This TV Show helps entrepreneurs Succeed
Ekalavya Hansaj
Founder & CEO @Ekalavya Hansaj, Inc | Serial Contrarian shaping global narratives for political leaders | 1K+ news brands in 3 Years | 3 Upcoming TV Channels | 14 Podcast Shows | 50+ SaaS Brands
Introduction
"We all want the freedom to make our own decisions." Daymond John.
Many a battle has been fought for freedom, and it continues on the sets of Shark Tank US- a popular business reality show televised on ABC network and Amazon.
SMEs, startups, and founders with revolutionary and sometimes revolting ideas pitch their dreams to get funded and mentored by leading entrepreneurs or "sharks" on the show.
Dave Health and Randy Goldberg walked into the Shark Tank set in the show's sixth season, pitching their sock brand: Bombas. The duo created the most comfortable socks and donated one pair of every pair sold. Daymond John took an interest in the business model and offered US$200,000 for 17% equity in the company. Since then, Bombas earned US$225 million and sold 42 million items.
The audience often looks for a personal connection when watching shows; many Americans could see themselves reflected in Dave and Randy. This provided a stimulus for a new generation of pioneers.
ABC's popular show Shark Tank started in 2009 and is in its 14th season, hosted by six self-made billionaires and millionaires: Mark Cuban, Lori Greiner, Robert Herjavec, Barbara Corcoran, Daymond John, and Kevin O'Leary. Five of these sharks are always present, while there can sometimes be one notable guest investor.
Shark tank is the American idol of entrepreneurship that attracts thousands of small businesses to participate in the show. However, only a few can make it to the final pitching round and appear on national television. Not every participant will receive investments, but entrepreneurs can improve their brand awareness and motivate others to develop innovative business ideas.
The primary purpose of the show is to influence budding entrepreneurs to give a shot to pitch their most successful shark tank products to help grow businesses.
Common problems that startups and new entrepreneurs face today
Did you know that?15.4%?of Americans work in startups and that there are approximately 32.5 million small businesses? These figures can prove why entrepreneurial shows like Shark Tank, Mad Men, and others are so popular with the audience.
The current economic market is competitive, new startups and entrepreneurs face numerous challenges, and about 90% of startups fail in the initial stages. But mentorship, networking, exposure, and funding can often propel a business to become a unicorn.?
Look into the most successful Shark Tank products in the market and see how new entrepreneurs can set up successful businesses with knowledge and sufficient cash flow in a company. Even the most successful Shark Tank rejects now have a business valuation of millions. Marketing magic is at work here!
The economic scenario for businesses in the post-pandemic phase has been complex, with inflation, supply chain issues, and workforce challenges. Here are a few challenges for small businesses, startups, or new entrepreneurs.
Finding a real problem and a solution
It is challenging for startups to discover the real market needs and find a solution. For example, a glucometer is already on the market to test diabetes at home. You must find out what that machine cannot give and introduce new technology for better outcomes.
Do not create a solution and then look for a problem!
Finding customers without being a household name
Finding customers and motivating them to enter your business takes a lot of work and effort. Startups usually don't have a budget for customer acquisition costs or to employ advanced marketing techniques. Without being a household name, you can attract customers by creating and publishing valuable content, optimizing the website for search engines, and creating an impactful social media presence.
Increasing brand awareness
Increasing brand awareness requires much effort and money that startups fail to withstand. However, having a solid brand image is essential to build a loyal customer base.?
Do you know why Apple and Nike have such a high recall value? They have created a consistent brand image and unique logos.
Dealing with the workforce
Startups and new entrepreneurs find hiring and retaining employees a complex task. Finding motivated workers and a passionate team can make all the difference.
Lack of cash flow management
Not having sufficient cash flow can affect business operations leading to closing the shutter at the worst. However, you can apply for funding from angel investors or venture capitalists or take loans from banks, depending on your business stage.?
Marketing
With the advent of technology, digital marketing strategies are on trend. But, it can be costly if you don't implement the best approach.
Growing business
Businesses do not thrive on an idea but on scalability. Most fledgling businesses fail to scale their operations and improve their ROI.
9 Business lessons to learn from Shark Tank
New entrepreneurs coming on the show can get profitable Shark Tank lessons that help them scale businesses and open doors to better opportunities. People walking to the show pitch their business in front of the panel, and the most successful shark tank products are now making big sales in the market.
Data analysis?of Shark Tank shows that 60% of women (133 of 221) who got a chance to the show have a deal than 55% of men (284 of 535). Thus the show ensures there are no gender biases in being an entrepreneur, but you need talent, hard work, patience, ambition, and connections.
Even those who failed to secure investment learned important business lessons from the Sharks and gained the attraction of other investors and people who knew their business. Here are a few shark tank lessons:
Entrepreneurs need to be good at the number games. You should have a good grasp of data related to annual sales, revenue, expenses, gross and net profit margin, customer acquisition costs, operating or overhead costs, operating income, market share, EBITA, etc.?
You don't understand your business if you don't know your numbers.
