BuzzFix: On 'Shark Tank', Is it Authentic Business Deals or More of TRPs?

Shark Tank has somehow managed to change the financial dynamics for many businesses all across the globe. For those who don’t know, it is a business reality television series which aims at helping budding entrepreneurs. The show features a panel of investors deemed “sharks.” The role of sharks is to decide whether to invest while entrepreneurs make business presentations pertaining to their businesses or products. With that, the sharks often brainstorm, or find weaknesses and loopholes in an entrepreneur’s product or business model.

The show first premiered in 2009 in the US and ever since, it has been a powerful way for entrepreneurs to grow their business. Also, it has been a major hit. However, one question that pops up time and again is if the show really fulfils its purpose. Meaning, is it really helping businesses or is it just another reality show which is boosting TRP and helping the channel get more audience?

In 2016, a Forbes report discovered that a total of 319 businesses accepted deals on-air in the first seven seasons of the show. Out of these, Forbes spoke to 237 business owners and discovered that 73 per cent did not get the exact deal they were offered on TV. However, it did not turn out as bad for many contestants because the publicity of appearing on the show ended up being way more worthy than the deal.

Sippline

Amid hundreds of pitches that the show receives, some turn out to be a massive hit and some just don’t work out that well. Having said that, everyone recently became aware of Rohit Warrier after he made headlines. Warrier, the founder of Sippline Drinking Shields, had pitched masks for drinking glasses on the show. At that time, his project was dissed as “wahiyat.” Shark Ashneer Grover had reacted to him asking, “Bhai kya kar raha hai yaar tu? Mazak hai kya? Aap kya bohot zyada peete ho kya? Matlab ye idea aapke dimaag mein aya bhi kaise ki glass ko mask pehnauga? (What have you been doing? Is this a joke? Do you drink a lot? How do you get the idea to make glasses wear masks?).” The criticism did not stop Warrier from pursuing his goals and he continued believing in his idea. Now, Sippline has turned out to be one of those brands which is doing tremendously well.

In one of his tweets, Warrier showed how he is promoting his products at The Hotel Show Dubai 2022. Sharing his experience at the show, Rohit wrote on LinkedIn, that he is pleasantly surprised that people in Dubai know him and even asked for selfies.

Here are a few big wins and failures at the show:

Wins

ReadeREST

ReadeREST is a magnetic pocket clip which enables you to hang spectacles to the front of your shirt while they are not in use. Lori Greiner invested $150,000 for a 65% percent stake.

Squatty Potty

The product is basically a stool, which is designed to be placed on the floor in front of your toilet. The purpose is to help one in doing the bathroom business easier by changing the position of legs when you sit down on the toilet. Lori Greiner invested $350,000 for a 10% stake. According to Failory.com, it is worth $175 million in sales.

Scrub Daddy

Scrub Daddy is a smiley face-shaped sponge. It changes hardness depending on water temperature. The scrub becomes firm under cold water and soft under hot water. The purpose is to make scrubbing utensils easier. This has been one of the best shark tank products due to its huge success. The founder, Aaron Krause, is now a multi millionaire. The brand’s revenue is estimated to be $209 million as of 2023. Lori Greiner invested $200,000 for a 20% stake.

Failures

ShowNo Towels

The idea behind the product was to design a towel shaped like a poncho. However, it did not turn out that well. It raised $75K for 25 per cent equity from Lori Greiner. The company had a deal with Disney, which eventually fell apart.

Breathometer

It is a portable device working with a smartphone app that measures blood alcohol levels. It raised $1m for 30 per cent equity from Kevin O’Leary, Mark Cuban, Daymond John, Lori Greiner, Robert Herjavec. Even though the idea was great, the business ran into a lot of problems after the deal. The company was unable to fulfill orders, the results were inaccurate and it reported a blood alcohol level way below the actual value at times. Shark Mark Cuban called it the “worst execution in the history of Shark Tank.”

Foot Fairy

An iPad used for measuring children’s foot sizes. It raised $100,000 in exchange for 40 per cent equity from Mark Cuban. The founders did not have any experience building an app so they hired developers. The app built was filled with bugs. Also, it did not capture commission payments. Hence, the deal with Shark Mark Cuban never closed.

Is the show authentic?

The show has always been questioned about its ‘authenticity.’ There have been many conversations with the contestants throughout the year and a new revelation was mad every time. Matt Canepa and Pat Pezet appeared on season four of the show and pitched their company Grinds. The idea was to sell chewable coffee pouches. The owners then agreed to give Daymond John and Robert Herjavec 15 per cent equity for $75,000. However, the deal was denied in negotiations. Speaking to Forbes about the same, Canepa said, “Pat and I went on the show 100% wanting to get a deal. He further added, “Regardless of whether or not you get the deal, there are a lot of success stories.”

Jon Shanahan also appeared on the show as the cofounder of men’s makeup company Stryx. Initially, the deal was made with Herjavec for $600,000 in exchange for 10 per cent equity. However, in a recent interview with Forbes, Jon revealed, “They told us they were not moving forward with no explanation why, even though we asked several times.”

In another similar instance, Holly Cooper revealed that she still has not gotten a definitive answer from Corcoran on the deal which was made three years ago. Holly is the founder of Nashville-based food truck business Fried Green Tomatoes.

Aaron Krause, on the other hand, is believed to have benefitted the most from the show. While speaking to CNBC, he revealed, “What I learned is if you’re unprepared, you’re the bait. And the Sharks will eat you alive.” He ensured that he watched every episode of the show before pitching. “I was ready so that I could answer all the questions,” he says.

Keeping everything in mind, the show does help the businesses in need. However, sustainability ultimately depends on many other factors. The deal that people achieve on the show does give a strong foundation to the company/product but it is very important to be able to materialise the same. There have been many cases where the deal died during negotiations. Also, at the end, its the audience who is the ‘real sharks’. The consumption of the product solely depends on the audience. If you’ve won them with your pitch, you’ve won the deal, and if not, there is nothing that can save you.

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