Imagine: Which place would be ideal to get your entrepreneurship degree if you study entrepreneurship? The answer is your home and your bed.
There are thousands of videos for entrepreneurs online. I have to admit that most of them are very informative and very inspiring. However, almost all of them are lacking an important aspect: FUN
Thanks to Pedro Pimentel (Youngsday author), I had a chance to watch an amazing TV show: Shark Tank
Before reading this, I would strongly recommend you to read Pedro’s amazing article here
Why is Sharktank fun to watch?
- The sharks: 5 sharks, who are billionaire and millionaire investors, sitting in a room with wanna-be rich&successful entrepreneurs…The atmosphere is terrific. The series of events happening in that room is a great reflection (or micro model let’s say) of how capitalism works. Investors try get the biggest slice possible of a cake. They are exploiting the lack of experience of entrepreneurs and as well as their disadvantaged financial status. In return, obviously they are trying to risk some amount of money as least as possible. Ok, up until now everything is normal. The fun part is that sharks show no mercy to the entrepreneurs. They do not only challenge the entrepreneurs, but also in most of the cases, they insult each other ruthlessly. Kevin O’Leary (a billionaire who is called as Mr. Wonderful) is the most ruthless shark you can ever imagine. One of the favorite sentence of Kevin would be “At the end of the day, all that matters is. how do I make money?” Can you imagine an investor, insulting an entrepreneur calling him “radioactive” since this guy has bankruptcy in his past?
- The offers: In Shark Tank, most of the times investors accuse entrepreneurs for being so greedy or savage, while investors themselves are giving ridiculous offers which reflect their own greed. In 1 out of 4 episodes, you can encounter a ridiculous offer from an investor that would make no sense to accept. Some of the offers are even extremely insulting. In one episode, 3 out of 5 investors told the entrepreneurs briefly that they want his business 100% (which was obviously not the initial offer of the entrepreneur), and they told the entrepreneur, the business owner, that they will fire him once they acquire his business, just because they think that the entrepreneur is not a sales guy and he might be a “headache” in the future. I don’t even mention that this is a popular TV show with a wide broadcast in US, imagine how many people watch these insults on TV…
- The entrepreneurs: Behind all those pitches of the entrepreneurs, there are amazing stories. And the strange part is that these ruthless sharks give credit on people with amazing stories. As a matter of fact, sharing entrepreneurial stories, (tears, sweat and blood), have an impact on investment success in addition to getting appreciation. Although I did not make the statistics, I would say roughly 70% of the people who have great story with full of pain behind their product or business get the investment. In addition to sharing stories, you can’t imagine how hard some of the entrepreneurs sell their idea. Good part is that most of them know about their strengths. Some entrepreneurs play on emotions (mostly passion, sympathy and empathy), while some others play on numbers (those ones are mostly ex-white collars, ex-investment bankers etc.
Why is watching Shark Tank a good way to study entrepreneurship?
You can find the detailed answer of this question in Pedro’s article, but let me give you my short answer: Shark tank helps you see the real life examples of
- How to do a great sales pitch
- How to invest
- How to get an investment
- How to build great product
- How to build a great business; instead of reading case studies or listening to corporate myths.
Here is an example: If you have no background in business related degree and no experience in corporate life but if you come up with a brilliant idea that you want to make it happen as a business, here is the very short summary that you can easily learn by watching only 6-7 episodes of Shark Tank.
- Know the essential reason you want to do that business: This should be the first question you should be prepared before meeting an investor. “Do I want to make money?”, “Do I want to own my business?”, “Do I just want to sell the patent or license and exit?” etc. Knowing this reason will help you get effective decisions when you face an unexpected offer from investors such as “Instead of an equity share, I want to acquire your whole business”
- Know your strategy: Even if you have multiple options to move your business forward, build at least one growth strategy to present to the investor. “Do I want to sell my product to wholesalers? the distributors? the retailers? online? or how will I manufacture my products?” etc. The worst scenario would be saying “I need your help on establishing a strategy to grow the business”. Don’t forget that these people are not sitting there to be your consultant or your mentor, they are sitting there to make partnership with you, to invest in you in exchange for an equity share.
- Know your customers: Investors are likely to ask you “whom are you selling this product/service”. The answer should be very specific. Also, you should know the customer acquisition cost, as it is frequently asked by investors in Shark Tank (especially to those who are pitching an online business)
- Know how to make money: Despite the fact that you will need investors to use their network and know how, don’t forget that you are pitching an idea to “make money”. Guys like Kevin O’Leary would even forget your name after your pitch if you don’t explain clearly how to make money, because the rest of your business means nothing to those kind of investors.
- Know your figures: Measure everything even if you have the smallest scale of business on earth. When an investor asks you a question like “How was the sales last year? How is the sales this year? How is the margin? What is the price you are selling this product? etc., you have to be ready to give a straight answer.
- Know your limits: You have to set your limits on the amount of investment you are seeking. It should not be a straight number but rather you should establish it in boundaries. You should be aware of the two thin lines: The line between being insane and being genius and the line between being greedy and being aggressive on bargaining.
- Know how to defend your past: You may have a negative business history in your past, which is very normal since everyone gets the taste of failure. What is more important here is to know how to defend that negative track. Did you get your lessons, or did you mitigate the risks by taking certain actions etc. You need to stick up for yourself when investors are challenging your past.
Entrepreneurship is not all about getting investment, that is for sure. However, it is helpful to watch Shark Tank to see how the mindset of a millionaire & billionaire is, when establishing or growing a business.
I will share more lessons with you in my next articles.