The survival mantra for businesses is to solve a real problem. People want genuine products that solve real-life problems. If you go for a niche problem, your business will never scale.
Look into the most successful Shark Tank products, like the Scrub Daddy, which have successfully changed the household cleaning problem. On the other hand, Throx claimed to help serial sock losers by packing three socks, which was not addressing a real issue and would pile up your drawers with extra pieces of socks, and they lost the deal.
Businesses can have numerous sales in a year, but they will not necessarily make a good profit. Sharks want to know an entrepreneur's cost in producing per unit and other expenses, to calculate the profit margins.
Every investor wants a good return on investment, guaranteed through the business's profit margin and future viability.
When forecasting your next year's revenue for preparing a budget or making business valuations, be realistic. Overvalued or undervalued companies may not receive potential investors; therefore, you must be honest.
Businesses with a good grasp of the market can make sound decisions in distributing their products or services. It gives an idea of the market size and the underserved and untapped portion of the market, understands competitors, and forecasts if the market can grow over time.
Even the most successful Shark Tank products can fail without sufficient cash flow. It may result in a bad business deal with investors, prevent you from paying employees, paying your bills, and face supply chain issues.
You can not just sustain funding but also create a money-making business.
When investors find a product will not make a profit anytime soon or are an early-stage business, they mostly opt out of making a deal. Every entrepreneur must understand their business stage and think smartly about using the situation to make it in their favor.
While telling a story to investors, speak a little about your personal stories; they are more interested in knowing your business stories. Your presentation must include every piece of your business, and the delivery must show a positive attitude and commitment toward your work.
If you see the most successful Shark Tank pitches, they are not straightforward negotiations but strategic debates involving multiple factors.
For example, Business A asks for $100,000 for 2% equity in the business. Shark 1 and Shark 2 both take an interest but ask for 4 and 5 percent of equity. While Shark 3 and 4 want to come together but ask for a cumulative 5% equity.
As a business, when you have multiple offers, do not just fixate on the equity but on which investor(s) can have the most value-addition to your company.?
You can also have a counter offer, say you want to go with Shark 2 but want him to consider the offer at 3% equity. Being prepared for eventualities and having a solid negotiation strategy will help investors place their bet on your capabilities.
Few other lessons from Shark Tank
About the sharks on the panel
The investors in the show are the "Sharks"; six sharks appear on TV on rotation with a guest investor at times. They have established themselves as entrepreneurial powerhouses. Thus, it is best to understand their backgrounds and businesses to customize your pitch to get "caught" by the shark of your choosing.
Kevin O'Leary or Mr. Wonderful
The founder of O'Leary Mortgages, O'Leary books, O'Shares Investments, O'Leary Funds Management, O'Leary Ventures, and O'Leary Fine Wines, Kevin O'Leary, has an approximate?net worth?of $483 million in 2023. He is the second wealthiest shark.
Lori Greiner, or "The Queen of QVC"
Lori Greiner created more than 600 products, holds 120 US and foreign patents, and is the founder of For Your Ease Only (product development and marketing). The?net worth?of "The Queen of QVC" in 2023 is approximately $150 million.
Mark Cuban
This tenacious entrepreneur founded and sold MicroSolutions to CompuServe for $6 million and co-founded and sold Broadcast.com to Yahoo! for $5.7 billion. He is the proprietor of the NBA's Dallas Mavericks, holds stakes in Magnolia Pictures and AXS TV, and is the founder of the Fallen Patriot Fund. The?net worth?of Mark Cuban in 2023 is approximately $4.6 billion.
When you ask which shark has made the most money on Shark Tank, it is Mark Cuban, one of the richest men in the US.
Daymond John
Daymond John is one of the most highly acclaimed entrepreneurs in America. President Obama appointed him as an ambassador to promote underserved entrepreneurs in 2015. Daymond John is currently the CEO and Founder of the Apparel Company FUBU and His?net worth?as of 2023 is approximately $350 million.
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Barbara Corcoran
She is an American Business icon, speaker, author, investor, consultant, and the founder of the Corcoran Report. Barbara Corcoran co-founded and sold The Corcoran Group (real estate) for $66 million. Her?net worth?in 2023 is approximately $100 million.
Robert Herjavec
The gregarious entrepreneur Robert Herjavec is a cast member of the Canadian series Dragon's Den. He founded and sold BRAK Systems to AT&T Canada for $30.2 million and RAMP Networks to Nokia for $225 million. This business tycoon won the Ernst & Young, Entrepreneur of the Year Award in 2012. Robert Herjavec is the CEO and founder of Herjavec Group (IT Security). His?net worth?in 2023 is approximately $200 million.
Some of the guest Sharks you can see on season 14 of Shark Tank are
Examples of few entrepreneurs getting the deal
Shark Tank's biggest success story continues to be Bombas. David Health and Randy Goldberg created Bombas, a brand selling comfort socks, and recently entered the apparel section. The company aims to donate one item for each sale to homeless people and complete donating more than 50 million items. Daymond John found interest in the company and agreed to offer $200,000 for a 17.5% stake. The sales have crossed $225 million in the last few years.
