7 Money-Making Lessons from "Shark Tank"...
 

I'm a fan of "Shark Tank"... but not everyone is!

I recently read a scathing review, which likened "Shark Tank" as an exercise in seeing people be humiliated. The reviewer thought that that was all there was to the show - seeing people be humiliated, embarrassed, and crushed by the jaws of the Sharks...

In contrast, I'd say you can learn a lot from the show! What you are doing is learning from other people's mistakes... The sharks often give quite good advice, and have good insights... Though sometimes they are harshly worded, they are blunt, and that's actually the most useful way to get the information - so there's no "pussyfooting" around, missing the point, or misunderstanding the lesson...

Here are some of the business lessons you can learn from "Shark Tank"...!

• You learn about the importance of "likability"... Because "likability" is definitely one of the factors the Sharks use in making an investment decision! They often won't invest in someone, and work with them, if they don't "like" them... Because for them, it's often not worth spending time with people they just don't like...!

• You learn about the importance of competence. Multiple "Sharks" have said that they invest in the "people" more than they invest in the "companies"...

• You learn several things about negotiations... One lesson is that a negotiation is not necessarily just about the money. Many other factors can come into the mix! Including when the money will come, how there could be "bonuses" if certain targets are hit by certain time periods, or maybe a shark's money is not just what's important to the entrepreneur giving the pitch, but they want access to a Shark's contacts and other resources too, before they'll accept the investment...

• You can learn about using time limits to force people to make a decision. I've seen Mark Cuban make an offer - and give the person one minute (or was it two minutes) to accept it, before he said he'd withdraw the deal...!

• You learn about what are investable assets. Although they don't use this terminology, these are what Harvey Brody (and also Joe Cossman) call "toll positions"... Things like patents, copyrights, exclusive distribution agreements, etc. Many times, the Sharks' questions hone in on these aspects of the business which is being pitched...

• You learn to assess the competitors in a particular market - since this is one of the things the sharks look at (usually without naming any specific names, though)...

• You learn from the mistakes the entrepreneurs pitching make... Especially if they have a money-losing business, and they persist in sending good money after bad!

So, "Shark Tank" may make you roll your eyes, or squirm in your chair, but if you pay attention, it could grow your wallet a little fatter too...!

Best wishes,

Dien

Re: 7 Money-Making Lessons from "Shark Tank"...
 

I only started watching it a bit ago and only reruns at that. But that was fine. It's amazing to see how much people are willing to spend and invest in something they truly think will work. Problem is they don't have a supremely objective group like the sharks to shoot down very basic business ideas.

I would say the advice and partnership with the Sharks is worth as much as the money they get if not more. One or two phone calls from one of them opens up a ton of doors.

When all 5 sharks say you have a bad idea, it's a good bet that it's probably worth spending more time and money trying to make work. Let it go!

Unfortunately it's a reality show, so we don't know how long the people actually get before they have to make a decision. Each entrepreneur spends between 60-90 minutes in front of the Sharks so it is highly edited for dramatic effect (Robert said that in an interview once).

I think the one take away for me would be to make sure you get someone objective to look at your idea, someone who won't just say it because they like you. Better to get your feelings hurt early than to spend money and time developing something that just won't go anywhere.

Re: 7 Money-Making Lessons from "Shark Tank"...
 

Hi Tommy,

I agree with everything you've said!

I think some people focus on the "hurt feelings" of some of the entrepreneurs... And they don't focus enough on the free lessons they get (even if they are rejected) - and which we (as the viewing audience) get, too!

I think the main "weakness" of the show, though, is by its very nature, it focuses on business that require a lot of investment capital to start or to grow.

As a counterexample, Richard Branson got started with about 300 £ (British pounds), which is about $450 US dollars - though that was in the early 1970s or so, it's still not a lot of money! He certainly wouldn't find himself on "Shark Tank" looking for $450 in startup capital...

The main advantage of "bootstrapping" this way is that the risk is low... If you fail, you haven't lost much money, and you can quickly get back in the game, without having huge debts. The disadvantage is that not every business lends itself to this - some do require more money to get started - so you have fewer options... Some people say that the "bootstrapping" approach, however, forces you to be more creative!

I agree with this...

I read an article recently which cited a study... This study showed that, of businesses which were invested in by venture capital, those startup entrepreneurs who had experienced mentors were about 3 times more likely to be successful, than those who did not have mentors! Experienced mentors are valuable...!

The great thing about a place like this forum is it's a place you can find mentors, and discuss with others... We all have different types of experience, and different levels of experience... You can easily send a "PM" (private message) to anyone you want to communicate with. If they're happy to do so, you can then take your communications to email, and so on...

Thanks Tommy, great comments... :)

Best wishes,

Dien