GUY RAZ, HOST:
Hey, everyone, it's Guy here. Just a quick note to tell you that there is a little bit of bad language in this episode, so if you've got small kids around, you just may want to be mindful of that. Thanks.
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BARBARA CORCORAN: She came to me. And she knew I had to fire a lot of people because you could just see that everybody knew something was going to shake out. And she said, why don't you publicly fire me? If you fire me, she said, no one else could be angry with you when you fire them. And she was right.
So at that Monday morning meeting we always had at 9:30, I said, I'm so surprised how bad things are. We're going to have to make a lot of changes. And it's going to be very hard for me to do but the hardest change of all is me firing my mother.
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RAZ: From NPR, it's HOW I BUILT THIS, a show about innovators, entrepreneurs, idealists and the stories behind the movements they built.
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RAZ: I'm Guy Raz. And on the show today, how a Jersey girl conquered the streets of Manhattan, built a real estate company worth millions and then reinvented herself as a shark on "Shark Tank."
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RAZ: One of the most surprising things about the entrepreneurs we've interviewed so far - at least surprising to me - is that most of them aren't necessarily book smart - street smart, yes, all of them. But only a handful of the people we've had on went to elite universities or were academic geniuses. Most of them had just figured stuff out along the way and used the tools they had. Which brings us to Barbara Corcoran, who is probably the most likeable shark on the TV show "Shark Tank."
As you're about to hear, Barbara wasn't the best student. In fact, she didn't excel at school at all. But what she had, or rather has, is something so much more valuable - charisma. It's how she'd eventually build one of New York's most successful real estate firms but more on that later. Barbara grew up poor, a big Irish Catholic family, nine brothers and sisters, a cramped apartment in Edgewater, N.J. But even though they had almost nothing, she remembers a childhood that was basically happy.
CORCORAN: I mean, we all had our issues as every family does but it was well organized. My mother was like a drill sergeant. So even though we all lived in such close quarters, it was meticulously clean and everything was put in order when my mother snapped her fingers. OK. We had a side yard which we controlled. It was a skinny little side yard but most of the houses in Edgewater were back to back, so we felt wealthy.
Even though we were renting the ground floor, we felt wealthy by comparison. And also, my dad was a printing press foreman and had to wear a suit to work. And every other guy in the town seemed to work for the aluminum factory or the coffee company in a uniform. So I kind of thought of us as like the Kennedys, like, whoa, we were something, you know?
RAZ: At school, it was a different story. Barbara struggled a lot. But every day when she'd get home from school, her mom was right there.
CORCORAN: She never told you what was wrong with you. She always told you what she thought was amazing about you. And she pinned one thing on each kid, so each kid knew what their thing was, you know? My thing was she said I had a wonderful imagination. And so when I couldn't pass any subjects in school and I was really upset, I remember distinctly when the nun from hell, Sister Stella Marie (ph), told me I'd always be stupid.
And I was so upset to hear that word stupid, like get a label finally. And my mother, said oh, don't worry about it, with your imagination you'll learn to fill in all the blanks. So I didn't learn to read or write but I thought, oh, good I could fill in the blanks. And I fell for it, you know? And she's right because I did have a good imagination, or at least maybe I learned to have it because of her.
RAZ: By the time she was 22, Barbara was working as a waitress at a diner in New Jersey. And one night during a shift, an older man - dapper, confident, charismatic - walked in for a bite to eat.
CORCORAN: And when Ramon Simone walked into my life and sat at my counter, call it what you want, it was a lucky break. It was like you could tell that he was something else. And he had a suit on. And he didn't have just a suit. He had like a pressed collar with a shiny tie and shiny shoes. And he had, oh, navy blue aviator shades, so I couldn't really see his eyes. Also, he told me he was from the Basque country.
And I didn't know where that was but I - it wasn't in New Jersey. And he told me it was a warrior tribe of some kind. I'm like whoa, cool. Now, later I learned his name wasn't Ramon Simone with an accent. His mother Vicky, who I got to know many years later, said his name was Ray Simon. Big difference - right? - but good for him, he fixed it up.
CORCORAN: And he wasn't from the Basque country, he was from 145th St. in Harlem but good for him again. What a merchandiser, right?
CORCORAN: And so he had a lot to teach me, OK? And I got a new family, which were his three girls who moved in with us after I moved in with him. I didn't know he had children.
RAZ: This is your first true love or real love?
CORCORAN: Well, I'm not even sure he was a true love but someone who was different than anyone I had ever met before - older, successful in life, had a big car. And I hate to be so trite as to say that impressed me but it was a Lincoln Continental with real leather seats. And when he offered me that ride home from the diner that first night, I remember thinking he had sprinkled talcum powder on all of his seats because I was sliding around. (Laughter) That's just called real leather, you know?
RAZ: So when you moved in with him, was that - I mean, was that what your life was going to be? I mean, did you have bigger ambitions?
CORCORAN: To know - honestly, I have never had that thought. And I can even say along the way of building a successful life, it's not like I've really had any big thoughts about wanting to be successful. I just had more of a curiosity as to see how far I could go. That was it - curiosity. No one in my family had ever gone to college. When I got into a college, I just couldn't believe it but it was a old girls college that had previously the year before been a nunnery that made nuns. I forget what you call that.
And there were only 30 spots. They were just opening. They took me. I basically now realize they took anyone. OK. But that was just a lucky break. And it didn't interfere with my work. I was holding three jobs all the way through college. I was going to always work around the clock. So it just kind of happened, you know, that I - one thing led to another.
RAZ: So how did you find your way to real estate?
CORCORAN: I was working as a receptionist for the Giffuni Brothers here in New York City, answering their phones a million times a day. Good morning, Giffuni Brothers. This was after I quit my job as a waitress.
