Business Lessons from Shark Tank

crypto.bbt
5 min readSep 30, 2020

I want to find out how to pitch and negotiate effectively. So I decided to learn from the legendary Sharks.

In this Shark Tank series, I will take note of how to engage in critical conversation and how to talk business. These three presentations are from Season 8 Episode 20 of Shark Tank.

Let’s get started:

1. Save lives with the See Rescue Streamer

First up is See Rescue Streamer, asking for $200,000 for 20%, with a 1 million valuation.

The See Rescue Streamer is the only continuous and passive signalling device that can help rescuers find you quicker.

The first thing mentioned in a pitch is valuation.

Usually, with a ridiculously high valuation, the sharks would be disinterested immediately because it shows that the entrepreneur did not do enough homework to work out the valuation.

However, in this case, the company had made $15 million in the past 15 years from a military licensing deal, making 1 million a decent valuation of the company.

The red reflective material that allows rescuers to see and rescue the trapped.

Mark Cuban mentioned 2 important things for him to consider, as an investor.

  1. How much work is involved?
  2. How big can this business get?

Addressing these two issues can be challenging.

Work involved

In this case, the work involves connecting the company with the military and government to make this item compulsory for soldiers and field personnel.

Either that, or starting fresh in the retail market. Shifting focus to consumers would also take much effort to set up.

It needs infrastructure, it needs marketing and it needs digital, it needs social media, it needs it all.
- Mr Wonderful

For an individual entrepreneur, that might be worthwhile but to the investor, it might be not reap enough return-on-investment (ROI).

Scaling

Scaling is one of the key aspects of a deal. How many customers can you reach with this product?

Maybe the product becomes mandatory for all life jackets, or maybe not. If it succeeds, it can make tremendous profits, but if the mandate does not pass, the company might not scale to the intended size.

For an entrepreneur, it’s important to consider the scalability of a product to get a reasonable return-on-investment (ROI) for its investors.

Know EXACTLY who your customers are.

One thing noted is that he knew his core customer base was not the hiker or diver themselves, but their loved ones. Targeting their close friends and family is a good strategy as the adventurer often overlook the risks in these activities.

2. Booty Queen Apparel

Butts. Are. Back. That’s a powerful opening statement.

Booty Queen Apparel is a high quality fitness apparel line that fuses comfort, fit, and fashion and focuses on… the “BOOTY.”

Source: https://bootyqueenapparel.com/

Ultimately, when the sharks probed deeper, they realised that her leggings are not innovative or proprietary and that she was selling with her social media persona of the “booty queen”.

But that is ok. Her brand and customer base are also assets and bring value. That’s the rising power of influencers and social media.

Analyzing The Risks

  • The big booty trend might fade and is not sustainable.
  • The whole business relies on the branding of one person.

On The Bright Side

  • They have consistent return customers.
  • They can sell complementary products through this platform, expanding their product line easily.
  • The investor only has to help with distribution and backend and leave the marketing and sales to the couple.

Now the company sells more than just leggings and their website features equipment and training packages too.

More than often, investors are also investing in the people, not just the product and company. In this case, the booty queen has an amazing personality and had a great energy during the presentation. Since Daymond has core competency in clothing, he is definitely the perfect partner for them.

3. Anti-theft Loctote Industrial Bags

Loctote created lockable backpacks that would be both stylish and technically outstanding.

Source: https://loctote.com/

A shocking $300 price tag to this seemingly simple bag.

However, this is extremely useful for travel or adventure. Personally, my phone had been stolen while I was in Vietnam in 2016, so I know the need for secure bags while travelling. Even after I am back from travelling Europe, my bag always has a lock, in case I have to leave it unattended.

Crazy Social Media Videos

To attract the attention of consumers, they made extravagant videos to test the strength of their bags.

These include slicing the bags with samurai knives and slashing someone who is wearing this fabric on their chest. These viral videos helped them get traction on Kickstarter and Indiegogo and most importantly, get to their customer base: the millennials.

Source: https://loctote.com/pages/bear-proof-bags

Their website states that the bags are “Grizzly-Bear certified”. What a bizarre yet eye-catching certifications. These viral videos help to get attention of not only their customers, but also their investors.

What I Would Have Done Differently

The overall presentation was quite stale, I would inject more humor and personality into the speech.

Concluding

These are my lessons from the Season 8, Episode 20 of Shark Tank. Honestly, I enjoyed summarizing and analyzing these pitches. Hope you enjoyed reading it as well.

If you have any suggestions, please do leave a comment!

Next week, we’ll look at the different gimmick products in the Shark Tank. Are they a flash in the pan or an actual business?

Till next time!

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