After licking his wounds from the Mattel eviction, O’Leary eventually looked at getting back into business. His first forays foundered. Along with backers from Citigroup, he tried to buy the video-game company Atari. When that fell through, he attempted unsuccessfully to get a TV video-gaming channel off the ground. “I have had some great successes and great failures,” concedes O’Leary. “I think every entrepreneur has. I try to learn from all of them.”
In 2003, O’Leary invested in a self-storage company called StorageNow Holdings Inc., which he learned about from Toronto entrepreneur Reza Satchu. Satchu’s high-school friend Jonathan Wheler had a concept but not much money—he needed investors. According to court documents, O’Leary put in about $500,000 and ended up with almost 13% of the company (all currency Canadian).
But the relationship among the three men deteriorated, and Wheler was dismissed in May, 2005. In a $10-million wrongful dismissal lawsuit, Wheler contends that Satchu and O’Leary altered an agreed-upon compensation deal, reducing his cut of the profits substantially. “It’s unfortunate,” says O’Leary. “[Wheler] is a good guy. There’s nothing wrong with him—but no performance metrics that even he put in place did he meet. So we had to part ways.” Wheler, on the other hand, believes that once O’Leary and Satchu realized how profitable Storage-Now was going to be, they pushed him out.
In a defence statement, Satchu and O’Leary deny Wheler’s allegations and state Wheler was let go because he was inexperienced, incompetent and lacking in initiative. However, Wheler went on to develop a storage business using his original concept; his stake in that company is now worth $10 million.
In the end, O’Leary and Satchu were outpaced by their competitors, particularly InStorage Self Storage REIT. In 2006, StorageNow had 10 facilities and InStorage had two. One year later, InStorage had almost 30 and StorageNow still had 10. “We kind of blew past them in terms of growth,” says InStorage’s former CEO, Jim Tadeson. When InStorage offered to buy StorageNow in 2007, O’Leary and Satchu accepted (which required settling the lawsuit with Wheler). O’Leary argues that both firms were growing rapidly and they couldn’t survive separately because the market wasn’t big enough. InStorage bought StorageNow for $110 million, and O’Leary did well on his investment: He netted an estimated $4.5 million.
O’Leary did not do as well at Environmental Management Solutions Inc. (later called EnGlobe Inc.), an Ontario waste management firm. In 2004, O’Leary was asked to join the board (of which Mark McQueen was also a member). Soon after, the board fired the company’s CEO. But the company’s leadership was unable to arrest a decline in its fortunes brought on by an overambitious acquisition program; the stock price slid from close to $4 to 3.5 cents during O’Leary’s term of almost five years as a director. When the company was bought by an Onex Corp. fund and privatized in 2011, shareholders received less than 30 cents per share. “I lost whatever my investment was in that,” says O’Leary, who owned 500,000 shares. “Sometimes you win and sometimes you lose. ...It was a zero for me.”
In 2003, O’Leary cold-called Jack Fleischmann, general manager of Business News Network (then called ROBTv), and told Fleischmann he would be good on television. Fleischmann, who’d never heard of O’Leary, agreed to a meeting. O’Leary flew to Toronto from Boston the next day for an audition. “He absolutely totally from the moment he opened his mouth lit that camera up,” recalls Fleischmann. The guy was a natural.
Eventually paired with Amanda Lang, O’Leary was given a show on BNN, SqueezePlay. It was a hit, thanks in part to O’Leary’s derisive language and theatrics. “One day he had a box of dog biscuits with him and he began talking about some really bad stock as being a ‘dog,’ and he put the biscuits on the desk and began howling like a dog,” Fleischmann remembers with a laugh. “It was very funny.”
But O’Leary really became a star in 2006, when he was cast on Dragons’ Den. O’Leary quickly established himself as the ingredient that contest-based reality shows cannot thrive without: a caustic judge. When one contestant burst into tears after being criticized by the dragons, O’Leary remarked, “Money doesn’t care. Your tears don’t add any value.”
Dragons’ Den debuted to weak ratings but soon grew into one of the most successful programs in CBC history, pulling in as many as two million viewers. And O’Leary is a big reason why, says Stuart Coxe, who hired O’Leary. “Editing that show without Kevin [would be] so hard,” he says. “[The other dragons] play off of him. Even if he’s not in on a pitch, they’re waiting to see what he says.”
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