Ever wondered what the investors on Shark Tank are looking for in the entrepreneurs that pitch to them on the show?
You’re in luck. The US cast sat down with Vanity Fair recently and spilled the beans on their top traits for up and coming entrepreneurs.
Their advice ranges from sensible and obvious to the esoteric — but they’ve provided some examples, so let’s dive in.
For Lori Greiner and Mark Cuban creativity is a foundational trait for any entrepreneur, whether it be selling software or, as it happens, sponges.
“Creative thinking is always really important to business because you’re competing and you want to try and give yourself an edge,” Cuban said.
Greiner used Scrub Daddy’s pitch from season four as an example. The kitchen sponge product was invented by Aaron Krause to shake-up the kitchen cleaning category.
Know your numbers
While knowing the financial position of a business might seem like obvious advice to any business owner, Kevin O’Leary explained having a good handle on the figures can be the difference between success and failure on the stage.
Good entrepreneurs “understand their business model, understand the market they’re in, they understand the challenges they’ve got and they are able to measure with the numbers”, Leary said.
His example? Jenni-Lyn Williams’ Snarky Tea business, which appeared on the show late last year.
Williams knew her cost of customer acquisition, her average order value and marginal cost like the back of her hand.
Or … have “chutzpah”
Don’t know your numbers? No problem, according to Barbara Corcoran.
Corcoran says she looks for “chutzpah” in an entrepreneur, although she doesn’t really explain what that means.
She did provide an example though, the inventors of a blanket-sweatshirt product called the Comfy, who went on the show without any inventory, or in-depth figures.
“They had two examples of it, no inventory, they didn’t know their numbers, but they had the courage to sit there and pitch as though they had gold,” Corcoran said.
I guess that means confidence? Charisma?
Business isn’t easy. If it was, everyone would do it, Cuban says.
That means successful entrepreneurs need to be problem solvers.
That can mean solving problems within your business or solving a problem with your business.
“Being successful in business is never a straight line,” Cuban said.
Drop Stop, a car accessory that sits between the centre console and a seat to stop things falling down, does just that.
Motivate others, and sell well
“Do you want your team coming out of the office where they work for you or with you and they’re like I don’t want to be here, they’re on Instagram the rest of the day,” explained shark Daymond John.
“People want to feel like they’re part of a movement.”
Motivating is important, its good for employee satisfaction, and selling to potential clients.
Anyone looking for an example of a master salesperson should look no further than De-Boned Baby Back Rib Steak founder Al “Bubba” Baker.
Be open-minded and listen
Cuban and Griener hammered home the message that diversity isn’t just good corporate citizenry, it’s also good for business.
“Look at your workforce, do they all look like you? Do they look different from each other? Do they have different experiences,” Cuban said.
“It’s really about allowing people to speak up and encouraging them to speak about their experiences … all it takes is one good idea.”
Cuban and Greiner couldn’t look past Alice’s Table founder Alice Rossiter, who has created a business out of helping other women create their own businesses.