Forget who has talent, who is an idol, who has the voice, and who can dance. We want to know who has the best new product ideas.
The reality TV show Shark Tank debuted in August of 2009 to help find those new entrepreneurs. Potential inventors bring their new product ideas to a panel of potential investors, or "sharks," seeking the capital to bring their ideas to reality. Shark Tank forces potential entrepreneurs to assess the weak points in their products or business plan honestly and have an answer to address them; otherwise, they will be "eaten alive" by the sharks — leaving chastened and without funding.
The show will be entering its seventh season in September. In its first six seasons, the Shark Tank has spawned a number of products as well as crushing a number of dreams. Here are some facts and figures about the sharks and their investment decisions.
(Statistics are current through Season 6, episode 20, nine episodes short of completion, using data complied by Statisticbrain.com from ABC, Forbes, and Business Insider. Stats from other sources are noted.)
- Total Investments – The total dollar value amount invested by the sharks was over $53 million ($53,263,000 with nine episodes to go). Mark Cuban is the top-investing shark with $18 million, even though he only joined the show full-time in Season 3. Robert Herjavec is in second place with just over $10 million invested, and Barbara Corcoran comes in third with $6.47 million invested.
- Deals – Almost 300 deals (297) have been accepted. As you might expect, Mark Cuban leads in the number of deals with 61. However, Lori Greiner is second with 51 deals even though she is also a newcomer (joining in Season 4).
At first glance, Kevin O'Leary appears to be the toughest nut to crack, with only 32 deals even though he has been a shark for all six seasons. However, a graphic from Entrepreneur shows that O'Leary is tied with Lori Greiner for combined successful and unsuccessful pitches at 31% of pitches. Maybe he is being "out-sharked" by the other sharks. O'Leary does hold the record for the largest investment at $2.5 million for 10% equity in Zipz Wine, a single-serving wine product.
- Success Rate – Around half of the pitches end in a deal, but 35% of those fall apart during the follow-up due diligence phase. That does not necessarily spell doom for the product. Lori Greiner's deal for Plate Topper, a more convenient means of storing leftovers, fell apart during due diligence but inventor Michael Tseng still managed to build the product into a $10 million business through affiliations with Wal-Mart and QVC.
- Successful Businesses – Of the products that have been pitched over the years, the leader of the pack is the Scrub Daddy, a cleaning product that changes its firmness with water temperature. Lori Greiner invested $200,000 for 20% equity, and the company made $18 million in its first year after airing.
Other largely successful products include Breathometer, the portable breathalyzer attracting all 5 sharks with a $650,000 investment returning $10 million in the first year; Readerest magnetic eyeglass holders with sales of $8 million on a $150,000 investment; and Tower Paddle Boards, with $5 million in sales on a $150,000 investment.
- Funding/Equity – If you want to succeed, be prepared to give more equity and ask for less money. According to Entrepreneur, the average successful deal netted around $184,345 in exchange for a 26% equity position. Failed deals were seeking $290,000 in return for a 19.6% stake on average. They declare the "perfect shark bait" as a food and beverage product with $450,000 or more in sales and seeking no more than $185,000 for no less than a 25% equity stake.
- Strange Products – There are downright amusing pitches, such as the Uroclub that allowed desperate golfers to urinate in a reservoir in the club handle instead of killing the bushes at the local country club. However, two of the strangest are probably the Drive Suit that made you a real life transformer, converting into a vehicle capable of around 12 miles per hour, and the Sullivan Generator, which proposed to use the Coriolis effect of the rotation of the Earth to make electricity from salt water, as well as produce salt and precious metals.
Do you think you can swim with the sharks? If you have a world-beating concept and/or product for the sharks to consider, give it a try. Make sure you do your homework, set up a proper business plan, seek the right balance of funding and equity, and prepare for the back and forth of negotiation. With luck and perseverance, you'll have the next Scrub Daddy and not the next Sullivan Generator.