Robert Leonard 1:11
I’d like to start our conversation by talking about your background and your story. I personally find it incredibly motivating and inspiring. And I’m sure the audience will as well. So please talk to us about your journey from how you got started to where you are today.

Matt Higgins 1:26
A big part of my background and central part of my history that’s shaped who I am today as I grew up, I was dirt poor, no other way to describe it. Born to a single mom in Queens, New York, and we just struggled a lot. In those early years, my mother was incredibly smart and went to college as an adult. And if I didn’t work hard, things were going to end for me.

So my career started in especially selling flowers on street corners, and selling handbags at flea markets, and basically like a lot of kids out there who grew up poor, just doing anything to make $1. When I was 16 years old, I had the epiphany that I needed to get out of the situation as quickly as possible. And there was a shortcut, which was to drop out of high school and take my GED. And the reason that we’re doing that were two-fold. One, I knew that things were pretty desperate on the homefront, my most helpless, or continue to deteriorate, but if I do something about it… And then second is that if I could enter college early, I would be able to get a job paying a lot more than the $3.75 an hour that I was earning at McDonald’s, $5 at the gallery.

So that’s what I did. And I always like to start there when I do an interview because it was the first time that I took a very unconventional path. And everybody told me this is crazy or I’d be branded forever as a loser. And the first time I realized, you know, everyone espouses to have the answers to your test, but they don’t have the context, right? No one really had visibility into what I was dealing with in the homefront. And so their advice was painted by the prison by which they view the world which works well for them, but not for me. So dropping out of high school is probably the single most important decision I made to send my career out in this trajectory. I know it’s unpopular, not conventional. I’m not encouraging anybody to drop out, but I’m encouraging them to follow their inner compass.

Robert Leonard 3:10
So as you progressed through your career, how did that end up impacting you?

Matt Higgins 3:15
So many people are conditioned to read books or sort of outsource their judgment to another. There’s a great essay by Emerson called “Self-Reliance,” and he talks about the indignity of recognizing your idea, and someone else’s words of art, and then you’re forced to take someone else’s opinion, you know, and what that feels like. And so for me, why it was so important, fundamentally for my career, it just gave me the confidence to trust my instincts, that you could go in an unconventional path that might not be right for everybody, but right for you.

And it doesn’t matter that it’s not in a book, or the internet, or in some top 10 list, right? That I had a special insight. And so what I always tell people, especially young people, when they’re starting out, everybody’s got a special perspective and insight that they were all able to cultivate from their circumstances. So my special insight was, technically, you don’t need to finish high school to go to college. And if you did well enough on the GED, you can go. And that was important to me because I felt like my mother’s health was a race against the time and she ultimately passed away when I was 26. So what it did was set in motion a series of I think unconventional decisions are going in my own way that builds confidence over time. And, you know, it’s a big reason why I ended up at 26, the youngest Press Secretary in New York City history and 20 years later on Shark Tank.

Robert Leonard 4:30
Hearing your story reminded me very much of your fellow Shark story and book, “The Power of broke.” In the book, Daymond talks about how being broke and having nothing but hustling grit is far more of an advantage than a disadvantage. With nothing to lose, you really had everything to gain. So rather than using their current situation as an excuse, how can an entrepreneur today be resourceful and use their shortcomings as an advantage?

Matt Higgins 4:57
I love that. Well, number one, I mean… talk to maybe some of your younger listeners, because I get this question a lot when you’re starting out. And sometimes you’re doing work that feels like pure drudgery. And it’s not what you want to be doing in your life. And I always think back to my, one of my early job experiences, I was working in McDonald’s, and I’ve worked in the play room, and you picture all these little mushrooms like Mario Brothers, like scattered around, and my job was to scrape the gum off the bottom of the chairs.

And interesting, you’ll be amazed how fast kids can replace gum as fast as you can scrape them. And then we’re thinking like, what is the point of this like, soon as I scrape the gum, somebody else just goes and puts it back on. And one time I was on the job and I saw a woman was hosting a party for her kid and a gum got stuck here to dress. I see the spangly spider gum as she got up and I’m like, “Huh, maybe this job does have a role in the universe.” And that’s less the point… One of the point is I would scrape the gum as much as hard as humanly possible.

And I made myself indispensable as the top gum scraper you could ever imagine, that ultimately led to a job of managing the party where I mean a few months later, because somewhere out there in the universe, there’s a manager who’s noticing this too. You know, a 14-year-old kid just going crazy scraping gum. So my number one piece of advice I have to people just starting out, trust the universe, make yourself indispensable in whatever job you’re doing, and somebody will recognize your brilliance, and give you an opportunity to do the next thing. And by the way, if they don’t, then trust yourself and quit, and go for the next job.

So in terms of entrepreneur, I know everyone told me that dropping out of high school would brand me as a loser forever back in the day. And something inside me told me actually, it’s not the only truth. If I can demonstrate my capacity to overcome adversity, and ultimately go to law school at night, which I did for four years in college for seven years, was on law review… for them that, what would be a demerit or a tick against me would actually turn into an asset because it demonstrated my mettle, right? So I would say to any entrepreneur who comes from a background of adversity, that as long as there’s a juxtaposition of before and after you started here and over there, frankly, it’s an asset.

Sometimes I feel bad because society now values people who had adversity and it’s cool to be a dropout, right? But like, I don’t want the pendulum to swing so far that somebody who had a fine life and maybe didn’t have adversity, they shouldn’t be judged either. So I say to entrepreneurs, wherever you started out is an asset so long as there is a compelling enough juxtaposition of where you are, because it proves your mettle.

Robert Leonard 7:14
Yeah, that dynamic is really interesting because it’s swinging so far to the other side. So I’m really curious to see how it plays out in the future.

Matt Higgins 7:23
Some type of tragedy or vulnerability, but now to the point that I think some people feel like if the manufacturer, I always say there’s nothing wrong with a stable upbringing. I would have been quite happy had I taken a conventional path, so I don’t want to glorify it or romanticize it. And I certainly don’t want to judge people who don’t have, because I had a lot of damage and trauma going through what I went through, and I don’t wish that upon anybody. I’m very comfortable. I always say, I witnessed something when I was 16.

And I can’t unsee the night and I like to generally stay there, which is the how powerful it is to ameliorate suffering in another person’s life. That if you could accumulate resources, money influence, power or so to speak, the best use of that influence of resources and money is to ameliorate suffering. You will have no greater impact. It doesn’t mean you need to be Mother Teresa and not enjoy your life. But it just, when I think back to me as a kid from 16 to 26, and spending all these nights at the ER, reading my law school books on the curve while mother was inside.

If somebody had reached out and lent a hand, it would have made a transformative impact. She would probably be alive, I would had a different upbringing. That’s not a poor-me story. That’s, “Wow, think about the power, when you now can go ahead and reach out.” So I, one of the minor things I do are important to me, but I write these scholarships to support single mothers who are going to college or another way. Now I can understand the impact I’m making on that person’s life when they go home to their kids and say, “Hey, I just won a scholarship. Things just got better.” So the benefit of having gone through what I’ve gone through is a unique insight of just how powerful it can be to ameliorate suffering in somebody’s life.

Robert Leonard 8:54
Let’s transition here and talk a bit about your experience on Shark Tank. After having been on the show, how is it different than what you might have expected prior to being involved?

Matt Higgins 9:04
Biggest difference? Like I’ve always been a fan, I watch it with my son. I just love the show, like anyone who has a dream and you’re thinking about transcending. The show is so inspirational, but you assume it’s a show, right? And it’s a reality show, technically. So I presume that it would be scripted, or there’d be a lot more architecting of the whole experience. And I remember sitting on the set for the first time. I was completely uncomfortable. It’s not like I’m a TV star.

I always said this, the maestro… there is like 100 people were scampering around the set, comes out and starts counting down, counting down? What? And then the lights go on. And it’s as authentic as you can imagine. There’s no hint of who’s going to walk through those doors. It’s not like cut off. I mean, it is edited. Obviously, my point is it flows naturally for 45 minutes to an hour, and nobody cares if you get in a word in edgewise. Like, it’s the most impolite dynamic. So, you know, at the end, it was very intimidating. The beginning was intimidating, but I kind of… I left there feeling, you know, it’s so great that the show that I loved and watch is completely authentic because it would have been really disappointing if it wasn’t. So that’s pretty much… it’s an elongated version of what you see on TV. But it’s the same exact thing.

