Reality TV has taken a dive to whole new levels in recent years. Toddlers & Tiaras anyone? And that’s why Shark Tank Australia is a welcome change on the reality landscape. The format is simple: budding entrepreneurs pitch their business idea to 5 successful Australian business people (sharks) keen to invest their own money in the next big thing. It’s addictive viewing.
What’s more, there are a lot of valuable lessons and insights for the couch-bound entrepreneur to take onboard and apply to their own business. Here are 10 learnings that we think are pretty valuable:
1. A great idea is worth nothing. 1% idea, 99% execution
It’s not enough to have a great idea alone, execution is so very important. As shark, Naomi Simson wrote in a wrap-up to episode 6, “enthusiasm alone does not a business make”. She was referring to super-passionate bike mechanic, Kerry Staite and his invention, the K-Lite. A seemingly great idea is the K-Lite, but Staite’s presentation lacked vital information for the sharks.
2. Strong, elegant brands and ideas do well
Enter Hegs. Pegs with a hook. It’s truly a whodathunkit kind of product. A simple, convincing story is at its birth. Beautiful, clever design. A business with a conscience – Hegs are manufactured in South Australia by Bedford Pheonix and Orana; two local organisations that are committed to giving opportunities to people with disabilities. Set to be a household name.
3. If you don’t know the numbers you lose credibility as a business owner
If, like most small business owners will tell you, you live and breathe your business, surely your should live and breathe the numbers. Financials is where most pitchers on Shark Tank Australia have slipped up. Vague recollection of last year’s gross profit won’t impress the sharks.
4. Good concepts are about solving problems
The Scrubba Wash Bag, for example, is all about solving problems. You’re travelling. You’re out bush. You only have a few items of clothing. They’re dirty. The Scrubba Wash Bag employees wash board technology in a light and cheerful unit. Beautifully branded too.
Image Credit: Happy Stüdio.
5. Investors are not just there to provide funding but to mentor and offer insight and experience
This was at its most obvious in episode 8. Janine Allis, founder of Boost Juice, took a 50% stake in Tommy Sugo, an Italian fast food business that was keen to quickly expand Australia wide. Allis has the food and franchise knowledge so was the obvious choice. Originally only wanting to giveaway 15% for $350,000, Allis managed to convince the Tommy Sugo boys of a much lower valuation and a bigger stake. “You know what I can bring to this business” Allis told them, and it’s true. If any shark is going to be mentoring entrepreneurs in that space, it should be Allis.
6. Many pitchers are not serious about investment, they just want the publicity
WeTeachMe went in wanting $200,000 for 2.5%. That values their business at $8,000,000. After a less-than-polished presentation and Q&A, the sharks grew suspicious and suggested that it wasn’t a serious valuation and that they were in it just for the publicity.
7. If the entrepreneur leaves the investor with too many questions, it raises concerns about trust
Shark Tank is not Family Feud. You can’t pass on an answer. Pitching is all about selling your business and yourself to an investor – who is ultimately in it to help grow your business and make a buck. They need to be able to trust you with their money, and that you’ll deliver on what you promise.
8. Tech wizz, Steve Baxter, is thirsty for investment
Down-to-earth tech entrepreneurs, Steve Baxter, has so far invested in more start-ups on the show than another other shark. According to a graph put together by fan of the show, Glen Arrowsmith, Baxter has invested $486,000 in 6 start-ups (true as at 23/3).
Image Credit: @Garrows on Twitter.
9. Market development is important
If it wasn’t for market development, the internet wouldn’t exist. Some products address an immediate problem or demand. Others create markets for themselves, like the G Stick tongue scraper.
10. People matter
The sharks are willing to take a punt on not just the idea or business, but the person behind it. If they don’t like you, they don’t want to work with you. Best to be likeable.