7 Entrepreneurial Lessons From “Shark Tank”

Paul FennerBusiness & Economics

I’m not sure how many of you spend your Friday evening watching TV but with triplets, I don’t venture out all of that much.  So if you ever find yourself looking for something to watch on those Friday’s I highly recommend Shark Tank on ABC.

The show introduces budding entrepreneurs to business moguls such as Mark Cuban, Kevin O’Leary, Robert Herjavec, Daymond John, and Barbara Corcoran who pitch their companies in hopes of gaining an investment in return for a piece of their company.  There are a lot of lessons to be learned from the show and Fast Company was happy enough to put together such a list.  The Sharks have invested $6.2m of their own money in order to support their entrepreneurs.Via Fast Company

  • Know your numbers. This is the number one lesson from Shark Tank. Whether you’re presenting to a team of investors or simply working to grow your business, it’s critical that you understand how much cash is coming in and out of the business. While you might think that most entrepreneurs on Shark Tank have a handle on their books, many believe that their passion will sell their wares. However, as we’ve learned from many of the Sharks, passion only gets you so far–numbers tell the real story.
  • Be a good marketer. Although the boys from The Brewer’s Cow didn’t get the deal they wanted, there is no doubt that the exposure from the show is extremely valuable. However, as a Shark Tank fan shares on his blog, the company’s website is pretty lackluster for a brand that hopes to go national. If you extend the online search to their Twitter feed, there is very little interaction since the show aired. The Brewer’s Cow currently has a deal with Whole Foods, but on the online front there is a lot more they could be doing just days after the television broadcast to capitalize from the on-air buzz.
  • Be humble. When a young entrepreneur appeared on the show to sell his custom clothing, he expressed the business drive that the Sharks love, but things started to fall apart when he talked about his lifestyle. Aside from asking for a starting six-figure salary (when the company has only grossed just over $315,000), he also lost some Sharks when he declared, “I’m now living the L.A. life.” As Shark Daymond John, founder of FUBU, expressed on his Twitter feed, a statement like this isn’t very appealing to a potential investor looking to form a responsible partnership.
  • Understand good timing. There are good and bad times in your business to ask for investment money. For many of the companies diving into the Shark Tank, they have great ideas but it’s too early on in their businesses to be on the hunt for a large amount of cash. Mom Raven Thomas was one of the most impressive entrepreneurs on the show in terms of leaking out little bits of information about her business to entice the Sharks, one by one. For example, when she shared that Sam’s Club recently put in an order for $2 million for her chocolate-covered pretzels, she had Cuban drooling to seal a deal.
  • Have a good story. When Travis Perry explained his company’s motivation to the Sharks, it tugged on their inner musician heart strings. Perry invented his product Chordbuddy to help new guitar players like his 10-year-old daughter avoid frustration when learning how to play the popular instrument. With a great story and a stellar product, Perry got investment help and now has his Chordbuddy product in more than 100 music stores.
  • Be prepared to walk. Some things are not meant to be, which was the case with entrepreneur Scott Jordan. As founder of the successful brands SCOTTEVEST and TEC, he appeared on the show to sell a percentage of the latter (a technology-enabled clothing patent). The Sharks, on the other hand, were interested in Jordan’s main business, SCOTTEVEST, which is on track to make more than $20 million this year. After a heated debate with some of the Sharks, Jordan was happy to walk away without a deal but with some new publicity for both his businesses.
  • Be personable. While all of the above will get you closer to your dream of running a successful business, it’s also helps to have a winning personality. No one wants to do business with someone who is unlikable, except maybe Mr. Wonderful. As Shark Barbara Corcoran said in a recent tweet, “All the entrepreneurs I’ve invested in have amazing personalities–no regrets.”
  • Remember all those things you learned about being nice in kindergarten? Those same things apply in the boardroom, no exceptions.