If you’ve seen the ABC hit TV show, Shark Tank, then you are already familiar with the premise. For those who have not experienced the phenomenon, the short version is that entrepreneurs pitch their business to a group of highly successful potential investors in the hopes of exchanging some equity for capitol. For anyone involved in business, it’s fascinating to watch the negotiation process take place and the business insights offered by the Sharks are pure gold.
Many of the insights offered by the Sharks pertain directly to pitching your business for investors, but there is quite a lot that you learn about business in general as well. One of the recurring themes that you see is that while every business starts out small, there are a number of key factors that separate the success stories from the flops. Here are ten killer business lessons from swimming in the Shark Tank:
1.Differentiation = Domination
One of the questions most often asked by the sharks is, “What is so special about your product that I couldn’t just do it myself?” And that question gets right to the heart of what makes one business a dominant force while another company falls flat.
If you want your business to truly succeed, you’ve got to offer consumers something unique. If you’re just another face in the crowd selling the same products at the same price, then it’s just more noise in the marketplace and your business is never going to be a raving success.
The best position to be in is one where you’ve invented a completely new product or process where you hold a patent, but even if that isn’t the case, you can still take steps to differentiate yourself. Really look at your business and at your competition and think about what makes you stand out. Is it that you provide a level of service that none of your competitors can offer? Do you offer a higher quality product than anyone else? Or do you have better prices? Whatever your differentiating factor is, once you find it, that should be your complete focus.
2. Be prepared
Being prepared isn’t just good advice for the Shark Tank, it’s good advice for life. Time and time again, entrepreneurs step into the Shark Tank and fail to get the deal because they weren’t fully prepared. Either the presentation is weak, or the entrepreneur is completely thrown by a question or comment from one of the sharks, or sadly, the entrepreneur just gives off the appearance that his or her heart is not in it 100%. Whatever the situation, the common thread is that a failure to prepare is tantamount to preparing to fail.
The most successful Shark Tank stories all begin with an entrepreneur with a solid product and an even more solid plan. They’ve got a roadmap for where they want to take the business and have planned for success. For your business to realize the kind of success that you dream about, you’ve got to know how you’re going to get there. Take the time to craft a well-designed plan from the start, and you’ll be miles ahead of your competition.
3. Know your numbers
One of the most painful things to watch on Shark Tank is when an entrepreneur is asked some basic questions about the numbers of their business and they just flounder. You can see the stress creep over them – they start sweating, they get a little twitchy and the words coming out of their mouths make no sense. If you want to succeed in business, you have got to know your numbers.
No matter what type of business, whether or not you went to business school or how large the business is, at the end of the day, understanding key things like profit margin, customer retention, website visits and conversion will play a major role in how successful your business ultimately is.
Data and analytics may seem overwhelming if you don’t have a business background, but understanding your key metrics tells you where you are today and it helps define your goals for the future. If numbers aren’t a strong suit for you – find someone who can mentor you on that side of the business or invest in a class or some good business books. You’ll be a better business owner for it.
4. Learn how to sell
In the Shark Tank, every entrepreneur is trying to sell two things: their business or idea and themselves. When you watch the show, you can see a clear distinction between the guys who know how to sell and the ones who don’t. There are some key fundamentals that all the great sales guys have in common:
- They know who their target customer is and have a plan in place to capture that market
- They have stellar product packaging and branding
- They sell the benefits of the product, not just the features
Focusing on those three things can be enough to set you apart and get that sale and at the end of the day, the sales are what keeps a business going.
5. Tell your story
One of the really cool things about Shark Tank is that you get to see not only how an entrepreneur pitches their business, but you also get to hear the back stories. You get to see what inspired a new invention, or how a family worked for years out of their garage to get a business off the ground and it’s incredibly powerful.
Your own story is powerful too and making that story a part of your brand narrative makes your business more interesting and more relatable. Sharing the origins of your business gives it a personal touch that will draw customers in and make them intensely loyal.
6. Who you know matters as much as what you know
When a company lands a deal on Shark Tank, they get two incredibly valuable things: 1) Capital to grow their business and 2) An investor with a massive business network. For many of the small businesses that appear on the show, landing a deal means gaining access to retailers or marketing channels that wouldn’t have even thought about taking a meeting with them previously.
The point is, who you know in business is just as important as what you know. Take the time to get to know other small business owners, get involved in your local community and don’t be afraid to strike up a conversation with people at events. Networking is an important part of creating a successful business and you never know where your next sale or lead is going to come from.
7. Don’t let good advice go to waste
Even though the sharks on Shark Tank have incredibly diverse backgrounds, the one thing that they all have in common is that they have been incredibly successful in the business world. Each shark has had the unique experience of taking a business from just an idea to a massive, multi-million dollar success. Needless to say, advice from such successful sources should be taken seriously.
Now a lot of people hand out business advice like it’s going out of style, but if you have the good fortune to get some input from someone who is successful, well-respected and well-intentioned, do yourself a favor and just listen. Chances are, the advice you get could save you a lot of time and money.
8. Keep your ego in check
A common theme on Shark Tank is the entrepreneur who doesn’t know how to listen. They waltz into the Shark Tank with the greatest invention known to man and get extremely defensive whenever any shark questions anything about their product. On the show, these entrepreneurs are usually eviscerated verbally before they are quickly shown the door.
In real life, failure to keep your ego in check could mean you losing it all. It’s a difficult line to walk because while you have to believe in your product 100%, you can’t be so stubborn that you can’t change or adapt when the situation calls for it. So believe in your business, but keep in mind that you may not know everything.
9. Get your hustle on
As much as we’d like it to be true, a business doesn’t just magically grow on it’s own – it takes everything you’ve got to build a strong, successful business. On Shark Tank, you can see a clear distinction between the entrepreneurs who are putting everything into their business and the ones who are just doing it as a “hobby business”.
The entrepreneurs who are really in it to win it exude passion for their company. You can see that they live it and breathe it every moment of every day and they are hustling for every lead, every sale and every opportunity. If you want your business to succeed, you’ve got to work at it every day.
10. Stay hungry
One of the really cool things about Shark Tank is that while all of the sharks are incredibly successful, you can see that they each still have a hunger for success. They all want to make more money and help build the next great American company.
Every business is going to have ups and downs, but maintaining a hunger for success will keep you moving forward through every stage. It’s that passion for success that will sustain even if things don’t always work out according to plan. Are you hungry? If not, find something that will give you the motivation that you need to succeed.