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Shark Tank mentor Robert Herjavec shared a video via his YouTube channel, talking about how businesses operate and recalling Steve Jobs' words about the same. In the video Robert shared on December 8, 2024, he stated the fifth lesson that he had learned from his greatest mentor, Charlie Munger, as Robert stated, was,
"Buy a business run by idiots."
Sharing more about such a lesson, the Shark Tank mentor stated:
"As Steve Jobs once said, it is incredibly complex to make things simple. Simple is hard. And operating a business that an idiot could run is really hard. The point is, a business based on talent is very difficult to buy, because guess what? The talent walks at the door every single day. This is one of the reasons they never invested in tech for such a long time. Tech is based on talent and on technology that can change and does very, very quickly."
Shark Tank mentor Robert Herjavec recalled Charlie Munger's thoughts on business acquisition and more
The video featured Shark Tank mentor Robert Herjavec sharing essential tips on why Charlie Munger has been his "greatest mentor." Robert recalled one of the meetings when Charlie shared the "best kind of business" individuals should buy.
While Robert was expecting the answer to be on:
"Certain categories, certain amount of EBITDA, some financial parameters, margins, blah."
However, Charlie's answer was not about any of those facts. Charlie stated, "Buy a business that can be run by an idiot." Explaining what Charlie meant by that, Robert said that Charlie knew about essential things and facts when it comes to running a business and how "complex" all that can be.
However, when Warren Buffett and Charlie Munger used to look at businesses that could be "run by an idiot," it simply meant that the duo was searching for a business that could be easily run, that "almost anyone" could run.
For the readers who might be confused, there's more.
As the Shark Tank mentor further revealed:
"They (Charlie Munger and Warren Buffett) didn't mean people or idiots, but they wanted a business that was easy and so well set up that almost anyone could run it. They believed they were smarter than the average person and could add some guidance and capital and make it better. But the foundation had to be a great business that someone had built to a point where it was operating smoothly."
Robert also stated that it was one of the reasons why Warren Buffett and Charlie bought "so few" companies in their time. He then recalled one of the things that Steve Jobs said once. It was about how making things was "incredibly complex." He mentioned how "simple" is "hard."
Further in the segment, Robert recalled a few businesses such as insurance, Diet Coke, infrastructure, and more.
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