ABC’s Shark Tank is an award-winning TV show in which budding entrepreneurs pitch their business ideas to industry experts who have money to invest.
The goal of the show is to elicit funding from these angel investors so contestants can take their small business ideas to the next level.
With a limited number of slots available, it’s tough to get on Shark Tank; however, there are plenty of entrepreneurial lessons you can glean just from watching the show.
Here are our 10 lessons from Shark Tank for small business owners and aspiring entrepreneurs.
You can have the best business idea in the world, but you’re not officially a “business” until you’ve made your first sale. Rather than focus on costly overhead, like glossy business cards or slick offices, you need to develop a minimum viable product (MVP) that appeals to a ready, willing, andpaying market. If demand isn’t there, your great idea could cost you a lot of time and money and lead nowhere.
A majority of contestants on Shark Tank come to the table with innovative products and services that don’t exist in the market, or they offer advanced features that their competitors do not. If there’s a ready market, those contestants will likely enjoy a decisive advantage once they launch. In fact, the hosts often stress the importance of developing something proprietary that no one else can offer.
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There have been more than 290 Shark Tank episodes over 13 seasons. The competition is stiff, with an average of 55% of contestants receiving deals in the first 10 seasons of the show.
It makes for gripping television, but this rejection rate can be fairly reflective of the real world since some of the investors and customers you approach will likely say “no” throughout your business’s existence.
It can be deflating. However, success favors those entrepreneurs who keep trying until they finally get a “yes.” You need just one positive answer before you’re officially in business.
The “sharks” on Shark Tank hold the purse strings. So naturally, the contestants listen to everything they say — including critical feedback and suggestions.
You’ll probably never have the luxury of sitting with Shark Tank investor Mark Cuban to discuss the ins and outs of your business idea, but surely you know friends, family members, co-workers, and potential customers — all of whom might have insights to share. You’d be surprised how much you can learn by listening to what they have to say. Doing so is often more valuable than trying to pitch your idea straightaway.
Although there are some people who are born to sell, many of us aren’t. Fortunately, this doesn’t matter since salesmanship is like any skill — it’s awkward and maybe painful, at first. But, with enough practice and patience, you can master the essentials.
Case in point: Shark Tank investor Barbara Corcoran reportedly held 22 jobs throughout her lifetime, including teaching and waiting tables. However, Corcoran never stopped learning how to sell, and now her net worth is $100 million.
What is your business and why should I care? This is the point of Shark Tank, with contestants having one chance to answer this question, present their idea, and sway investors.
While the stakes are high for contestants on the show, you have countless opportunities to share your business ideas with others. After each encounter — good or bad — you should refine your sales pitch so that it becomes tighter, shorter, and more convincing.
It can take time, but eventually you’ll be able to present the uniqueness of your viable product in a way that earns you more “yes” than “no” votes from prospective buyers, suppliers, and investors.
One way to perfect your pitch is to put yourself in the shoes of your prospective audience. More specifically, you need to correctly identify what problems they’re facing and how your solution can help solve their challenges. Using the same language that your customers use when describing their specific pain points can help increase your chances of making the sale.
Because most of the Shark Tank business ideas feature solo entrepreneurs, it’s easy to walk away believing that these driven individuals do everything on their own.
Behind every successful business, however, is an entire network of connections, contacts, mentors, alliances, and partnerships. When nurtured correctly, these relationships can help boost your exposure and bring more opportunities and sales your way.
Some business ideas emerge because you spot an unmet need in the marketplace. Thereafter, you have to study the problem, identify potential pain points, and speak to the needs of your prospective customers.
However, if the problem you’re solving is one you’ve personally faced, most of the heavy lifting is already done. You understand the pain points intuitively. Plus, you know exactly how your product can solve that issue. With this type of first-hand knowledge, your sales pitch should come off as more authentic and impactful.
Despite the show’s cutthroat name, one of the recurring lessons from Shark Tank is “don’t be greedy.” It’s tempting to go in for the kill whenever possible, but to launch a sustainable business, everyone needs to walk away from each deal feeling satisfied. This obviously includes your investors, but it also includes customers, suppliers, and everyone else attached to your business.
Biting off more than you can chew might win you that first sale; however, it could be unlikely you’ll retain customers if the buyer feels cheated or ignored.
You’ll notice that every episode of Shark Tank is packed with useful insights you can apply to your business. Starting with some or all of these strategies can have a huge impact on your business’s long-term growth potential.