And now that I got your attention, let’s talk about another shark-related topic: the Shark Tank. Yes, the one on TV. If you’re an avid viewer of the show, then you already have a good idea of its concept.
For those unfamiliar: Shark Tank is a reality TV show where accomplished investors (sharks), are pitted against entrepreneurs in a big room (tank). Participants are then given enough time to present their business ideas to the investors. Then the fun begins.
Aside from the pure entertainment value that we can get from each episode, we can, actually, learn a lot from the interactions between investors and entrepreneurs.
So let’s take a look at some of the key lessons that you can get from simply watching Shark Tank; and how you can use them to deal with the “sharks” of the business world:
(Just for fun and awareness, I’ve included real shark facts in each of the list below.)
1. Sharks smell blood.
Some of the entrepreneurs in the show are not very well-prepared. It’s either they freeze in the middle of their presentations or don’t entirely know the financial aspect of their product. Because of this, investors can just go in for the kill, anytime.
As an entrepreneur, you should always come over-prepared when going to a pitch or meeting. Get to know your business inside and out. More than enough that you can actually present your idea even with your eyes close.
And don’t jump into the water just yet if you don’t know your financials by heart. Like they always say, “Victory loves preparation.”
Did you know great white sharks can detect a drop of blood in 25 gallons of water and can even sense tiny amounts... http://t.co/mKfRZYFdwW
— PangeaSeed (@PangeaSeed) March 23, 2014
2. Only a few sharks are dangerous to humans.
Entrepreneurs sometimes forget that it’s not always about the product, but the person behind it. Oftentimes, a Shark Tank investor prefers to work and invest with a likeable and passionate entrepreneur.
Your job as an entrepreneur doesn’t stop at creating amazing products. Make sure that you also know how to pitch your idea in an honest and fun way.
And you love doing it.
If you struggle in that area, go find a partner who fits the role.
3. Sharks generally can’t distinguish humans from sea lions.
Almost all of the pitches in the show comes with a little background story on how each of the idea was born. Sometimes, the entrepreneur with the most interesting story behind the product is more compelling to the investors.
Through a story, investors can have a better perspective behind the purpose and meaning of the product.
If you want investors to hear more about your business, make sure that you include the personal story of how you came up with the product or service.
“Emotion and storytelling have been part of how we communicate with each other and inspire action for thousands of years,” according to SEOmoz co-founder Rand Fishkin.
So get your story out there.
4. Sharks are more likely to attack a lone individual.
By watching the show, you’ll notice that most of the successful entrepreneurs who walk out with a check are those who have unique products. Investors are more incline to shell out cash for products that are not easily copied or replicated.
If you want to be a successful entrepreneur, make sure that you have yourself a product that’s way different than others, or something that has never been done before.
Find a problem that doesn’t have a solution, yet. Then, if it’s possible, patent that idea to protect it from being copied.
5. Sharks can detect motions or vibrations in water.
In the show, investors are always eager to bring out the weaknesses of each entrepreneur. This is to see if the person is indeed ready to bring his or her business to the world. And when they start to see a weakness, investors are quick to exploit that to their advantage.
As an entrepreneur, it’s important that you know how to bring out more of your strengths and less of your weaknesses. Review your business proposal to see if it’s fortified with all the things needed to gain the trust of the investors.
Otherwise, the investors are going to use your weaknesses against you -- either by using it to minimize the offer or to decline your pitch altogether.
6. There are many species of sharks.
In the show, some of the investors tend to be more interested to ideas that they can relate to or are really passionate about.
For instance, Robert Herjavec always wanted to learn guitar playing, so he supported a guitar learning business; and Kevin O’Leary loves tea so much that he invested in a tea company.
Find and research VCs that share the same passion that you have. It’ll be much easier to pitch to someone who is experiencing the problem that you’re trying to solve with your product or service.
Know your investors before approaching them.
7. Don’t provoke sharks, you may lose an arm, leg, or even life.
Entrepreneurs in the show often lost deals because they try to ask for more. Or sometimes they get a lower deal because they don’t know how low they can go. Investors like Mark Cuban doesn’t like to work with people who tend to ask for more than the final offer.
And if investors sense that you don’t know your absolute bottom, then expect a much lower deal.
Again, research is vital in negotiating with investors or VCs. Study previous deals or talk to someone close to them or a business partner. Know his or her negotiating style so that you’ll know when to stop and when to go further.
Also, set an exact number on how low you’re willing to accept an offer. And while you’re at it, learn the art of saying “no.”
8. Sharks use electromagnetic fields to find preys.
The investors in the show are very adept at valuing businesses. For entrepreneurs who don’t know how to evaluate their businesses properly, they often find themselves going home with nothing. Investors love businesses that have a proven record of earnings.
If you want investors to take you seriously, make a deal that makes sense. An asking price of $90,000 for a 10 percent stake in your business is not attractive at all -- especially if you don’t have revenue numbers to back it up.
Always remember, investors are talking with you because they want to make money out of your business.
Show them how.
9. Most sharks can be highly social, contrary to popular belief.
The investors in Shark Tank bring with them a highly valuable network.
For instance, the connections of Daymond John with Best Buy and other businesses greatly helped a sticker company and Nubrella for their retail distribution. Or the other entrepreneurs who benefitted from Lori Greiner’s connection with QVC.
Aside from the monetary value, try to look at the network value of investors or VCs. And if they do, find out if they are willing to leverage that connection for your business. You should do this in advance, right before any papers are signed.
Sometimes, it’s worth the risk to accept a less lucrative offer in exchange of having the right network that the deal brings.
10. Surviving a shark attack is a milestone.
Win or lose, all entrepreneurs who participated in Shark Tank should pat themselves on the back. Not everyone gets to experience pitching an idea to a group of elite investors.
The free insights, opinions, and advices from the investors are already priceless and highly valuable to any passionate entrepreneur.
When things don’t go your way, like not getting the deal that you’ve always wanted, think of those shortcomings as an inspiration to make yourself better.
Learn from the experience.
Take all the valuable tips given by the investors and bounce back stronger.
Do you watch Shark Tank? What other lessons did you learn from the show?