Robert Leonard 10:11
Given that it is a reality TV show, that’s really interesting to hear.

Matt Higgins 10:16
When you’re on there, it’s like, “Whoa.” I saw *advocates here like I can’t pull out a calculator, because that would be embarrassing, like your mind is racing. So and a few things are happening simultaneously, just to deconstruct those 45 minutes. Number one, you’re assessing whether or not the deal is worth doing. Is it a scalable idea? You’re assessing the founder. Does the founder have what it takes to scale? So you’re looking for little tablets, little signals, right? Do they acknowledge things they don’t know? Right? Are they trying to placate you and agree to everything that you’re saying? Do they have the emotional wherewithal to handle being *inaudible?

So all those things are being assessed. Then at the same time simultaneously, you’re deciding whether to sell yourself too, right? Because you might be competing, so interesting. They’re assessing and deciding whether to sell and then potentially selling all in a 45 minute timeframe to make a decision. So what I love thinking about on the show is can you really assess the validity of an idea and the capacity of a founder to execute it in, you know, 45 minutes to an hour? And what I’ve generally found is, the answer is yes, the rest is you’re filling in what you generally feel intuitively, which tells me a lot. And a lot of the assessments we make about a decision of business and a person are really formed in 20-30 minutes. So if you’re listening out there, you really got to make sure you know those first few minutes because first impressions are everything.

Robert Leonard 11:33
Your calculator comment actually leads me to a question that I’ve always had ever since I’ve been watching Shark Tank. And so what are the Sharks actually writing on their notepads? Are they making notes about the pitch or they may be doing calculations and what is going on with the Sharks when they’re writing on those notepads?

Matt Higgins 11:50
That’s a great question. I wonder what everybody’s writing too. I mean, I got to, I’m just gonna be honest, I went to law school. I never wrote a single note. You know, I just was like, I don’t get it. I never got notes. I mean, I want my mind to be thinking, I would try to borrow other people’s outlines, or I would read different books, but I’ve never been a note taker and still not a note taker. So sitting on set, I’m like, I guess I need to take notes. But everybody has their own style. I think some are mostly taking notes on questions they want to ask. And then deal structure is the I would say rather too.

Robert Leonard 12:21
It’s funny you say that because I’m not really much of a note taker myself. But what due diligence goes on after the show if a deal is reached?

Matt Higgins 12:30
There’s the screening that goes into the show beforehand. I mean, 40,000 people try to end up on Shark Tank every year. It’s a pretty grueling process. And there’s a degree of self-selection, right? You have to go through a lot to get there. So just getting on Shark Tank, I think about it as a tremendous achievement. So that’s what I love. I love meeting people and thinking like wow, what did it take for you to get here? So that’s interesting, right?

If you can get this far, chances are you can get farther right? So is that journey worth my time and money is a separate, you know, question, but then you know, post deal you do a deal. You really do the due diligence thing, what was represented on the show, right? Because they, you know, you make representations, “This is my revenue.” And revenue can be casted in a lot of different ways. Are you probably sure if you exclude all expenses? So a lot of it is really just verifying what was represented on the show and try to have a meeting of the minds like any deal, right? That’s one part of it. But you also then have to come to an agreement.

Robert Leonard 13:25
You may or may not have insight into this, from what I’ve heard is the Sharks don’t have any influence as to what businesses get to pitch to them. It’s all from the TV network. So you may not know exactly, but in your opinion, what do you think makes a company be able to get on to the show?

Matt Higgins 13:41
That’s a great point. I’d say probably number one is authentic desire to do a deal. This is not meant to be a nationally televised commercial that doesn’t, that’s not good for anybody involved. It’s a waste of time for the Sharks, but it’s also taking us precious spot from somebody who really needed the support and amount of the investment. So that’s one. There’s a degree of sky scanning for validity. And I think if you raise a massive, massive round before, what’s the likelihood that you’re going to give enough equity to make it interesting for a Shark?