RAZ: And who were the Giffuni Brothers?
CORCORAN: Joseph Giffuni was a large real estate holder in Manhattan. He owned probably 50 apartment buildings in New York City.
RAZ: Oh, wow.
CORCORAN: Yeah. They were very wealthy. It was Joe and his other kind of gadfly brother Andrew who ran the business but Joe was really the power. And he hired me. And then within a couple of months, Ramon said to me, you know, with your personality, Barbara, you'd be great at real estate sales.
I said, OK, I'll try it. I mean, why not? I had - I think I had counted up 22 jobs, maybe 23 by then. And I thought why not, you know, give it a whirl? And Ray gave me the thousand dollars. I started my own firm.
RAZ: Just like that?
RAZ: So - OK, so Ramon gives you a thousand bucks. And then how did you start your own real estate firm?
CORCORAN: The only person I knew was Mr. Giffuni. And I asked him if he would just let me rent one of his apartments, the same building where I answer the phone every day. And he gave me a listing to try to rent apartment 3L. And so when I saw 3L and what he was asking - I think it was 330 a month, roughly there - I looked at him thinking, oh, how do I - it was a dungeon. He gave me the worst one. Maybe it was a challenge. Maybe nobody could rent it.
Who knows? It was in the back. It was like a super's apartment. But when I saw the listing and looked in The New York Times and saw reams and reams of ads that read identically one bedroom 340, one bedroom 335, one bedroom - it was all the same. I'm thinking, how do I spend my three linehead (ph) wisely? Because remember, I had a thousand dollars.
CORCORAN: I divided it by my overhead. And I knew I had seven weeks to stay in business according to my math, OK? And so I asked him if he'd build a half wall to divide the, you know, straight part of the living room from the L next door with a double entrance. And I told him I thought I could get him 360 a month, which is another, like, $20, $25 more than he wanted.
CORCORAN: And he said he - yeah, he'd build a wall. And I got it for him because my ad then read one bedroom and den for the same price that everybody else was offering a one bedroom. And I got - that first Sunday, I must have gotten 60 phone calls from prospective tenants.
CORCORAN: And so I easily rented that apartment and then got others and got others. And it just built from there.
RAZ: And you were basically making a commission off each rental?
CORCORAN: I made exactly what the monthly rental was. And when I rented that first apartment, I did the smartest thing in the world knowing I was ahead of the game because I collected the commission within a week. That's what's beautiful about rentals. You don't have to wait for a sale closing. So I collected that check for Mr. Giffuni. I cashed it at Citibank. And I ran right over to Bergdorf Goodman's and I blew it on a new coat. And it was the smartest thing I could have done because I dressed like a poor kid from Edgewater.
Nothing looked, you know, I just looked not the part but I bought the fanciest damn coat - brown and white herringbone. It was real pearl buttons, down - three-quarter length with fur - real fur, not fake fur. And I wore that coat for the next three years. And you want to know, it was the smartest thing I could have done with the money because in it, I felt powerful.
CORCORAN: It was a weird thing. I just felt like I'm cool, man.
CORCORAN: I'm a cool girl, you know?
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RAZ: And, by the way, what did you guys call the business?
CORCORAN: It was called Corcoran-Simone, yeah, with an accent on the Simone. I kept the accent because I really thought it was pretty sophisticated.
RAZ: Right. This was because Raymond (ph) owned part of this, right?
RAZ: So while you were - like, while you were going out and working as an agent to rent apartments, what was Raymond Simone doing?
CORCORAN: Well, Ramon Simone. Say it right...
RAZ: Oh, Ramon. So forgive me, yes.
CORCORAN: ...Ramon Simone, a small little flash there. Ramon Simone was building one-family houses in New Jersey, usually clusters of three or four houses and making a very good living. And that went on for probably three years or so, as I recall. And then one day, we drove to his accountant's office in Hackensack, N.J. And he had me wait in his car with the car running. He comes out and he said, well, guess what? I'm bankrupt.
CORCORAN: And I thought it was a joke.
CORCORAN: And we moved immediately out of his fancy apartment and moved into his mother's Hackensack house. And that was the bad years, where we - he kind of had to go not undercover but had to come up from the earth all over again.
And he did, he was a great entrepreneur but it took about three years. And those were the very, very tough years. But lucky for both of us, the rental business was paying for itself and we were able to eke out a salary.
RAZ: Were - you were running this from your - from that apartment, your rental business?
CORCORAN: Oh, no, no, no. I had an office. I initially ran Corcoran-Simone from an apartment I shared with two roommates on 86th St. But then when I could afford to, I subleased a desk from an accountant on E 60th St. And by the time we moved in to Ramon Simone's mother's house, we still had the office on 16th St. We already had I guess maybe 10 or 11 desks occupied by rental agents.
RAZ: So you were going into Manhattan every day?
CORCORAN: Yes, definitely.
CORCORAN: It was like the land of Oz. You know, the minute I stepped foot into Manhattan, I saw it for what it was.
CORCORAN: It was like, where have you been all my life?
RAZ: Wow. This is like the violent 1970s in New York, when New York was bankrupt, like the Son of Sam era.
RAZ: Like, what was it like to - I mean, was it hard to get tenants to rent apartments? It's crazy to imagine today, of course, but back then, was it hard to get people to rent?
CORCORAN: No. What saved my ass in those days was you had corporate America very well implanted in Midtown. Granted, it was dangerous. You wouldn't dare park your car on the street, you know, it gets broken into. Sirens were always going off everywhere. So it was not easy but fortunately you had employees - young employees coming into New York City who had to live there working for these corporations.
