My First Million: Barbara Corcoran, The Corcoran Group
How a self-made salesperson took $1,000 and took on the titans of New York's legendary real-estate industry.
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If Woody Allen ever starts making movies in the Big Apple again, Barbara Cocoran's New York entrepreneurial story would make a great screenplay -- girl meets boy, boy gives her $1,000 to start a real-estate firm, boy cheats on girl, girl builds multimillion-dollar business as revenge.
Since selling The Corcoran Group in 2001 for a reported $70 million, Corcoran has become the feisty face of residential real estate in the Big Apple and beyond -- she has penned four books, serves as a real-estate contributor on NBC's Today and helps snare rising entrepreneurial stars as a judge on ABC's Shark Tank.
Her latest book, Shark Tales: How I Turned $1,000 into a Billion Dollar Business, does just that -- chronicling Corcoran's remarkable rise from a 23-year-old, wet-behind-the-ears broker into a New York real estate mogul mentioned, much to his chagrin, in the same breath as Donald Trump. In fact, her story of chasing big dreams is why so many set sail for New York in the first place. At least a few of them have rented apartments from Corcoran along the way.
"I had 22 jobs before I started in real estate and I had a very lucky break. I was waitressing at a diner and met my boyfriend and soon-to-be partner Ramon Simone at my counter. It was Ramon that would give me my $1,000 that would start my real-estate company. I was 23, I didn't know any better and there was a great charm in not knowing what to be afraid of and starting young. That was my very first lucky break.
"A thousand dollars 30 years ago bought an awful lot. I was able to afford a three-line ad in The New York Times, I was able to run the ad for about eight weeks and be able to pay for my new pink princess phone. Frankly, real estate is fairly easy -- you put an ad in the paper, you hook in a body and you try to rent or sell them a home.
"I learned very early on that creating a great advertising hook was key, so I took a typical one-bedroom, convinced the landlord to put a half-wall between the dining L and the living room and I relabeled it a one-bedroom and den. Same square footage, but I started advertising one-bedroom and den. Every other competitor out there, much larger than me, was advertising a one-bedroom for the same price and that's what hooked in a lot of customers. So I got a lot of bang for my buck.
"In the New York old-timer days, back in the mid-'70s, everything in New York City was an apartment for rent. There were virtually no co-ops or condominiums to be sold. So, of course, I got my start in the rental business -- a great business, because you rent your apartment on a Monday, you get your commission on a Tuesday. Not a bad way to get started.
"Everything went bonkers in New York City in the early '80s, once the landlords of thought of a way, a legal way, to convert rental buildings to cooperative buildings, and it seemed overnight that every single rental building in Manhattan was converting to a co-op and that created a huge opportunity for people in the real-estate trade business.
"I came across just about every wacky, harebrained type of character in New York because New York has always attracted crazy people. I think the most bizarre experience I had was trying to unsuccessfully sell an apartment to Janet Jackson when she was at the height of her fame. I actually locked her in a bullet-proof van, one she insisted I rented, with her two huge dogs -- they must have been six feet tall -- her three bodyguards, her horrific boyfriend and her future mother-in-law. And I had to serve them pizza to lock them in the back of that car and not let them out of my grip. Spent the whole day and sold them nothing.
"One of the more interesting calls I got the second year I was in business was from a guy that owned a 14-room apartment at the Dakota on Central Park West. He said to me, 'If you can sell it, they don't have to pay me. I'll give it to the buyer for free, if only they'll take up the $1,200 maintenance for me.' And you know what, I advertised that Dakota for months and never found a buyer, go figure! What was I thinking? I should have robbed a bank and bought it for myself!
"Most people think that salespeople have to know how to close, they have to know how to pitch and they have to win people over. The truth of the matter is, what you really need to know is how to get the people in your hands in the first place. If you can drum up business, you at least have people that can buy or sell. And on top of that, it has nothing to do with closing. I never knew how to close, I used to talk people out of buying things. But what it has to do with in the real-estate business is nothing more than trust. If people trust you, they're going to buy from you, if they trust you they're going to recommend you -- and it's in the recommending that builds the empires in the real-estate business.
"The biggest sales mistake many people make today is that they try to hustle someone for something they half-like, or try to push them to close when the people are not ready. It might make you a deal here or there, but the customer is going to hate you after they close -- if it even works, it rarely works. And most importantly, you're not going to get more business.
"What every great salesperson has, that is always underestimated, is not their ability to hustle so much. It's their ability to get up after they've been hit. Handling rejection is 90 percent of what sales is all about, and the better you are about getting up quickly, and not spending too much time feeling sorry for yourself, that's what determines who are the superstars.
"The biggest stumbling block I ever had was when my boyfriend married my secretary. I had been raising his three daughters at the time and he came home one night -- and I'm dumping out the pasta making dinner for his kids -- and he says, 'I have some bad news. I'm going to marry your secretary.' I just couldn't believe it. That was the worst block for me personally to get over. One, she was prettier than me. Who wants to lose a guy to someone who's prettier than they are? Not me! She was 10 years younger than me. I was only 30, she was 20, she looked better than me. I hated her and I hated him as a result of it. But you want to know, when I had the courage to end that partnership, he gave me the best gift of my life. He said to me, 'You'll never succeed without me.' And I knew, right then and there that moment, I thought, 'Oh yeah? I'd rather die than let you see me not succeed.' And you know what? That was an insurance policy for success. Every time I was thinking of failing or giving up, I would think of one more thing, just because I didn't want them laughing at me! Maybe not the best motivation but whatever, it worked for me.
