When Shark Tank debuted in 2009, I admit I wasn’t interested in business in the slightest. It wasn’t until 2012 that I saw an episode, but I was instantly hooked. It was an internal look, albeit highly edited, into some of the things entrepreneurs face when they’re trying to grow a business.
The show’s success itself was a contributing factor in deciding that I could start my own business on the side of my fulltime job. To be sure, I even referenced the show’s popularity in my personal statement letter when applying to business schools as a testament to and importance of the growing field of entrepreneurship.
When I met my wife in 2012, she didn’t watch the show, nor would I think she cared much about business at all, let alone to the degree it’s discussed on the show. However, it was a favorite of mine, and given our newly blossoming relationship, she obliged my interest by watching it with me.
Fast forward six years later, across three moves, our wedding, and the completion of my MBA, I actually don’t like watching the show anymore. For various reasons, I just grew tired of watching what seemed like the same mistakes or victories. While I stopped watching the show nearly a year ago, my wife watches it every week still. She has become engrossed and still recounts the more ridiculous events for me. Given that she is a psychologist, her self-confessed interest is in watching the psychological dynamics of both the entrepreneurs and the sharks.
But something else has occurred behind-the-scenes of her watching the show for so many years. Just last week, after watching an episode, she came in to tell me something that happened between two sharks. I suddenly realized that she was inadvertently learning some pretty important business insights, ones that many entrepreneurs never learn.
So I asked her flat out, “What are three things you’ve learned about starting a business?” Her answers were great not just because they were thorough, but because they weren’t filled with business-speak. Her insights are a simpler way to look at starting and running your own business.
You can’t just have a product.
The sharks often love an idea, like the Scrub Daddy, that has a support system wrapped around it. But sometimes there are products or services that are simply ideas that have been brought into physical existence. Getting some sales is a great first step, but products don’t sell themselves. It’s romantic to think this, but there are people out there who either already compete with it or are willing to compete with it. It is important to support the product with the structure of a company. You need everything, from solid accounting software (see wave vs quickbooks for advice) to a clear marketing strategy to the people to run it.
Also, there should be an objective. The sharks ask most people what their plan is for the future, but sometimes the entrepreneurs are too vague, or they pick something really complex that the sharks have difficulty following. Communicating the objective is important – if the entrepreneur can’t explain it, for whatever reason, it seems like they don’t know what they’re talking about.
You need to solve an existing problem.
Sometimes the sharks seem really out-of-touch with normal people, like when one says they have an actual doorman in their building, so they wouldn’t use a package holding service like Doorman. These are ideas that solve problems the sharks don’t see themselves (anymore). However, some products are solving problems that don’t need solving for most people. One product, Barkems, was basically a pre-packaged lunch for dogs. One of the sharks pointed out that dog owners can just throw food in a bag and cut out the need for the product.
If people are already solving the problem, whether it’s with an existing product or a DIY solution, the entrepreneur really isn’t bringing anything to the table. They’re competing with common sense basically, which is really difficult. Whatever the product is, it needs to make people’s lives better, not just replace the current solution with a more expensive one. Using the best software can help solve problems and holes in business workings. For example, businesses could find it useful to use a unified communications platform to keep everyone connected in the business and outside the business, this article can provide more information on the subject.
You need to know your stuff.
There are so many people that go on the show and can’t remember their business numbers, or have to leave to make a phone call, or have some excuse as to why they haven’t done something. It’s a valid reason in rare instances, but most often, the sharks see through it. This shows that the sharks are just as interested in the person who will be running the business as they are the business itself. The sharks won’t be doing the day-to-day operations, so having a person who clumsily runs it now doesn’t earn much confidence for what will happen in the future. Those who use HR software to organize payroll, time off, ACA Compliance and more will be able to streamline their day-to-day activities, thus giving them more time to address the more pressing matters that a business must deal with.
A different aspect of knowing the business is knowing yourself. Two guys came to the tank and pitched their Birddogs shorts but left without a deal because of their apparent lack of self-awareness. With a decent business history, they turned off many of the sharks with their bro-culture marketing. A lot of entrepreneurs come in with a great idea and amazing numbers, but their personality or willingness to take feedback takes away all the value of their company.
Without a background in business, my wife, who I graciously appreciate the contribution of for this article, could glean these reflective insights from watching hundreds of pitches and deals. It is not to disparage her business acumen, but rather to show what is of paramount importance when starting or running a business. You don’t need to be well-versed in business or get an MBA to be successful. While these things can certainly help speed up the process, what’s most important is the cycle of listening, learning, adapting, and executing. Put that on repeat and you’ve got yourself a winning formula for success.