2. Scrub Daddy
Scrub Daddy is a smiley face-shaped sponge that gets hard in cold water and soft in hot water. The double-sided mouth portion of the smiley design makes cleaning utensils easier.
Aaron Krause's Scrub Daddy has a business valuation of $209 million in sales. The founder appeared on season 4 of Shark Tank and successfully got an investment from Lori Greiner of $200,000 for a 20% stake in the company.
3. Simply Fit Board
Gloria Hoffman and Linda Clark, founders of Simply Fit Board, pitched their business on the 7th season of Shark Tank and received an investment from Lori Greiner of $125,000 for a 20% stake in the company. The company metrics: $160 million in sales.
The brand produces stationary exercise skateboards designed to strengthen your core by balancing and twisting back and forth on it. The skateboard has no wheels so you won't skate but rather get fit.
4. The Comfy
Brian and Michael Speciale, founders of The Comfy, introduced their wearable hoodie blanket on the 9th season of Shark Tank. The company successfully convinced Barbara Corcoran to invest $50,000 for a 30% stake in the company.
After appearing on the show, numerous companies tried to copy their hoodie-blanket designs and fleece-lined styles. However, they are still the best manufacturers.
5. Drop Stop
Marc Newburger and Jeffrey Simon introduced an innovative idea of producing a car seat gap filler in Season 4 of the show. Drop Stop fits between your car seat and the center console to prevent anything from falling into the legroom while driving. The company's business metrics are $24 million in sales. The founders collected an investment from Lori Greiner of $300,000 for 20% equity.
6. EverlyWell
Julia Cheeks, the founder of EverlyWell, offers sample-collecting at-home lab testing kits for more than 30 ailments and to transform the medical lab testing market to provide customers with easy-to-handle and understandable test outcomes. The company is valued at $2.9 billion.
EverlyWell appeared on the 9th season of the show and collected an investment of $1 million from Lori Greiner for a 5% stake.
Some of the other most successful shark tank products are
Entrepreneurs who failed to get the deal yet are winners in the market
The best Shark Tank inventions manifest entrepreneurs' hard work, patience, and capacity to pitch their businesses to investors on the show. Many capable entrepreneurs end up on the Shark Tank disappointed and unable to win over investors. But appearing on national tv itself is excellent publicity.
Here are the two most successful shark tank products that didn't get a deal but have made millions.
Ring
Jamie Siminoff pitched a DoorBot, a caller ID for your doors, on Shark Tank in 2013. This doorbell was integrated with a video camera, sending alerts and video feeds directly to your smartphone. It was developed to ensure homeowners' homes are safe while they are not around.
When he walked into the show, he was already making $1 million in annual sales. He then asked for $700,000 at the company's value of $7 million. No one except Kevin O'Leary showered interest in the product, but Siminoff did not accept his offer.
However, Siminoff made an additional $5 million in sales after the show. "Ring" got funded by the billionaire Richard Branson, whooping $28 million and gave the company a valuation of $60 million. In 2017, Siminoff raised a whopping $109 million from venture capital. According to Pitchbook, the company raised $209 million and was valued at $760 million. He was later called as a guest investor on the Shark Tank.
Chef Big Shake
Shawn Davis, the founder of Chef Big Shake Foods, pitched his unique seafood burger business on the Shark Tank in 2011, asking for $200,000 against 25% equity of the company. Davis was looking to introduce foods that relied on seafood and not traditional meat sources into the market.
Though the Sharks loved his shrimp-based burgers, they found this new venture challenging to invest in, and Davis had to return empty-handed. However, after the show, angel investors offered Davis $500,000, and the annual sales for his company CBS Foods projected to $5 million from $30,000 in 1 year. Later in 2017, Cuban regretted not investing in food innovation, making it one of the most successful Shark Tank rejects.
Other most successful shark tank rejects are:
Best TV shows for entrepreneurs
Multiple TV shows help you become a better entrepreneur when looking for ways to improve your business. Other popular shows for budding entrepreneurs are as follows:
What is the actual involvement of the sharks after a deal?
According to Mark Cuban, shark tank is real, as it is their money. However, there are a few more facts that the audience needs to learn.
More than 25% of shark tank pitches get rejected for some reason. Investors can leave even the best shark tank items after making a deal. Investors can refuse investments in a company that gave incorrect data on the show to win the Sharks.
When an investor gets ready to make a deal with an entrepreneur, they have the right to conduct due diligence to identify inconsistencies in the company. For example, if an entrepreneur claims to make a gadget for $1 and sells 1 million items but is found to make it for $10 and sells only ten items. These inconsistencies result in sharks coming out of the deal.
Conclusion
Ordinary people look for motivation to become extraordinary. Entrepreneurs gain this motivation from Shark Tank. The show helps businesses scale and motivates others to confidently come up on the stage. Plus, sitting at home, you can learn valuable details on running businesses from Sharks. This platform not only makes businesses successful but improves brand awareness and customer acquisition, finds angel investors and others, develops good networking and nurtures the hidden entrepreneurial talents within oneself.
References
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