If not for that, I don't think I would have stayed in business because I went door to door and knocked on all these corporate personnel departments to try to get business. I saw where the traffic was coming from. And I had great accounts that fed their people to me one after another after another. And so I had a huge edge over my other small competitors because I had a steady stream of people coming at me.
CORCORAN: That was key, or I don't think I could have stayed in business.
RAZ: So how did you make the transition from renting - from looking for renters to selling apartments?
CORCORAN: Really quite by accident. I had gotten a referral of a young engineer from Union Carbide. I don't recall his name. And I lined up a whole bunch of stuff to show him like I usually did 'cause I had learned by then in sales if you could control someone's time, they can't go to anyone else. I would say, I'll pick you up at the Drake Hotel - it's now a new name - at 9 o'clock. And be aware, we won't be finished till at least 5:30.
This way, he can't even entertain going with another broker in town. And then I would tell him midway too, I've got everything set up for tomorrow. I would just control - park them in your garage and don't let the character out, right? So I had this young guy, and I showed him the first two apartments. He said, well, when am I going to see the ones for sale? I said, oh, no, these are for rent. He said, no, I want to buy something. I was like, oh, crap. So I said, well, that's excellent.
So I said I was going to take him on a tour of all New York 'cause it was very important for him to learn all the neighborhoods to see what he could choose from to see what he reacted to best, and that the next day we would show him the sale apartments. Of course, I had no sale apartments. So I got him in a taxi, walked him around every street, showed him every place in town. And then that night, I went home and I hit the floor running.
I dropped him off at like 5:15, as early as I could, called every single apartment with a owner ad, which was very common in those days, and said I have a young engineer. He's looking exactly for your apartment on Sutton Place. He's looking for a small terrace. I'd read him the ad back and then go but he must see it tomorrow. Yes, come on over. And I booked everything that night. And the third apartment we saw, he bought the next day.
That's what got me in the sale business. And when I got that commission check in my hand, it was $38,500. So it said 612 - I can't do the math anymore, shame on me, but 6 percent of that. Do you know what - I got that check in my hand on closing and I thought God has given me this to open up a sales department. And I hired two sales agents. And that was the birthing of the sales business.
RAZ: Wow. And all the while, you were still - I mean, you're still - I mean, Ray is still part of this thing? He's still in your life?
CORCORAN: Yes, Ray was still part of my life because that was within the first seven years. We stayed together for seven years until he married my secretary, which was really, like, so emotionally discouraging for me, a real upheaval.
RAZ: Wait. He cheated on you with your secretary?
CORCORAN: Yes. She was kind of innocent. They fell in love. I was angry with him but, of course, directed my anger at her as women tend to do. And so when I wanted to fire her - because I said, I can't come into the office every day and see your fiancee. They were getting married in three months. It was very fast. I'm mortified. I was mortified. And then he moved Tina into our combined office. I had to look at them through the glass door...
CORCORAN: ...Which was really - it's such a stupid thing. I must have been so young at heart to be so injured over some stupid thing. But here's the thing, I said, I have to fire her. He said, no, I'm the controlling partner. You can't fire her.
RAZ: I mean, he owned half of this company and...
CORCORAN: No, he owned 51 percent. And that's how I found out the value of that 1 percent (laughter). Oh, that's how it works.
CORCORAN: Yeah. But that didn't last for long. One year later, I stomped in there, finally built my courage and told him I was ending the business.
CORCORAN: I said, Ray, I'm going to end the business today. And this is how we're going to do it. We're going to do it like a football draw. We've got 14 sales people. You can pick the first, I'll the second, that kind of thing. So we each got seven. OK. Like, they were children in a divorce, they didn't know what was happening. And we also had close to 70-some-odd-thousand dollars in receivables, which I remember at the time thinking half of that would get me through a month and a half of overhead, you know?
And so I had the ability to take my half of the money and start all over. And lucky for me, I went to my landlord in our existing building. We were on the eighth floor. And I asked him if I could lease another floor. We had always paid the rent on time. And he rented me the 11th floor above Ray, which I loved being above him. Isn't that weird how sick? I really needed a shrink.
RAZ: He started his own company and then you...
CORCORAN: He stayed there and renamed it Polk-Simone (ph) because his wife's name was Polk (ph).
CORCORAN: And I moved up to 11, took my seven people. I told them on Monday we'd be moving. And they were like, oh, wow, where are we moving to? I said it's a surprise because it was a surprise to me, even (laughter). But by Monday, you could open an office in New York. You could buy the desk down on decrepit 42nd St. and have those guys actually physically run the desk up to the location.
CORCORAN: That's what they did. You could order a phone, which I did on late Friday morning and had installed on Saturday. And by the time my agents came in - I called them over the weekend, gave them the new address which was simply a different floor. They came in, they had all their stuff in a neat box on top of their new desks like nothing had happened (laughter).
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RAZ: Here's a question, Barbara. I mean, is it that - I mean, are you just sort of hard-wired as a tough person? I mean, that - I mean, emotionally that must have been pretty rough, right? I mean, and this is a guy that you're with for seven years. You think you're in love and meanwhile, he's having an affair.
CORCORAN: Well, hey, listen. The truth be known, I'm not at all a hard person. I mean, the idea - ask any woman who's been cheated on, any guy, all right - you feel like such a fool and you burn so deeply inside. No, I could barely walk I was so decimated by that. It wasn't that I even so much lost faith in him. I mean, you're allowed to fall in love - let's be real, right? - with somebody else. But it was that I fell out of love with myself.
I actually thought, my God, I was nobody before he found me. He got me to believe in myself. He put me in business. He, you know, was my mentor. He was a man of the world, you know. And all of a sudden, he's going off with somebody else. It was like I'm nobody. I never - I actually questioned whether I was capable of anything until he insulted me on the way out the door.
