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Articles on this Page
- 09/19/12--06:47: _A Silicon Valley VC...
- 09/21/12--08:37: _23-Year-Old Turns D...
- 11/09/12--15:03: _Pitching Advice Fro...
- 11/12/12--08:40: _2 Ladies With 37 Gr...
- 11/16/12--09:12: _10 Shockingly Terri...
- 11/19/12--08:03: _Here's A Sure-Fire ...
- 12/03/12--07:05: _What 'Shark Tank' C...
- 05/13/13--13:03: _AT LAST: A Secure, ...
- 08/13/13--12:55: _Startup Competition...
- 09/10/13--13:45: _The 10 Worst ‘Shark...
- 09/18/13--08:52: _7 Cliches The Shark...
- 09/23/13--13:46: _Mark Cuban Called T...
- 09/24/13--12:12: _You Should Be Nervo...
- 09/25/13--07:05: _Why 'Shark Tank' In...
- 09/28/13--10:52: _This Awesome Idea G...
- 10/01/13--11:09: _The 10 Best 'Shark ...
- 10/07/13--06:58: _Just Because Mark C...
- 10/08/13--06:00: _Why Mark Cuban Made...
- 10/13/13--10:54: _Even A Flashy Pitch...
- 10/15/13--13:15: _How To Craft The Pe...
- 09/19/12--06:47: A Silicon Valley VC Rates The Pitches On ABC’s Shark Tank
- $50K for 75% of the company
- $50k for 51% of the company with no salary
- $50k for a 12% royalty off the top
- 09/21/12--08:37: 23-Year-Old Turns Down Big Money From Mark Cuban
- 11/12/12--08:40: 2 Ladies With 37 Grandkids Get Big Startup Money From Mark Cuban
- 11/16/12--09:12: 10 Shockingly Terrible Startup Pitches
- The content is bad, off-base or not well-thought-out.
- Slides or visuals are poorly executed or confusing.
- The founder is unprepared or lacks basic presentation skills.
- 11/19/12--08:03: Here's A Sure-Fire Way To Blow A Pitch On 'Shark Tank'
- 12/03/12--07:05: What 'Shark Tank' Can Teach Us About The Job Hunt
- 08/13/13--12:55: Startup Competition Winners Say Mentorship Is The Key To Efficiency
- 09/10/13--13:45: The 10 Worst ‘Shark Tank’ Pitches Of All Time
- 09/18/13--08:52: 7 Cliches The Sharks Always Use On ‘Shark Tank’
- 09/23/13--13:46: Mark Cuban Called This The Worst 'Shark Tank' Pitch Ever
- 10/01/13--11:09: The 10 Best 'Shark Tank' Pitches Of All Time
- 10/08/13--06:00: Why Mark Cuban Made 'Shark Tank' Change Its Contracts
- 10/15/13--13:15: How To Craft The Perfect 'Shark Tank' Pitch
I’ve just started watching Season 4 of Shark Tank, the incredibly popular show on ABC where entrepreneurs pitch their businesses to a panel of five individual investors (the Sharks) for investment. I thought it might be fun to give a VC’s perspective on the businesses getting pitched.
You can watch the first episode online, if you didn’t see it live, to see the pitches and learn about the businesses. I’m going to focus on analysis, and not explain the businesses themselves.
The first pitch was for Coat Chex, a company using a tablet app to make coat checks (and other “bailment” businesses such as valet parking, dry cleaning etc.) simpler and more secure. Looking past the cheesy theatre of the guys pitch, this company was the one most likely to actually pitch a real Silicon Valley VC, given its technology angle.
Mark Cuban was right to describe the pitch as a “Horrible! Horrible! Horrible idea!”. The company was pitching a franchise business to roll out the technology nationwide, when it had yet to actually run it live in a single location. This is a classic example of focusing on scaling up before product-market fit has been achieved. The founder had not thought about his go to market approach, he had not researched competitors, and he had not done any market testing because it wasn’t convenient for him (wrong time of year – too hot in Indiana, so he didn’t bother). This business school student made the classic mistake of mistaking an idea for a product for a business plan. He thought that all be needed to get the investment was to charm and entertain, when what he needed to do was convince.
Despite all of this, Cuban made an offer to invest $200k for 33% of the company. The founder wanted to take the offer, but he called his advisor (his business school professor) who told him it was too much dilution for this stage, so he turned it down. This was the right decision. There is a lot that he can do to address the questions being raised, including building out some locations and operating the service. He had come too early to pitch.
Although the decision was right, the fact that the founder went against his judgment to listen to his advisor, and regretted the outcome later, is a negative sign. Founders need to have the courage of their convictions. They should listen to advisors, of course. But if the advisor doesn’t convince them, they need to be leaders, and do what they think is right. This founder isn’t ready to be a startup CEO.
The second pitch was for Bev Buckle, a belt buckle with a fold out bottle holder. The founder had sold $340k worth of the product at 60%+ gross margins at festivals around the country, and had interest (but not purchase orders) from a long list of retailers. He had problems with his manufacturer (poor quality) and working capital and had only 62 items available in inventory. He was seeking $50k and wanted to take a salary in the $2-3k per month range to do this full time. He got three offers:
It is very positive that the founder had generated some sales and interest from retailers. He has shown some hustle, and demonstrated product-market fit.
The issue here is that this is likely to be a bit of a fad product. Now fad products, like the Slanket, can be incredibly profitable, but they don’t generate enterprise value. At some point the fad passes and sales will crash. Enterprise value comes from a projection of future continue sales growth, or at least stability, and that is unlikely for this product. Fad products look more like projects than companies, with a defined endpoint to the investor participation. They are often structured as loans which need to be repayed with interest, so that the investor knows that they are getting their money out. That is likely why we saw the offers structured as they were.
Two of the offers would see the founder cede control of the company to the investor. This way the investor knows that they can get their money out because they can control the payment of dividends, and can wind down the company and distribute cash if they determine that there is no future in the company. Founders can get too tied up in the product to see clearly when it is time to wrap up the company and they can waste a lot of money trying to revive a product without a future, or swinging for a new hit product. Since founders can pull salary and other benefits from the company continuing while the investor gets nothing until distribution, an investor would want control over a company likely to have a defined “end of life.”
The other offer saw money coming off the top as a percentage of revenue. This also protects the investor from a situation when the company should be wound down but isn’t. The investor doesn’t bear risk on ongoing expenses without the prospect for future revenue.
The company chose to sell 51% of the company and take no salary. I think that was a poor decision. The gross margins of the business can support a 12% royalty and this would be both cheaper in the long run, and allow the founder to keep control.
