By Matt Morr
The channel ABC features a show called “Shark Tank” where entrepreneurs bring their businesses in front of a panel of five extremely successful and wealthy entrepreneurs. The panel consists of Mark Cuban, Kevin O’Leary, Robert Herjavec, Daymond John, and Barbara Corcoran (and occasionally Lori Greiner).
The show works like this: Entrepreneurs come in with a pitch and a valuation of the company and the “Sharks” have to decide if they want to invest in the company. If they like it, they invest. If the “Sharks” like it, but it’s valued too high for their liking, they will give a counter-offer and negotiate price and percentage stake in the new company or product. If there is no interest by any of the five Sharks, then the prospective entrepreneur will be out and no deal will be struck.
Many successful companies have become very popular because of the show. Some of the most well-known and successful businesses include Scrub Daddy, Tower Paddle Boards, and Breathometer. The most successful company is Scrub Daddy, which brought in more than $20 million in revenue in 2015. Lori Greiner purchased 20% of Scrub Daddy for $200,000. Just a few years later, it’s an entire business, all thanks to “Shark Tank.” Scrub
Daddy now has 50 employees and a 40,000 square foot facility. The product was very small and not well-known before Shark Tank, but now it’s becoming a household name. The product has brought in over $50,000 million in total in revenue ever since the show aired.
There is a ton of competition to get on the show. Only 1% of 45,000 applicants in 2014 got their time to shine in front of the Sharks, and then only a handful of those got on television! If you’re lucky enough to be on the show, it’s worth all the hard work.
Even companies that don’t strike a deal with the Sharks see a big spike in sales just from being on the show. It’s nearly impossible to get on a company website for a couple hours after it airs. On January 10th, 2014, exactly that happened. CJ Isakow went into “The Tank” with his product, EyeBloc. EyeBloc is an attachable piece of plastic that you can put on your computer in order to block the webcam. His reasoning for creating this product was because he believes “we’re being watched.” Seems like a silly product considering you can use nearly anything to block a webcam, and he got laughed out of the room. Kevin O’Leary called the product “absolute crap on a stick.” Even though he did not get a deal,
within the 24 hours following his appearance, EyeBloc sold more than it did in the previous five months. While since then the product hasn’t sold as much, it’s currently sold out on the website and still available on Amazon. The exposure that these companies get on the show is a huge advantage because it’s “free” ad time for the product.
This is not the only scenario where a Shark Tank rejection ended up having a positive outcome. Entrepreneur Lori Cheek was lucky enough to get on the show, but did not end up striking a deal with the Sharks. She was pitching her product, Cheek’d, which is a unique dating app. In just two days after getting rejected, the website gained 100,000 individual visitors. In addition to this, her inbox was flooded with words of praise and support, and even interested investors. So even companies that don’t ever get a deal end up potentially becoming successful. That’s how much of an impact Shark Tank has on up-and-coming businesses.
What about for companies that actually do get deals? I previously covered Scrub Daddy, which has become the most successful product in the show’s history, but what else and what other companies has Shark Tank helped? Entrepreneurs come in looking to get money to help their company and/or get one of the Sharks to help expand their company. But you have to be careful with the valuation, otherwise Sharks will not want to strike a deal.
Breathometer is another very successful product that I mentioned earlier. The product is a portable breathalyzer that plugs into a headphone jack on a phone. The product wasn’t getting much recognition before Shark Tank, but it was such a genius idea that it got all five Sharks to bite and they combined for the show’s first $1,000,000 deal (for 30% of the company). The valuation of the company was about $3.3 million. In 2015, Breathometer made $20 million in revenue. With the help of all five Sharks, the company is one of the most successful in the history of the show.
Another very successful company that was revolutionized by Shark Tank is ReadeRest. The product is simply a magnetic glasses holder for your shirt so no matter what, you won’t lose your glasses. It’s always the most simple products that make big money. Lori Greiner purchased 65% of the company for $150,000. It’s a small product, but because of Lori’s expertise, the product hit big. Lori Greiner is the president of QVC, a television product network, and ReadeRest was perfect for it. Every time the product is featured on QVC, the entire batch sells out. Ever since the product aired in season 3, the company has made $8 million in revenue. That’s extremely impressive considering how small and simple the product is.
The drive for success is embedded in us from birth, but there’s another component as well: “The American Dream.” Everyone wants to be able to own a house, have a family, and be well off for themselves. Getting exposure in today’s market is incredibly difficult, and “Shark Tank” is a way that people can spread the word about their companies or products. “Shark Tank harkens back to a pre-20th century version of the American dream, in which “one could realize the fruits of one’s aspirations through applied intelligence and effort,” self-motivation, and discipline.” While being able to get on the show in front of the “Sharks” is anything but simple, the show provides equal opportunity to get the light of day. All you need is a foot in the door, and you can bust it wide open.
Clearly, Shark Tank has had a profound impact on businesses, even if a deal is not even made. Getting there is extremely tough, but if you make it, it will pay dividends for your company. Shark Tank has revolutionized companies and being an entrepreneur in general. If you’re running a company or have an invention that you want to be more publicized and want it to go big-time, then Shark Tank is for you. You just have to be able to have thick skin and realize that any publicity is good publicity.