'Shark Tank' Is Making Viewers Dumber At Business
We all should know by now that reality television is not reflective of real life. If it were, then the head lunch lady would throw plates of chicken nuggets against the wall like Gordon Ramsay.
So it shouldn't be too bold a claim for us to say that Shark Tank isn't entirely reflective of an actual business negotiation. Yet, scores and scores of articles will treat Shark Tank as a blueprint to business success. Don't get me wrong. There are tons of things to learn about business through Shark Tank, like the importance of knowing your sales numbers during a pitch and to never try and out tech Mark Cuban.
But I think we've all known someone, be it a roommate, sibling, or even ourselves, who has watched an episode of Shark Tank and thought (or, in the case of your sister, screamed loudly while drunkenly standing on the kitchen table), "I'm going to start a business and get on Shark Tank!"
See, the problem is that modeling your business so that you can succeed on Shark Tank is not a good strategy to succeed in general. Shark Tank is a show about venture capital. Your goal is to win an investment, but less than 5% of startups or small businesses ever raise money from an investor. If you build a business that requires significant capital to get started or to advance, and you don't end up on Shark Tank, then you might have just built a shitty business.
In fact, many of the entrepreneurs that get on the show aren't actually after a deal. They're looking for exposure for their product. Being on Shark Tank is a commercial for seven million new potential customers, and the Sharks know this. The Sharks refer to these people as "golddiggers" and shit their Armani suits over anyone who would dare deface the purity that is a Shark Tank investment opportunity, but then price in that exposure and their own personal branding when crafting a deal.
Many of the entrepreneurs will then take these deals because, again, they're looking to buy further exposure. The problem is that they're not allowed to admit it, so they instead have to dream up some sort of purpose for their $150,000 ad purchase. Some viewers might not realize this, and then think you need to give up equity to purchase inventory.
Then there are all the deals on Shark Tank which rely on a good old fashioned cry to get the deal done. The Sharks might swear up and down that this isn't a charity or a showcase of their benevolence, but then regularly will give out deals "because I see you as a young (insert Shark Name Here)" or because something like this happens:
I'm not saying a pitch shouldn't have an emotional element. Even the investor firms might contain one cyborg with an empathy protocol to give your whale snuggling business a shot. But it's not a good template to base your expectations around. The Sharks are on TV. They're going to look shitty if they don't pretend to give a deal (many deals that are agreed upon initially fall through in later negotiations) to the crying cancer kid.
All in all, if you love Shark Tank, that's great, but if you want to start a business, maybe check out Cake Wars or something.
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Top Image: ABC