BODY WALKING INSTITUTE
The third pitch was for a company selling certifications in “Body Walking” a massage technique that involved using the feet. The pitch was all about potential, market size and math “if we just had 10 classes a month with 20 people in those classes, that is a revenue of $300k.” The company was not novel, had had very limited success to date (only 30 certifications sold in 7 years) and all the Sharks passed.
As two of the Sharks said, “Potential is not sales.”
The last pitch was for Buggy Beds, a company building bed bug glue traps. These guys focused their pitch on the product, and they really hid the lead. They should have led with their tremendous traction with retailers (Home Depot, Burlington Coat Factory) and direct sales to Housing Authorities that had generated $150k in sales in six months with $100k in profit.
The company asked for $125k for 7% of the company (pre money of $1.66M), having turned down an offer for $5M for the patents and trademarks before they started sales. The founders clearly believed in the upside of the company and that is why they were willing to take a lower valuation but wanted minimal dilution.
All the Sharks were interested in investing. One made an offer of $250k for 25% of the company (pre money of $750k) and offered to let all the other sharks join him in his offer. He was clearly trying to get the Sharks to collude to avoid driving valuation up. Two of the other sharks joined the offer. Another offered $150k for 15% of the company (pre money of $850k – slightly better) but made it an exploding offer and demanded an immediate response. The founders waited, the exploding offer was withdrawn, and all the rest of the sharks joined in on the group offer. The founders accepted it.
With this level of interest, the entrepreneurs should have known that they had room to negotiate. Entrepreneurs should never take an exploding offer with such a short deadline. It suggests desperation on the part of the investor. They want to force you into a quick decision, likely because they are worried that a higher offer may be made by someone else. But if they want in so badly, they will still come back later on, just as this Shark did.
Similarly, when they see so much interest from so many partners, they should push for better terms. With this much interest, it is likely that at some point the collusion will break down and one investor or more will make a better offer to try to seal the deal for themselves.
The company left money on the table by not countering, or refusing the offer. They could have said “we want just one investor, fully committed to helping us build something great, so we have to turn down this offer, but are open to alternatives” and let the Sharks fight each other to get into a deal that they all want. Almost always, having one major investor with a lot of skin in the game is better than a “party round” with lots of people in for a small amount. When the company needs help with a “party round” no one has enough at stake to do real work to help. Conversely, when a single investor has real money at stake, then they have real upside to help the company grow, and real money at risk if the company is in trouble, so will be there when help is needed.
The other big mistake that the company made was that they should have asked for more money. The company made $100k in profit in six months. Yet they only asked for $150k. What could they do with $250k in capital that they couldn’t do with the $100k that they already had? And if they waited another six months, they would have had $200k+ based on their run rate. In order to hit an inflection point, they would likely need an order of magnitude more capital than they currently had available, and should have been asking for $1M or more to build their company to the next level.
Shark Tank is a fun show, with companies that are very unlike most of the pitches I see as a VC, but where many lessons still apply. I’m going to break down the pitches for each episode this season on our blog.
When Derek Pacque was a student at Indiana University, he'd often go to the bars. As the weather turned colder there was always a decision that weighed heavily on his mind:
Should he wear a coat out at night or brave the cold?
There were no coat checks in the bars, so if you wore one you risked it being spilled on or stolen.
Pacque, now 23, wondered why the bars didn't implement some kind of coat service. When he asked the owners, some said they didn't have room or staff for a coat check. Others said they didn't want the liability. Pacque set out to solve both problems.
In 2010, the then senior borrowed $500 from his parents to buy a bunch of coat racks and hangers. He and his friends created a company, CoatChex, and they volunteered to run the service for the local bars and clubs. The bars could decide how much to charge per coat, and Pacque would keep 85 percent of whatever was made. Within five months Pacque raked in $50,000.
He spruced up his equipment, sought help from a business professor, and started building mobile technology to make a smoother, ticketless CoatChex system. He started getting more gigs. His company even worked the ESPN/Maxim Super Bowl party.
Just as he was in the process of testing the mobile equipment and rolling out CoatChex in new cities, Pacque read a life-changing tweet.
"I was sort of just joking to my professor and said, 'Wouldn't it be funny if we got on the show?' He encouraged me to apply," Pacque tells Business Insider.
Pacque wrote two paragraphs for his initial application. "I filled it out sort of as a joke," he says. "I figured they wouldn't read it. I wrote, 'I'm exactly like Marc Cuban. I started a business in college and we're both Philly fans. I made $50,000 in my first five months.'"
Shortly after submitting the application, Pacque received a call from the show's producer.
After a two month screening process, Pacque became a contestant on ABC's Shark Tank. He spent an hour pitching Mark Cuban, Barbara Corcoran, Daymond John, Kevin O'Leary and Robert Herjavec. ABC spliced it up into a dramatic 10-minute segment.
At the end of his CoatChex pitch, Marc Cuban offered to invest $200,000 for 33 percent of the company. Pacque wisely walked away from the offer.
"People are so curious to know why I turned down Cuban," Pacque tells Business Insider. "He wanted one-third of my company. Now maybe if he had offered a $5 million investment and he was going to flip it for $20 million in a year, then I'd be ok with it," he jokes. "But at this early stage I just can't give that much equity to someone who's not going to be there day-to-day to test this thing with me. Cuban has places I can put CoatChex, but my problem isn't finding opportunities for the service, it's scaling the business."
Despite what ABC aired, Pacque says Cuban wasn't surprised that he turned down the offer, and the two are still in touch.
"Mark would be a great guy to have as an investor eventually," says Pacque. "He's still very interested in hearing where we are in our testing process."
Here's the clip of Pacque's pitch and public Cuban rejection (zip to 2:16):
It's pretty safe to say that after three full seasons of the ABC hit show "Shark Tank," Daymond John has seen almost all there is to see when it comes to pitching an idea.
Now into the fourth season, the "sharks" are facing some of the most passionate, intense entrepreneurs yet, but not all of their pitches lead to a deal.
We spoke with John, whose own success with his company FUBU and as a branding expert makes him an ideal candidate for providing advice on how to nail the pitch:
What does an entrepreneur have to do to impress you?
Fail a couple of times, go as far as they can without requesting help from another person until they feel it’s a good enough opportunity to present to somebody. And have a problem-solving attitude. Every problem can be solved as long as they use common sense and apply the right research and techniques.
What kinds of qualities do you look for in the people whose ideas you invest in?
I look for somebody who is never going to stop no matter what, or somebody who doesn’t feel like I’m the be-all-end-all, that regardless they’re going to to be okay. I look for somebody who is a good problem-solver, and I look for somebody with the same beliefs I have, in integrity or in business, or in relationships, or staffing, or something of that nature.
How much time goes by in a pitch before an entrepreneur begins to lose your interest?
