7 Lessons from the Shark Tank

Pitching before the Sharks

Those who accuse television of making the world’s population dumber clearly have never watched the Shark Tank. For those who don’t know it, Shark Tank is a Reality TV series produced by Mark Burnett that features a panel of potential investors, called "sharks", who consider offers from entrepreneurs seeking investments for their business or product. When I first heard about it I was skeptical because I’ve realized that a lot of the “Reality Shows” contain more “show” than “reality” and have plot lines which are just as interesting as the weather forecast. However, when I finally sat down to watch my first episode of the program I was completely hooked. Despite all the drama that goes on in the “Tank” there are a lot of lessons to be learned by aspiring entrepreneurs. I‘ve listed 7 which made a mark:

1.  Show me the money-The Sharks always ask about the actual business done before they invest. Actual work done, actual profit, actual sales. Not fancy power point projections, verbose business plans or fictitious financial projections. That’s the best way for them to determine the level of risk they are getting themselves into. You have to present actual figures so far and yes, those figures must tally. 

2. Business requires flexibility-When the sharks saw a flaw in the strategic plan of an entrepreneur, they were quick to suggest a better plan. When better ideas are offered that are different from the original plan, adapt to them. Let go of what’s not working including bad products, non working strategies, products which aren’t being sold and embrace what’s making money. The motive of a business is profit, not sticking to a mission statement.

3. Invest in areas you have information- Invest in the business you have knowledge about and passion in. The sharks don’t touch businesses they have no knowledge in or ideas on how to scale them however lucrative they might seem. Not every good looking opportunity is the right opportunity for you.

4. Unique ideas are all around us- We don’t have to search in outer space for that special Eureka moment to be in business.  The entrepreneurs with the most impressive ideas discovered that they were just simple solutions to everyday challenges. Kids having problems with keeping toys? Make a fancy toy box for them.  You want to listen to music on the go without annoying wires connected to your headphones? Create hooded jumpers with in-built wires and detachable headphones.  Some, like the one for the fellow who came up with the idea to charge people to draw funny cats for them would have been ridiculous were they not making as much money as they did. Ideas are everywhere, those who identify and execute them well end up at the top of the food chain.

5. Protect your product- Copyright or patent whenever possible. Add new features to make sure the competition is always playing catch up.  Any idea that’s worth a lot of money will be copied; it’s your job to make sure copying it is as difficult as possible.

6. Cook the bird in hand-Entrepreneurs who were offered the deals they had asked for but continued negotiating because they thought they would get better deals ended up losing the deal or being shortchanged. Closing a sure deal is much more important than soliciting for a better offer.

7. Sell value, not features- People aren’t convinced to buy products because of the features packed in them; they buy them because of the value they get out of them. They buy hooded jumpers with in-built headphones not because they are convenient, but because they look and feel “cool” in them. They buy flavored premium tea not because it tastes good, but because its “premium”. It doesn’t have to make sense to a customer; he just has to love the idea of having it.

In life there are definitive moments. You only get a few of them…Kevin O’Leary, Entrepreneur and Shark Tank panelist.