I don’t watch much TV. When I do find myself watching it, I usually feel like I’m wasting my time.
But, I have a confession to make. I’m a Shark Tank junkie. I don’t think I’ve ever missed an episode.
There’s just something entertaining about hearing the stories of these entrepreneurs, how they’ve grown this company from nothing and now they’re pitching it to investors on a national TV show.
I also like to think I’m learning something from watching it. Sure, some of the Shark Tank products are ridiculous, but some are really great ideas that are truly filling a need. Someone saw a need and decided to fill it. Now they have a successful business to show for it. Surely there’s something to be learned there.
So, I grabbed a notebook and a pen and unscientifically made a list of some common threads I see in successful pitches on the show. Turns out, there are some really great lessons to be gleaned from the show.
Here are the 5 things I learned from watching Shark Tank.
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Make something proprietary
I can’t tell you how many times I’ve seen sharks go out because there wasn’t something proprietary about the product. If anyone with a few thousand dollars can come into your market and replicate what you do, you don’t have a very strong business. You need something proprietary that is patented, copyrighted or otherwise difficult to reproduce.
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Carve out a tight niche in a big market
Two reasons that deals often fail are the business is unfocused or the market is too small. If you’re trying to sell something to anyone who could possibly have some interest in being healthy, you’ll never grain traction. The product is unfocused and the audience is far too broad.
Conversely, trying to sell a course that teaches 35 year old, unmarried men about underwater basket weaving will never work because the market is too small. You need to fill a need in a large market and target a very specific group of people.
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Know your numbers
How are you ever going to grow a business if you don’t know your numbers? It baffles me when entrepreneurs come on the show and don’t know their customer acquisition cost, manufacturing cost, monthly cash burn or any other specific number that’s critical to running their business. Know your numbers inside and out.
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Be sold-out on making your product successful
If you plan to grow your business past your living room, you have to be completely devoted to it. A business you work on the weekends is fine for a side-gig, but it’s not going to work if you want 7-figue annual revenue. You need to eat, sleep and breathe your business if you want to be super successful.
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Don’t nickel and dime your way to doom
So many deals on Shark Tank have been killed because the entrepreneur couldn’t close a 5% or 10% equity gap between their ask and the shark’s offer. They’re giving up the chance to grow their business 10 fold to hang on to $10k. A small piece of something big is far often better than a big piece of something small.
Translating it to Your Business
You may have a desire to start a business or maybe you have a steady side-gig, but no aspirations to run a million dollar company. That’s fine. There’s nothing wrong with that at all, but these principles still apply.
No matter the size of the business, you need to treat it seriously (assuming your goal is to actually make money from the business).
You need a product that can be easily marketed to a specific, yet large enough audience. You need something that isn’t overly easy to duplicate. You need to be dedicated to running your business well and you need to understand the numbers behind it.
If you aren’t willing to follow some form of these principles, you don’t really have a business. You have a hobby. There’s nothing wrong with a hobby. Hobbies are good. Just don’t expect it to grow into something that will generate a ton of cash for you.
But, if you do desire to have a real business (even a small one on the side), pay close attention to what makes successful entrepreneurs successful. The next time you watch Shark Tank, try to pick out what makes a particular deal attractive to the Sharks.
Now for you. Do you watch Shark Tank? What do think it is that makes a company successful?