It’s hard to gauge because you can discover things as time goes on, discover things about a company later on that maybe the entrepreneur didn’t highlight at first, and often I’ve been surprised at the last minute.
If an entrepreneur bombs a pitch, how can they bounce back?
Always, you have to understand who you’re pitching, why you’re pitching them, and what problems can you solve in their life. So you should do a fairly large amount of research on the person because people generally invest in people they find valuable. Would you be pitching to Kevin O’Leary because you find exit strategy valuable, and royalty valuable? Would you be pitching to Robert Herjavec because if he thinks you have a good idea, that you’re a problem-solver, you can go out there and hold your own, that he’ll give you more money than you asked but won’t hold your hand every single step? So you always have to understand who your target is.
Being in the fashion industry yourself, do you find yourself more drawn to entrepreneurs who are also in the fashion industry?
I know the business extremely well, but one of my main objectives has been health and fitness these days. I already have enough apparel businesses that are either doing well or not really doing anything at all, and I’m looking to broaden my portfolio. But when I do see somebody with an opportunity in the market that is proven, that they’re having sales, that I know I can easily plug into my network, then I’m going to jump in on it. But I don’t necessarily resonate with another fashion person as much.
How do you broaden your portfolio?
It’s really about, what do I have in my portfolio where I can enhance a company? I do a lot of brand management of up-and-coming businesses so, is their product—can I give them a push there? Or is it my understanding of manufacturing and distributing where I plug a company into my manufacturing? Or is it the fact that I may be dealing with the retailers such as Macy’s? You may have some form of a kitchen product that traditionally, I don’t operate in the kitchen department because my apparel doesn’t lend itself to that department, but now I can garner more real estate in there, working with your company and talking to Macy’s we can make a lot of money together working and offering in one category that I can garner more real estate in.
What are the biggest lessons you learned while growing FUBU, and how do you carry that over to the investments you make on Shark Tank?
The things that I’ve learned is, try to make all the mistakes with your own money and on a small level so that when you are responsible for a partner’s money or assets you’ve learned and you don’t make bigger mistakes. Try to go as far as you can without anybody else’s help first.
Also, there are no shortcuts. There really is no shortcut just because you have a name, or you have some kind of access or some way you can solve all the problems. And I think one of the things I learned with FUBU, you have to understand that there’s really only two ways of operating a business: more sales, or lower overhead. Bottom line, a lot of times we’ll throw a lot of people at a problem, and if it doesn’t create more sales you’re still going to end up jeopardizing your brand and your company, so don’t overshoot it.
What’s the best pitch you’ve seen so far in “Shark Tank”?
There’s so many good ones ... I really loved Al Nelson, from EZ VIP. I loved somebody else coming up named the Scrub Daddy. Who else... see, now I’m drawing a blank because there are so many good ones... oh—the women with the Buggy Beds. I think those were some of the best pitchers.
What was the worst?
The guy who wanted to create gold out of the river, wanted to create deposits of gold. The guy from the first season who wanted to put the electronic Bluetooth in your neck, surgically. Who else... you know, there’s so many of those guys, too.
It's never too late to be an entrepreneur.
In exchange for the cash, Beverly Vines-Haines and Charlotte Clary gave up a 40% stake in their company, even though they were only looking to give up a 15% stake.
But these two are not your typical entrepreneurs. Vines-Haines used to be a romance writer and Clary has a B.S. in Natural Health. And between the two of them, they have 37 grandchildren.
"You'd think 37 grandchildren would keep us busy enough," Vines-Haines says. "But while our friends are out scrapbooking and quilting, we've developed a major business."
They started off as two grannies in a garage hammering away at the hard candies to break them into smaller pieces.
The Ice Chips are made with Xylitol, a healthy, natural sugar alternative and come in 17 different flavors.
But before the two grannies set out on their venture, they were told that no one could make a hard candy out of Xylitol.
Now, they're selling Ice Chips all over the world and are on track to hit $1 million in sales by the end of the year.
"Those are some sweet numbers," FUBU founder and investor Daymond John said.
With help from the sharks, they hope to start distributing on a larger scale.
Corcoran liked the idea and loved how the candies come in different shapes, so she initially offered them $125,000 for a 33% stake. Kevin O' Leary, aka Mr. Wonderful, tried to join in on Corcoran's deal for a 40% stake, but she refused to do business with him.
She will, however, do business with Cuban. While there were other offers on the table from Mr. Wonderful and John, the two grannies felt Cuban and Corcoran would be a better fit for their personalities.
While these two women took the big money from the show's investors, some Shark Tank contestants do not. Check out: 23-Year-Old Turns Down Big Money From Mark Cuban.
Here's Vines-Haines and Clary's pitch, below. Zip to 29:16 to watch the grannies land their big investment.
Giving a good pitch can make your career as an entrepreneur.
Giving a bad pitch can break it.
When you pitch investors on your startup, they aren't just watching you to see if they want to invest. They want to assess your powers of persuasion—which you'll need to woo talent, customers, and partners.
With that in mind, we scrounged up some of the most unbelievably bad startup pitches we could find.
Lumier founder Cullen Dudas was incredibly awkward and painful to watch
Product: Software to personalize your Windows experience.
Founder: Cullen Dudas
Where: TechCrunch Disrupt NYC 2011
Why it's not a great pitch: He doesn't do a great job of telling us why we should care, nor what the company actually does. He awkwardly rambles on during his pitch, and the MC even says "I think I've just been punked."
Where Lumier is now: If you head over to Lumier.com, you'll see that the company has yet to launch to the public. As of right now, it's only accepting email sign-ups for the beta product.
Amanda Schlechter of Ledge Pillow went after too small of a market
Company: Ledge Pillow
Founder: Amanda Schlechter
Product: A pillow to help women with large breasts or implants comfortably sleep on their stomachs
Where: Shark Tank 2012
Why it's not a great pitch: For starters, Ledge Pillow is going after a very small, niche market. Investors typically don't invest in companies that lack a broad appeal. Also, the sales she disclosed weren't very impressive, having only sold 83 products since launching in 2008. Ultimately, she didn't communicate well what the value proposition was. It simply didn't solve a big enough problem for a large enough market.
Where the Ledge Pillow is now: According to its website, the Ledge Pillow is temporarily out of stock—but has a big announcement coming up.
Yaron Bazaz of CrowdFanatic couldn't explain the company's business model
Founders: Yaron Bazaz, Gabriel Melman
Product: Online engagement platform.
Where: Dragon's Den 2012
Why it's not a great pitch: For starters, Bazaz and his team came out screaming and chanting. That didn't impress. Then they failed to comprehensively explain their revenue model and had no sales to back up their claims. It also wasn't totally clear to the investors what the business is actually trying to achieve.
