Lessons you can learn from watching Shark Tank
For anyone who is remotely interested in entrepreneurship, business, or investing, the popular television show Shark Tank is very addicting. However, it does provide more than just entertainment. If you study the individuals that go into the Shark Tank, there are actually a number of valuable takeaways.
As an entrepreneur, you should watch Shark Tank with a critical eye. Sure, the show is a dramatized Hollywood version of real life events, but that doesn’t mean there aren’t some truths to be found in the show’s action-packed episodes.
Simple and affordable beats complex and expensive
Many entrepreneurs come into the Shark Tank with complex and expensive ideas that they believe will revolutionize the world. Sadly, the complexities and cost of these products are typically their downfall. (Remember the Ionic Ear pitch?)
It’s actually the simple and affordable products that work. Take ReadeREST as an example. This simple magnet clips to your shirt and provides a convenient and secure place to hang reading glasses. It’s a simple magnet, but has done millions of dollars in sales.
Innovation doesn’t stop after a deal is made
This is a simple lesson everyone should learn. While Shark Tank portrays the investment from one of the Sharks as the proverbial mountaintop experience, the reality is it’s just the beginning. Once the deal is made, the real work begins.
This is something you can clearly see by studying Sarah and Josh Margulis, a couple who appeared on a 2014 episode of the show. While they came in to pitch Honeyfund, an online platform that allowed wedding guests to contribute to a honeymoon in lieu of gifts, they’ve since expanded. Sarah and Josh now operate Plumfund, which is also wildly successful with more than $350 million raised to date.
Innovation doesn’t stop after a deal is made. Successful entrepreneurs recognize this and continue to push on even after receiving support and validation from the outside.
Investors invest in people
This is a fact that’s proven over and over again on every episode of Shark Tank. Whether it’s the fiery Mark Cuban or the calm and collected Robert Herjavec, every Shark on the panel will tell you that they focus on the person then the idea.
You can have the greatest idea in the world, but if investors don’t feel like you’re the right person to lead and grow the company, they aren’t going to invest their hard earned money. On the other hand, if your innovation is “okay” but your personality and character are noteworthy, an investor may take a chance on you. They do this because they’re confident that one of your ideas will eventually stick.
Proof of concept is everything
“How much do you have in sales?”
This is always one of the first questions asked by a Shark. The reason is that proof of concept is everything. Your idea may seem good, bad, or average, but sales will expose the truth.
As an entrepreneur, the smartest thing you can do is establish a proof of concept before pitching to an investor. This will go a long way towards helping you present your case.
Never stop learning
Regardless of where you’re at as an entrepreneur, there are incredibly valuable lessons to be gleaned from watching Shark Tank. Sure, much of the show is sensationalized and spliced for the viewing pleasure of the audience, but you also have to remember that these are successful millionaire and billionaire investors who are pouring real money into companies and ideas.
Find an episode of Shark Tank and see what you can learn.