Exclusive Q&A with Barbara Corcoran, Founder of The Corcoran Group

Barbara Corcoran founded The Corcoran Groupin 1973 with a loan of $1,000. She grew the real estate agency into a five billion-dollar business before selling it in 2001. Barbara is also a best-selling author, a contributor to the Today show and a judge on the hit show Shark Tank.

How did you decide to start your own business?
I had 22 jobs before I decided to start my own firm. I did have another business of my own–a flower delivery club. Once a week, you’d get flowers fresh to your door. I’d pick them, and I’d bring them to you, and you pay for them. That kind of thing. Well, that failed miserably, and then I was back working as a diner waitress, and I just got a lucky break. A guy walked in, became my boyfriend, and six months later he said, “you’d be great as a real estate salesman” and he loaned me the $1,000 to start. So I kind of had a very big lucky break early. Why did [starting my own business] appeal to me? Freedom. I had never worked for a boss that I thought was smarter than me. I thought, “OK, I can do that. I’d be a good boss.” 

You’ve had great success in the metropolitan real estate market. What are tactics that you’ve had success with that real estate agents in smaller communities can take advantage of?
There’s no difference, honestly, between a large market and a smaller market when it comes to building real estate brokerage firms. If anything, it’s easier to become dominant in a small market. Two magic cards you need to build a big business fast are 1), you need a big voice in your marketplace. So how do you do that? You publish a statistical report. One thing I learned early on is that reporters don’t need a new story idea, but they do need statistics to back up their story idea. So I churned out a corporate report every six months my entire career, and as a result of that, I was able to steal the limelight from large competitors as the little guy because I always had a statistical report out there named after myself. That would work in any market.

The other most important piece in building your business is recruiting top people as salespeople because if you don’t have people who are selling well, then you’re going to go out of business. As far as recruiting people? That’s nothing more than romancing the stone. Anytime any salesperson at a competitor’s firm got an award, I would send them a bouquet of flowers to tell them congratulations on the award. My note would say “Congratulations on your award. Your boss must be so proud of you.” And, of course, their boss had never said “boo” to them. I must’ve sent thousands of bouquets every year. My competitors hated me, constantly sending their salespeople flowers, but you know what that did? It made them think, “I’m going to get a lot more attention over at her place than I’m getting here.” And they eventually came over for an interview, and once they were in my hand, I wasn’t going to let them go.

Another thing you can do in any market, but it takes a little longer to do, is build a very fun environment. Why would you work for a competitor with the same commission splits and the same benefits if you can come over to my place, and not only have that, but go to parties and have fun? So the fun card is a key card and again, I think that’s easier and cheaper to do in a small environment than it is in a big one. 

If you had an extra $500 in your budget at the end of the month after covering expenses, how would you spend it?
I’d blow it immediately on a party. I’d take my employees to a movie in the middle of the work day so they feel like they’re cheating by playing hooky. I did this many times. I’d announce a sales meeting. Everyone shows up for a sales meeting, and we’d go and have fun. 

If you had one piece of advice for small business owners, what would it be?
Don’t be afraid to make big mistakes because every time I made a big mistake, a big belly flop, always on the heels of it, I found the bigger things that have made all the differences in my business. I never seemed to come up with anything really incredible that would make a sizable difference, until I was trying to recover gracefully from a mistake.

 For example, I had blown, I think it was $71,000, my whole profit for the year, on a great idea–put all my apartments in the city on videotape so buyers could just pick up a videotape and they didn’t have to visit [the properties anymore]. I thought that was the greatest idea. I called them HOT–Homes on Tape–and I was in love with my idea. Well, nobody in my company handed them out, none of the salespeople, because I made the mistake of putting the salespeople’s faces and phone numbers on all of the videos, and they were afraid that their buyer or seller would call another salesperson instead of them. I just didn’t think that through, and my partner was ready to kill me. But at the same time, I just happened to hear from my husband, who was a weekend navy officer, that he was playing a war game on something new called the Internet. And when I heard about that I thought, “Oh that’s a good face save,” and the following Monday, I said “Alright, now we’re going to take your properties into cyberspace!” I was really just covering up my mistake, and I threw all those videos on this new thing called the Internet, and we were the first ones in real estate to ever sell property online.

 I could tell you dozens of stories of how all the good stuff happened when I was trying to save face or fail well or get back up. It wasn’t even like I was trying to discover anything new. When you’re under pressure, there’s something amazing that happens. Put yourself under pressure or against a wall, and you’ll always come up with your best stuff. It just happens that way because you have no choice.

What are lessons that you’ve learned through trial and error while growing your brand? 
I learned that the little guy always has the corner on the big guy on creativity, and yet, a lot of small businesses don’t know that. They’re aware that the big guy is out-spending them, but I always learned that when times were bad, they were the best times for me to move ahead because all the big guys wanted to hoard their money. They didn’t want to waste it, so they held on to it and they sat on everything, and I was able, with no money, to think of some angle that they would never try because they had a big reputation and they didn’t want to look bad if they failed. Whereas, I had nothing to lose and nowhere to go but up. I had a reputation to lose, but what did I care? So I found that the little guy always has the power card that they don’t realize they have, which is creativity and the freedom to not have to hold up their own reputation. They also don’t have committees and attorneys to have to vet ideas through.

 I always felt like I was running a speedboat while giant firms were trying to make a big wide turn with a giant cabin cruiser, and I always beat them. It was very hard as my company grew exponentially to work lean and mean and fast and get an idea on Monday and crank it out on a Tuesday. It got harder and harder the bigger company became, but I was really determined not to lose that advantage, and that’s why we did so very well.

What are your keys to success?
I was a dunce in school, so I’m always afraid of failing. I should really spend most of my time with shrinks, but I tried that, it didn’t work. I still wasn’t secure. Insecurity, thinking you’re going to fail, is my main motivator. I don’t think I’m in any situation ever where that gut feeling doesn’t come right back. I’m back there all the time, any time I’m trying something new. In a real way, I feel like in everything I do, I’m trying to prove once and for all that I’m really not stupid. So I’m always pushing against that and that gets you running pretty hard and fast all the time. It gets you over-prepared, gets you to think every thing through and really brings out the best in you. People under fire can be very powerful.