RAZ: What'd he say?
CORCORAN: He said, you'll never succeed without me.
RAZ: Wait, he was having an affair and then he rubbed salt in your wounds by saying you're never going to succeed without me?
CORCORAN: Yes. And you know what? He knew me. Remember, we lived together almost seven years. I was his business partner. He may have even been wanting to motivate me, knowing that I'm good when I'm insulted. And, you know, I have learned that because every one of my great successes building the business, the ones that were bellwether changes that I thought wow, did that make a change, they were always a result of an insult. (Laughter) Isn't it weird?
RAZ: So it was like fuel to your fire. He says this and you are, I mean, of course, obviously devastated inside but you just think I - the greatest revenge is I'm going to prove that he was wrong.
CORCORAN: Well, it wasn't even a revenge thing, honestly. It was like I couldn't stand the idea that he might see me fail.
CORCORAN: It was more the opposite. And you want to know something? I got to believe that was all tied in too because it injured so deeply and became my motivation, I have to believe that that was tied into being the dumb kid at school. Because he was basically damning me to hell.
RAZ: Yeah. Yeah.
CORCORAN: And that's how I felt in school every day, like I'm a loser, you'll go nowhere. And so he hit my hot button for sure, you know, for sure.
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RAZ: So did you - from day one when you go to the 11th floor and you start your company, are you thinking - I mean, was he your main competitor? Was his company the one that you were up against?
CORCORAN: Oh, no, no, no. I moved off of that. I just - I was in survival mode, figuring out the math, knowing I had a six-week run to stay in business.
RAZ: You had six weeks. You - that's how much cash you had on hand?
CORCORAN: Yeah because I had a bigger overhead by then, you know? In the beginning, when my thousand dollars gave me a little bit longer run because it was just one ad per week in The New York Times, three line ad, whatever it cost then. And my sublease charged for my desk. So now it was more complicated. When I moved to the 11th floor, I also had 14 desks but I only had seven agents. That's a problem, you know. That's a big overhead, no income.
RAZ: And classified ads were really expensive at that time.
CORCORAN: Well, they always were going up in price, yes. So they didn't go very far but, you know, that was the bloodline of the real estate business.
CORCORAN: It was pre the Internet. If you wanted to get a lead...
RAZ: So crazy, yeah.
CORCORAN: ...You put an ad in the paper.
RAZ: Yeah. Were you freaking out?
CORCORAN: You know, surprisingly no. I never freak out about pressure. I never have because it is what it is. You know, I kind of have a matter-of-factness (ph). In other words, I'm thinking OK, give it a shot. If I'm going to fret about, oh, my god, oh, my god, it's going to get against me. If I get cocky and big-headed like, oh, this is no big deal, I'm going to get cocky. So I just kind of - OK, this is what I got. Let's see how hard and fast I could run.
However, I did have one vision, I must admit. The day I opened The Corcoran Group, I remember sitting at that desk and paying the extra dollar a month for a pink princess phone. You paid a dollar extra to rent it if it was pink because it looked fancy. And I remember answering that phone sitting there and thinking I'm going to be the queen of New York real estate.
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RAZ: Barbara Corcoran. In a moment, how she actually did become the queen. I'm Guy Raz. And you're listening to HOW I BUILT THIS from NPR.
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RAZ: Hey, welcome back to HOW I BUILT THIS from NPR. I'm Guy Raz. So at this point in Barbara's story, she may have thought she was going to be the queen of New York real estate but it was going to be an uphill battle. She'd broken up with Ramon. They'd split everything up. She had a pink princess phone in her new office. And she had to figure out how to get more attention for her company in one of the world's most competitive markets.
CORCORAN: I distinctly remember the day I sat and paused and said to myself holy shit, we are going to be successful.
RAZ: What happened?
CORCORAN: I came up with the idea of taking our 11 sales for the year. We had 11 sales so far, whatever time of the year that was, and dividing by 11 which was good. I was always good at 11 times table. And I came up with an average sale price. And I typed it on a piece of paper. And I named it after myself, The Corcoran Report. And it looked lonely, one number, average apartment price. I didn't even say Corcoran Group. I just put average New York City apartment price.
And on the top, I put the Corcoran Report. And then I thought it needed something more 'cause it looked empty. And I put market - I can't even remember, something long-winded like market report of conditions and trends in the Greater New York City market area, some long thing to fill up the page. And I mailed it out to everyone who wrote for The New York Times that day, everyone. And I never heard from the Times at all.
But about two weeks later, I opened up the real estate section, which was a gigando (ph) thick portion, the main generator - that and the automobile section - for The New York Times before the Internet. And I opened it up. And the front page read New York City prices hit all-time low because we're in a recession again. And the first line said according to Barbara Corcoran, president of The Corcoran Group. I'm like holy shit. I can't believe this. I knew my business was going to be successful.
RAZ: You just made this - I mean, you just took your sales numbers which was 10 properties for a year.
CORCORAN: No, 11 properties.
RAZ: Eleven properties. And you divide that up and then you said hey, this is the average price of a Manhattan, you know...
CORCORAN: Well, I didn't really say an average. I put average New York City apartment price. And - now, that sounds misleading. I could see now, from where I sit, that is misleading. I didn't intend it that way. You know, I did intend to trim it up with that long conditions and trends. But, you know, it was amazing to me that the newspaper printed my number...
RAZ: They liked your...
CORCORAN: As the average.
RAZ: They were like, hey, who's sending us this newsletter?
CORCORAN: Yeah. But also, there were no numbers. Remember, there was - there was no public data of apartment prices. In a vacuum of no numbers, I supplied a number. And they wanted to do a story on the bad market, and I put a label on it, how bad it was, right?