Where Crowd Fanatic is now: The site is still up and running, but there are no SEC filings showing CrowdFanatic raising venture-capital funds.
See the rest of the story at Business Insider
If you've been following "Shark Tank," the prime-time show where entrepreneurs pitch investors on their ideas, you've probably seen your fair share of successful pitches and pitches that totally suck.
In the most recent episode of "Shark Tank," David Powers and Scott Tindel of Tie Try sought a $100,000 investment for a 25% stake in their designer neck ties subscription service.
The two had a solid pitch overall, but it was missing two very key elements: a healthy subscriber base to tout, and passion.
Going into the Tank, Tie Try only had 110 subscribers.
Mark Cuban, the tech-billionaire owner of the Dallas Mavericks, felt wary about the subscription model, and expressed concern over the number of people who might cancel their subscriptions. Robert Herjavec, a Canadian tech entrepreneur, agreed. He also didn't make an offer.
To shake things up a bit, Kevin O'Leary, a software entrepreneur turned fund manager, offered to put up $50,000 if the two could convince another Shark to join him in the deal.
Real-estate magnate Barbara Corcoran wouldn't bite.
Fubu founder Daymond John seemed to be Tie Try's best bet. But they blew it due to a lack of passion.
"I didn't hear not one word about fashion in this whole discussion," John said. "I didnt hear about ... the excitement about the beauty of a tie. For that reason you're not obsessed over this business like we are all over our businesses. I'm out."
As an entrepreneur, you must show excitement for the problem your startup addresses. Otherwise, why would an investor take a risk and back your company?
Ultimately, Cuban passed on O'Leary's offer to coinvest because he wasn't convinced Powers and Tindel fully thought through the business. With all of the other Sharks out, O'Leary pulled his offer, and that left Tie Try without a deal.
Shark Tank is one of the only reality-type shows my wife and I watch (though we’ll dabble in X-factor every now and then, shh!).
The premise of the show is that entrepreneurs come in and pitch their products to a panel of venture capitalists (“sharks”), who try and strike a deal for a stake in the company. So the entrepreneur must sell his or her product to get capital for the company.
The job hunt requires some of these same skills. You need to sell yourself to the employer, and we can learn right from Shark Tank what works and what doesn’t.
The way you represent yourself needs to be crisp. Those who go in the Tank with confidence and are sure of themselves and their products have a much better chance than those who don't.
In your job search, you need the same mindset.
1. Present your case clearly and sincerely. Convince them that you would be an asset to the company.
2. Make sure you are professional and courteous.
Hiring Managers don’t just want the bare necessities for the position, they want someone who brings a breath of fresh air to the table.
You have something that others do not. Make sure to reflect this on your resume and in the interview.
If you are new to the workforce, show how your skills from school make you a star candidate. If you've been working for a while, you have years of experience to draw stories and successes that effectively demonstrate your unique value.
One of the worst mistakes in the Shark Tank many entrepreneurs make is they don’t know the ins and outs of the company (especially the numbers).
Many make this same mistake when they’re on the job hunt.
1. Know what you want to do. You should take the time to figure out if this position is even a step in the right direction.
2. Plan, prepare, and practice for the interview. You should know the basics of the company and your interviewer backwards and forwards, and go in equipped with questions that show your enthusiasm to learn more. Think about your answers to the questions they might ask you.
When you negotiate ("when," not "if"), you need to know the numbers and exactly what you deserve. Think, “What’s the market value for this position? What leverage do I have? What leverage do they have? What’s on the table for negotiation?' If you don't, like Kevin O’Leary says, “You will get slaughtered!”
Talent can only go so far at times. In the end, you and your personality are what your co-workers are stuck with day in and day out. If HR doesn’t like you, chances are you may not get the position.
But you want to work with people you get along with too, so do your research, talk to current and ex-employees and see if the culture fit is right for you as well.
Some deals in the Shark Tank came about not because the product was amazing, but the investor said, “I really like you,” and that’s what sealed the deal.
One object startups have tried and failed to kill is the good old-fashioned key.
We shove them onto tiny metal rings and bury them deep in pockets and purses. They're impossible to find when we need them most, they're a hassle to retrieve when our hands are full, and losing them means changing all of our locks.
Still, no mobile app, motion or touch device has worked as flawlessly. So the easy-to-lose, headache-inducing physical keys have remained.
Phil Dumas has spent the better part of his career developing a key-free way to unlock a door. He graduated with a degree in electrical engineering from University of Florida, then helped invent a biometric finger-lock technology. But it was faulty, only accurately reading the owner's fingerprint sometimes. "The lock needed to work the first time, every time," Dumas says. And it didn't.
His latest creation, UniKey, may finally replace physical keys. When Dumas debuted the product on ABC's Shark Tank last year, he received investment offers from all five judges. Dumas has now raised over $2.3 million from traditional investors including ff Venture Capital, and he is licensing Unikey's technology to Kwikset, one of the largest lock and lockset manufacturers in the world. Unikey's touch-lock devices will soon be sold in major retail outlets such as Home Depot.
The Kwikset Kevo looks like any other lock. There's a place for a physical key, and it's double bolted onto the door. You don't need to call a specialist to install it. You can still unlock the door from the inside by turning a knob. But unlike a traditional lock, this lock uses proximity to unlock doors.
The lock operates via iPhone or iPad app, or a fob for people without smart phones. When the mobile app or fob are nearby and you touch the lock, it turns blue then green to signal it is unlocked. If you tap the lock three times, it turns yellow and locks again. If you don't have access to a door and you touch it, the lock turns red.
You don't have to be touching the app or fob to lock and unlock doors. The devices just need to be within range. You can set the range to either a few inches or a few feet via the app or website.
UniKey's technology knows which side of the door the owner is on, so being too close to the lock from the inside won't let a nearby stranger in.
There's no pin required to access the mobile app key or button that needs to be toggled. You just enroll your device(s) once. Hackers aren't really a worry either, because UniKey scrambles together new key codes all the time. If you lose your smartphone with the the app, you can turn off access on via the website. Otherwise, access will turn off on the old device as soon as you activate a new phone.
The best feature is the ability to share permanent or temporary keys with others via mobile app. For example, you could assign a key to a house cleaner for a specific day each week, or let a construction worker use a key for a few hours each day. Family members can get their own mobile copies. Keys can be cancelled as quickly as they can be created on the app.
"We focused on convenience, control, simplicity and elegance," Dumas tells Business Insider of his ten-person team. "We're not the first company to open doors with a cell phone. We're the first to do it in a passive manner where you don't have to engage your phone. The minute you have to toggle a switch, you may as well put a key in the door."
