baby move on. It's very easy to feel like a gigantic behemot is not guiding your baby the way you want it to be guided and taking it in the direction and making it the center piece of everything you do. Particularly when you're the founder and the entrepreneur, I started the company from the windowless basement of my building. There was a trash compactor across from the window, from the office, and there was nowhere to escape that trash compactor's fumes because it was a windowless basement.

Sometimes you want to jump in there, I'm sure.

It was a journey where I was a one person operation, then two people, then four people, then eight people, then two people. You lose everybody. It was a very long journey. Then all of a sudden, turbo growth and 500 people and incredible multibillion-dollar sales. Being part of every path, it's just an incredible growth experience. You grow and you learn so much. It is part of your identity, handing out kind bars.

You brought some today.

By the way, I don't have a stake in the company anymore. But one of the things that I agreed on with my former partners was that I would get some kind bars because I like gifting kind bars. I have a budget of kind bars for a few more years because that was important enough to who I am.

You've done it for so long. I mean, it's a hard habit to break.

Yeah, I know some people expect it.

Also, yes.

We were hoping for some kindbars.

Really before you came, I was like, I'm so hungry, but I know he's going to bring me a bar, so we're You're good. What is it like doing business with Mars? Notoriously, they're so opaque and secretive.

The cultures, they're good people. I think they have integrity and good intentions. The culture of an entrepreneur and of a large company are very different. To your point, a large company tends to be a lot more cautious, a lot more secretive. A large company tends to be more defensive, and an entrepreneur tends to just want to pounce on all the opportunities and be more transparent and be more assertive. The cultures were different. That's a tension that almost no entrepreneur can overcome, meaning every single time that a friend of mine has been in this situation, we all think that we can suspend the forces of gravity and that we are going to be the ones that do it differently. The reality is that as a large company acquires a small company and Kind was a $7 billion company, but compared to other companies, it's not. I'm trying to be respectful of confidentiality. That's why I don't see what their size is. But they're much, much, much, much, much bigger.

I'm surprised that you're saying this much, so I appreciate it.

But Any time that an entrepreneur does a partnership with a large company, they need to expect that there's going to be a natural friction between the different cultures.

I know. Every entrepreneur is like, This time we'll be different. It's a similar playbook, but it's so cool to see you now on the other side of it. It's so cool to see you on Shark Tank. It's so cool to see what you're doing with Camino Partners. How do you think about supporting founders now on the other side of the equation?

It gives me a lot of energy and meaning. First of all, Shark Tank, what it does is it's teaching young people entrepreneurship, and it's one of those rare shows that both it's entertaining and educating. At the same time, it's very engaging. The format is really fun. But you're learning how to build companies. You're learning about entrepreneurship. Then Camino Partners is a platform where some of the most extraordinary people that I was blessed to work with are now leading the way. We only get to invest in a couple of companies a year, but we're trying to help them fulfill their potential and try to fulfill their dreams. It's really fun, particularly when you find an entrepreneur that wants to learn, that wants to listen, and they take your feedback, and they do something good with it. It's so fulfilling and so meaningful.

How did Shark Tank happen?

I don't know 100%, but I think Barry Pozenick, who's one of the producers, saw an article about me and shared it with a fellow executive producer, and then they invited me for a conversation. I love the show I was a late adopter to the show. I didn't know that it existed. I remember my first time I saw Shark Tank because I was on a plane. I'm the type of person that if something looks interesting, I'm that annoying person that asks, Excuse me, are you watching? I'm sorry. I'm very friendly. Earlier today, I was on a board call and there was a baby and this lady walking and I said hi to them. That's just my personality.

Can't wait to bring the baby at the end of this.

Yeah, I wanted to meet that baby. I wanted to meet that baby. I was on the I was playing and I saw on a screen this weird format because people are sitting down and they're talking. I'm like, What the hell type of format is that? It's not a scripted show. What the hell is it? I asked somebody and they told me what it is and they watched it. The entire was a long flight and I watched many episodes and I fell in love with it. I would play it to my kids to watch it. I would pause and teach them and ask them, What do you think? What would you do? It's a fun show to pause with your... Well, the kids maybe don't like now when I pause. But back then, they were little. They would indulge Then when they called me, I'm like, Yeah, I would love to do it. Then they do a little screen where there was four different interviews, and then eventually they invite you.

You crushed it as usual. What's been your favorite moment or founder or pitch that you've had on the show?