RAZ: So did you start getting calls from people who said, what is this Corcoran group?
CORCORAN: We got instant credibility. We called for listings on the for-sale-by-owner ads. And most of them had heard of us. In one day...
RAZ: Simply because it was in the Times.
CORCORAN: Well, everybody read the Times.
CORCORAN: The front page - if you were looking to sell your home, you're reading the front page of The New York Times - real estate section, without a doubt. And when they didn't hear of us, my broker started saying things like, I'm sure you've read about us in today's Times or last week's Times - didn't take them long to use it. So we got listings more easily. We got credibility more easily. And we got more phone calls - and all because we were quoted as an expert. That's it.
RAZ: Wow. And so presumably, that was the birth of The Corcoran Report. You didn't stop sending that that newsletter out.
CORCORAN: No. I got it out every three months.
CORCORAN: And eventually, it was enormously credible, you know based on thousands of sales. You could really trust the information. But initially, if I had been a big company and I'd run it by attorneys' vetting, committee decisions, it would have never gone out. The beauty I had as a little guy is I had the freedom to run.
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RAZ: But, Barbara, what was it like - this is the late '70s in New York. I mean, was the real estate business - was it a more welcoming place for a woman to be leading a company? Or was it still - I mean, you know, you hear about that time. And you hear how women were sort of, you know, relegated to being secretaries and typists and things like that. Did you feel like you were respected and treated with dignity?
CORCORAN: Do you know, I never paid attention to that. I didn't give a crap, really. You know, the whole business was 90 percent female. It wasn't like women were not in the real estate...
RAZ: Yeah, yeah.
CORCORAN: ...Brokerage field. But it just happened that all the firms were owned by the men.
CORCORAN: The bosses were all men, OK? So yes - so there were female-owned businesses that I competed with. But that was - that was not even an important detail. What an important detail in my mind was, was that I had 14 agents. And the largest company in town at that point, Douglas Elliman, had, like, maybe 80, 90 agents. That seemed to me like IBM itself.
CORCORAN: How am I going to compete with them? My eye was on that ball.
RAZ: How did you know, Barbara, how to even run this business? I mean, I know we're talking now - early 1980s. And you'd been working with Ray for a few years. But, I mean, you don't have an MBA. You don't have formal business background.
CORCORAN: Thank God.
RAZ: Right? How did you know how to - you know, how to deal with the management issues, how to deal with - how to pay people, how to price things? How did you know that stuff?
CORCORAN: It's - I think you make it sound more sophisticated than it is. All you needed to know is how to work with people. And that's all the business ever is. All the work I do today, it rests entirely - any success or failure rests entirely on my ability to work with the people at hand. So learning how to recruit people - I learned how to recruit because I made friends with every store clerk, every waitress, every stewardess. Everyone I ever met, I made friends with because I'm very friendly. And if I saw a spark in them, which said to me, sales personality, I would say, have you ever considered doing real estate sales? I recruited everywhere. Everywhere I went, I recruited people.
RAZ: And from what I understand, you yourself actually didn't go out and sell many houses - or many permits, right?
CORCORAN: I didn't. I sold - (laughter) - I sold the engineer his first house.
CORCORAN: And then, from Merrill Lynch, I got a referral of David Palmer, who's a really big wig. And I sold him two apartments side by side on the Upper East Side, on East 89th Street - two new co-ops, and, like condominiums. And that was it.
RAZ: That was it. You didn't sell any property after that.
CORCORAN: Why should I?
RAZ: You just - you hired people to - because I guess you recognized that your talent was not in selling property but in - what? - managing people.
CORCORAN: No. I was great at renting apartments. However, I realized that if I were to continue to sell - because it's time consuming to be a great salesperson...
CORCORAN: ...Very time consuming. I realized that if I were to continue doing that, I could only build my business on the side. And I just took a leap of faith, especially when I sold David Palmer two apartments side by side for a total value of - it was a little bit more than 350,000, which today would be the equivalent of, say, a $10 million property.
CORCORAN: That was a landslide victory for me. I took that check. I remember collecting it from the developer on 89th Street and walking it to 60th Street, where my office was, skipping down Madison Avenue and singing "Georgy Girl" to myself. I quit that day sales. And I decided to use that money to hire three new sales people. Right there, I knew I could afford it. And then I hired six more and then 10 more. And then, before you knew it, we had a thousand people. I don't want to make it sound like it's overnight. But it was just that same methodology. Whenever I had spare money, I would divide it by an overhead monthly, figure out how many bodies I could afford, like a mother paying for the kids. And then I would go out and hire that many people.
CORCORAN: That's - it was a simple formula I never changed. And it was really very useful.
RAZ: Yeah. I'm wondering - I mean, it sounds like in the first few years, there was, you know, quite a bit of success. But, I mean, in a short period of time, you must have hit the stock market crash of 1987, right? I mean, that was a huge crash. I mean, how did that affect your business?
CORCORAN: That was a bloodbath, for a good reason. When the economy crashes or even really wavers, a terrible thing happens if you're in the real estate brokerage business. Buyers and sellers do nothing. Nothing is terrible for brokerage. A big seller's market is great because it's action. A horrible market is great because people have to sell. But in the beginning, when nothing happens, you go out of business. Well, what happened was the great majority of my competitors went out of business. The bad news to that is it's hard to stay in business. The very good news in that is I realized I had lost half my competitors. That's a motivator.
RAZ: What happened to you guys?
CORCORAN: Well, I was really on the brink of declaring that it was over. But I was ashamed and trying to make back the money I owed to various suppliers, like my ad agency, The New York Times. But I owed over $300,000.
RAZ: And there was no business coming in?
