Shark Tank Jump Start Your Business: How to Launch and Grow a Business from Concept to Cash (24 page)

The reason I’m successful is because I outworked everyone else. I worked jobs I didn’t like. I worked jobs I loved but that had no chance of becoming careers. I worked jobs that barely paid the rent. I had so many jobs my parents wondered if I would ever be stable.

With every effort, I learned more. With every mistake and failure, not just mine, but those around me, I learned what not to do. I had more than a healthy dose of fear, an unlimited amount of hope, and more importantly, no limit on time and effort.

I read every book or magazine I could get my hands on. Heck, it costs three bucks for a magazine, twenty bucks for a book. If it inspired one good idea that led to a customer or solution, it paid for itself.

No one really asks me about my adventures working for Mellon Bank, or Tronics 2000, or trying to start a business selling powdered milk (it was cheaper by the gallon, and I thought it tasted good). They don’t ask me about working as a bartender or getting fired from my job at Your Business Software for wanting to close a sale rather than sweep the
floors. No one ever asked me about what it was like when I started Micro Solutions and how I used to count the months I was in business, hoping to outlast my previous endeavors and make this one a success.

The point is that it doesn’t matter how many times you strike out. No one is going to know or care about your failures, and neither should you. All you have to do is learn. Everything I read was public. Anyone could buy the same books and magazines. The same information was available to anyone who wanted it. Turns out most people didn’t want it.

In business, to be a success, you only have to be right once—one single, solitary time—and you are set for life. That’s the beauty of the business world. Just get it right once.

A business can’t exist without an entrepreneur and
Shark Tank
couldn’t exist without the Sharks. Together, Robert Herjavec, Lori Greiner, Barbara Corcoran, Kevin O’Leary, Daymond John, and Mark Cuban provide a wide range of talents and skills that have helped countless businesses achieve unimaginable results. From tech companies to bakeries, these six disciplined investors have demonstrated an extraordinary ability to evolve and grow companies of all shapes and sizes. But how and why were these six chosen?

“When we were putting the show together, we spent a lot of time making sure we found the right Sharks,” says executive producer Clay Newbill. “We were looking at a lot of people. Not only did we want to find a group of extremely successful entrepreneurs and investors, we wanted to make sure they had diversified portfolios.”

But diversity is about more than just a portfolio. Each Shark represents his or her own specific approach to business and investing. Robert’s point of view may be quite different from
Lori’s or Kevin’s—and in fact it is. A quality that attracts one Shark to an entrepreneur may be the very thing that turns off another Shark completely. And while these varying perspectives can create tension, they ultimately help give
Shark Tank
its spark. Perhaps more important, this broad array of ideologies represents a larger truth that you’re bound to experience when starting your own business: there is no template for success. The Sharks don’t use a formula when evaluating a company; there’s no special algorithm to guarantee a return. All they have to rely on is their own knowledge, experience, and gut instinct.

“Sharks are unpredictable,” says Newbill. “If you’re in the water and you see one coming towards you, you don’t know what will happen. Will it swim past you? Will it take a bite? Maybe it will take a bite out of another Shark. The same thing is true on the show. You never know what’s going to happen.”

Each week on
Shark Tank
you learn a little more about each Shark, but there’s more to these six passionate investors than what you see on-camera. It’s their small, subtle idiosyncrasies that make them unique, and it’s these same distinct characteristics that play an integral role in their investment decisions. Whether or not you ever get the chance to pitch your business to the Sharks, knowing more about who they are and what they value can only make for a more exciting viewing experience.

As the author of
Shark Tank Jump Start Your Business
, I’ve been given a very unique and special opportunity to get to know the Sharks outside of the tank. After spending time with each individually via phone calls, emails, and in-person meetings, we all gathered together during the taping of the fifth season for a roundtable discussion to dig deeper into their philosophies about business and investing, to answer some of
the most highly requested viewer questions, and to uncover more valuable advice for present and future entrepreneurs.

