The only show I really enjoy, and learn from, on TV is ABC’s Shark Tank. I actually don’t even watch it on TV because every single season and episode is free on Hulu. The show is produced by Mark Burnett and is based on the Canadian show Dragon’s Den. Each episode features a panel of five rich investors called “Sharks.” The Sharks have either sold their businesses for millions (or billions in Kevin O’Leary’s case) or have sold billions of dollars worth of products, like Lori Greiner did on QVC. They each bring industry knowledge to the table and have different specifications for what they invest in. If you come in unprepared, they will ask you the right questions and you will look like a fool on TV and not get any money. On the other hand, if you have a very strong product, without much revenue attached to it, they may still bid on it. There is no formula for what they will invest in, but after watching every episode, here are some entrepreneurship lessons that I learned.
1. Get your story right and don’t leave out important facts. One of the things that the Sharks look for is someone who has an interesting story to tell about how they created a product or business from scratch. Within that story, they are trying to find real meaning and purpose behind what the entrepreneurs are doing to see if there’s a market for the product. Your story should be compelling in that it makes them want to hear more. The only exception is Kevin O’Leary, who cares about money more than intention. So in order to win the Sharks over, tie your product to a personal story and end the story with why there’s a big business opportunity for them.
2. It’s all about the numbers. The valuation you put on your company is extremely important and it happens before you enter the tank. If you’re asking for $100,000 for a 10 percent stake in your company and you have no revenue track record, then they won’t take you seriously. At the end of the day, they are looking to get their investment back and make money off the deal. The Sharks are experts at evaluating businesses so if you aren’t, they will catch you and you will go home with nothing. (Read more on VC funding.)
3. The product has to be unique. It's a a recurring theme and strong entrepreneurship lessons. If your product can easily be replicated or if it has no distinguishing characteristics, Sharks won’t be interested. Successful entrepreneurs usually patent their inventions so they can’t be copied. The patents on the shows are sometimes more interesting to the Sharks than the actual products. You need a new or highly custom product if you want to appeal to the Sharks. (Get some business ideas.)
4. Know your strengths and hide your weaknesses. The Sharks are trying to sniff out your weaknesses, trying to see if you’re the right person to run your business. If they catch wind of your weaknesses, they will expose them and potentially put a deal together to buy the entire business or gain control of it. Identify your strengths so that you can show your best self and gain their trust.
5. Learn from your experience. During the show, the Sharks give entrepreneurs advice as to what to do next with their business even if they decide not to invest in them. This advice is worth its weight in gold! Along with the exposure that the entrepreneurs get from being on national TV, this form of mentoring can help you make better business decisions in the future.
Dan Schawbel is the managing partner of Millennial Branding, a Gen-Y research and management consulting firm. Subscribe to his updates at Facebook.com/DanSchawbel.
Photo credit: ABC