The locks will be available for pre-order on Amazon soon. They'll retail for about $249 or less.
To better understand how the Unikey lock will work, here are some screenshots of the device in action.
Click on the video below to see the prototype of Unikey in action on Shark Tank. To watch it, scroll down to the bottom of Unikey's press page (Shark Tank has rights to clips locked down and we couldn't find an embeddable version).
Note: Even though he agrees to work with Cuban and Kevin O'Leary at the end of the episode, the deal didn't close. Dumas merely says he and those particular investors "couldn't come to terms."
Sulaiman Sanni, co-founder of nonprofit crowdfunding platform WeDidIt, says finding a mentor early is the best way startups can focus on the things that really matter.
"You’d spend less time, not waste weeks, when you have someone who has already been there and done that to say, ‘Hey, this isn’t actually that important. You might as well make a decision now and move on,’" Sanni told Business Insider.
Moving on is exactly what Sanni and co-founder Ben Lamson have done for the past two years, as they've expanded their startup from a fledgling business idea into a competition-winning service.
Launched in 2011, WeDidIt helps nonprofits crowdfund projects, much like Kickstarter does for individuals except WeDidIt takes the process one step further. Sanni and Lamson's company provides nonprofits with tools like fundraising coaches to help them successfully transform a video campaign into an executed project.
Sanni said that without the help of the mentorship he and Lamson found while participating in the Miller Lite Tap The Future competition last year, they would have been lost.
"As an entrepreneur, in the early months, you’re doing things based off of your assumptions. You have no idea if real customers will like your product," Sanni said. "If you can get involved with a business competition where people are assessing your business plan to let you know that you’re on the right track, and on top of that give you some startup capital to put your idea into action, that’s golden."
One year later, WeDidIt is helping other startups by acting as judges for this year's competition, alongside business mogul and Shark Tank investor Daymond John.
The competition, which spans over the next three months, ending with the national final round in December, awards one entrepreneurial team a grand prize of a $250,000 business development grant.
Though Sanni and Lamson said that they're in the midst of seeking out additional venture capital of their own, they're happy to share what they've learned in the last year with the competition's participants.
"Work quickly and learn from your mistakes," Lamson said. "Focus on things that are moving your business forward. If they’re not moving your business forward, they’re not worth it."
In four seasons of ABC’s reality pitch show “Shark Tank,” we’ve seen some doozies. Hopefuls have pitched selling “pairs” of socks in threes (because you’re bound to lose one), a portable urinal that looks like a golf club, and flatulence-scented candles.
With an average viewership of six million and airtime that’s worth about half a million dollars to the aspiring entrepreneurs who make it on, you’d think every pitch would be thoughtful, well-rehearsed, and airtight. But you’d be wrong.
Andrew Figgins, a Chicago-based entrepreneur and owner of the fan site InTheSharkTank.com, says nearly half of the hundreds of pitches that have been made on the show have been awful. The most common problems? Far-fetched ideas, wacky personalities, and lack of basic business knowledge. “The people who have gone on the show and don’t know their numbers get chewed up and spit out,” says Figgins.
Ahead of the fifth season’s premiere on Sept. 20, Figgins combs the archives to make his picks for the worst “Shark Tank” pitches of all time.
Michael J. Desanti pitches a bird feeder that zaps squirrels.
Episode 423: “Squirrel Boss”
In the most recent season, Desanti says his interactive bird feeder is the first of its kind, designed to keep pesky squirrels away. The remote-controlled feeder allows owners to “zap” critters with a harmless static shock.
Desanti demonstrates his invention by shocking Mark Cuban.
Episode 423: “Squirrel Boss”
In the demo, most of the Sharks feel the shock themselves, and more so when Desanti asks for $130,000 for a 40% stake.
The Sharks aren’t feeling electrified enough to invest.
Episode 423: “Squirrel Boss”
The Sharks are split between thinking the invention is cruel, crude, or just bad business. When they find out that the product hasn’t been patented, they pass.
See the rest of the story at Business Insider
In the build up to the premier of the fifth season of ABC’s reality pitch show “Shark Tank” this week, we decided to take a look at all the catch phrases, cliches, buzzwords, and business jargon used on the show.
We weren’t disappointed. “Shark Tank” turns out to be a melting pot of colorful lingo, propagated mostly by the Sharks themselves.
With the help of Andrew Figgins, a Chicago-based entrepreneur and owner of the fan site InTheSharkTank.com, we compiled the following list of the most common always used by the Sharks (we’re looking at you, Mark Cuban):
1. “You’re not an entrepreneur; you’re a want-repreneur.”
Cuban first and most memorably said this in season three to Amanda Schlecter, founder of the Ledge Pillow, a pillow designed to help women recovering from breast surgery or with large breasts lay comfortably on their stomachs. The statement has since been adopted by many of the Sharks in response to what they view as sub-par pitches.
Translation: You don’t seem willing to put in the time and effort it takes to make a company succeed.
2. “Follow the green, not the dream.”
Cuban used this gem most recently in season four with Erica Cohen and Lori Barbera of Baby's Badass Burgers, a bright pink food truck that sells gourmet burgers (motto: "Come for the burgers, stay for the buns"). Because the truck had steady sales, the pair wanted to open a traditional restaurant. Cuban advised that they stick to what they know.
Translation: Focus on what’s working, rather than expanding into a new business venture just for the sake of expanding.
3. “I need more skin in the game.”
Most of the Sharks have used this at one time or another, though Cuban probably the most, when they want a higher equity stake. Cuban said it to Mike Hartwick and Sarah Ponn of Surfset Fitness, a surf-focused exercise equipment and classes provider. They asked for $150,000 for a 10% stake, but Cuban wanted more “skin in the game” and offered $300,000 for 33%.
Translation: I’m willing to put more of my money on the line to get a better deal.
4. “That’s a Slick Willie move.”
Daymond John nicknames any entrepreneur who isn’t forthright with their answers or changes valuations mid-pitch a Slick Willie. When Michael Tseng, creator of the food-storage invention PlateTopper, changed his company valuation from about $2 million to $15 million in the midst of talking to the Sharks, John deemed it “a Slick Willie move.”
Translation: You’ve been deceptive and lost my trust.
5. “I’m starting my 24-second shot clock.”
Borrowed from his basketball background, Cuban says this when he wants to pressure an entrepreneur to make a decision quickly. He used the shot clock in the third season with Mark and Hanna Lim of Lollacup, a pediatrician-approved sippy cup, and ended up making a deal. Other Sharks have also used and sped up the shot clock. Lori Greiner once reduced it to two seconds.
Translation: You have the next few seconds to make a deal.
6. “You’re dead to me.”