"There were two things that happened that for me were like a big light in my head. One was when I accidentally sold an apartment rather than renting it. I was just planning to rent the apartment when the young engineer said that he wanted to buy, that's what got me in the sales business. It wasn't a big plan. It should have been, but it wasn't. That was like 'Whoa!' You make a lot more money selling something than renting it and I'd still be renting apartments. The other wonderful thing that happened was one year I actually had $80,000 in profits. Probably had maybe 500 salespeople and I thought to myself, 'I've got enough money to buy my mother and my father a new car.' So, I bought him a Lincoln Continental -- hey, what the heck, my dad dreamt about it his whole life -- and I replaced my mother's old rickety, old blue whatever-the-heck-it-was. And so, the idea that you could buy each of your parents a new car in one week and have it delivered was mindboggling, and I ended up going, 'Whoa, maybe my business is actually a business.' That was the first really big wake up call.
"Our company, The Corcoran Group, was always smaller than the public thought we were, and the reason for that is we had a big mouth in the media business. If I wanted to become something more than what I was, I would publish a report on it. That's how I met the terrible Donald Trump. I published a 'Top 10 Condo' survey where he ranked No. 8 and 9 when he was telling the whole world he ranked No. 1. That's how I got called into Mr. Trump's office and made him my best friend intentionally. When I wanted to do celebrities sales, we had no celebrities, so I put out a 'Madonna Report' in the daily paper. And would you believe I was interviewed on three television networks that week? Not because I was Madonna's broker, but because I had the big mouth and I was talking about it. I never got her as a client -- I wish that was the ending -- but I did get Richard Gere as a client that week because he saw me in the news as a celebrity broker, which I wasn't. So we were always looking so much bigger than we actually were, simply because I learned the power of putting out a statistical report and sending it out to the press. It built our brand, and for that reason alone, we sold our business for a heck of a lot of money.
"The day I decided to sell the company, we had a little bit more than 1,000 brokers and we had $5 billion in sales. That's a lot of business. I don't even think I would have thought about selling the company if my archrival in the business hadn't called me the week before suggesting we merge our firms. This was a company that I competed with my whole life, it was a giant and now the giant was asking to merge firms. That was the day I realized, 'My God, I could probably get a lot of money if I cash out.' And that's exactly what I did.
"I was extremely clear when I decided to sell the company, because I had waited until I was 46 to have my first child. He was already four years old and I found myself wanting to be a super mom and a super leader at my business, and frankly, I was doing each at about 80 percent. Which is still better, since they add up to more than 100 percent, but not good enough. That's what made me sell the company. As most women will wrestle with at some point in their life when they have children late, it was hard to do both.
"Once I sold The Corcoran Group, I was shocked and dismayed at what life became for me. What I learned is that I missed the power of the position, I missed tremendously the camaraderie, I missed tremendously not having a giant blackboard to be creative against -- to have an idea on a Monday and see it executed by Wednesday. All those things, I never realized how important they were to me, and it took certainly a good three years to adjust and start aiming my guns at a new target, because I realized in short order I was no good without a team. I love building businesses.
"I think entrepreneurs have to be born with the talent to work with people. A lot of people that want to be entrepreneurs, but they don't have the people talents, and I think the part that's made is your background, how hungry you are to succeed. I knew in school -- I was dyslexic and the dunce of the school -- I had something to prove, I wanted to get out in the world, get out of that old jailhouse I was in everyday and prove to the world that I wasn't stupid. I had tremendous motivation to build a company and to do whatever I wanted rather than by somebody else's rules. But I think the motivation has to be there because it takes a heck of a lot of energy and time to jump over the hurdles that get between you and having a successful business.
"I've written four books since I've sold The Corcoran Group and I can't say that that's my sweet spot. I write well because I work at it, but that was a means to and end. What I was really trying to do -- and I think I've accomplished now, thank God, successfully -- was build my Barbara Corcoran brand independent of The Corcoran Group. So now I'm the real estate expert on the Today show, I think people know my name, when you hear real estate. In fact, all that people ever say to me is 'Oh, you're the real-estate lady,' and I say, 'I actually have a name,' but they call me the real-estate lady. More recently, which I'm totally enjoying, is being a shark on ABC's Shark Tank. I love that because, in a way, I'm now hiring salespeople again. I'm hiring the heads of many entrepreneur companies to be my partner, and in doing so, I'm back to picking out great salespeople and entrepreneurs and developing their businesses all over again, their individual brands. I'm doing a lot more of what I really, really love to do, and that's been a real blast. The failures and the winnings!
"Ask any entrepreneur. It's great arriving where you want to arrive cause you can say, 'Hey, I did it.' It's great cashing out because you get a ton of money. But talk to any entrepreneur, once they have a beer or a whiskey in them, and they'll tell you the best days of their lives was when they were starting the company. There is something about that baby stage, just like raising kids. That's where all the charm in life is. It's never the getting there -- it's the process of getting there."