The television show Shark Tank has become something of a phenomenon, especially with the entrepreneurial set. So as I was trying to think of a pop culture situation and lessons we can learn for today’s post, I knew this would be a good one related to small business owners.
What is Shark Tank? Shark Tank is a business-themed show in which business tycoons, the ‘Sharks,’ hear pitches from entrepreneurs, with the goal of investing in the best businesses and products. The Sharks are tough, self-made, multi-millionaire and billionaire tycoons that give budding entrepreneurs the chance to make their dreams come true and potentially secure business deals that could make them millionaires.
It amazes me how many people make it through the multiple pre-qualification rounds to actually make it to the show, and then get lost when they appear in front of the sharks.
It’s a mindset challenge. Too many entrepreneurs come unprepared to discuss details with investors. This crosses ALL levels of experience on the show. Whether the ‘preneurs have been in business for 1 year or 5 years, too many aren’t prepared to discuss their venture at the level of detail required. It’s as if these contestants think the tycoons were waiting their entire lives for their product.
I don’t think so!
Unless you have a cure for cancer (or something really close) no one has been anxiously waiting to hear about your business and give you money. You might have a fascinating product, but you have to be prepared to pitch that sucker like your last breath depends on it!
It is in this spirit that I offer a few valuable lessons that can be learned from watching Shark Tank. There are lessons to be learned from the contestants and the sharks. That is, if you’re ready to pay attention like a boss.
Lesson Entrepreneurs Can Learn From Contestants On Shark Tank
Lesson 1: Successful people value their time.
When you have a moment to introduce your business to a successful business person, make every second count. Craft a 90 second power pitch that includes why your product/service is so amazing and what it can do for the masses. It’s not about you, it’s about the effect and impact your product/service will have on the world. Do not drag on and on about how wonderful YOU think it is. When introducing your product, captivate your audience with the benefits of the product, and more important, who it benefits.
Lesson 2: You must be able to articulate your reason for needing money.
When you are speaking with potential investors, know what you want the money for and have a detailed plan of your proposed expenditures. More importantly, you should be able to articulate this to investors. Investors want to know what they’ll get in return for their monetary investment. Good will, fuzzy feelings, ummm… no. They’re giving you cash money, and they must understand why you need it. And more important, what they’re going to get in return, and when.
Lesson 3: Seek out financial advice to understand what your company is worth.
If you do not understand company valuations, talk to a financial executive first. Your company’s valuation has nothing to do with how many hours you spent on the business, nor does it matter that your business is your passion.
What is your revenue, net profit, projected revenue, and why? It is apparent most of the contestants on Shark Tank come up with random valuations for their company that are based on dreams and theory, and this is why they get crushed. Don’t let this happen to you.
Lesson 4: Don’t take a NO at face value.
When you are pitching your business to a current or prospective client, a ‘no’ doesn’t necessarily mean ‘no.’ Dig deeper to find the reason behind the ‘no’. No could mean,
- Not at this time, but keep me informed
- Your approach wasn’t strong enough to garner interest and get me excited
- Keep talking and give me some more details
- I’m busy and I don’t have the mental capacity to mull it over right now, or
- I am not a good fit for your product/service.
NO can mean a multitude of things. So check your emotions at the door, and evaluate the situation a bit more closely. Read a person’s body language, eye contact, and gestures. Do they say ‘go away’ or ‘I’m waiting for you to wow me?’
Lesson 5: Be prepared BEYOND the 90 second pitch. Prepare for follow up questions about your business.
Be prepared to talk about your business, at all times. Rehearse your pitch until you can say it in your sleep. Rehearse anticipated responses so you can be prepared to extend the conversation. That’s the part that stumps quite a few people on Shark Tank. Everyone talks about having a killer elevator pitch, but what comes next?
What happens if a person is interested and wants to hear more? Do you know how to carry the conversation further? Use friends to do mock conversations. You just might be surprised at how easily (or not-so-easily) you can respond if someone wants to talk more in-depth with you.
Final Thoughts: Shark Tank is one of the best tv shows for entrepreneurs.
Watching Shark Tank is work for me. I can’t simply watch it for entertainment purposes. As an entrepreneur, I can’t help but dissect pitches, take notes, and crunch the numbers. If you watch it for business purposes like I do, listen to the questions and language used, listen to the advice the tycoons dish out, and read between the lines. You can learn some valuable insights to use to grow your own empire!
What’s a lesson you’ve learned from Shark Tank? Share in the comments.