While reality shows seem to feature fantasy over reality, I find it very interesting when motivated and hardworking entrepreneurs become the subject of a long-running reality show like Shark Tank. Running for 10 years already, the Shark Tank in the United States has produced many successful ventures that turns over millions of dollars annually.
In this video, I explore what small business owners like you and me can learn from successful entrepreneurs of Shark Tank.
In two previous videos, we discussed certain prominent judges of the US version of Shark Tank and the lessons we can learn from them (link forthcoming).
This time, I explore lessons from two of the most successful business ventures to come out of that series—and one venture that failed to seal a deal with a Shark but became one of the most successful companies to come out of Shark Tank, and was later bought by Amazon for more than US$1 billion in 2018.
Lesson from Scrub Daddy: Provide a solution to a pain point
Aaron Krause is the founder and inventor of Scrub Daddy, a non-scratching reusable sponge that made cleaning very easy, thanks to the scrub’s characteristics. He developed his first scrub in 2006, but failed to secure any sales, and so sold most of his sponges to the 3M Company as scraps. In 2011, in need of sponges to clean off his own lawn furniture, he discovered that his special sponges got the job done without scratching any surface.
In 2012, he went into the Shark Tank and secured a deal with Lori Greiner. To date, Scrub Daddy has made more than US$50 million since its pitch.
Scrub Daddy provides a simple solution to an everyday problem. It makes cleaning easy. But that’s not all—the product has also been lab tested to rinse clear of debris and resist odors for up to two months. Krause and Greiner, both inventors, have said it again and again—successful products are ones that provide easy solutions to your customer’s pain points.
It all boils down to your customers. How can you help them? How do your products and services minimise or even eliminate their pain points? How can you improve the products and services you offer today to make sure that you provide a better solution to your customers’ pain points?
Lesson from Tipsy Elves: Identify risks and diversify
Founded by college friends Evan Mendelsohn and Nicklaus Morton, Tipsy Elves started out as a company that designed and sold ugly Christmas sweaters. The company differentiated themselves from other ugly sweater creators by using higher quality materials and also by teaming up with Save the Children, an American non-profit organisation, in dedicating a portion of their profits to providing underprivileged American children with winter clothing. After their pitch, they partnered with Robert Herjavec.
One of the risks that Herjavec and the founders of Tipsy Elves identified from the very beginning is the seasonality of the product—it only came out during a few months in the year. So one of the things that they immediately worked on was diversifying their product line so that the company has business the entire year. They have since expanded to over twenty clothing categories, including Hawaiian shirts and swim trunks, patriotic clothing, and Halloween costumes. Since their pitch in 2014, the company has seen more than US$50 million in revenue.
Most, if not all businesses experience business cycles—and throughout the year, there will be lean months and there will be months when we see a lot of business.
The question you should ask yourself is, how can you diversify so that you can have more business during the lean months? What can you do so that you can extend your busy months?
Lesson from Ring: Have a focused vision
In 2013, Jamie Siminoff pitched his product, then called Doorbot, a doorbell with a camera that sent video to users' smartphones. Despite having made solid sales for Doorbot, Siminoff walked away without a deal. His appearance in Shark Tank only increased interest for his doorbell camera, but this is a story of overcoming many challenges.
The first set of Doorbots he launched into the market produced poor video quality and had spotty WiFi capabilities. Siminoff had to spend 9 months responding to customer complaints. Funding also continued to be a challenge.
But Siminoff was motivated by his purpose: to make neighborhoods safer for everyone. He designed his smart doorbell because his wife had difficulty hearing when someone rang the doorbell and also because of his own concerns for home security. While there were smart doorbells in the market, it did not provide the benefits that he wanted from one.
So he pushed forward. Eventually, he was able to work with a manufacturer who could improve the quality of his doorbells. He also found partners to work with, one of whom suggested to change the name from Doorbot to a simpler name, Ring, that had a better recall.
He was also introduced to Richard Branson who lead the last round of funding for the company. In case you did not know, Branson sometimes appears as a guest judge on the Shark Tank. You could say that Siminoff eventually walked away with a deal from a Shark.
In 2018, Ring was bought by Amazon for US$1 billion.
When things became difficult, Siminoff held on to his purpose and his vision for the company. He was specifically motivated by his desire to provide a solution for an important pain point: home security—much like how Scrub Daddy offers a solution for a pain point in home cleaning. And Ring itself has diversified, offering other complementary home security products—much like how Tipsy Elves diversified their product lines.
If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.