This is the Kevin O’Leary go-to response when contestants turn down his offers. In the first season, when Paul Watts of Graffiti Removal Services dismissed the deal for a majority stake in his business, which would make Watts a mere employee of his own company, O’Leary said: "You're dead to me if you turn around." He did and walked right out the door.
Translation: That’s my final offer, and I don’t renegotiate.
7. “Is the business scalable?”
From the annals of business speak, this is the most-often used jargon trotted out by Sharks on the show. Essentially, they’re asking if contestants can handle more than their initial success and put systems in place for consistent growth. It’s an important concept, but an annoying cliche.
Translation: Will you be able to meet increased demand and grow revenue quickly and easily?
During the season five premiere of ABC’s reality pitch show "Shark Tank" on Friday, Mark Cuban literally got out of his chair to tell Tucson, Ariz.-based doctor brothers Richard and Albert Amini: "Worst pitch ever."
But the worst part is, if you watched the episode, you can't blame Cuban. This is a lesson in how not to pitch your business to investors.
The Amini brothers' pitch is a mobile health app called Rolodoc, which is meant to be a secure social media platform that allows physicians to upload and display their medical records. The platform would also act as a communication tool between doctors, patients, and other medical professionals.
"What we’re trying to do is bring social media and the social network to the medical profession," says Albert, the surgeon brother credited with the idea.
The Aminis were asking for a $50,000 investment in exchange for a 20% stake in their company.
Their mobile technology idea isn't a bad one. But the problem is, that's about as far as they got.
They couldn't explain how they would convince physicians to sign up for the platform. Or how they would market or advertise Rolodoc. Or how they would vet doctors using the platform. Or even how they are planning on making any money.
And it just got worse. The Amini brothers couldn't explain how physicians could use social media on their platform, despite selling the idea as a social media communication platform for doctors and their patients.
"You keep saying social media, social media. This is all one-to-one communication," argued Cuban.
"You didn't show us anything about social media," he said. "You showed us profiles and talked to us about emails. You didn't tell us at all about how you were going to get there."
By the end of the pitch, the brothers were completely annihilated and received no funding for Rolodoc.
Real estate mogul Barbara Corcoran called the pitch the "worst sales presentation I've heard," and entrepreneur Kevin O'Leary said: "I don't mind sacrificing a couple of doctors if the next two doctors that come in will make me money."
No matter what profession you're in, there's one lesson any aspiring entrepreneur can learn from the Amini brothers: If you're trying to raise money, make sure you have a solid elevator pitch — and business plan.
On Friday’s premiere of the fifth season of ABC’s reality pitch show “Shark Tank,” pitches ranged from what Mark Cuban called the worst in the history of the show to one so enticing every Shark wanted a piece of it.
Sweet Ballz, a packaged food startup by Dallas-based entrepreneurs James McDonald and Cole Egger, swept all five Sharks into a competitive bidding war that ultimately forced the entrepreneurs to choose who they wanted as an investor — a rare yet flattering place to be. However, with so much interest in their company, they may have given up too much too soon.
The entrepreneurs initially asked for $250,000 in exchange for 10% of their company, which would value the company at $2.5 million. The Sweet Ballz business is selling packaged cake balls that come in packs of four in flavors like red velvet, chocolate, and cookies and cream. It capitalizes on the trend of the cake pop, but the balls come without the stick and a 45-day shelf life.
“Which one of you is ready to make some sweet, sweet dough with our Sweet Ballz?” McDonald asked.
The Sharks were clearly intrigued and raved about the taste. They peppered the business owners with questions, and McDonald and Egger didn’t disappoint. The packs retail for $1.99 to $2.49 each, but cost only 86 cents to make. They are already sold at 7-Eleven, one of the largest convenience stores in America, and since 95% of their sales are from 7-Eleven, there’s plenty of room to grow distribution.
If the Sharks weren’t already hooked, their eyes grew even wider when the business owners said they’d done $700,000 in sales in the past 90 days and had profits of $95,000.
“Things are going great for you,” said investor Robert Herjavec. “Why are you here?”
That question alone should have tipped the business owners off that they had something of obvious value to the Sharks. Egger said the investment would go a long way towards growing the business and its distribution points.
Then the feeding frenzy began. Barbara Corcoran offered $250,000 for a 40% stake, and Kevin O’Leary undercut it with the same offer but for a 30% stake. Lori Greiner jumped in with an offer for a 36% stake, saying it comes with her QVC network.
Soon the panel of five Sharks, who had devolved into bickering over which one has the best network, divided themselves into two offers: Cuban and Corcoran would go in together at $250,000 for a 25% stake; and O’Leary, Greiner, and Herjavec jointly offered $250,000 for a 30% stake. They asked, Who do you want to work with?
It was a strong move on the Sharks’ part — one parents use often. Give someone only two options, and you ensure they’ll end up choosing something you’ve sanctioned.
In this case, the business owners chose Cuban and Corcoran, an investment that values their company at $1 million. When the business owners walked away pumping their fists and celebrating, they seemed to have forgotten that they were initially seeking a valuation of $2.5 million.
They have a hot business, and it will surely get hotter with a large cash infusion and powerful investors behind them. But they also just gave away a quarter of their business in what seems a fire-sale deal for the Sharks. “I think they made a mistake,” said O’Leary as the credits rolled.
At first glance, Lynnae's Gourmet Pickles, one of the contending businesses on this week's "Shark Tank" season premiere, looks like a pretty good business. They've seen very impressive growth in their first year.
But according to the Sharks, their pricing and product choices mean the business is set to crash into an inevitable ceiling.
The very personable Lynnae Schneller and Ali Cullinane, friends from Tacoma, Wash., based the product on a secret family recipe from one of their grandmothers. The business showed potential, with $144,000 in sales in its first year and products available in 26 states. Plus, they had a meeting with Target lined up.
That charm didn't last long, however. When they asked for $125,000 for a 20% stake, the Sharks broke down step-by-step why Lynnae's Gourmet Pickles didn't have the growth potential to be a major player.
Price is the problem.
The pair's gourmet pickles sell for about $6.99 at retail and $4.00 wholesale, they said. In comparison, an average jar of pickles costs $3.00 to $3.50 in supermarkets.
The moment that price differential was revealed, the Sharks started to turn.
"You've just walked into a huge risk," investor Kevin O'Leary said. "Why would Target put a $7.00 jar [on shelves] when the market's at $3.00?"
The pair's defense is that their price is in line with other specialty retailers. But they had a hard time explaining why their product is so different from any other. They also couldn't explain how they'd get past making a product that can be pretty easily imitated or replicated by someone with deeper pockets for cheaper.