The Sharks BACK ROW (
left to right
): Daymond John, Barbara Corcoran, Robert Herjavec FRONT ROW (
left to right
): Mark Cuban, Kevin O’Leary, Lori Greiner

MICHAEL PARRISH DUDELL:
People choose to start businesses for a variety of reasons—one of the most common and perhaps elusive of which is to satisfy a passion. What role do you think passion should play in the life of a business and entrepreneur?

BARBARA CORCORAN:
First, let me start by saying that passion can blind you, but it can also give you clarity of vision at the same time. And often it does both. It’s dangerous to be blinded by the love of what you’re doing, but you almost have to be that dumb to see your plan through to the end.

LORI GREINER:
Barbara’s right. I really believe that if you want to succeed you have to be passionate about what you’re doing.

DAYMOND JOHN:
Yeah, but what’s most important is that you’re passionate about the process of running a business. If somebody wants to be a designer and all they care about is their art or vision, you could call them passionate, but that’s not necessarily the right kind of passion to have. If you
really
care about your art, you need to be passionate about the actual running of the business.

MARK CUBAN:
I think passion is overrated. Everyone has a lot of passions. I have a passion for sports—a passion for music. That doesn’t make it a business, and that doesn’t make you qualified to run the business. So you should never start a business based on a passion. It’s really about where you put your efforts. If you’re willing to work hard at something and put effort into it, a passion will naturally develop. Effort should come first. You should see what you’re good at and go from there.

ROBERT HERJAVEC:
Yeah, but you’ve got to love it, Mark. You’re going to be working on your business 24/7, and if you don’t love what you’re doing you won’t last. I’m sitting here right now on my email; I’ll be flying all night after we’re done taping; I’ll be on email for another nine hours once I leave here. And yeah, I’m complaining about it, but I love it. If you don’t wake up excited to go to work every day, how can you survive?

LORI GREINER:
We all love what we do, right? Most entrepreneurs are driven by passion and that’s why we don’t mind doing it 24/7.

KEVIN O’LEARY:
But I think some entrepreneurs use “passion” as an excuse to avoid focusing on performance metrics. In other words, they think being passionate about something should give them a free pass to fail.

ROBERT HERJAVEC:
Right. I think some entrepreneurs use it as an excuse when their business isn’t making money. But if a business isn’t making money, it’s not a business. It’s a hobby.

KEVIN O’LEARY:
So for me it’s just a default. I expect people to be passionate about their work, but I don’t care about it. What I care about is if it helps them drive metrics of performance. In the case of a startup, are they achieving sales? In the case of a more mature business, are they maintaining or growing margins? And if they can’t do that, I’d rather fire them and find a better executor. In the end, businesses that succeed and make money for shareholders are built around execution.

MICHAEL PARRISH DUDELL:
So I think it’s clear you all feel very differently about the topic, which actually speaks to a much larger issue. While each of you has achieved success, you represent a variety of different ideologies. In fact, the only thing you really do have in common is that you’ve put tremendous time and effort into building your businesses. You’ve all put in the work. Today, there’s so much talk about optimizing a business and working smarter instead of working harder. When it comes to real, sustainable success, do you think there’s something to be said for good old-fashioned sweat equity?

KEVIN O’LEARY:
It’s a given that you have to put in the work. But as an investor I don’t care how much time it’s taken for
an entrepreneur to build a business. All I care about is if the business is making money.

LORI GREINER:
But sometimes seeing that a person has worked hard and persisted shows you something about their character. It shows you they have the stamina and perseverance to not just give up when things get hard. And to me that’s an important trait for a partner to have. I want to know that my partner has the drive and tenacity it takes to put in the time and hard work.

DAYMOND JOHN:
Look, you’ll never be able to optimize your business 100 percent. Until you exit the company, there’s always going to be more to do, more hours to put in. If you don’t want to work the hours, you shouldn’t be an entrepreneur.

MARK CUBAN:
Right. Putting in the hours has always mattered, and it always will.

