I just pitched a business reality show. I went to LA, pitched to nine networks. It went well.
The first business reality TV show I watched in my life was Shark Tank. I’ve watched every episode. I force my kids to watch it. I’ve studied every aspect of the show.
I’ve also coached several entrepreneurs who have gone on Shark Tank, were terrified beforehand, I coached them, and they got their deals.
One time I was up all night with an entrepreneur, throwing potential difficult questions at her and working her through her responses. Mark Cuban ended up writing the check.
On Shark Tank: five investors sit on a stage, keeping them slightly higher than the supplicants who come in asking for money.
Then, one by one, aspiring entrepreneurs are led into the “Shark Tank” where they pitch their products. And the Sharks, right then and there, decide whether or not to give them money.
The entrepreneurs are often humiliated, laughed at, insulted, ask the stupidest questions I’ve ever heard, but occasionally get some good advice and even better, walk away with a check if one or more of the “Sharks” think their business is a good idea.
“The Sharks” as the show describes them, “are filthy rich” and invest their own money.
It’s not always the same sharks each show. Mark Cuban is often a shark. (See also, “How I Helped Mark Cuban Make a Billion Dollars“)
And the rest of the often rotating cast includes Barbara Corcoran of real estate fame, Kevin O’Leary who started and sold “The Learning Company” for $3.2 billion to Mattel, Robert Herjavec, who has sold “companies worth $350 million”, Daymond John who started Fubu and “has sold $6 billion worth of products”.
I’m never jealous of any of these people. Money doesn’t buy happiness but it certainly solves your money problems. It’s up to you after that to be happy or not. To not self sabotage at every opportunity.
I can tell you this: I am very good at making money but have often had a talent for self sabotage. A talent I have been hoping these past few years to suppress.
So I think highly of the people who have learned through experience not to sabotage their successes. I think very highly of all of the Sharks.
So what have I learned from the show? Some items are good for investors, some for entrepreneurs, some for me, and some for my kids.
The first thing that happens when an entrepreneur enters is they say: “Hi, my name is ABC and I’m asking for $100,000 for a 10% stake in my company.”
At this point we would pause the show and I’d ask my kids how much the company is worth.
Any trader, investor, entrepreneur, does this math instantly and I wanted my kids to get good at it.
And they did. At first the answers (from either kid) would be a nervous, “I don’t know”. Then they’d start to figure it out but still be nervous “One… million?” And then finally, by the last episode, they were doing it in their head and blurting it out before I even hit pause.
But sometimes the entrepreneurs would present confusing numbers like, “I’m asking for $85,000 for 15% of my company.” And then they’d launch straight into their story.
To be honest, I can’t even do this accurately and quickly in my head. I always wondered if these entrepreneurs did this on purpose so that the sharks would focus more on the product than the specific valuation.
2. Not Everything is as it Appears
This is a TV show. Not a venture capital firm (where, also, by the way, not everything is as it appears. In fact, in all of life, nothing is as it appears but this is never more true than a “reality” TV show).
When you see a three minute conversation on Shark Tank, that might have actually been a three hour conversation.
They edit it to create the greatest drama. That’s what they should do. It’s a TV show.
But you will lose in business if you think this is representative of negotiations and presentations.
My guidance for people who are going on the show, or for anyone who pitches any investor, is to carefully study every aspect of the background of the people you are pitching.
Heck, even do it before first dates! Ten years ago I was going on a date and I saw that the woman was interested in Kabbalah.
I didn’t know anything. But I spent the day reading everything I could. I was pitching myself. Did I marry her? No. But I still do this whenever I am pitching something.
3. Sell the Dream, not the Sales
Many of the entrepreneurs go in th