Shark Tank is the ABC network television program that tells the story of business entrepreneurs who seek an investment in their business to start, grow or save their organization. The Shark Tank process starts with an application that be found on the ABC Shark Tank website ("Shark Tank Initial Application”). A contestant can apply by sending an email or by attending an open call. An entrepreneur must fill out the short application, then provide several releases, including an audition release, a release for materials submitted to the program producers, and an regarding intellectual property. The application package requests the candidate to complete the applicant questionnaire, a questionnaire on the business details of the company, a questionnaire on the various intellectual property components, a background questionnaire, and a participant agreement. There are a number of prerequisites that must be met in order to become a Shark Tank participant. Participants must be 18 years old and a legal resident of the United States. Candidates must not be affiliated with any Shark, or the production, studio, advertising or broadcasting companies, or their subsidiaries or affiliates in the last year. Participants also may not be running for public office or begin to run for public office for one year from the point of their audition. In addition, candidates must agree to a background check and not be a felon ("Shark Tank Initial Application”).
Out of the 40,000 applicants for Shark Tank in 2013, only 180 made the cut (Entis). Yet there are many things that a wannabe can do to enhance the likelihood that they will land on the show. Scott Salyers, a casting producer for the show, suggests that those who want to get on the show have the best opportunity for success if they show their personality. Personality is key, both for Salyers and for the Sharks. It is often the authenticity and credibility that an entrepreneur presents, that wins over (or, conversely turns off) the Shark investors. The Sharks operate on intuition, and a great personality can often overcome their tendency to initially disbelieve. Often, if you can sell yourself to the investors, you will be able to sell yourself to other potential collaborative parties in the future, as well. Also, it is important to remember that you are trying to get on a television program, and being entertaining is an important component for even just getting your foot in the door of the studio (Entis).
Similar to having personality, the casting producers want candidates to be bold, strong-willed and able to stand up against the aggressive behavior offered by many of the Sharks. Wall flowers need not apply. Salyers even says that confidence that is along the lines of arrogance is encouraged, because it simply makes for great TV. Casting is also looking for a compelling personal story. Answering the question, how did you get into this? or why did you choose this business in particular, is best answered with a heart-wrenching or heart-warming biopic that pulls people in. Telling a story that everyone can relate to is a step in the direction of achieving showtime success. Salyers also suggests that participants not pitch baby or pet products because the market is just too saturated (Entis). If you have a great product, that serves a true need, and is unique in the marketplace, you are walking down the right path. Relevant and unique are the keywords – the world does not need any more widgets. On the same note, differentiating your product in relation to your competition is critical. The more that you can show how your product is different from your competitor’s, the better off you will be in terms of grabbing the appreciation of the Sharks. When communicating with the Sharks, and of course the audience, it is best to be crisp, organized, concise and clear. For those who may remember the scientific professor like entrepreneur, named Mark Sullivan, who sought an investment to be able to “create contained hurricanes for electricity production” by using the Sullivan Generator, he is the perfect representation of what not to do. For those of you who do not remember him because you fell asleep, this makes sense and proves the point. For those who intend to ask for $1million for 2% of your business, just do not waste your time. If you are not going to give them enough skin in the game to get excited, seek venture capital elsewhere. Salyers also says that you should be as flexible as possible and have a great time (Entis).
For me, Mark Sullivan’s Generator, from Season 3, was arguably the worst pitch ever, yet many beg to differ (Feloni). Another horrific pitch was the Gato Café, in Season 6. First and foremost the company did not exist. Adriana Montano asked for $100,000 for 15% of a hypothetical company. The Café would require its patrons to pay an admission fee to drink coffee, while in the company of rescue cats. Now, the idea of rescuing cats is a fantastic idea, but paying admission to sit with one while drinking my latte? Head shaking left to right and an eye roll! Cougar Energy, pitched in Season 3, was another head scratcher. The entrepreneur sought $150,000 for 30% of his company, which made energy shot drinks for single, middle-aged cougars who wanted to date young men (Feloni). There was no explanation why a cougar would need the drink, or why young men would find the prospective cougar more appealing, and the pitch simply went down in flames. If he had thought about it, he would recognize that he could not sell his drink to men, he could not sell his drink to most women, and the few women cougars who he could sell it to (a subset of a subset) would likely not be cougars that long once they found a man their own age that they really loved. The fatal shot occurred when he said that he had only made $60,000 over a three year period (Feloni).
Lori Greiner is one of the Sharks on the Shark Tank. She came on the show as a guest in the third season, and has been a main player ever since. In fact, Lori inked a deal with Aaron Krause, of the company Scrub Daddy, during the shows 4th season (Feloni 2). After a little Shark war regarding price, Krause signed up with Lori for $200,000 in exchange for a 20% equity stake in his company. The deal is legendary in the Shark Tank annals, raking in over $75 million in revenue since it first aired in 2012. In fact, the company had revenues of $20 million in 2015 alone (Adams). She promised that she would make him a millionaire in less than a year, and to no one’s surprise, she did (Feloni 2). Krause seemed a bit overwhelmed with the interest he received from the three Sharks that made offers during his appearance, besides Greiner, Daymond John and Kevin O’Leary made offers, too. But in addition to the fact that she is known as the Queen of QVC, the fact that she said that she would make him a millionaire within a year, likely was the clincher for Krause (Feloni 2). In addition to Scrub Daddy, the yellow kitchen sponge with a functional smiley face in the middle, he now offers Scrub Mommy, and Sponge Daddy, which round out his kitchen cleaning product offering.
