My best successes came on the heels of failures. –Barbara Corcoran
NEW YORK—Barbara Corcoran turned $1,000 into a $2 billion real estate empire and worldwide fame. Along the way, she picked up five lessons she shared with credit unions at PSCU’s MoPRO meeting here.
In remarks that were humorous, insightful, at times painfully honest and often even ribald, Corcoran’s story is every bit the American pull-yourself-up-by-your-bootstraps path to success as her fellow Shark, Daymond John, who had spoken to a different group of credit union executives just one week earlier.
Born as one of 10 children to a “devoutly Catholic” couple in Edgewater, N.J., just across the Hudson from Manhattan, Corcoran grew up in a two-bedroom house with a mother whom she called a “phenomenal motivator.” Her mother anointed each child a future role as soon as they were born; in Corcoran’s case, it was to fill the role of having a “great imagination.” That led her to being in charge of putting on plays or “going in the backyard and opening a rock store.”
Barbara Corcoran speaking to PSCU MoPRO meeting.
“She was also the most organized non-military person in the world,” said Corcoran. “She had a system for everything. She never wanted to do any task twice. If she had gone into business instead of having 10 children she would have been an efficiency expert.”
Life Changes
Corcoran spared little detail in how her life changed one day. While working in a diner in Fort Lee, a handsome man named Ramone Simone who was 10 years her elder walked in. Simone returned the following night and gave her a ride home, the first time she had ever seen leather seats. “My parents hated him on sight,” recalled Corcoran.
Simone told her she needed to go to New York, which, amazingly, Corcoran in her 20 years had never visited. He put her up in the all women’s Barbizon Hotel and gave her $100 to buy her first “New York outfit.”
“He told me to get a job here and for me it was like a dream come true,” said Corcoran. “About eight months later Ray said ‘You’d be great in the real estate business, and he lent me $1,000. He took 51% of the company. For next seven years I worked that business like crazy. To me it was like stepping in playland. For me it was not even a job, just pure joy. I had 14 sales people.”
Corcoran was also living with Simone, with whom she had three daughters. She thought she had it all.
“One night I’m dumping pasta in a sink and Ray said, ‘I have something really serious to discuss with you.’ I was just about to turn 30. He said, ‘I’m going to marry the secretary.’ I ran out of there. For the next six months I worked that business with my heart in the sewer. It was most insulting because I said you have to fire Tina (the secretary). He said, ‘I own 51%, you’re not in charge.’ So I worked for six or seven months with Mr. and Mrs. Simone, and one day, something clicked. ‘I said you know what, we’re ending this business. We’re chopping up this business, you pick one, I’ll pick another employee. Just like a football draft. He picked the top salesperson. I picked next. We chopped it up in five minutes.”
Corcoran took those seven people and moved to new offices, along with the last words she heard from Simone ringing in her ears: “You’ll never succeed without me.” Those words, she said, became an “insurance policy” that she she would suucced.
“I think if he had said ‘You’re amazing, you’ll do fine,’ I would not have done as well. He insulted me. And I have met so many people who are motivated by a great anger. I was thinking I would rather die than have you see me not succeed. That thought got me through more crap over the next 20 years.”
Twenty years later, she sold Corcoran Group for $66 million.
Five Lessons Learned
Between those low days and the sale of her company, and then on to Shark Tank fame, Corcoran said she learned five lessons:
1. Perception Creates Reality. “My mother used to say the meek shall inherit the earth. My mother was wrong. The big mouths inherit the earth,” said Corcoran.
With no advertising budget, Corcoran began assembling data the company had and created a handmade “Corcoran Report: Conditions and Trends in the New York Real Estate Market,” that she sent to everyone at The New York Times. When she opened the Sunday Times she was stunned to see a headline and a story based on her real estate analysis.
“That was the day I realized I had a new partner in the market, and it was the New York Times,” she said. “Suddenly people had heard of us. Listings got easier. We had 9 people, people thought we had 50. Why? I had discovered the art of being a big mouth in the press. I would send out a report on anything and everything.”
When Madonna was house hunting, she built data around it and called it The Madonna Report. She mailed them to TV stations and once on TV, a host surprised her by referring to her as the “Broker to the Stars.”
Out of that she got Richard Gere as a client when he was at the top of his Pretty Woman fame. “When his representative called and asked if I would consider him as a client, I said, ‘I would consider it,’” she laughed. Out of that she created the Richard Gere Report. “It went on and on until the whole world believed we had the celebrity market. And it was true. I created the image first, and then we ran like crazy to keep up with the image.”
2. There are two kinds of people: Expanders and Containers.
“I have found that by dividing people into two piles, expanders and containers, has made me so much more effective as a hirer,” said Corcoran, summing up how she divides people by personality type.
Corcoran is an “expander,” and as a result handles publicity, interacting with people, and sales. But “containers” are critical, too, especially for organizational skills. She cited a hire named Esther for making clear to her how valuable “containers” can be.
“Esther, she was the opposite of marketing, She would identify the one marketing campaign she didn’t like, and then I would select that one,” laughed Corcoran. “But from that day forward I hit on a formula: every office had a mini-Esther and a mini-Barbara, and they complimented each other, as long as they respected each other.”
3. Fun is good for business. “I found the most important thing to spend money on was fun,” said Corcoran. “Fun was not common in the real estate business. The top sales people in any real estate shop hate each other. That’s just the way it is. That bothered me. I wanted the same kind of feeling I had growing up, but I didn’t know how to do it.”
Her first test: she told all the employees to dress to the nines for a secret trip that would be leaving at six in the evening. With everyone looking their best she put them all on the second deck of a double-decker bus, and had it driven straight to Harlem.
“That’s when Harlem was the scariest place on Earth,” said Corcoran. “I had the bus stop in the epicenter of Harlem, and the driver pretended the bus was broken down. Panic set in. Then we took them back to the office. I dropped them off and everyone couldn’t believe it, but they were laughing with relief that they were alive. They talked about that Harlem bus ride for months. So I became a massive party planner at Corcoran Group; I considered it a third of my job.”
That led to theme parties, such as one that required anyone trying to get in to be cross-dressed—it drew more than 1,000 people.”
“What I expected to get from that was camaraderie, but what I never expected to become was the creative shop of New York City. I tell you the best ideas never come out of a staff meting or an advisory meeting. When you get outside the walls you get creativity.”
Corcoran said becoming the “fun” place to work also meant more people wanted to work for the company, and would choose it even when there were better offers elsewhere.
4. One Price Sale. Corcoran said another lesson she has learned that is “hugely important” is “your capacity to deal with failure.”
“One thing that is terrible about the sales business is its 80% rejection and 20% yes or maybe. The only difference between the top sales people making a million dollars a year and the person making $65,000 isn’t education or even contacts. I have found the difference between the phenomenal people and everyone else is when they took a hit and simply spent less time feeling sorry about themselves. I think this was largely responsible for the fact we had low turnover. I attribute this to being a terrible student, and being forced to read out loud with other students laughing at you. It’s horrific for a child. I thought thank God I came out of that, not that I would wish that on anyone else, but that I came out of that determined to show everyone else they are wrong.”
5. You Have The Right To Be There. Corcoran has faced many competitors in her life who didn’t want her there, not the least of whom has been Donald Trump. When Corcoran’s company trumped Trump in a lawsuit, requiring him to pay her $4 million, the settlement meant a payment of $44,444 every month from Trump. With each payment Corcoran sent Trump flowers and a note of thanks. He sent every one back.
“I knew it was driving him nuts. I did that and had flowers on my desk for five years,” she said.