"Do you have anything that's so differentiated people are going to say 'wow'?" Mark Cuban asked.
They said they appeal to a "gourmet, high-end audience," but that market simply isn't that big, the Sharks said. And, beyond competitors, anyone with the time and initiative can make pickles on their own at home for a tiny fraction of the price of buying them.
It's a matter of time before they get crushed.
The business fundamentally has a ceiling, Mark Cuban told the pair.
The pair described their strategy as attempting to "explode into the market" and get a lot of distribution quickly. But the Sharks believe they won't be able to get anywhere near challenging a big competitor without getting knocked out.
"You guys hustle, which is great, and you're creative. But the big guys aren't paying attention to you because you're at $144,000 in sales," Cuban said. "You don't matter to them. But as you grow — and you will — they'll start paying attention, and they'll make a decision. Do I buy them? You're not big enough. Do I crush them by just putting out a comparable product? Probably."
You usually can't overcome pitching to the wrong audience.
The pair have a nice and growing business, but not one with the sort of nationwide and rapid growth potential that these investors look for.
"You aren't worth more than $600,000," O'Leary said. "And I don't think you can sell these pickles for $7.00 at Target."
In this case, personal preference also played a major role. Sharks Lori Greiner and Robert Herjavec backed out in part because of business concerns, but also because they simply don't like sweet pickles.
The relationship between "Shark Tank" investors is usually contentious; they get into bidding wars, snipe at one another, and frequently disagree.
For the first time, the five Sharks on ABC's reality pitch show saw a business that was so exciting they all jumped in together and invested $1 million in Breathometer, a startup that makes a breathalyzer that plugs into a smartphone.
The intriguing product reads your blood alcohol level in seconds, tells you how long it will take to sober up, and lets you call a cab with the push of a button.
Founder and CEO Charles Michael Yim had already raised $1 million for the business and wanted to raise another million, starting with $250,000 from the Sharks for a 10% equity stake. He brilliantly leveraged the Sharks' interest to get all of the funding in 20 minutes instead of over two months. Yim also got a massive publicity boost from getting all of the Sharks on board and the combined expertise of five multi-millionaires.
Yim had sold a company before, experience that was immediately evident in his confident pitch. He let the product and idea speak for itself, knew his numbers cold, and made it clear that it was succeeding in its own right. Breathometer had launched on the crowdfunding platform Indiegogo and done more than $100,000 in sales within a month, he said.
Yim fluently answered the Sharks' questions and eased their concerns about the potential legal liabilities involved in a breathalyzer that would influence users' behavior. And the fact that he already had venture backing didn't hurt.
The pitch was so compelling that investor and Dallas Mavericks owner Mark Cuban almost immediately made an offer of $500,000 for 20% equity, double Yim's initial ask. Cuban said he already had experience in the sensor world with his company MotionLoft and that he thinks it's "the future of technology."
Investor Lori Greiner asked if she could join in and do the retail side.
Cuban's response? "No."
"I'm not worried about the retail," Cuban said. "That's just like a smidgen vs. the long-term benefit."
Then Kevin O'Leary counter-offered with $250,000 for 15%, trying to persuade Yim that giving up less equity was to his benefit.
That's where Yim got clever. Instead of sparking a bidding war, like the one that divided the Sharks in the season's first episode, he encouraged everyone to join in.
"My idea within the next 60 days is to close a full $1 million round from angels," Yim said. "I'm more than willing to open it up to more than one Shark."
The idea for the Sharks to do the whole round was immediately floated, only for Cuban to respond that he didn't want to work with anybody else. But after the other investors showed they were willing to pitch in together, and that a bidding war would be far more expensive than working together, Cuban eventually agreed to a deal where he would put down $500,000 for 15% equity, and the other Sharks the remaining $500,000 for another 15%.
After talking through some concerns with his CFO, Yim accepted the deal, finding the combination of cash, expertise, and publicity too good to pass up.
Aspiring entrepreneurs with good ideas can get a lot out of ABC's reality pitch show "Shark Tank," be it cash, publicity, mentorship, or a national stage.
The show also provides a weekly education on how to successfully pitch your business idea to high-profile investors.
Andrew Figgins, a Chicago-based entrepreneur and owner of the fan site InTheSharkTank.com, says the best pitches stick out for several important reasons.
PITCH: Heath Hall and Brett Thompson presented an award-winning BBQ sauce.
In the first season, Hall and Thompson presented their Pork Barrel BBQ Sauce, which earned them second place at the National BBQ Battle in Washington, D.C. They told the Sharks they were in the process of getting their products distributed in a major grocery store chain and had $30,000 hard copy orders in hand.
They hoped $50,000 for a 10% stake would be the secret sauce.
RESULT: Shark Barbara Corcoran invested $50,000 for a slice of the bacon.
Corcoran invested for half of the company and joked that the entrepreneurs should dress like pigs to push the products in grocery stores. When they landed a deal with Costco, they happily complied. There’s now a Pork Barrel BBQ Restaurant, and the sauces line the shelves of more than 300 supermarkets.
PITCH: Alan Kaufman created a hands-free umbrella that also keeps users warm.
Even before his first-season "Shark Tank" pitch, Alan Kaufman’s dome-like umbrella, called Nubrella, was a hit on the Internet. He'd sold over 3,000 units and had orders from 47 countries.
The hands-free Nubrella straps to the body, can sustain 35mph winds, and protects users from the wind chill. He asked for $200,000 for a 25% stake.
See the rest of the story at Business Insider
The word "no" doesn't mean no forever. It doesn't even mean no for 20 minutes on "Shark Tank."
In the latest episode of ABC's reality pitch show, billionaire investor Mark Cuban called entrepreneur Chris Johnson "a fool," yet later decided to invest $300,000 in his business.
Johnson was after an investment of $300,000 for a 10% equity stake in his company, Rapid Ramen Cooker, which produces square-shaped bowls that give ramen noodles stove-top taste despite being cooked in the microwave.
Johnson said he would use the money to manufacture his cookers, which cost $0.75 each to make and sell for $5.99.
From the beginning, Cuban questioned the need for an actual cooker to make ramen noodles. "You're drunk [when eating them] — it doesn't matter," the investor argued.
In three months, Johnson was able to get his cooker in over 2,500 stores, including Safeway, H-E-B, Winco, and Raley's, and brought in over $164,000 in sales. He predicted sales would hit $2 million in the next year.
When Johnson said that he's so confident in the projected growth of his company that he wouldn't sell it for $3 million today, Cuban said what no business owner wants to hear: "You're a fool. I'm out."
Sharks Kevin O'Leary and Robert Herjavec decided to team up, offering the funding for a 25% stake plus $0.75 every time a Rapid Ramen is sold until the investment is repaid. The royalty would then drop to $0.25 per unit.
