What Can Your Business Learn About Innovation from Shark Tank Ideas?
Shark Tank has been around in some form or another since 2001, starting with the Japanese series Money Tigers. Entrepreneurs pitch their idea to a panel of investors, who pick their idea apart before deciding whether and how much to invest. Usually, a dollar amount is set for a small but significant percentage of the company.
And when it comes to innovation strategy, the show can teach businesses quite a bit about how to refine and launch ideas.
Here are Six Things Shark Tank can Teach Businesses about Innovation Strategy.
Eliminate Risk For Innovators
Getting on the show is, on paper, a brutal process. Tens of thousands apply annually for approximately 80 to 100 slots, and those who do get one have no promises of even hitting the air, let alone securing any funding. Nor are the judges particularly kind if they think an idea is a bad one, which means entrepreneurs risk public humiliation on national television, as you can see in the video above.
Yet even if you come out singed from the feedback and without a dollar from the Sharks, it’s worth your business’s time. Just appearing on the show is marketing so valuable that it can double your company’s revenue — or triple it, or more, according to an analysis by Inc. Most of the companies in the above clip are still in business and even thriving.
Even the worst pitch can work out in the end. The notorious Tower Paddle Boards, for example, still managed to impress Mark Cuban, who offered some financing, feedback, and valuable advice that improved the company’s fortunes. For entrepreneurs, if their skin is tough enough, there’s no downside.
Remove both risk and the appearance of risk from potential entrepreneurs. Even if that risk is intangible, like being embarrassed, eliminating it will pay rewards.
Doing Your Homework Pays Off
The most successful contestants are the people who’ve done their research beforehand. They know the judges — as the Pizza Cupcake team demonstrates in the above clip — what the investors have in their portfolios, both on and off the show, and why. They have relevant patents in place. They’ve done their market research and can demonstrate that there’s an interest or need in the product. And they’ve usually practiced their pitch in front of investors, or at least an audience who offers honest feedback, multiple times.
Any work in innovation, internal or external, needs to encourage your group to do the same thing. Clearly developed ideas will win regardless of structure, and anticipating questions and challenges wins over tough audiences.
Innovation Involves Everyone
When you pitch on Shark Tank, you’re not just looking for funding. You’re pitching to a potential mentor. None of the Sharks expect to simply cut their investments a check and let them sink or swim. They want to be right in the center of the business, over the long term, to the point where sometimes the CEO of the company is expected to move their business across states or accept orders if they want to keep going.
Beyond The Tank underscores this with two seasons of sometimes difficult business decisions, where the Sharks offer advice or even actively take the reins of the company temporarily. Your innovation strategy should be built on the same concept; people beyond your innovation team should become invested in what you do and its success.
When Doorbot appeared on the show in 2013, it was a disaster — and CEO Jamie Siminoff acknowledges as much. The sharks were all skeptical that a WiFi-enabled doorbell with a camera in it had any value, and almost all of them passed, with one offering a deal the company couldn’t accept.
A few years later, Siminoff was a guest judge. The sharks may not have seen the value at the time, but consumers absolutely did, and Doorbot began moving far more products and saving the company in the process. Ultimately the company was renamed Ring and sold to Amazon, which uses the online eCommerce giant to streamline its delivery.
This is true even if, unlike Ring, the product has no obvious utility. The Gato Cafe, for example, struck out hard on Shark Tank, yet by 2019, there were 125 cat cafes around the world.
What we can draw from these pitches is that nobody has a complete view of any market, and there’s always room in any innovation strategy for humility.
One of the most invaluable parts of the process, for many entrepreneurs, is the constructive feedback from the sharks, whether it’s positive or negative. They’ve brought products to market themselves dozens of times across a host of industries and are often able to spot problems that are only clear when you haven’t worked with an idea day in and day out. While this can be tough to hear in a high-pressure environment, many entrepreneurs who go on the show incorporate the feedback even without an investment.
Make sure constructive feedback is part of your innovation strategy, as well. It can inspire even people with rough ideas to try again.
It’s Always A Process
Shark Tank’s ideas become more intriguing when you spend a little time with its two-season companion series, Beyond The Tank. That series follows past winners and losers and often finds that just because you have a good idea, expert guidance, and the funds you need, it doesn’t mean that you’re going to be a success. Some companies expand too quickly and need to rein it in, others need to make changes that leave their investors unhappy, and still others struggle to fill key roles consistently.
Beyond The Tank is a superb illustration that innovation is always going to be a process, even after the product is shipped or the service is launched, right down to the details, like packaging. Once that step’s complete, you need to take stock, iterate, pick a new goal, and start it all over again.
Whether you’re looking to be one of the next great Shark Tank ideas or want to build an innovation strategy that’d impress even the sharks, IdeaScale can show you how. Schedule a 30 minute consult today.
This article was originally published on the IdeaScale blog here.