I think if they end up with entrepreneurs on the show who have an idea that it is just going to entirely fall flat one after the other, that’s not very interesting. So I assume that the great folks that you know, so many who are working on putting together or trying to make sure that it’s an interesting idea, and it’s going to resonate, it’s going to resonate with Sharks, it’s going to resonate, you know, with the view. Some things I see and I say, “How the hell did this end up on the show?” So I, sometimes it’s a mystery, right? And then, and I’ll be sitting there thinking, I don’t know who on earth would get behind this. And then next thing, you know, Mark Cuban makes an offer, and I’m like, “What do I know? He’s Mark Cuban.” But regardless, I’m sure they want it. They want it to resonate with the Sharks, because that’s certainly *not interesting.

In what I personally look for, like I want to make sure something is generally a scalable idea. I’ve learned this the hard way but, and this is important for your audience to as they’re starting out, just because you can do something doesn’t mean you should do something. And I find that is the hardest question for a budding entrepreneur to ask themselves, because you’re so excited that you have an idea that you feel like you’re passionate about, you could run with it, right? And you feel it could have a modicum of success or large degree of success.

But that you want to bypass that question is, it’s almost like scary to ask, should I really be doing this? Is this really worth my time? And in order to ask that question, you need to forecast your future self and say,” Okay, if I go down this path, it’s gonna take me at least three to five years to execute, what would I even capable of executing in another year? And another thing I ask myself when deciding whether I want to back a deal, is this really worth my time? Because small ideas and big ideas take almost the same energy. Is it, and sort of a sub point of that is, how big can the business really be? And then I’m assessing whether or not the entrepreneur has the unique blend of confidence and humility to go the distance.

Are they confident enough to recognize that they’re heading in the wrong direction and the humility to do something about it? Because people are afraid to admit it, every entrepreneur has to pivot. It’s just like obvious, but very few do until it’s too late. So a lot of my time I’m spending, I’m asking questions, but I’m also assessing. So I’ll give you a tell that I see sometimes, like, if I see an entrepreneur and if they’re working hard to placate everything that the Sharks say, for me, it’s an out right away, because now you’re just doing everything you can to get a deal.

I also don’t want to go to a rescue mission. So if I see to somebody who thinks that I am magically going to make the difference in the trajectory of your business, that never happens. It is a fallacy. I don’t want to be the hero, right? I don’t want to be. *inaudible I really like people who can acknowledge that they don’t know the answer to something, but they demonstrate to me they have the resourcefulness to get the answer. That’s different than not knowing the answer to something they must know which is their number, right? But there’s a lot of categories as an entrepreneur that are the knowns and unknowns, so to speak, and I look for people who are have the confidence to *inaudible.

Robert Leonard 16:52
Let’s dive into that fallacy because I see it a lot on the show. A lot of entrepreneurs say that they just need the Shark as a strategic partner, and then ultimately that will make all the difference. So, talk to us a little bit more about this fallacy.

Matt Higgins 17:06
Well, right, exactly. Well, I put in this category of hope, right? Like if you can’t articulate how a Shark or an investor or partner, this goes for everybody listening, if you can’t articulate specifically, or with enough specificity to define how a partner, a co-founder or an investor is going to make a difference, then you’re relying on hope. And hope is not a business strategy. So the fallacy plays out something like, “Come on. Hey, I just had Matt Higgins as my partner, Mark Cuban, where suddenly I’d be in every you know, hope like, well, not at the *product stocks.” Right?

So I think it’s unrealistic. Now, when somebody tells me, “I want to use you because you have access to this massive soccer tournament, right? Or, you know, you and your partners with Gary Vaynerchuck, and I think that Gary can help me with my digital strategy.” Okay, that makes sense, right? So I’d like to see a well thought out, you know, a thesis and usually that fallacy goes hand in hand with somebody willing then to give you everything you want, “I just want to get the strategic partners, I’m willing to change my entire business model to land Mark Cuban to me.” Those are those are *sick.

Robert Leonard 18:07
Has your experience on the show changed how you view entrepreneurship and startups? And if so, in what ways?

Matt Higgins 18:15
Has it really changed it? I think what it’s done is nourish my soul to an extent. I mean, it’s a business and you want to back things for the right reasons. And the right reason has to be to make money because that’s a distortion. It’s not supposed to be about philanthropy. However, I work on these big deals in the day, massive deals, large checks, you know, tens of millions of dollars. It’s really amazing to roll my sleeves and go all the way back to day one, and work with these founders and entrepreneurs who are just trying to break through and give them an unfair advantage.