It's so hard to answer it that way because- Or memorable, so good or bad. I'll give you one quickly, but just so you understand, the way it works is you show up at 6: 45 AM in the morning and you finish at 8: 00 PM, and you're back to back to back recording 8-10 segments, and then the next day again, then the next day. It is hard to But let's say in this last season, there was a really fun situation with these two crazy guys from Google. They work at Google and they came up with this. They saw the problem. What I love about Chuck is the entrepreneur Theurs come up with really creative solutions. They're surfers themselves. Nobody wants to wear helmets because they look so nerdy. They came up a way to make helmets cool, and they come up with a fun way to wear a helmet. It was so clever, and I wanted to do the deal, but I think they had three sharks buying for it. The other sharks actually had a better deal than me, and they went for mine. We all have a little bit of a competitive ego.

I was Yes. I think Barbara got upset at them. Why did you not even consider my offer when my offer was better? Why didn't you respond? They said, Because we know Daniel had done a deal with Tandem Surf, which was a company that's also in water sports, and so we thought that he had synergies. Barbara said, It's a great answer. No problem. I actually get it. But it was like all the dynamics that going to Shark Tank where it's very real. What's cool about the show is that we We as Sharks don't know who's going to present. We don't have any information, so we need to solve the puzzle on the goal. Every segment films when it's edited 8-11 minutes, but we don't get that much more. It's unedited. Might be 30 to 45 minutes, rarely an hour. But within 30 to 45 minutes, you need to decide if you want to invest, negotiate, and develop the strategy to how are you going to win over the other sharks. That part I'm not that good at because I'm very transparent. Then the shark see, Oh, he wants the food deal. I want the food deal, too.

What Mark was really good at doing, which I need to start learning from, is he would just stand back and wait, and then he'd bounce last minute. Sometimes Kevin did that to me. In my first show, my first segment, I think, I was negotiating and negotiating and negotiating. Kevin also just undercut and said, I'll I did that. I'm like, Wait, what happened? It's funny. When you record Shark Tank for a few days after, you're driving, you're like, Oh, I should have said this because there's so much going on at the moment.

How many deals really go through? Because I know there's a period of due diligence. You only get a few minutes and you have to verify everything.

Yeah, it's range per season. But I try to have more than 50% of them close. Sometimes I get 60, 75% close. My worst season, it was like 30%, but also it's not your side of it. If an entrepreneur retrates and they want to change the terms of the deal, then I walk away. But I would hope that it's more than half close.

I know you're so good at budgeting. You're like frugal mindset even to today. Do you have a sense of how much you want to invest going in? Or how do you think Shark Tank versus your private investment?

The first season The reason that I was on, and my kids and my wife make so much fun of me about this, I didn't know what I was doing. I liked this hammock company, and I offered a million dollars. My wife made me sleep outside that night, and there was no hammock. But actually that hammock company, Yellowleaf, is doing really well now. They're selling tens of millions of dollars, and so it turned out to be a good investment. But I was of the mind that my most precious asset is my time. If I'm going to invest and I'm going to give my time, I need to get a big piece of the company and I need to invest big amounts. It's like when you play poker, the real good players, they just play the long game. The other sharks, they know to be patient and not to put everything on one hand. I learned that in the latter seasons, but I don't have an amount that I want to deploy. I probably should. I should have consulted with Call me when you're done. But I just go with what I see in the particular.

Well, we've had... Kevin was just here.

Kevin wasn't with you?

We would love to do, which we've done with the other sharks that have been on the show, a little lightning round, if you don't mind. Which shark would you want to be trapped on a desert island with?

Probably Damon, because he's the only person that I knew before Shark Tan. He's like a dear, dear friend of mine, Soanjo. But you don't need to procreate, right? Or do you? Is it a desserted item that requires procreation?

No, it's not required. Okay, so then I'll take Damon. Which shark would you start a business with?

Honestly, any of them. I love them. But I think probably Mark. That guy is, first of But he's so ridiculously bright. He processes so fast. He has so much integrity. His word is his bond. I think he would elevate my game. He stretches me. He challenges me. But I would partner with of the Sharks.

Which shark is the best dressed?

I used to say Damon, but I think Robert. He is so spiffy. I think Robert.

Have you hired a stylist?

I haven't hired a stylist, but as you can tell, I don't know how to dress. I don't know if you can tell, this morning, I thought this was black and black, and then the light showed up, and, Oh, this is blue and looks horrible.

I think that's in now, navy and black. Then I got lucky. I wouldn't know.

