8 Financial Lessons From ‘Shark Tank’ Wins and Losses
“Shark Tank” has been on the air on ABC for more than 13 years. It’s where hopeful entrepreneurs go to watch their business dreams bloom, or possibly die, based on the response of a team of venture capitalists known as the “sharks.”
Related: 5 ‘Shark Tank’ Fails That Cost Big Money
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This year, the sharks include regulars like Kevin O’Leary, Barbara Corcoran and Mark Cuban, as well as guest shark Kevin Hart and seven others. On the show, the entrepreneurs present their business models and plans and hope they’ll leave with an investment that can push their company to success. Just as often, however, they leave with a harsh critique and a lot of tears, because the business world can be cutthroat.
Despite its entertainment value, the show also lends itself to a lot of useful business lessons if you know how to read between the lines. Here we identify eight lessons from “Shark Tank” wins and losses.
Women founders bring a better ROI
One surprising theme that’s emerged from the 13 years that O’Leary has been on “Shark Tank” is that the companies that deliver the best return on investment (ROI) are largely those run by women. He told CNBC’s “Make It” that 75% of his returns have come from women-run companies, no matter the industry.
He suggested a few lessons that emerged from this data, which we’ll get into now …
Be a good listener
Likely a result of cultural conditioning, according to O’Leary, women tend to be better listeners. This is a crucial skill in customer services and in leadership roles of any kind, but especially when it comes to managing employees and helping them grow to better your business. And, it’s a skill anyone can improve upon — regardless of gender — just by bringing attention to it.
Set realistic financial goals
Another area where women behave more effectively in business, O’Leary said, is in setting more realistic financial goals for success compared to men. Specifically, he found that women set their sales targets 30% lower than companies run by men, which makes them more likely to be achieved. O’Leary referred to men’s tendency to overshoot sales as “testosterone bravado.”
Learn to multi-task better
Another way women are socialized differently from men is that women are taught to be multi-taskers, which extends to their work. O’Leary also noticed that women are more generous and concerned about how they take up employees’ time, which leads to better relationships with staff and reduces turnover. This may have to do with the fact that women are often multi-tasking at home when they have children.
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Look for substance, not just glib talk
There are lessons to be gleaned from failure as much as success, and one of “Shark Tank’s” biggest failures came from its first season.
An infomercial star named Jack Jack Barringer convinced two sharks to invest $180,000 in his device, The Body Jac, to make pushups easier. Despite the investment, the company did not fly, and Corcoran later told Forbes, “My worst [Shark Tank deal] was investing in a fast-talking cowboy selling exercise equipment who needed to lose 50 pounds.”
Sometimes, you have to look past a slick talker and determine if a businessperson really has what it takes to succeed.
Deliver on your promises
Another “Shark Tank” failure actually raised $1 million from five sharks back in 2013, but the company failed in multiple ways.
The Breathometer, founded by Charles Michael Yim, was a portable breathalyzer device that was supposed to measure blood alcohol levels on an app. Despite its huge investment, the company struggled to fulfill orders, and the device was not as accurate as promised. The Federal Trade Commission made them refund every customer and stop selling the product.
The lesson here is pretty simple: Be sure you can deliver on your promises as a business before you take people’s money.
Take constructive criticism
The criticism the sharks deliver can be pretty harsh, and as Reminder Media points out, a lot of contestants leave in tears. While some of this is dramatized, there’s truth behind the devastation, but it all lends itself to a major lesson: It’s better to hear honest criticism up front before you spend more time and money investing in something that can’t succeed. Absorbing the constructive criticism can also lead to making the proper changes in order to find success.
Work shouldn’t make you miserable
Perhaps the biggest lesson anyone in business can learn, hopefully early, is that if your work is making you unhappy, it’s probably not worth it.
Sometimes, a “no” on “Shark Tank” might be saving people from years of drudgery or pointless labor. According to Reminder Media, the shark investors have pointed out that happiness and money are not equal. Some people can be happier making less money than those who make more. It can take some time to figure out what kind of work makes you happy, but most of us know right away what doesn’t.
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