Shark Tank Jump Start Your Business: How to Launch and Grow a Business from Concept to Cash (25 page)
Authors: Michael Parrish DuDell
KEVIN O’LEARY:
Oh, come on! Business is about money. That’s it. Look, after I invested in Wicked Good Cupcakes, the daughter actually cried. She told her mother that I was the worst devil in the world.
BARBARA CORCORAN:
She was right.
KEVIN O’LEARY:
But Barbara, we’ve made so much money together now she calls me “Daddy.” It’s ridiculous. That business is up 10,000 percent.
LORI GREINER:
But don’t you ever care about anybody? Don’t you ever feel something about the people, their families, their life, their passion, anything? Are you always so cold?
KEVIN O’LEARY:
We’re talking business here, aren’t we? I think you have to separate personal from business. If you get emotionally involved with someone in business, it clouds your decision-making ability. That’s a huge mistake. Because the reality is that as investors we’re not right all the time. And sometimes you have to make tough decisions in the moment because you don’t always know beforehand which businesses are going to fail and which are going to be a huge hit.
LORI GREINER:
I don’t think it’s that much of a crapshoot though. If you have experience and intelligence, you know pretty quickly which businesses are going to work and which aren’t. I always go with my gut and my experience. I can usually tell if it’s going to be a winner or not.
BARBARA CORCORAN:
I don’t think it’s that easy to tell. You can make an educated guess. That’s about all.
MICHAEL PARRISH DUDELL:
This may seem a little off topic, but I want to discuss the parallels between art and business. Kevin you’re a photographer. Lori you used to be a playwright. Mark, you love film and music. Do you think there’s a parallel between artistry and entrepreneurship?
MARK CUBAN:
I think it’s about logic and the way people think. If you’re a musician, you know how to combine notes in the right way to make a song. That same process can easily be applied to building a business. It’s like programming. Musicians are better programmers. Programmers understand logic. Logic is required to run a business.
KEVIN O’LEARY:
I think there’s a great balance in the karma of business: the yin and yang. Art is about chaos; business is about discipline. A person needs both.
MARK CUBAN:
Kevin, if there’s karma in business, you would be dead.
KEVIN O’LEARY:
It’s great to have both because they balance each other out. After a tough day of doing deals, there’s nothing like rocking out with your band. I do that every Thursday night at 9 p.m.
ROBERT HERJAVEC:
He’s a great guitar player.
BARBARA CORCORAN:
I can’t picture it. I just can’t.
KEVIN O’LEARY:
Our band is smoking hot.
BARBARA CORCORAN:
I’m sure it is. But do you wear a wig? I just can’t picture it.
LORI GREINER:
What kind of stuff do you play?
KEVIN O’LEARY:
Lately we’ve been trying to get into the whole Steely Dan portfolio.
DAYMOND JOHN:
Wait, you actually have a band? Who the hell wants to see you play?
KEVIN O’LEARY:
We just practice. We rent out a space and just rock out for the hell of it. We don’t play in front of crowds.
ROBERT HERJAVEC:
I think when you run this hard you’ve got to have something like that. Mark owns a basketball team. I race cars. Kevin plays guitar.
KEVIN O’LEARY:
I don’t think you race cars, Robert. You crash cars.
ROBERT HERJAVEC:
That’s probably true.
LORI GREINER:
It’s all about creativity. An entrepreneur needs to be creative, so naturally they’re attracted to creative activities outside of work.
MICHAEL PARRISH DUDELL:
Let’s move on to education. I think the conversation around education has changed dramatically in the last ten or fifteen years, especially when it comes to higher education. Do you think an entrepreneur should get an MBA? Yes or no?
KEVIN O’LEARY:
Absolutely not. Completely irrelevant.
DAYMOND JOHN:
You don’t need it.
LORI GREINER:
Irrelevant.
ROBERT HERJAVEC:
Waste of time.
MARK CUBAN:
Waste of time and money.
BARBARA CORCORAN:
I’ll tell you what, it gets most entrepreneurs into trouble. They think too fancy. They complicate things. All of a sudden they think they have the magic formula. Having an MBA and being good at business aren’t related at all.
LORI GREINER:
Yeah, it doesn’t mean anything. Some of the most successful people in the world didn’t even graduate from high school.
KEVIN O’LEARY:
I agree with Barbara and Lori. An education is no prerequisite for success at any level whether that’s high school, college, or an MBA.