But Artemis, who's the wardrobe consultant on the show, is my godsend because she teaches me what to do. Then I borrow whatever she taught me for that season for that year. Then the next year, she teaches me what's new. Because what I don't What I think about you, stylish people, is that you change the rules every year. If I start wearing this and then the next year is like this, the shoes or the this or whatever. So Artemis is my secret weapon.

Which shark is the most competitive?

Everybody's very competitive. That's what's interesting at the show. It really brings out that competitive. You do not want to lose a deal. Then afterwards, you reset. But when somebody wins a deal over you or where you don't want to partner with them, whatever, all of us have our it goes, and it really does. I think everyone is very competitive. I think Mark is probably, with me, was the most competitive because he admired me a lot, but he also regreted that he lost some food deals to me because Mark almost never lost deals. You could tell that he does not. He teased me. Sometimes he would do some deals. What I like about Mark is sometimes he would do the deals. If he felt that the entrepreneur was not getting the right deal, he'd jump in. I think Mark is the most competitive, but every one of us is.

Which shark makes you laugh the most?

They all make me laugh. Oh, Kevin. I laugh out loud with some of his stuff. Kevin, he's very funny, and I know some people think he's mean. He's more funny than mean. Also, we're speaking early about telling it like it is. The gift of feedback is very valuable. I don't like that sometimes he's such a tough cabroncito, but he's so funny. He's very witty. He's very fast.

Who's the kindest shark?

Kindest shark. Not counting me. I think Robert's a real gentle soul. I think Laurie is the nicest and the most nurturing. But Barbara is, without any doubt, of all of us in that panel, the person that more surprises me at how deeply, authentically kind she is all the time. She blows me away every time I see how she behaves towards everyone. But every shark, I think, is a kind shark. Even Kevin, who has a reputation for being a cabrón, he's-Which means...

Cabrón means-I guess we can guess.

What's interesting about Spanish is that there's a lot of words in Spanish that are bad words. But in Mexico, the bad words are sometimes good bad words. Cabrón means like a mofo, jerk, but in a loving way. It's very hard to explain. But cabroncito is a devilish mischivas motherfucker. That's That's when a cabroncito. Do you want me to resay it without the word? No, we like it.

No, I agree. Barbara, I met her actually for the first time when she came on the show, and it was one of those examples where she debunked the idea of never meet your heroes. She was so wonderful and kind.

Barbara is really... And she really wants to help others. But every one of the Sharks, in my experience is someone that I would want to be my friend.

So you're signed up for a long time? You're on the show.

I enjoy working with the Sharks a lot. The broader question depends on the powers that be in and a lot of other factors. But yeah, I think the format of the show, the show, the people that put it together, It reminds me a lot of the kind culture. The Shark Tank, everybody in the crew and in the production team are working towards a higher goal. They're all working towards each other. It's a very cool culture. I I'm not used to too much Hollywood, but the way they put the show out is best in class in terms of culture.

I love it. Well, maybe we can think about, we'll brainstorm on your networth, how much you should be investing so you don't have to sleep outside. Anymore. Just maybe have a budget.

I thought you were going to say that you were going to... You should come visit Shark Tank.

I would love to. I've talked to the producers before. They've asked me for recommendations all the time.

That's useful, too, but you should come.

My brain, I don't even know if I've recommended you in the past. I could also potentially take credit for that. But it's an amazing dynamic that you guys have, and you're killing it. It's so fun to watch. I'd love to talk to you about the op-ed that you recently put out that I was very, very moved by talking about your Jewish grandfather. As you know, I'm very, very proudly Jewish. Both my parents immigrated from Israel, so I'm first-generation American.

I had forgotten that.

But now you remember. It was so moving to hear about your own anti-Semitic experience, someone you thought was a close friend of yours. Can you share that story?

Yeah, I was at Stanford Law School, so this was 30 plus years ago. One of my friends, he was drunk, and he started throwing pennies at me and then said, Hey, you're a Jew, pick them up, pick them up. It really broke my heart. He was someone that I considered a dear friend. I think I think he probably regret it.

Did you ever talk since then?

I don't recall. Being who I am, I probably shared that I was hurt, and I explained it to him, but we never were friends after that.

You talk about how saving money is misunderstood and what you learned from your grandfather.