The Scrub Daddy was developed somewhat by mistake (Akman). Krause said that he created it because he wanted something to clean his hands after he finished building robotic equipment and machines at his company. He disliked going back to his desk and doing his non-mechanical work with grubby hands. So he created the sponge to get the grease and dirt off his hands. Then one day when he was washing the dishes, a responsibility he shares, he does the dishes and his wife cooks, he used the sponge by happenstance, and realized that he had missed the boat. It was not for scrubbing hands, it was a great sponge for cleaning dishes and things in the kitchen. The rest is history (Akman).
In addition to the success of Scrub Daddy, Lori invested in what would normally be an embarrassing subject, the product Squatty Potty (Adams). The Squatty is a toilet stool accessory that fits around the base of a toilet, that causes the “squatter” to sit in a position on the throne that is said to be more natural and aids in a better “squat?” for lack of a more appropriate term. Howard Stern is a big fan of the product, and with millions of listeners, he acts like a running advertisement for the product. The entrepreneurs, Robert and Judy Edwards, a mother and son team, made a $350,000 deal with Lori, for a 10% stake in their company. The team is expecting revenues of $25 million in 2016 (Adams).
Also in Season 4, Robert Herjavec invested in an ugly Christmas sweater company called Tipsy Elves (Feloni 2). Likely to everyone’s surprise, there were actually people who loved these horrible sweaters. The uglier, the better. Herjavec invested $100,000 in exchange for 10% of the company owned by Evan Mendelsohn and Nick Morton. Instead of being a seasonal sweater company, Herjavec has transformed the company into a year-round company that addresses many holidays and also focuses on the college football season. In 2014 the company made $6.5 million, and was expected to make $12 million in 2015 ("Typsy Elves").
Another successful Herjavec business is one he bought into with Mark Cuban called The Red Dress Boutique in Season 6 (Feloni 2). As its name implies, the company is an online retailer for women’s fashions. The pair divided a $1.2 million ask for 10% equity in the company. The online store is owned by Diana and Josh Harbour. After encountering a few glitches and making some changes to their process and website, the retailer brought in $14 million in revenue in 2014 (Feloni 2).
Mark Cuban, billionaire business mogul, has made some successful venture investments on Shark Tank, too. Owner of the NBA Dallas Mavericks, Cuban is known for his tempered, but bold opinions, and for finding new and creative ways to introduce his well worn statement, “I’m out!” Aside from the success he is sharing with Robert Herjavec, with The Red Dress Boutique, Marc has made investments in a number of technology driven companies (Feloni). One that is doing well, and has a very bright future is Breathometer. The company is owned by Charles Yim. Breathometer is a breathalyzer that functions by way of an app on your smartphone. Yim is one of only a few entrepreneurs that have secured an investment from all five Sharks, simultaneously (Winfrey). Cuban, Herjavec, John, Greiner and O’Leary all invested in the deal to avoid a major predatory Shark fight. Yim received $650,000 in exchange for 30% of his company. Since his Season 5 appearance, the company is expanding its scope into the breath-monitoring industry, with a second device called Mint. In 2015, the company had revenues somewhere in the area of $9 million and $10 million (Winfrey). Not bad for airing on Shark Tank late in the season on September 2013.
Rugged Races is another Shark Tank investment made by Mark Cuban (Adams). The company, started by friends and fellow lawyers, Brad Scudder and Rob Dickens, is an obstacle course racing experiential entertainment business. Rugged Races, also known by Rugged Manic, offers contestants, fire pit jumping, trampoline bouncing, 5K races that people can actually finish, tunnel crawling, wall scaling and muddy water sliding. Mark Cuban bought into the company for $1.75 million in exchange for a 25% equity stake. In 2015, the company earned revenues of $8.4 million.
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Akman, Terri. "Scrub-a-dub-dub." SJ Magazine. n. d. Web. 9 August 2016. <http://sjmagazine.net/ten-questions/ten-questions-aaron-krause>.
Entis, Laura. "Want to Get on Shark Tank? 8 Secrets From the Show's Casting Producer. " Entrepreneur. Entrepreneur Media, Inc. 13 June 2014. Web. 9 August 2016. <https://www.entrepreneur.com/article/234838>.
Feloni, Richard. "The 15 worst 'Shark Tank' pitches of all time." The Business Insider. Business Insider, Inc. 14 September 2015. Web. 9 August 2016. <http://www.businessinsider.com/worst-shark-tank-pitches-2015-9>.
Feloni, Richard 2. "The Most Successful 'Shark Tank' Companies of All Time." Inc. Mansueto Ventures LLC. 16 December 2015. Web. 8 July 2016. <http://www.inc.com/business-insider/most-succesful-shark-tank-companies-of-all-time.html>.
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"Typsy Elves." Inc. Mansueto Ventures LLC. n. d. Web. 9 August 2016. <http://www.inc.com/profile/tipsy-elves>.
Winfrey, Graham. "How This 'Shark Tank' Superstar Is Monetizing Bad Breath." Inc. Mansueto Ventures LLC. 11 June 2015. Web. 8 July 2016. <http://www.inc.com/graham-winfrey/shark-tank-s-breathometer-founder-launches-mint.html>.
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