At this point, Cuban jumped in and said he would provide Johnson with the $300,000 for 20% equity, but $150,000 of it would be in the form of a loan.
Johnson counter-offered with 15% equity to a hesitant Cuban.
"You know I'm going to be the one grinding," Johnson said. "I'm going to be the one making it happen. I will outwork every single one of your entrepreneurs."
This was exactly what Cuban needed to hear. He accepted the offer.
The lesson here is to believe in your product, don't be afraid to negotiate, and even when someone says "no" to you, it doesn't mean you can't turn that "no" into a "yes."
According to the clause, all contestants were required to give Finnmax, Shark Tank's production company, either 2 percent of their profits or 5 percent equity in their company. This rule applied regardless of the deal struck with investors, and all contestants since Season One were obliged to agree to it.
"FYI, there is no additional equity or percentage of anything taken any longer. That was removed retroactively," he told a group of former contestants. "I told them I wouldn't come back this season if it wasn't." ABC and Sony Pictures Television declined to comment.
Cuban also wrote that if the clause stayed in place, the "quality of the companies and entrepreneurs would decline." The reason: Savvy entrepreneurs aren't willing to trade an automatic stake in their company for appearing on a show without a deal, says Ami Kassar, a New York Times financial columnist. Here, he explains the pitfalls of that arrangement (emphasis ours):
"Remember that when you're giving away equity, you're getting married to your investors. Make sure that your value and ideas are in synch. And keep in mind that if your company ever wants to borrow money in the future, it's likely that any investor who owns 20 percent or more of the company will have to guarantee the loan personally. Will your investor be willing to do that? And if your investor is promising expertise and help the way the sharks do, make sure they spell out precisely what they mean before you sign."
Cuban said the clause was removed retroactively, meaning every contestant who's appeared on the show since Season One will be relieved of the commitment. However, how that will work out logistically remains unclear.
Radio DJ R Dub looked sharp, knew his numbers, and even had help from R&B star Brian McKnight when asking for an investment in his radio show on ABC's reality pitch show "Shark Tank."
But none of that could save what was seen as a bad investment in a very bad industry.
R Dub was looking for a $75,000 investment in exchange for a 10% equity stake. His pitch? To expand "Sunday Night Slow Jams" by hiring a sales manager for the program.
"We feature the ultimate mix of love songs from today and the classics from back in the day, but most importantly, special coast-to-coast listener dedications that we call 'oral expressions,'" R Dub explained, to chuckles from the Sharks. Those chuckles turned into oohs when, seconds later, McKnight walked onto the floor and began serenading his audience.
But it wasn't enough.
"So, syndicated radio is a horrible business," investor and Dallas Mavericks owner Mark Cuban began.
"Do 19- and 20-year-olds really listen to slow jams?" fashion entrepreneur Daymond John asked.
"I love romantic music, but when I sit here and think about you really expanding, I'm not sure it's just this sales manager that you need," inventor and entrepreneur Lori Greiner added.
Then venture capitalist Kevin O'Leary put the nail in the coffin.
"The radio market as an investment sucks," O'Leary said. "I can tell you that as an institutional investor. This is radioactive waste out there. It's terrible."
R Dub walked away with no money, and it's hard to imagine anyone doing any better.
It's a lesson any aspiring entrepreneur can take to heart. Knowing your product is only half the battle. You've also got to pick a profitable industry.
Now in its fifth season, ABC's hit reality pitch show "Shark Tank" has made entrepreneurship and the process of acquiring funding a cultural phenomenon. It's also provided countless examples of pitches that work and pitches that fail miserably.
Is there a formula for crafting the perfect "Shark Tank" pitch? Pierce Marrs, a sales and communications coach who does a weekly podcast recapping the show, thinks there are some basic rules any aspiring deal-maker should know. His tips don't only apply to "Shark Tank" hopefuls; they're useful takeaways for any entrepreneur looking for money.
Below, Marrs shares his top strategies for making a perfect presentation.
Minimize stress, and master the "30-second stare down."
A little known fact about "Shark Tank" is that before contestants begin their pitches, they must stand on a mark in front of the Sharks and not say anything for about 30 seconds. This gives production the chance to get a few static shots and also helps the Sharks size up the mettle of their contestants. Can they handle their nerves? Do they keep their cool or get fidgety? In fact, Marrs says he's interviewed contestants who were told to wait 15 or 20 minutes on that mark without speaking to anyone. It's essential to remain composed before, during, and after the pitch. "Everybody needs to be set at ease for it to be a happy negotiation and presentation," he says.
Know your numbers, inside and out.
"The cardinal question is about how much sales you have," Marrs says. "That question right there can make or break you." Contestants on the show need to know their numbers inside and out. How much does the product cost to make? How much does it retail for? How many markets are they currently in? What other marketing opportunities are available? Knowing the data is part of knowing the product, and the Sharks are looking for people who can rattle off those figures in their sleep. Plus, the numbers better be impressive, because that's something you can't charm your way around.
Remember you're pitching an investor, not your mother.
One of the top mistakes hopeful entrepreneurs make, Marrs says, is to make their presentations as if they were talking to friends and family members. Your mother might think everything you say is delightful, but the Sharks won't be so easily convinced. Assume your audience will be skeptical, and be prepared to back up claims about your product with evidence. More importantly, don't be shocked if the Sharks make disbelieving or snarky comments about your pitch and product. Think of the toughest questions and criticism you could face and have responses ready.
Show, don't tell, how awesome your product is.
Most of the contestants on "Shark Tank" bring a sample with them. But the most effective pitchers turn that sample into a compelling demonstration. Just last week, for example, a family from California landed offers from both fashion entrepreneur Daymond John and technology guru Robert Herjavec for their land-based surfboard invention, Hamboards. It's probably not a coincidence that John and Herjavec were also the only two Sharks that chose to try out the boards themselves, riding them up and down the stage. Once the Sharks connected with the product, they were far more willing to take a chance on it.
Most importantly, know what each Shark looks for, and appeal to it.
The Sharks care about and value different things, and understanding that is the most important part of succeeding on the show, Marrs says. Dallas Mavericks owner Mark Cuban, for example, wants to see a hard worker who will go above and beyond for the business. For Kevin O'Leary, an educational software businessman, it's all about the money. And while John can be tough, he softens up for people that are struggling to pull themselves up by their bootstraps like he did. The best contestants on "Shark Tank" don't just know how to pitch to any investor — they understand how to connect with each individual.
"The biggest mistake that I see people make is that they believe people will buy their product, their service, their company, for their reasons," Marrs says. "To move people, to persuade people, to sell people, you’ve got to look at things through their eyes."