DAYMOND JOHN:
Wait now. I don’t want to give a message to kids that they shouldn’t go to school. Getting an education is important.
KEVIN O’LEARY:
We didn’t say it wasn’t.
MARK CUBAN:
But you don’t need an MBA. Do the math. You’d be an idiot to get an MBA with how much those things cost today.
DAYMOND JOHN:
But an entrepreneur still needs to understand the basics—things like accounting. You still need to learn that kind of stuff. That’s all I’m saying.
MICHAEL PARRISH DUDELL:
Even though each of you is an entrepreneur at the core, on
Shark Tank
you’re acting as an investor,
which requires you to wear a very different hat. How did you make the leap from entrepreneur to investor?
KEVIN O’LEARY:
I decided I didn’t want to be the sole executioner anymore. I wanted a diversified portfolio with a variety of high-performing companies. That’s how you achieve real success.
LORI GREINER:
I’ve just always been doing it all along. As I’ve grown my business I’ve invested in others too.
DAYMOND JOHN:
For me, it goes back to your first question about passion. Do you love the business or do you love the product or service? Designers often think that success will never end. But of course that’s not true. This too shall pass. That’s my motto. Whether it’s good times or bad times, you have to remember that this too shall pass. When I first started, I looked out in the market and saw all these other fashion lines that swore they’d be around forever and were gone within a few years. So I started investing in other companies because I recognized that no matter how well my business did, it was eventually going to end. That’s how I made the decision to invest.
BARBARA CORCORAN:
I took the leap from investor rather blindly, and frankly I probably have no business being here. That’s the truth. I knew real estate. I knew sales. When I started investing, I took on some really terrible businesses.
DAYMOND JOHN:
But that’s not true. You’re not new to investing You’ve invested in real estate for a long time.
BARBARA CORCORAN:
Yeah, but that’s my game.
DAYMOND JOHN:
But you’ve been an investor for a while. You just altered what type of investments you can make.
BARBARA CORCORAN:
That’s right.
MICHAEL PARRISH DUDELL:
Personally, I think the best investors bring more than just cash to the table. Besides capital, what do you feel is your greatest contribution as an investor?
KEVIN O’LEARY:
First, I think we bring the celebrity of
Shark Tank
that’s attached to us now. Number two we bring contacts. Every one of us has a huge Rolodex, and we generally get our calls returned. We all have experience in different sectors, so a lot depends on what the entrepreneur is selling. But I think at the end of the day success boils down to the market, the product, and the person. We just add a little extra sauce.
DAYMOND JOHN:
Also, I think what we all bring is our knowledge and experience. We make sure they don’t pull the trigger too soon or make a move they’ll regret later. Really, I think our knowledge is our greatest asset.
MARK CUBAN:
It’s like anything, right?
Shark Tank
can provide that extra jump start for a business, but it’s up to the entrepreneur after that.
There’s no doubt about it: walking into the Tank can be a stressful experience. But it doesn’t have to be. Having a great product or service is important, but the best way to ensure success is to be as prepared, poised, and professional as possible. Here are ten tips from
Shark Tank
executive producers Mark Burnett and Clay Newbill that every entrepreneur should know before going head-to-head with the Sharks—or any potential investors.
1. Be able to communicate your business masterfully: Before speaking with investors it’s crucial that you’re able to articulate certain key areas of your business. What’s your business model? What problem are you trying to solve? Who does your company serve? Not only should you be able to painlessly answers these types of questions, you must do so in a way that’s clear and concise.
2. Know your numbers: It can’t be stressed enough: if you want to succeed in the tank, you
must
know your numbers backwards and forwards. From revenues and expenses to projections and manufacturing costs, be ready to answer any and all financial queries. Remember, the Sharks are powerhouse investors; they expect your numbers to add up.
3. Research each Shark thoroughly: You know more about the Sharks than they know about you. Use that to your advantage. Do your homework and uncover everything you can about each of their personal and professional histories. The more information you have, the more targeted your pitch can be.
4. Prepare for all potential questions: You don’t necessarily need to study every single episode of
Shark Tank
like Cousins Maine Lobster founders Jim Tselikis and Sabin Lomac did, but it’s important to be prepared for any question the Sharks might ask. Does one particular area of your business make you uncomfortable? Don’t run from it. That’s probably the area that needs the most preparation.