CORCORAN: There was no business, no. When the market stops, it's like - (exhaling). It's like the silence. You know, it's a terrible, terrible thing. And you have to remember, you have sales people, many of them supporting their family, who have no money coming in. That's the worst part. Never mind the business. It's the pressure on the people.
RAZ: Did you have to let people go?
CORCORAN: Oh, my gosh. I always let people go anyway, but it was interesting. I had my mother working for me then - for two years of my life - because all of her kids were grown, and she was working at the 5 & 10 on 215th Street and walking across the George Washington Bridge. And she was getting older.
CORCORAN: And I said, Mom, you can't do that. You've got to come and work with me. She - she was delighted. So she was the file clerk, and boy, did she keep - God, she kept great files. She color-coded them, tagged them. She was a genius at that. All right, but anyway, when the shit hit the fan - which is what my mother always called it, by the way, and I get it from her, my filthy mouth - she came to me. And she knew I had to fire a lot of people because you could just see that everybody knew something was going to shake out. And it was fast. And she said, why don't you publicly fire me?
If you fire me, she said, no one else could be angry with you when you fire them. And she was right. I thought, what genius. So at that Monday morning meeting we always had at 9:30, I said, you know, it's no surprise how bad things are. We're going to have to make a lot of changes. And it's going to be very hard for me to do. But the hardest change of all is me firing my mother because I can't afford to keep her on.
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RAZ: I mean, you must have been really close to going out of business if you had to make that decision.
CORCORAN: Well, I was going out of business. I owed the 300-some-odd thousand. But I came up with a great idea to sell Bernie (ph) Mendik's apartments that nobody wanted, which was owned by Equitable insurance.
RAZ: He was, like, a big real estate guy?
CORCORAN: He was one of the - he - until his death about, I guess, 10 years ago, he was the largest developer in New York. Him and Larry Silverstein were partners for many years - who built the World Trade Center. I'm sure you know that name. Anyway, he asked me to look at 88 apartments scattered throughout the city in a number of properties. And he said, I want to find out from you how you can sell them. I knew every broker in town had been in to see them. And there was no way to sell them. Nobody was buying.
RAZ: Why? They were just..
CORCORAN: They were the dregs of the market. Some of them didn't have kitchens. They were caught midstream when the market collapsed. So they were in C-rated buildings. Everything was wrong with it. Anyway, I went and I visited maybe eight or nine of the apartments through the supers. And right away, I thought, oh, forget it.
RAZ: They were dumps.
CORCORAN: They were dumps. They could not be sold. We needed a market to sell them, a desperate market. We had no market. So anyway, I went back, and I told him there was no way to sell it except a public auction, if you want to do a public auction. He said, we can't do a public auction. We don't want the publicity of a failure. And I said, well, there's no other way. You can't sell these. And I'll never forget what he said. He said, Barbara, you're a smart girl; you'll figure it out. And I went back and thought about it.
And boom, right in my head came a memory of my mom taking, like, seven or eight of us - however many were born then - down to Toms River, N.J., watching a puppy sale with the farmer lady across the street from my grandpa's house. And my mother sat us on the grass and watched all these fancy New Yorkers arguing over puppies - or little Jack Russell puppies, really cute. And anyway my mother said to us, look at all these fancy people. Do you know why they all want those puppies? It's because Louise (ph) was smart enough to invite them all here at the same time. And so that popped in my head. And I went back to Bernie Mendik the next day. And I said, I have a plan. I'm going to price all the apartments alike.
RAZ: Same price.
CORCORAN: Well, I price all the one-bedrooms alike.
RAZ: OK, yeah.
CORCORAN: ...All the two-bedrooms. They were, like, a $10,000 difference between the categories.
CORCORAN: But some were on 22nd floors with gorgeous views. Some were on the third floor with no kitchen. They were so uneven.
CORCORAN: First come, first served - we're going to have a secret sale. We're not going to advertise it. I'll announce it to my salespeople. Only let them bring their best customers. But I need you to give me two years free maintenance. You're not going to unload these two years anyway.
RAZ: Maintenance is like association fees?
CORCORAN: Monthly maintenance - yeah like a condo...
RAZ: Like condo fees, yeah.
CORCORAN: ...Condo fee, monthly maintenance fee. I said because it's going to erase the terrible maintenance in their head and nobody thinks beyond two years. And pricing them all like is going to create a hype.
CORCORAN: And so he said, OK, give it a whirl. And I said, we're having a secret sale, to my salespeople. I was really going to, that Monday, announce we were closing the business. That's how close we were...
CORCORAN: ...Because I felt unconscionable. But pressure's a wonderful thing in life - isn't it? - makes you think. And so I announced it to my people. I said, but get there early, and don't bring too many people - just a family member, if you want, and your single best customer. Don't bring - don't spread it around. We don't have enough to go around. And I'm telling you, I arrived 81st Street, where we had that makeshift office, that morning at 7:00 a.m. And we had a line of 60 people waiting (laughter).
RAZ: To see those apartments.
CORCORAN: To see those apartments, and I'm telling you, an hour and a half, I had more than a million dollars in net commissions.
CORCORAN: And I close - it was a closing. They signed the contracts. And boom, it was like a fire sale. And - but boy, were people happy. They got the deal of the century.
RAZ: Yeah, I bet they're really happy today.
CORCORAN: But not as happy as I was that day.
RAZ: Yeah, I bet.
CORCORAN: Because I went from being near desperation to being filthy rich, in real estate...
RAZ: Filthy rich.
CORCORAN: You got it.
RAZ: In one day.
CORCORAN: I went right out, and I rented myself a full floor at 660 Madison Avenue because I had the cash to do it.
