I don’t know if you watch Shark Tank, but I have become addicted to this show. It is about these millionaire, billionaire sharks who listen to entrepreneur ideas and decide whether to invest with them or not. From Farmers to Firemen, Housewives to House Painters, they all have ideas, they come to Shark Tank, trying to either get money for expansion or network for knowledge and input from the Sharks.
There are very valuable lessons from this show for anyone in business and I highly recommend it for everyone who wants to learn about opening a business, evaluate their business or becoming an entrepreneur. I even think you could have a staff meeting discussion on some of the entrepreneurs. What happen, why they got money, why the did not.
That said, I have learned quite a few things from Shark Tank in running a business and evaluating our business model:
Know Your Math/ Numbers– You have to know you numbers, you have to know your bottom line. Sales, cash flow, debt, margin, customer acquisition cost. More great ideas are turned down because the entrepreneur does not know their math. They have taken a slapdash approach to their financials in general and it shows. Who wants to invest or even work in a company when the owner doesn’t know their business.
Know your competition and your industry- inside and out. When asked who else ‘has this type of product’ and they say no-one and Laurie Greiner comes up and say’s We have had this on QVC and ….. When Daymond says, I invested in this type of product and still have 5 million dollars sitting in my warehouses, when Mark Cuban, says, I lost 2 Million dollars on a similar product, you should know the market, how big it is, the potential, your demographics, who your competition, the pricing on your competition and how big they are. If you do not know your market, it is over on Shark Tank and it could be over for you as well..
I think is even more interesting, is the Sharks will bring up new market potential you may never have thought of. Do Your Homework .
Know Your Core Business: I have seen this more than once. A company has a brand, that is doing OK, and they want to branch out to another brand, that doesn’t necessarily have anything to do with the first. In fact, it might detract from the first brand. For Example an eyecare office, has never carried sunglasses or even kids frames, and they decide to expand into this market. This market does NOT detract from their Core Competency. But, if an eyecare provider want to start importing their own Sunglasses from Asia and need start up money to start distributing and reselling the product, it might detract and pull attention and money away from their core business. Risky.
Know what you are good at: After 35 years in this business, I have seen many eye doctors that should not be running their business, conversely, I have seen many eye doctors that should be running the business, not being an eye doctor. It is interesting to see some Sharkee’s ask for help in running the business, because they don’t know, (and they are more likely to get money) but the worst are the Sharkee’s that think they know everything (and they hardly ever get money). Which brings me to the next:
Be Humble: I watched these young doctors doing a pitch for a Rolodoc. They thought they were cute in their little doctor coats and their pitch was they were going to grow this business by social media. The only problem, was they didn’t even know what social media was, how they were going to do it, how was it going to be executed. That had to be the worst pitch I ever saw in Shark Tank History. Another Doctor (podiatrist) was pitching for an app for children’s feet and thought just because she was a podiatrist, she should get funding, another doc, was so cocky, that because she would not listen to their advice, not one took her up on the deal.
Attitude will take you farther – One of my favorite shows, that actually made me cry, was a farmer in Florida, who invented a way to save the fruit trees from freezing. He was so enthusiastic and caring about his product and saving Farmers Crops and agriculture, that a Shark actually took him up. I have seen Sharks invest just because they had the right attitude with the right idea. This real weirdo comes on with a great product and keeps making odd noises. Mark Cuban was out, just because he said, I could not take listening to that.
Passion and hard work are not everything: It is wonderful to have a passion for your product, but you have to be able to step back and say, how do we make it work? How do we make it viable, and sometimes, that passion can get in the way and it is not guarantee you will make money. Nor is hard work, and that is not reason, because you work hard that people will buy your business. They buy business because they make money or they want to launder money, or they think they can make money.
Be a problem solver– A true entrepreneur finds solution to problems. A truly committed person continues on as a problem solver. I have never seen any Shark take on an sharkee who has not demonstrated how they solved the problem or why they stayed with they are doing. For instance, when confronted about their cost of goods (big issue)and told they can manufacture in China, the Sharkee in response says they are about providing local jobs and made in USA.
Be an entrepreneur: I have hear more than once each of the Sharks say, you are not an entrepreneur, this is just an idea. You may not be the right person to run the business. Just because your family loves you. Kevin O’Leary says, “Any business that after three years isn’t profitable isn’t a business, it’s a hobby.”
Listen: Whether or no a Shark invests with you or not, you need to listen, Often times they give great advice, even when they turn people down. Even more important, and the hardest of all, do not get defensive, accept what they had to say. This sophomore invents a new ‘box’ that is easy to ‘unfold’. Mark Cuban says, the pitch is saving time and she need to go after companies that do a lot of shipping. She tells him he is wrong is about ease of use and the market is for movers. Mark Cuban goes out and now she is done to 1 Shark and begging with tears in her eyes for someone to take her up. She will ‘work hard’ and ‘do anything’. Laurie Greiner, feels sorry for her and eventually takes up her with ‘exceptions”
Learn to Sell: ‘Everybody Lives by Selling Something’, I don’t care if you are an eye doctor or the file clerk, you have to sell or pitch your products or services. Communication is key, from the website to the phone to the chair to the dispensing area. You suck at it and you will lose, unless your whole product is so spectacular, it is going to make money right off the bat.
Last but not least Age Has Nothing to Do With It. An 18 year old pitches Skin Care Products, 13 Year Old who build a 5 million jewelry business, 80 year old pitching diapers, 16 year old starting a Beekeeping- Honey business, 14 year old starting a bow tie business. Never again will I listen to college kids complain that they can’t find a job, never again will I listen to others coulda, shoulda, woulda’s. Nothing is more heart warming that watching young kids starts businesses and be successful.
I love this show, since I don’t have a TV, it is available on Hulu.