DAYMOND JOHN:
If one part of the business is doing well, most good entrepreneurs will switch focus and try to expand another part of the business. The goal shouldn’t be to work less.

MICHAEL PARRISH DUDELL:
Let’s talk about failure for a second. Individually, each of you has spoken with me about the value of failure—that sometimes failure in the short term can lead to success in the long term. Are there any specific lessons that you’ve learned through failure that may be helpful to new entrepreneurs?

ROBERT HERJAVEC:
I hate to use the word “failure.” I prefer to say challenges or stumbling blocks. The only time you really
fail is when you give up. There’s been a lot of crap that’s happened to me in business, just like everyone at this table, but I don’t think entrepreneurs view that kind of stuff as failure. Failure feels so finite.

LORI GREINER:
One of my favorite quotes is “Failure is not an option; it’s a state of mind.” And that’s true. I don’t think any of us look at “failure” as failure. I think we look at it as a new challenge to overcome.

BARBARA CORCORAN:
Here’s a great example. In Season 3 I invested in a company called Daisy Cakes. The founder was doing so well so quickly that we took her to three large bakeries and reconfigured all of her recipes so she could produce on a mass scale. Well guess what? It didn’t work. The reconfiguration was wrong, and two of the three bakeries were unreliable. And you know what? She lost a ton of money, and guess where she is now? She’s making cakes back in her little kitchen. But all of the quality control issues are gone, and her business is doing really well. She’s smarter now and more prepared for what’s ahead. She had to take a step back before she could move forward. She’s a walking, talking example of someone who has handled failure the right way.

MICHAEL PARRISH DUDELL:
Each of you seems to have certain types of companies that you prefer to invest in. Is that true? Are there certain industries that you favor and others that you try to avoid? For instance, Daymond, I know you don’t usually invest in food-related businesses.

BARBARA CORCORAN:
Yeah. Why is that, Daymond?

DAYMOND JOHN:
Because I was the one at Red Lobster taking boxes of frozen shrimp home every day and selling it to the Chinese place around the corner. Businesses that involve food or perishable items typically have smaller margins and are less reliable. If Hurricane Sandy hits, for instance, and you have a bunch of product in a warehouse in New Jersey, you’re immediately out $10 million worth of goods.

BARBARA CORCORAN:
See, and I love food businesses because it’s not complicated. You see what you’re selling, who’s going to buy it, and you ship it. That’s not so bad. It’s not so sophisticated.

DAYMOND JOHN:
Yeah, but look at what happened with the Daisy Cakes thing. I’m never going to have the wrong formula on a T-shirt.

BARBARA CORCORAN:
That’s a good point. I think that was a case of too much growth too soon.

MARK CUBAN:
I like to invest in tech companies. I try to stick to what I know.

LORI GREINER:
Personally I like anything that I think is going to be great on the market. It can be in any industry as long as I think it’s going to really sell. I just like great products and great businesses. I need to be excited by it.

ROBERT HERJAVEC:
I don’t look at a specific industry; I prefer to work with an entrepreneur who knows a market. You have to know your industry inside and out because that’s something
I can’t bring to the table. So it’s not a matter of industry for me; it’s the entrepreneur.

KEVIN O’LEARY:
And I could care less about that. I’m more concerned about the product and market than I am about the entrepreneur. People are interchangeable. If someone can’t perform, I’ll take them out behind the barn and shoot them. I have no problem doing that. And it’s important that the entrepreneurs I work with understand that about me. I think this whole idea that you care about the person and that they matter is stupid. I couldn’t care at all. I just want to make money.

LORI GREINER:
That’s amazing. It’s so the complete opposite for me.

KEVIN O’LEARY:
And look, we both have success so we’re both right. I mean personally I think I’m more right.

BARBARA CORCORAN:
Oh Kevin, I don’t believe any of that crap you’re always saying.

LORI GREINER:
I know. I can’t believe this is real. I just feel like humanity is so important. It isn’t always just about money. These are people we’re talking about.