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RAZ: And, like, everything I've read about you, people say, you know, Barbara's talent wasn't about selling homes. It was about marketing. She was an incredible marketer. Is that...
CORCORAN: Absolutely right.
RAZ: Where did you - is it just an instinct? Is it just trial and error? Is it - is it just being, you know, kind of a hustler.
CORCORAN: No, I think it has more to do with creativity. It's not a black-and-white game, marketing. It's a softer side of things, right? It involves exaggeration. It involves an acumen for seeing what a storyline is or what would capture people's interest. It definitely includes people smarts. And you know what I actually started realizing? I was best when things were bad because I would go into any bad real estate cycle in, say, 15th position - pecking order within the industry. And I would come out of it in eighth position because a lot of people got knocked out.
RAZ: Yeah. So you you decide, I guess in 2000s - sometime 2002 - sell the Corcoran Group, to get out.
RAZ: Why did you decide to sell? I mean, you loved the game. You love that - that, you know, energy and that, like, pressure. So why did you do it?
CORCORAN: Two things happened. One, I had my first baby at 46. I gave birth to my son, Tommy, after eight years of in-vitro. That was nothing short of a miracle, something I desperately wanted that finally happened. Once I had that child, my heart changed, believe it or not.
CORCORAN: And it played out in my heart every day. I was home, at my grand old age, nursing my son and feeling guilty about it because my kids at work were, where's Barbara? Where's Barbara? And so it took me about four years. And then a wonderful thing happened one evening. Esther and I were doing the Corcoran Report numbers.
RAZ: Esther was your partner.
CORCORAN: Yes, Esther, my business partner. We were doing the Corcoran Report numbers one night, which took us hours because we wanted to have accurate numbers. We were very particular, both of us. I don't know why. My first report had no accurate number, right? (Laughter). It was just - by then, we were very respectable and making sure all of our numbers were accurate. And we also did, monthly, a report of who controlled the market share on listings because there was no MLS in New York for still many years.
RAZ: The MLS is the multiple...
CORCORAN: Multiple listing service that showed you who had what listings.
RAZ: Like, you couldn't just go to one place to see all the listings.
CORCORAN: No. And we broke the market into price categories and east and west side, uptown, downtown. So we had those categories. And we would go through the listing count together. And she'd say, 575 Upper West Side. I'd put a stroke - boom, boom, boom. But we had to categorize by all the top agencies in town - the top seven. And then that night, we did all the add-up, and we could clearly see that Corcoran was number one. We had more listings in every category, from the highest to the lowest, uptown, downtown, east to west - not by a lot, but a smidgen over Brown Harris (ph), Douglas Elliman. And I turned to Esther. And I said, let's sell this joint. (Laughter). Just like that. (Laughter).
CORCORAN: Big, thoughtful move - but also, to be fair, it was the first year that I had made over a million dollars myself. And I figured, it's probably worth something.
RAZ: You sold it for $66 million, which...
CORCORAN: In cash...
RAZ: In cash.
CORCORAN: That's important because I remember being on a ski lift with my roofer brother, John, who still lives in Edgewater. We were out in Utah, I think. And we're going up a chairlift. And I get on my cell phone a call from my attorney, who said, I've got great news. He said, I have an offer of $23 million dollars. Are you seated? And I said to him, $23 million? He goes, yep, $23 million, all cash. And I said to him, great, come back when you get 66 million in cash. And he said, why 66 million? I said, because it's worth it. And I hung up. And I said to my brother John, just got 23 million - think of that, John. Imagine us having $23 million. And he said, but why did you say 66? I said, oh, because that's my lucky number (laughter).
CORCORAN: And would you - those accountants killed themselves to try to figure out why 66. It wasn't until the closing, I got great satisfaction telling a whole bunch them, oh, it was my lucky number. (Laughter). And it was. I proved it.
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RAZ: Did you - when you sold the company, did you - did you regret it?
CORCORAN: I would have to answer that, honestly, on some level, yes and in a more important level, not. I felt an enormous sense of freedom to be a phenomenal mother. And so that was exactly what I wanted. And I had the enormous satisfaction of knowing I had become the queen of New York real estate.
RAZ: And financially now set for life at that point.
CORCORAN: Yes. But I never understood how much I loved the people I worked with and how much that team meant to me. It was my lifeblood. I had found them, recruited them, trained them, lived with them, gotten through good times, bad times. I had sales managers, 11 of them, that I adored. And they adored me. We were such a tight team.
CORCORAN: And I felt terribly lonely. And I really thought I was going to get depressed and probably needed a shrink because I really didn't know what to do with myself. I yearned for good morning, Barbara, good morning, Barbara, good morning, Barbara.
RAZ: Yeah, yeah.
CORCORAN: And all of the hoopla that went with being somebody in a business, it was gone. So that part, I thought, what did I do? What did I do to myself - until, of course, I - I don't want to say reinvented myself - starting all over again and trying to build a new career.
RAZ: I mean, that's - that's a thing - right? - because, I mean, obviously you did go on and build a second career because I think most people listening to this would know you as one of the sharks on "Shark Tank," not as the head of the Corcoran Group.
RAZ: Do you - when you're on that show, do you - it seems like you have a bias toward people who, you know - who have similar backgrounds, who come from no money.
CORCORAN: I'm very biased. They have a much better shot at succeeding.
CORCORAN: A lot of reasons - they're more desirous. They've never had the fancy vacation, the delicious new car, the private schools, the higher education, in many instances. And they aspire to it. So they get more satisfaction out of climbing that ladder and getting to it. And they've seen their parents struggle through life to give them whatever they've given them. They're more appreciative. They don't take things for granted. And you know what else, which I should have started with? They're totally free from expectation.
