How Shark Tank’s Kevin O’Leary became rich

Last Updated on April 26, 2026 by Dave Farquhar

Kevin O’Leary, also known as Mr. Wonderful, is one of the most divisive stars of the reality TV series Shark Tank. Like Mark Cuban, O’Leary made much of his fortune in technology. But while Cuban is a dotcom billionaire, O’Leary made his money through a different model, selling software at retail. In this blog post, we will map out how Mr. Wonderful became rich. May 13 is a happy anniversary for him, but I can think of a major toymaker who doesn’t call him Mr. Wonderful.

How Mr. Wonderful became rich

In 1986, Canadian businessman and investor Kevin O’Leary cofounded SoftKey Software Products, Inc. with John Freeman in O’Leary’s basement using a loan of $10,000 from his mother.

SoftKey published and distributed personal computer software for Windows and Macintosh computers during the late 1980s and 1990s, primarily on CD-ROM. Its lineup consisted of software intended for home audiences, initially buying the rights to application packages from their authors and accumulating a library of 35 different products by 1992. SoftKey began to develop its own software by 1994, and branched out to include edutainment games and CD-ROMs in its line of products. Some of its titles were just pure shovelware: load up a CD with thousands of fonts, or tens of thousands of clipart images, paying more attention to quantity than quality, and selling it for the lowest price in the industry.

Softkey mostly packaged its software in bare jewel cases with a uniform appearance and eye catching graphics, which took about 2/3 less space than more traditional big-box software that was common at the time. Softkey rented 5 or 10 square feet of retail space and made guarantees about sales volume based on square footage. They then placed one or more revolving racks of software in the space. Early Softkey software often looked more impressive in the store than it did when you brought it home to run it.

Pricing strategy

Softkey caused a race to the bottom in terms of price. It charged $40 when the average price of commercial software was closer to $60 or $80. When O’Leary approached Wal-Mart, Wal-Mart said it wanted to sell the titles for $20. O’Leary cut prices to comply. Later he cut prices to $10. At that price point, the profit margin was only $1-$2, which meant there was no budget to improve the quality.

Early in my career, I cringed every time I saw a Softkey title in a customer’s cart, or when I was working on a computer and saw a Softkey title on their shelf. Loading a computer down with 5,000 fonts is an excellent way to slow it to a crawl.

Softkey acquisitions

Starting in February 1994, Softkey embarked on an aggressive acquisition spree, making 14 acquisitions in less than five years. Acquiring names like WordStar, Spinnaker, The Learning Company, MECC, Mindscape, and Broderbund, Softkey became the place 80s software companies went to die. During these acquisitions, Softkey often bid against Broderbund, inflating the acquisition cost. Eventually Softkey acquired Broderbund itself in August 1998.

• February 1994 – Spinnaker Software and WordStar International
• June 1994 – Aris Multimedia Entertainment
• July 1994 – Compact Publishing
• September 1995 – Software Marketing Corporation
• July 1995 – Tewi Verlag GmbH
• August 1995 – Future Vision Holding
• November 1995 – The Learning Company
• December 1995 – Compton’s New Media
• Late 1995 – EduSoft
• May 1996 – Minnesota Educational Computing Corporation (MECC)
• October 1997 – Microsystems Software
• December 1997 – Creative Wonders
• March 1998 – Mindscape
• August 1998 – Broderbund

Consulting company Booz Allen Hamilton said two of SoftKey International’s acquisition deals ranked among the ten worst U.S. acquisitions during 1994–1996 as measured by shareholder value two years after the deal.

Kevin O’Leary’s turnaround strategy for companies he acquired

Softkey’s strategy was to acquire a company, reduce it to a skeleton staff, and lower prices. This meant it could increase sales volume on existing software, but with the reduced staff, creating new titles could be difficult. The quality suffered, and O’Leary has been credited with destroying the educational/edutainment software industry.

After the acquisition of The Learning Company in December 1995, SoftKey changed its name to The Learning Company, a publisher with greater name recognition and a better reputation. The name was ironic, as MECC’s senior vice president of product development Susan Schilling said, “[O’Leary] had an interest in earning money. I’m not sure he had a desire to help children learn.”

At the end of its acquisition spree, The Learning Company had a large portfolio of big-name software franchises, including Reader Rabbit, Math Rabbit, The Oregon Trail, Word Munchers, Number Munchers, Storybook Weaver, Carmen Sandiego, The Print Shop, Living Books, Family Tree Maker, Arthur, and KidPix.

How merging with Mattel made Kevin O’Leary rich

In the fall of 1998, toy company Mattel, maker of Barbie and Hot Wheels, agreed to acquire The Learning Company in a stock-for-stock merger valuing the company at approximately $4.2 billion. The merger was finalized and unanimously approved by both companies’ boards of directors on December 14, 1998. The merger was completed on May 13, 1999. Jill E. Barad, Mattel’s chairman and chief executive officer stated “This merger gives Mattel a $1 billion software division with an unparalleled portfolio of branded content and profit margins exceeding that of our traditional business.”

Mattel kept O’Leary on as president of Mattel’s new TLC digital division. Within a few weeks, O’Leary sold his stock in the company for $6 million. In the fourth quarter of 1999, Mattel reported a loss of $184 million due to poor sales and inventory problems. The stock price valuation of Mattel dropped $2 billion in one day. O’Leary, along with former Learning Co chairman Michael Perik, left the company November 10, 1999. Each received a severance package worth $5.2 million.

Bloomberg, Businessweek, The Telegraph, and CNBC all described it as one of the worst mergers of all time.

On April 3, 2000, Mattel announced its plan to dissolve its assets related to the software business. Gores Technology Group acquired The Learning Company for $27.3 million plus a profit-sharing agreement with Mattel, a stunning reversal of a $4.2 billion merger that had happened less than 15 months before.

Although O’Leary sold his company for $4.2 billion, his earnings from the sale were in the millions, not the billions.

Dave Farquhar

David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.