Entrepreneur Tips: Get Stuck in the ‘Shark Tank’

When you see beyond Shark Tank veil of pitching, wheeling, and dealing, you see as much about marketing as about the art of the deal.

In this show, where eager entrepreneurs pitch their dreams to real investors, these lessons already begin with the program’s market niche.

Hope Harnesses Harsh Markets

You likely cannot remember a time without the “Monopoly” board game. Ubiquitous for the second half of the 20th Century, America started that century without it. The 1920s offered financial market boom time, much like the 1990s. The 1930s brought the Great Depression, and “Monopoly” offered players a nostalgic connection with a better market, while the had a chance to feel rich for a few hours. Historians believe that’s why in a decade when money was hard to come by, people still spent money on “Monopoly.”

ABC’s “Shark Tank” wrings success out of an adverse economy the same way. Starting with 15 solid episodes in its first season, its fourth season has 26 planned, according to TVLine.com. It reached 4.2 million viewers during the first season, and ZAP2it reports it now has 6.4 million. The very idea behind “Shark Tank” inspires people, so it gains a market share even during a challenging economy.

Customers Determine True Market Value

If you’ve appraised your home in a seller’s market and sold it in a buyer’s market, you already understand the basics of this lesson. The value on paper rarely equates to the actual selling price. A product’s real value is only the price it commands on an open market. Many contestants with good ideas seek too much because, like the one who failed to pitch a “Boogie Box” workout DVD, they overestimate the value. Intermediate marketing goals help with carefully set milestones allow smaller investment at the start. If intermediate milestones show a profit, then investment in later marketing goals pay for themselves. If not, you have not risked everything on something out of reach anyway.

Branding Exceeds Reputation and Past Performance

Contestants who have already made sales — and announce the dollar amount — often do not get picked. The Sharks tend to invest in those who sell them on the concept more than the specifics. Even with sales around $1 million, games2u.com didn’t make a close. Scott Olson, who invented Roller Blades, clearly has a track record of success, but even that did not get one Shark interested in 20 percent of his SkyRide — a bicycle sliding downhill on a roller coaster rail — for $2 million, according to thedailybeast.com. Bringing the market to accept your dream makes customers feel a part of something greater than themselves. It may sound hokey, but Coca-Cola and Pepsi have maintained their brands that way for decades.

Positioning Means Defining Your Competition

The show is as much about the Sharks competing for good ideas as it is about contestants trying to sell them. Kevin O’Leary, one of the regularly featured Sharks, often takes charge of negotiations by recounting what the other Sharks have bid before making his offer. When he summarizes what his competing colleagues have offered, he makes the entrepreneur focus on him, giving him an advantage. It’s the same thing you see when insurance companies offer to give you quotes from all their competitors. It creates a parasocial relationship with them and lets them define their competition. When you can define your competition to the market, you have actually succeeded in defining the market yourself.

Failure Has a Silver Lining

Many deals made on “Shark Tank” subsequently fall through, but even when they do the contestants often end up with new investors from elsewhere. In the same sense, some proposals that fail to gain interest from the Sharks end up with deals later. According to the Wall Street Journal, the exposure from 15 minutes of time on “Shark Tank” is worth $700,000. That means that pitching an idea that gets shot down in flames is still a value-added experience in any market. Bring out your idea with pride and enthusiasm, and even if people laugh, at least they’ll talk.

You can still catch the season five finale; it will be airing May 17, states TVLine.com. According to directtvdeal.com, cable packages that run “Shark Tank” start at $30 per month.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan