If you’re like me, every Friday night, you tune into the Dragons Den for your weekly entrepreneurial pep talk and pick-me-up. You may even find old episodes of the British equivalent of Dragon’s Den and when you’re done watching those, you turn to the Canadian version.
Shark Tank, in my opinion, is one of the most entertaining reality TV Shows on television. BUT it’s about as instructive for entrepreneurs looking to start and grow their businesses as watching an episode of Million Dollar Listing is for getting advice on how to sell your home. Here’s why.
You Don’t Need Venture Capital or a Billionaire Angel Investor
The tech bubble we’re surrounded with right now along with shows like Shark Tank has propagated a belief that the only way to start or grow a company is through raising round after round of venture capital or the investment from a super-rich angel investor. Of the hundreds of thousands of new companies formed in the United States each year, the vast majority do not receive funding from venture capitalists. Look around you. There are thousands of successful businesses, whether it’s the restaurant in your city with six locations, the plumbing company with 100 employees, or the person importing from China. They all started with no venture capital.
Now the bad news is that most businesses need some capital to start. But often, this money is far less than entrepreneurs imagine. Most people can start a business importing from China for $2,000 or less. And the vast majority of most types of businesses can be started with money that you can beg, borrow, and steal from friends, family, and *gasp* credit cards. And if you do need more capital, whether it be from an investor or bank, both are much more attracted to entrepreneurs who have scrapped their way to some initial wins without necessarily a ton of money. Access to large amounts of capital should affect your velocity and acceleration, not whether you can get off the ground or not.
Your Company Doesn’t Need to Make Billions of Dollars and Conquer the World
When venture capitalists invest in a company, they need that company to be mammoth. A $5 million-dollar company generating $500,000 of profit is of little interest to most venture capitalists. But for me? I’d be more than happy pocketing $500,000 a year! Venture capitalists notoriously HATE lifestyle businesses, and they’re also not fans of “small businesses” with a few employees and low 7-figure revenues. The vast majority of companies, many very successful, fall into either the lifestyle business or small business category, and there’s nothing wrong with this.
Venture capitalists have a mantra of “go big or broke.” They need the next Uber or Facebook as their entire business model and investment strategy is built around these home runs. In fact, many venture capitalists would happily run ten successful small businesses into the ground in the hopes of turning just one of them into a unicorn.
Many years ago, I attended a conference, and the speaker spoke about once facing a crossroads for their company: she had to decide whether to be a small company or a big company. At the time, I thought this was the craziest thing that I had ever heard. Why would anyone choose to be a small company?! But eventually, I understood there are many tradeoffs to being a big company. Be honest with yourself about what type of company you really want to be, and remember that there’s nothing wrong with choosing to be small.
There’s No Silver Bullet for Your Company or Idea
This one isn’t a bash towards the concept of Shark Tank so much as the entrepreneurs who go on it. Countless times, you’ll see an entrepreneur on Shark Tank who is looking for, even more than money, mentorship and guidance from one of the Sharks. They think that if Mark Cuban can turn the Dallas Mavericks from a 20-62 team into an NBA Championship team, he could surely sprinkle a little bit of magic dust on their company and make it hugely successful. Wrong!
Mark Cuban has dozens upon dozens of other entrepreneurs he’s invested in, and entrepreneurs would be lucky to get more than a few sporadic minutes of his advice. Ultimately, he expects the entrepreneur to do almost all of the grunt work. And the same applies to your business, Shark Tank or no Shark Tank. Ultimately, you need to do the work. There’s no person, no app, no Gary Vaynerchuk motivational video, and no online course that is going to do the hard work and sweat equity for you.
If you’re considering starting a business importing from China, or any other business idea, you ultimately need to be the one to kick your butt into gear, start your business, and make the hard decisions. For better or worse, this blog tends to attract a lot of comments along the lines of “can you recommend some products I should import and also tell me some good suppliers for them.” That’s like asking Colonel Sanders for his secret recipe mix and then asking him for permission to use his kitchen! They’ve put no work into researching a product or suppliers, and they want someone else to do all of the hard work for them.
Despite the tone of this post, I still think Shark Tank is one of the best shows, if for nothing else than for a motivational kick in the rear end from time to time. And for something else, there are also solid nuggets of practical advice that can be found from episode to episode as well. But Shark Tank should not be the Torah for how to start and grow your business (because, as everyone knows, that job is already filled by EcomCrew!). Even if you look past the fact that Shark Tank is, at the end of the day, a made-for-prime-time business show (meaning any advice already has to be taken with a big grain of salt) the truth is that many of the takeaways are applicable to some entrepreneurs, but not to most.
What do you think? Is Shark Tank a good show to watch for entrepreneurs? Or is it just reality TV hidden under the CNBC syndication veil of being a business program?