What I talk about, this is a Washington Post op-ed where I explain mind that my grandfather always taught us to not be arrogant about money. But he would emphasize not to be so arrogant that you think it's beneath you to pick up the pennies. Certainly from my experience building kind, I was very proud to be resourceful. I would have not been able to build a multi-billion dollar company, create billions of dollars in shareholder value if I hadn't been comfortable Picking off free furniture. When we were starting the company, did you ever watch Mad Max? Sometimes I feel like there were these people living in the subterráneo. They would come out. If there was a free desk that somebody left, we'd grab the desk and bring it into our basement office. But we saved ourselves $500 and we operated out of the basement of our building instead of a fancy place and, and, and, and. There were so many ways in which we were initially frugal, then resourceful, But we didn't waste money. We stretched those dollars and we were able to create billions of dollars in value. Still today, it's not that I have to not throw out that avocado or that bread, but I hate throwing food not just because there's people that are hungry, but because I was taught by my parents to not think that I'm above that.

It has nothing to do with being cheap or anything else or not being kind or giving, because the opposite. I give tens of millions of dollars a year, every single year in charity. I'm very generous when I have guests and I try to be lavish with my guests. I love giving. I just don't like throwing stuff out. I think it's dumb and stupid. The more that you avoid that. Also, it's a skill for a business people to teach, and it's a skill to teach my kids. One of the conversations that I tend to have with everybody because everybody does it wrong this way, is like, How many streaming accounts do you have? We don't do it perfectly, but we don't have an unlimited… We don't have 20 streaming accounts. You can only watch one TV show at a time, and each of them has an up-depth. The ideal, you're like, Who's this dude? I try to teach my kids. I give them a budget. They're like, make choices, learn, because otherwise, when they go out into the world, they're going to not be well-equipped to negotiate and to make choices. Of course, we can afford to have 5 or streaming accounts, but choose the three or four that you like the most and then use them.

Then if you ever need the other one, then choose which one you're no longer using because you're not going to be watching 50 things at the same time. Again, that $10 does not make a difference on my... It doesn't register on my radar. That's not the purpose. It's a principle to learn how to... Well, that's what your show is about, to teach people to make choices.

Yeah. I mean, how you do one thing is how you do Same thing, too. So extrapolate that to other things. It's crazy that you say that phrase that you learned growing up because every time still it's like, embedded in me when I see a penny and like, nobody uses pennies anymore. I don't even have cash. But I will always have to pick up the penny because I was told, If you don't pick it up, you're not worth the penny. So I don't know, maybe this is like a Jewish experience.

It should be a human experience, and certainly it's an American experience, because what I talk about in that article, by the way, the pennies are now collector's items, so there's an additional reason to pick them up because they're being discontinued. But part of our founding father's ethos was Benjamin Franklin talked about a penny saved, a penny earned is a penny saved, a penny saved is a penny earned. Our founding fathers talked about thrift as an essential tool for being entrepreneurial culture. America is the most extraordinary country for entrepreneurialism. It's partly because we're not so arrogant that from the dynastic, oh, la, la, aristocrats that say, I'm beneath saving that dollar. I think we should do that. Then you can be charitable one dollar and donate that dollar, but don't be so arrogant that you think it's beneath you for you to save that dollar. We're entering a period of a lot of instability where a lot of young people have not been taught the importance and the gifts that we have of this free market system. It's very imperfect. There's a lot of people that are suffering that don't have enough, and we need to find a way to create a level playing field so that everybody can be elevated.

But part of the toolkit to do so is to have agency, to not be a victim, to know that you're a protagonist, to have that kindness of spirit with that strength or purpose, and to be comfortable taking decisions that are going to help you earn some money. That is a fundamental tenet, not just of our Jewish upbringing, but of what made America such a fundamental success story and example for the world. We should not lose that. It's really, really important that we retain that entrepreneurial, resourceful spirit.

Daniel, as you know, we end all of our episodes by asking our guests for one tip that listeners can take straight to the bank. What is one final tip about saving, investing, raising money?

I think it's create a real or artificial sense of scarcity so you can make a choice, as always. Even you can afford it doesn't mean that you should do it. Even if you can get an extra house or an extra car or an extra 3Maker account, learn to make choices because the choice is not just about whether you can afford it. Choice is like whether it's going to make your life better. Warren Buffet used to say that you don't own properties. Properties own you. When I was building kind, I didn't I didn't have, after I sold it, I didn't have a car, I didn't have a house. I was just focused on my business, and I was renting and just being resourceful. And fortunately, we now are able to have more. But managing all of that you have takes time. And I don't think I could have built kind. You had to worry about all of the other stuff. And so every decision you make about what you purchase might enslave you more than you realize. So be thoughtful about every decision you're making and use the instrument to think not, Can I afford it?

But is this something that's the right thing for me? And can I do without it? Particularly if you're a parent that's successful when you're raising your kids, find a way for them to learn to make those choices.