Seven lessons entrepreneurs can learn from the Shark Tank, and how to refine these lessons through leadership coaching.
I love the show Shark Tank. I find it inspiring, shocking, entertaining, provocative, and, above all, instructional. I feel like a business voyeur watching these inventors and budding entrepreneurs parade their sometimes great and sometimes idiotic ideas in front of deep-pocket investors who could hold the key to their future success. Inevitably they have passion, but they don’t always have either a strategy or even a business.
The premise of the show is simple: aspiring entrepreneurs approach a group of experienced angel investors with their ideas. They have to secure the amount of money they are asking for, or they get nothing. In the (rare) best-case scenario, the investors fight over the right to fund the entrepreneur’s start-up. The worst-case scenario? Humiliation in front of six million viewers.
I recently came across an article in Fast Company by Amber Mac titled 7 Entrepreneurial Lessons from Shark Tank. In the article, the author discusses seven lessons that entrepreneurs can learn from watching the show.
- Know your numbers. Understand how much cash is coming into and going out of your business.
- Be a good marketer. Build a snazzy website, position yourself as an expert by rolling out the information products, and make sure your social media presence is current and active.
- Be humble. Your appeal as a responsible partner will increase if you come off as an unpretentious individual. Don’t blow yourself up, or people won’t like you!
- Understand good timing. Know when the right is time to ask for money, as well as the wrong time.
- Have a good story. The better your story, the more likely investors will buy it.
- Be ready to walk. If the deal doesn’t suit you, know how to walk away.
- Be personable. Those who have winning personalities are more likely to win.
Over the last couple of years in my executive coaching, I’ve recommended Shark Tank as an unorthodox but fascinating tutorial about business, strategy, and sales. Clients are usually surprised but game to give it a try. And guess what? They often learn more in just a few episodes than they may have learned in business school.
So I created my short list of Four Lessons Learned from the Sharks:
- Know your facts—I agree with Amber, you have to know your numbers. But it’s a lot more than just cash flow. You need to know your market, competition, product costs and margins, operating expenses, client acquisition costs, and future capital requirements. Whether you’re a Shark-facing entrepreneur or a business professional, there is no substitute for digging into the numbers and understanding all the financial and economic facets of your business. And this is true no matter what role or position you hold.
- Have a solid strategy—it’s shocking to me how many presenters do NOT have a cogent strategy for the future of their business. Way too often they haven’t done thorough due diligence about their market, their products or their competition. A good business strategy is also not based on just one product. What is your overarching business model? What is your competitive advantage? How will you sustain it? What comes next? Where will you go next? What distribution channels make sense? As a business leader you have to be future focused—and have several options to choose from. In this lightning fast world of change, flexibility is paramount.
- Be candid—the Sharks will smell overstatement and puffery in a nanosecond. Tell the truth. Don’t try to pull the wool over their eyes and hope they won’t notice. I’m most impressed by the entrepreneurs who are up front and tell the real story, and I know they earn a degree of credibility by doing so. In business, transparency and candor are extremely valuable and sometimes scarce attributes that can go a long way to creating a strong credibility foundation.
- Know what you (or your business) is really worth—really. What are they thinking? In virtually every show, one or more of the entrepreneurs will come in with an absurd valuation. Here’s the typical scenario: cool product of some sort, maybe has a patent, but usually doesn’t, with sales of $11,000 over the last two years and they want to value the company at $1.5 million. No kidding. It makes you wonder if they believe in the tooth fairy too. If I were going to ask the Sharks for money, I’d make darn sure I had a viable valuation even if a little bit aggressive because you will probably have to negotiate. This combines all three points above—credibility, numbers, and strategy. In business, this is particularly relevant to your personal “worth” to the company. Your career progress and ultimate success may be a function of really knowing what you are worth in your current job and potential future jobs.
There is no substitute for passion and commitment, but it takes more than that to make a business and career successful. With leadership coaching to help you work on your business prowess, you can take your own business and career to new levels of accomplishment and success.