The power of Shark Tank is an unfair advantage. One day waking up and now you’ve got a Shark backing you. You’ve got a tremendous network. And you have the imprimatur of the show, is incredibly powerful. So what I love emotionally is seeing somebody who’s strived so hard to get on that set And then they win a deal. And you can watch in real time over the next six months, their life change. To me, that is amazing. I’m working on something right now. And it just brings me like pure joy, because I’m watching how them being on the show. And that’s partnering together, is going to change the trajectory of their life, but I love them. Ideally, you make money while you’re doing it, but that hasn’t really changed me. It’s really, just I’d say, nourish my soul.

Robert Leonard 19:23
We’ve briefly touched on this a few times but let’s dive into it a little bit more. What are the most important characteristics of a great pitch to investors? Whether it be on Shark Tank or not. Just in general, what makes for a great presentation that really gets you excited about the company?

Matt Higgins 19:39
Number one, is it a big enough business? Is it scalable? Right, how large is the total addressable market? How big *inaudible is big, because rule number one: too many small ideas have big ideas like almost the same amount of energy, right? So that’s number one, two, are there signs or indications of early traction? Whether the business or it’s pre-revenue or hasn’t launch of the fundamental behavior you’re trying to tap into, right? What is the magnitude of the problem you’re trying to tap into, and demonstrate that there’s traction.

So example, Drone Racing League, some young guy by the name of Nick came to my office with a PowerPoint, just talking about how he wanted to create a new sport called drone racing. And everyone at first was like, “What are you talking about? What is drone racing?” But he made a very compelling case that all throughout the world, and it was on YouTube, people were racing drones, like Star Wars through *farce and garage. So the activity already was demonstrated. There was a form of traction even if it hadn’t been launched.

But as a business is launched, it’s pre revenue, but I want to share I want to see the ramp up right. So I want to see however you define traction of mindshare, or you know, in revenue or *yours, whatever. And then three, I prefer to back people who, God put them on this earth to make this company. If you were born to do this, you were destined to this and only you could do it. And maybe only you could do it because you just have the fire and you’re crazy enough to kill yourself dry or because you have something special about yourself.

So to me if you could demonstrate those three things, right, scalable, you know, at the end of day, some form of traction, and that you were born to be the founder, and then you have all the characters to do it, then I’m interested, right? What I don’t want to hear is, “You’ll make the difference, if only you back me then we can do XYZ.” Like all right, well, now I got another job. I just want one job.

Robert Leonard 21:26
Shifting away from Shark Tank a bit, but still on the idea of venture capital and raising money, do you think every new business needs to raise capital from investors, if the founders don’t have a lot to begin with? And if not, when, and why wouldn’t it make sense for some businesses to raise capital?

Matt Higgins 21:43
I think if you… one, you want to try to keep as much equity as you can on the journey, not just from an enrichment standpoint, but actually for alignment of interest. You know when a founder begins to get diluted to such a point that you have only a fraction of the dream that you helped create. You get resentful, maybe you, you know, you just work in a different way.

So it’s important to be really smart and think about how much money is it going to take to get me to the final endpoint, whatever that may be, and be strategic about the dilution when you take it. So if you can get a business off the ground, with your own friends and family money at a low cost, you know, maybe it’s *inaudible, or you’re using your own money then by all means self fund.

At some point in the journey, though, I think the absence of scrutiny from outside investors could actually be a liability. And there’s good investors and there’s bad investors, there are pain in the ass investors who are way focused on the spreadsheet instead of what you’re really trying to do with *a panic and whatnot. But let’s set aside the good and bad and talk about the middle. The middle brings a degree of accountability and oversight. I’ve been there before. Sometimes when you completely self fund you, you miss that and you end up maybe not going on a vanity path but something similar where you’re just not being rational and rigid in your analysis of, “Are you headed in the right direction?”

My number one piece of advice, self fund as long as you can. At some point, though, be careful because you want to another set of outside eyes. You can achieve that too by having, you know, having advisors and I would say just one aspect for our investors generally, the best investors are strategic and make a difference in their strategic first and their accountability, second. The worst investors are totally focused on accountability. But I don’t believe investors ever entirely changed the outcome.

