Shark Tank has become my binge show. When I need to unplug from daily tasks, I flip on Hulu TV and have all 10 seasons available. For those that aren’t familiar, Shark Tank is a reality show set in what feels like a high-class conference room. Promising entrepreneurial-types come to present their business or product ideas to a group of 5 to 6 investors, hoping to exchange equity for funding. The investors, the Sharks of the shark tank, include multi-millionaire and billionaire tycoons such as Mark Cuban, Lori Greiner, and Kevin O’Leary. It’s a subject that is able to be successfully dramatized as people’s lives change because they came up with a real business idea, or they’re sliced and diced in front of millions of viewers, crushing their dreams. I love it. It’s generally a humbling experience for some as they present their big idea along with their valuation of the company. This is what it’s worth based on its accrued revenue. Again, another area where the business owners hopefully have this right, or the investors who live, sleep and breathe business building will sniff out the falsity to their claims, and bring them quickly back to reality.
Besides the general entertainment of why this reality show was created and after watching several hours of these episodes of these presentations, I have found that there are valuable business lessons hidden behind all the cameras and overacting. Other than knowing your business and numbers, and to make one hell of a presentation towards the investors, here are four business lessons for anyone on the road to entrepreneurship.
1. Failure is necessary for success.
As the all-too familiar advice goes, you need to learn to fail to be able to succeed. There is actually nothing more truer in the business world, and in life, than this. Think back in your life to break ups. As heart wrenching as they were, it helped you see what to look for in a partner. Hard pill to swallow at the time, but necessary for personal growth. On Shark Tank, the presenters share stories of the journey taken to create their business. From quitting or losing jobs, moving back in with parents, having cars and houses repossessed, losing marriages or significant others, it’s fascinating to see what these people are willing to go through to make their dreams of being a successful entrepreneur a reality. Respectable in all regards, but not for everyone. Now, this isn’t to say that the show doesn’t pepper in trust-find kids looking for a way out of ever holding down a real job. But I guess there needs to be variety to appreciate the real hustlers.
Personally, seeing what people give up normal comfortable lives for something that may never work, or change everything for them is majority of the reason I watch. It’s inspiring. Need to feel a kick of motivation to get make the most of your day? Watch an episode or two. I have always been impressed by those that have built successful businesses, knowing that they had to go against the grain many times to achieve it. Having a vision in your head that no one else in the world may ever understand or believe, and make it real is what entrepreneurialism is all about. Those that successfully do it have fallen on their face more than they probably care to share, but also know that those hurdles are what builds their success, and makes them appreciate it that much more. You know what they say, if it was easy everyone would do it. Successful businesses usually have a tale of the journey taken leading to what they‘ve accomplished. And it is all well deserved.
2. Brands with stories are more interesting.
More and more companies are surfacing today that have a cause for existence. We’ve seen brands like Toms, who donate a pair of shoes for every pair sold, Patagonia, who gave 100% of Black Friday sales to environmental groups, and Airbnb, who rather than telling their story, use the stories from their customer’s travel as the brand’s foundation. From how the products are made to where revenue proceeds go, there is something interesting and aspirational happening to the transactional experience. You are now confronted often with brands that aren’t just about a purchase, but making you apart of them. In Simon Sinek’s Start With Why, there are real-life stories of organizations & businesses who’s framework caused movements. A very good read if this is a topic you want to dive into further. The same can be seen on Shark Tank. Businesses being created that are centered around how their passions became the basis for the company. Shark Tank has had several examples of companies founded on this particular premise, and it always seems to connect stronger with the sharks. People are sharing businesses that are more than just making money, but to ultimately changing the world. Businesses still needs to fall in line with being profitable and being able to scale. However, when the two come together successfully, it’s fascinating and refreshing to see.
In our world now it also seems that larger corporations are going back to their roots to define these foundations, and pivot their brand story. It adds more value to them as a company, and to the consumer purchasing their products. As Shark Tank deals with smaller entities as far as revenue and scale, the parallels are being seen between big and small business, and ultimately affecting the culture of business entirely.
3. Start with pain points.
“There has to be a better way.” It’s a common statement, and thought we’ve all had at some point. This is the thinking that builds successful businesses everyday. Simply put, finding a broken system for doing something, and disrupting the process with a more efficient solution can lead to amazing products and companies. I see it on Shark Tank often, and always wonder why I never thought of it. If it makes life easier, and is feasible from a production sense, then success & revenue can quickly follow. Everyone is looking for the easier way of doing something. Many of the businesses shown on Shark Tank center around discovered pain points leading to their eureka idea. Once the sharks are hooked, the sales questions generally follow quickly after to confirm that society is interested and buying into it.
I teach a class for design students that is based on this concept. I distribute each group a certain industry such as residential, medical or financial, and employ them to dive in and look for broken systems. Discover pain points. Become empathetic to the every day user in these worlds, and what are some of the hurdles faced just by archaic methods that no one has ever attempted to reinvent. Often they find real issues that people are facing, and then create a solution, whether it be a product or service, that disrupts that industry, and proceed to bring it to life. Shark Tank is always a reference material I recommend for learning how people approach pain points and address it in simple ways. If it brings more complication to the user’s life, they generally won’t alter their habits. What have you come across today that was frustrating, and made you think there had to be a better way? You’ve identified a pain point, now go solve for it.
4. Know when the idea is bad, and kill it.
After going through the top three points, sometimes the idea doesn’t make sense. It’s more trouble than its worth, and probably will never work. The sharks can usually quickly address this and shut it down. The more you watch you’ll start seeing yourself disputing the realism of the idea, and sit back and watch it be destroyed. Some people don’t go down easy. They just know they have the next big money-making idea, even though they have never made real profit or seen any sort of real success from it. This is where the more dramatic flare of television comes into play, and definitely increases the entertainment value of the show. I’ve seen it in my students when they fall in love with their concept, and I have to dissect it to show there is no meaning. I’ve done it myself. It’s difficult to know when it’s time to break up with the idea and move on to greener pastures. Or as writers say for their works, “know when to kill your darlings.”
A big benefit of presenting in the Shark Tank is though they may not realize it at the time, valuable advice is being given. Even if there is no money or hugs exchanged at the end of the presentation, there is direction for moving forward. Watching the show you see how real successful business builders approach bad ideas, and present their tactics for altering it, or suggesting it be “taken behind the barn and shot.” Dramatic of course, but preventing wasting any more time and money on something that’s not going to work. That’s not to be said that sometimes the sharks are wrong, and the business does succeed, it will help you gauge a perspective for understanding simply why things do work in our world, and why they don’t.
Take some time this weekend to watch Shark Tank, and consider these lessons presented. It’s valuable information that can help anyone who has a dream of building a successful business to take into account. Being an entrepreneur is not for everyone, and certainly not for the feint of heart. Seeing how Shark Tank gives an inside look to the conception of businesses, there are so many more lessons that will give you appreciation towards the brands and companies you believe in.