Hundreds of entrepreneurs have pitched their business ideas to the “Sharks” on the popular reality TV show, Shark Tank.
Some have failed miserably, while others have succeeded greatly…
There’s a lot you can learn from both sides of the spectrum. There is immense value in being the “fly on the wall” during these high-level conversations between billionaires and entrepreneurs.
So, let’s cut right to the chase!
Here are 4 business lessons you can learn from Shark Tank…
1. Be Cautious of “Good Ideas.”
“That sounds like a good idea!” says your mother, family, and friends…
There have been a lot of Shark Tank pitches around what the entrepreneurs thought were “good ideas” – perhaps thanks to the feedback of family and friends.
Ideas like the Gato Café or the BedRyder in season 6…
Here’s the thing: even if your family and friends don’t like your idea, they won’t necessarily be up front about it because they don’t want you to feel bad. They’re also more likely to rationalize how the idea can work. For example, “Hmm, yeah, I see how some people would want that product.”
What’s important is that you not only test your idea, but start taking action to make it successful.
For you, this might be an idea for a new product or service, or for a whole new business. Whatever it is, make sure to test it with the public before deciding that it’s a surefire, great idea. Don’t just rely on the opinions of people you know.
2. Negotiation Skills Are Key.
You can have the best business in the world – but when it comes to getting investors, you’ll still be in trouble – that is, if you’re missing one of the most important skills in business…
We’ve seen this happen time and time again on Shark Tank – bad negotiations that either lead to no deal or a sub-par deal for the entrepreneur.
You must be able to make the right offers and counter offers to get the best deals. Otherwise, you may lose a big chunk of your company for much less than it’s actually worth.
What’s more, you must also keep the negotiation from getting too contentious, as this can make partnerships difficult down the road.
Here are some quick negotiation tips:
· Always know your limit. If you’re dealing with investors, know exactly how much equity you’re willing to give up, and don’t go overboard.
· Don’t nickel and dime. Fiercely arguing over a percentage point or two can lead to a bad partnership or a worse deal.
· Be willing to walk away. The person who is more willing to walk away has the most power in the negotiation.
3. Nail Your Elevator Pitch.
Ten seconds or less – that’s all you have to make a great first impression with investors.
But it’s not just investors you should be worried about. You should be prepared to give your 10-second elevator pitch to anybody. You never know when you’ll have a chance encounter with a potential customer or someone who can have a big impact on your business.
So, how do you create a great elevator pitch? You can start by checking out the 18 best Shark Tank pitches of all time.
And to see an example of a bad elevator pitch, check out season 1, episode 1 of the podcast, Startup. In this episode (rightfully titled, “How Not to Pitch a Billionaire), the founder pitches Chris Sacca, a big-time Silicon Valley investor (who has also made some appearances as a Shark). Chris tears the pitch apart and explains what should be improved.
4. Know Your Story.
Stories influence people. If you can tell your company’s story in a unique way, you can get investors (and others) excited about your idea.
One of the most notable Shark Tank stories came in season 5, with Tree T-Pee.
Go back and listen to that story, as well as the stories of other successful Shark Tank companies. These will help you to craft and perfect your own story, which is crucial for both pitching investors and selling to customers.
Shark Tank not only provides great entertainment value – it also provides tons of unique business lessons. Keep these 4 lessons in mind, and the next time you watch the show, see what other lessons you can learn!
What are some of the biggest lessons you’ve learned from Shark Tank?Opinions expressed here by Contributors are their own.