Robert Leonard 23:25
With all of your experience working with startup founders and entrepreneurs, what have you found to be the most important traits or characteristics of a person in order to be successful? And what separates those who are successful from those who are not?

Matt Higgins 23:39
Number one, self-awareness is the most important attribute. If you possess self-awareness, you could achieve anything because to persist is to prevail. So if you have self-awareness, and you have the ability to persist, your self-awareness will cause you to iterate at those important inflection points. So you’ll come across a fork in the road, your business model is not working, you’re self aware about what’s going wrong, either in the business or in your management style. Tou’ll reflect and you will iterate and you will attack, right? If you’re missing self-awareness, you will blame Bob or Mary instead of yourself. You’ll complain that it’s just the market doesn’t get how smart you are. You will bark the moon.

And so I just think self-awareness is so important because self-awareness leads to iteration, iteration leads to eventually figuring it out, right? Persistence, to me is probably important… grit. But it’s a caveat to persistence. If you persist and keep doing the same thing over and over again, it’s a definition of madness, right? So you can’t just have persistence, you need self-awareness. So you iterate and continue to persist, and that’s very convoluted. But I think if you broke that up, you understand exactly what I’m saying.

Robert Leonard 24:47
If you were to be stripped of everything you have now, money, relationships, contacts, fame, etc., except for your knowledge, and you had to start over from scratch, where would you start today and why?

Matt Higgins 25:01
I would create a direct-to-consumer business. I think we are living in such an incredible time where the bar to creating DTCs is still so low. I mean, it’s not… It wasn’t was five years ago, but the fact that you could launch “hims” and 18 months later, it’s a billion dollar company. I would launch my own DTC. Sometimes I think about it I, if you asked me what I would I love to be doing off to the side, I’ve been doing that. We invested in a lot of them. But I think it’s amazing how somebody anywhere could have a great idea and a great product and basically launch it themselves and A/B test it on Instagram and get tons of data and give it a go.

Robert Leonard 25:38
Is there a specific industry or product that you’d go direct-to-consumer with?

Matt Higgins 25:42
Well, that’s probably the problem. Well, I haven’t done… I haven’t had a brilliant idea. I just keep investing in other people’s brilliant ideas, which at some point, my need for self-worth and self-esteem will drive me to have to create my own hit. Now I haven’t had an idea worth big enough, worth pursuing. Which is, I’m actually proud of that because it’s discipline, right? I mean, I’ve got ideas but none of them are worth distracting myself to pursue. But I’ll come up with something. I got a lot of good ones I’m backing *inaudible. Also, it’s interesting that the word DTC, direct-to-consumer, digitally native brands. That’s just a launching pad because everybody ends up having to end up with retail, a brick and mortar, but the bar or barrier to entry is very low to go ahead and launch a great product. Then you have Amazon, that’s eBay. Just have going direct. It’s amazing what you can do.

Robert Leonard 26:31
Matt, thanks so much for your time and for sharing your wisdom with the audience. Where can people learn more about you and all that you have going on?

Matt Higgins 26:40
I spend most of my energy on Instagram. So @mhiggins on Instagram is the best place.

Robert Leonard 26:47
I’ll be sure to put a link to Matt’s Instagram in the show notes so you guys can go connect with him there. Matt, thanks again for your time. Really appreciate it.

Matt Higgins 26:55
Thank you so much for having me today.

Robert Leonard 26:57
That’s all for today’s interview. But before we end the episode, I’m excited to tell you guys about an offer we have going on right now with the show. For the next few weeks, anyone who leaves an honest rating and review for this show in Apple podcast will be entered into a drawing for a free book or a one-on-one coaching session with me. In order to enter, all you have to do is take a screenshot of your review, post the photo on Instagram, and tag me in the post. I’ll then pick three winners at random and contact you directly if you’ve been chosen. Not only will you be entered for this giveaway, but it’ll also help the show grow and allow me to continue to bring on the best guests like today’s episode with Matt Higgins from Shark Tank. I really appreciate all of your support, and I look forward to seeing you all again next week.

Outro 27:47
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