10 Tips For Running A VAR: Advice From Shark Tank's Robert Herjavec

Shark Tank Tips

Robert Herjavec, owner of solution provider The Herjavec Group and co-host of ABC's reality TV series "The Shark Tank," spoke at the 2013 Best of Breed Conference, hosted this week by CRN publisher The Channel Company, and gave advice and offered several tips for VARs in the channel today. Here are some of the highlights. For more, watch Herjavec's keynote at the 2013 BoB Conference.

Don't Lie To Yourself

"The biggest lies we tell in life are the ones we tell ourselves," Herjavec said.

Specifically, Herjaveck said, most solution providers see themselves as sleek, powerful great white sharks, while their customers view them as one small fish in a sea full of fish. And, every one of those fish sells itself as a killer shark, too.

Change Or Die

"What makes running a VAR business really difficult is the constant change," Herjavec said. But, he said, too many solution providers want things to remain as they are and are adverse to change. And, it's up to the owner to lead that change.

"Why do most VARs never become big companies?" Herjavec asked. "It almost inevitably comes down to the owner."

He said there are two types of owners: businessmen and engineers. The former is usually proactive about change and transforming the business, whereas owners with a technology background often lag behind.

Change Isn't Pretty

"Change is not a fluffy kitten," Herjavec said. "Change is bloody."

The Shark Tank co-host said VARs pitch business transformation and technology migrations as a bright, sunny experience, but customers view it as a painful, stressful ordeal.

Your Enemies Are Not Your Friends

Herjavec is not a fan of the "coopetition" concept of working with competitors.

"My competitors want to kill me," he said. "We live in a zero-sum game. If you won a deal, that means someone lost the deal. And let me tell you, they don't like you."

In fact, he said, the competitor that lost that deal is probably plotting right now on how to take you out. So, VARs always need to keep that in mind, he said.

Your Vendor Loves You ... Now

"My vendors tell me how much they love me, ... just before they sign up 20 other people in my region," Herjavec said.

According to Herjavec, most vendor partnerships are short-term affairs that are marriages of convenience. But overall, they're not built to last. In fact, he compared the typical vendor-solution provider partnership to a Hugh Hefner marriage with one of his Playboy Playmate models. "They're both getting what they want out of the relationship now," Herjavec said, "but you know it's not going to end well."

Put Yourself Out There

"The world will not beat a path to your door," Herjavec said. "One of the biggest fallacies we see on the show is ... the better mousetrap concept."

Herjavec said too many companies believe that if they made a superior product, then customers will find them. But, that's not true, he said.

"The world doesn't care about you. Word of mouth is not a marketing strategy," he said. "You have to put yourself out there."

Free Is Not A Sale

Herjavec told VARs in the audience that they need to stop giving away services for free. The practice not only hurts their bottom line but also takes no skill.

"Free is not a sale," he said. "How many of us give away our services for free? Well, anyone in this room with no sales training can sell something for free."

A Level Playing Field Is A Bad Thing

Herjavec doesn't line vendor deal registration programs. Why? Because they create a level playing field for all partners. VARs should always be looking for a leg up or an advantage they can exploit over the competition.

"Why is [a deal registration system] good news for me? Who in their right mind wants an equal playing field?" Herjavec said. "I've worked for 30 years in this business so I don't have to play on an equal playing field."

Prepare For (More) Falling Margins

Herjavec said VARs that are still making a lot of money on product sales, whether it's hardware or software, need to prepare for the future. "Margins are definitely going down," he said. "Whatever you're making on products today, even with back-end rebates, is going down."


Make Tough Decisions -- Or The Market Will Make Them For You

Herjavec told the audience about how many years ago when he was running a VAR, he made a tough decision to abandon a business, which led to lower revenue for his company, in order to get ahead of a major business trend. That trend? The introduction of Cisco routers and switches, which replaced bridges.

"Everyone wants to be successful but few people are willing to pay the price," he said. "And the price, especially in this business, can be very exacting."