Do you know how lucky I was to never for a second ever think, I wonder what my parents think of this? All it was was just, let's see how far I could go.
CORCORAN: I had nothing to lose and nowhere to go but up. Do you know how freeing that is, to take risks? So they're not risk aversive. And you strive harder.
CORCORAN: So I really am biased. I'm not saying that you can't succeed. I mean, God willing, I have - I have privileged children. And I hope they'll succeed. It's much harder for me not to let them feel my success, even if I don't say a word, you know?
CORCORAN: And so they're not as free as I was. You know, God bless them. It's harder for them.
RAZ: Do you feel - I mean, when you were a kid, you were told that you weren't smart. Do you feel now that you've convinced yourself that you are smart?
CORCORAN: Well, yes and no. I'm certainly street smart. I'm certainly people smart. I have an instinct when trouble is brewing, whereas the best accountants in the world will wait until the wall hits them. So I trust my math instinct, OK? I think I'm a smart person for sure. But more than that, I think I'm an enormously hard-working person. And I have great confidence from my ability to work hard through anything. And I think I'm very good at not feeling sorry for myself. And I think that's important.
RAZ: How much of your success do you think is because of just skill, intelligence, hard work, and how much of it is luck?
CORCORAN: Well, I do believe in luck. I've had many, many, many lucky breaks, including meeting Ramon at the diner that night, right? That was the beginning.
CORCORAN: Or the very good luck of having my parents as parents - not bad, right?
CORCORAN: Once you grow up, you make your own luck. Definitely you make your own luck. I think all the lucky breaks I had were more a result of me staying in the game and just believing something would break, just hanging around long enough. That's more important than luck in my opinion, being aggressive at every opportunity and standing up for yourself - yes, more important than luck.
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RAZ: Barbara Corcoran. By the way, she was initially rejected for her spot on "Shark Tank." They went with a younger woman. So Barbara wrote a letter to the producer. And it said, I consider your rejection a lucky charm because everything that ever happened in my life came on the heels of failure. The next day, he called her, said he reconsidered. And, well, you know what happened.
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RAZ: And please do stick around because in just a moment, we're going to hear from you about the things you're building.
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RAZ: Hey, thanks for sticking around because it's time now for How You Built That. And this one comes from Aryel Rivero. He lives in Weston, Fla. And about 10 years ago, Aryel found himself scrambling at the last minute to buy something thoughtful for his girlfriend's birthday.
ARYEL RIVERO: I don't believe the gift was actually very good. It was just, I think, like, a box of chocolate - just some random gift that I'd given her.
RAZ: So a box of chocolates - not super creative, right? But Aryel actually is creative. In fact, he's a graphic designer. So he thought, well, maybe I'll at least do something cool with the wrapping paper.
RIVERO: So I think I had my picture just on my computer. And I just clipped out the head really quick. And I decided to just repeat it on a piece of paper with a funny background.
RAZ: So he duplicated his face 15 times. And then he photoshopped them onto a backdrop.
RIVERO: Like a cheesy yellow starburst pattern.
RAZ: And he printed the whole design onto plain paper. He wrapped the chocolates. And then he handed the gift to his girlfriend, Vanessa. And her reaction...
VANESSA CLAVIJO: Oh, my God, this is hilarious. You know, like, what? What did you do? And why is your face on this? You know, it was so funny.
RAZ: And clearly it worked because three years later, Vanessa and Aryal got married. She also happens to be a graphic designer. And now and again, they would do the same thing. They would make wrapping paper for friends and family and put their faces on it.
RIVERO: And just about every time we'd give it to somebody, they're like, oh, you should start a business out of this. You should - you should make a website. You should make a website.
RAZ: So eventually, Aryel and Vanessa did just that.
CLAVIJO: And at first, it was - it was tough because we are not web designers. You know, I mean, now I guess we are. But back then, we weren't.
RAZ: But after some trial and error, they started the website. And then they named their business Gift Wrap My Face. So you upload a photo. They duplicate it and print dozens of your tiny little faces onto whatever image you choose.
CLAVIJO: We have the statue of David, the "Mona Lisa," the cupid, bride and groom...
RAZ: Anyway, when Aryel and Vanessa launched a few years ago, they got a few hundred orders at first. And about a year and a half later, Oprah featured the wrapping paper in her magazine.
RIVERO: When it finally hit and we see Oprah holding our paper in - I think she was in her kitchen, holding up a box that's wrapped in our paper, which I know that I printed for her - it was wild. It was really wild.
RAZ: And thanks in part to Oprah, Aryel and Vanessa sold about 5,000 orders of wrapping paper last year - not enough to pay themselves just yet. So they're still keeping their day jobs as graphic designers. Right now they've got two printers. They're still working out of their garage and also raising two kids.
CLAVIJO: So it's either talking about the business or talking about the kids. (Laughter) That's pretty much our life now.
RAZ: That's Vanessa Clavijo and Aryel Rivero of Weston, Fla. To find out more about their company, Gift Wrap My Face, head to our Facebook page. And of course, if you have a story about something you're building, please tell us about it. Go to build.npr.org.
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RAZ: Hey, thanks for listening to the show this week. If you want to find out more or listen to previous episodes, you can go to howibuiltthis.npr.org. Please also subscribe to the show if you haven't already through iTunes or however you get your podcasts. You can also write to us. That's firstname.lastname@example.org. And you can send us a tweet. It's @HowIBuiltThis. Our show was produced this week by Rund Abdelfatah with original music composed by Ramtin Arablouei. Thanks also to Neva Grant, Sanaz Meshkinpour and Jeff Rogers. Our intern is Claire Breen. I'm Guy Raz. And you've been listening to HOW I BUILT THIS from NPR.
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