Why Paul Graham was wrong about Shark Tank, and what YC can learn from it

Paul Graham wrote a well known tweet about Shark Tank that kicked off an enjoyable back and forth. Without fanning the flames, I think it’s worth sharing our experience.

At the time of Paul’s post, I had filmed a Shark Tank segment for brightwheel and was waiting to hear if it would make the cut. It did, and Mark Cuban and Chris Sacca ended up having a very public battle to get involved. So, as a VC backed Silicon Valley startup that also pitched on Shark Tank, I think we have a unique voice to lend to the discussion.

Paul’s critique focused mainly on a founder’s time, which I would agree is limited and valuable. But the inherent assumption, then, is that Shark Tank isn’t valuable or — as Paul suggested — that it’s marketing to help cover up an “unappealing” product. That just isn’t accurate. Shark Tank is a pitch. With a huge audience and a clear goal. Not unlike Y Combinator’s Demo Day.

Let’s compare:

  • Pitching for Y Combinator (YC) Demo Day and Shark Tank (ST) probably take the same amount of preparation. A founder is going to want to get it right.
  • YC pitches last a few minutes. ST pitches are 30–90 minutes (edited down for TV).
  • YC pitches are one-way. ST pitches are a grueling back and forth with five investors.
  • YC pitches are closed to the outside except for blogging excerpts. ST pitches are broadcast to a national primetime audience of 8M+ people, with ongoing reruns.
  • In both cases, the chances of actually getting to that stage are slim, and the opportunity immense.

So — in terms of pitches — you could argue that ST is actually tougher with potentially a bigger payoff beyond a financial investment.

But this post isn’t about the value of YC. It would be silly to question the portfolio or the value of program and network. I have friends and colleagues who have gone through it, thought about applying myself, and hold it in the highest regard.

This post is about the value of Shark Tank, and perhaps what YC can learn from it.

If you’re fortunate enough to make the ST cut, it’s an unbelievable opportunity and something I would recommend to any startup — including those that are venture backed. For us, Shark Tank has meant:

  • Partners: Mark and Chris and their teams jumped in right away and have been incredibly helpful at every step.
  • Investment: We closed $600k — quickly and at great terms.
  • Exposure: Shark Tank has a broader reach than any of the major network morning shows or national papers, and we got to tell our story in a meaningful way. For 12 minutes. You couldn’t pay for that reach and storytelling.
  • Growth: Our user growth (across schools, childcare, and camps) — along with the interest from prospective employees — has far exceeded even our most aggressive predictions.

Let me be clear: Before the show aired, we were growing beyond plan — completely organically with passionate schools and families across the globe. That’s because we focus every ounce of energy on our product and user experience. We don’t do marketing — or sales. We just build a product that people love.

And I would say the same for the other entrepreneurs I met while filming. It’s a passionate group that knows a good opportunity when they see it.

Writing off Shark Tank is unjustified. If brightwheel had gone through YC, my hope would have been that Paul and the team there would have looked at the facts and encouraged us to find the best path for our company. I actively seek advice from our investors and advisors, but ultimately they trust me and our team to determine our path. This was a clear opportunity that was worth the time — and the risk (it could have gone very badly). In fact, I’d be concerned about any company — YC or otherwise — that had a shot at something like this and didn’t take it seriously.

And so what can YC learn from ST? Again, that’s a tall order given YC’s success. But there’s a clear opportunity: open it up. Livestream Demo Day to the world to give your companies a broader audience of both investors and customers, and to possibly help inspire the next generation of entrepreneurs as Shark Tank has been doing.

The other key difference is the back and forth with investors. With YC — and with our seed round — it happens behind closed doors, one by one. Although grueling, I frankly enjoyed being able to pitch 5 investors at once — and learned a lot about them in the process. It also led to a nice partnership with Mark and Chris (despite some very real jostling). If looking to save founder time, how much time is spent by YC companies meeting individually with investors after Demo Day? Fundraising is a full time job and one of the single biggest things that takes founders away from product and customers. If concerned about a founder’s time (rightly so), how about grouping the initial investor meetings? And then creating channels to bring together complementary investors.

This isn’t to say that ST can’t learn a ton from YC. It absolutely can. I’m just relaying my firsthand experience. And questioning the notion that it’s a gimmick or that the entrepreneurs involved aren’t fully focused on their products.

Ultimately, Shark Tank is a pitch — just like YC Demo Day. Both offer big outcomes and implications. Unless YC founders are being told to wing it on Demo Day, I just don’t see the point of disparaging the founders who opt for primetime TV.

Maybe one day I’ll be able to watch both and compare.

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Curious? Read more about the Shark Tank experience: https://medium.com/@davevasen/shark-tank-behind-the-scenes-481f79c13cf9#.1xyec45m1