5. Be honest and forthright: The very worst thing you can do in the tank is be dishonest or conniving. If you don’t have an answer to a particular question, it’s better to be truthful and look unprepared than it is to make something up. Don’t forget, there’s a lengthy due diligence process once the deal is made.
6. Articulate your growth strategy: The Sharks only want to invest in companies they believe have real growth potential. By articulating your strategy during the pitch, you will help them understand how you plan to grow your business. They want to know that you have a plan to take the company to the next level.
7. Address your weaknesses: Every business has an Achilles’ heel. That’s a definite. So there’s no reason to avoid it or run from it. Don’t just be aware of your weaknesses, but embrace them and be able to address them in a straightforward way. Make no mistake about it: if there’s a glaring hole in your business, the Sharks will find it.
8. Play up your secret sauce: What’s your niche? What’s your most valuable and compelling differentiator? Whatever it may be, make sure it’s included in your pitch. Chances are you have many competitors. The Sharks anticipate that. What you must prove is that there’s something special that sets your business apart.
9. Exude confidence: Everyone’s attracted to confidence, especially the Sharks. From the moment you walk into the room, be cognizant of how you’re presenting yourself. What’s your body language like? Is your voice strong and confident or weak and shallow? You may be surprised at just how much charisma and confidence can help you succeed. Remember, you were chosen to be on
Shark Tank
for a reason. Act like it.
10. Show appreciation and graciousness: Maybe you’ll get a deal. Maybe you won’t. No matter what happens in the tank, don’t forget to always be appreciative and gracious. As SoundBender founder Rabbi Moshe Weiss pointed out, this is an opportunity to appeal not just to the Sharks but to your customers and the larger business community as well. Dignity and manners count for a lot.
To find out more about how you can appear on
Shark Tank
, visit ABC.com/SharkTank.
BIG IDEA: Gourmet cupcakes for all occasions that can be shipped in a jar nationwide.
INVESTOR: Kevin O’Leary
For Tracey Noonan, watching her youngest daughter Danielle leave home was difficult. Tracey had always been close to her children, and the thought of an empty nest left the mother of three feeling unsettled. Determined to maintain a close relationship, Tracey and Danielle decided to take a cake decorating class together once a week at a local bakery. Never did they imagine this seemingly insignificant hobby would turn into a full-fledged business.
Shortly after the first class, the duo discovered that they had a natural talent for baking. “People would literally stand in front of us and moan as they ate our cupcakes,” says Tracey. “They just loved everything about them.”
Working out of their home kitchen, Tracey and Danielle began getting more time-consuming orders and eventually even secured a handful of corporate clients. After two exceptionally large
orders and some unplanned press, the mother-and-daughter team knew it was time to turn their hobby into a business.
“Neither my daughter nor I graduated from college,” says Tracey. “And I guess in some small way I felt like we had something to prove. We knew we had a great idea and people loved the product, so we decided to take the leap.”
Shortly after their decision to move forward, Tracey and her husband invested money from their 401K to open the first Wicked Good Cupcakes shop in South Shore, Massachusetts, just outside the city of Boston. A big fan of
Shark Tank
, Tracey decided to fill out an online application shortly after opening the store, and eventually she made it onto the show. Less than a year after their official launch, Tracey and Danielle were partners with Kevin O’Leary.
Given only two weeks to prepare before their episode aired, Tracey and Danielle began scrambling to get everything in place. Thanks to a lot of tireless work, and the fact that Tracey’s husband is a technologist by trade, their website withstood the heavy traffic and Wicked Good Cupcakes was able to capitalize on all the attention. In the week following the episode, the bakery did $230,000 in gross sales—almost as much as they had sold in the entire previous year.
Today, Wicked Good Cupcakes has a second location, in Faneuil Hall–the fourth largest tourist attraction in America—and is continuing to grow and expand. Exactly how big can a cupcake empire get? You’ll have to keep your eye on Tracey and Danielle to find out!
To find out more, visit WickedGoodCupcakes.com or follow them on Twitter @wkdgoodcupcakes.
REAL-WORLD WISDOM: “Never let anyone say no. You can’t let that be an option. When we started this business, many people told us that it was a dumb idea and that we shouldn’t do it. But we refused to let that get in our way. If you want to succeed, you can never take no for an answer!”
