11 Entrepreneurial Lessons learnt from Shark Tank.

by Darpan Sachdeva

The show Shark Tank, where entrepreneurs pitch investors for capital, has some great business lessons to learn from.

1.Hustle is necessary

Hustle is necessary, but not sufficient. Successful entrepreneurs like Elon Musk, who famously worked 100-hour weeks to launch Tesla and SpaceX, demonstrate the power of hustle. However, hard work alone doesn’t guarantee success.

Consider the story of Airbnb’s founders, who faced rejection from investors seven times before securing funding. Their perseverance, combined with a innovative business model, ultimately led to success.

Conversely, Elizabeth Holmes of Theranos worked tirelessly but failed due to a flawed product and ethical issues. This illustrates that hustle must be paired with a viable business model and integrity.

The key is to hustle smart. Jeff Bezos didn’t just work hard; he strategically identified opportunities in e-commerce. Similarly, Alibaba’s Jack Ma combined relentless effort with adaptability to local markets.

Successful entrepreneurship requires a trifecta: the right vehicle (business model), the right knowledge (market understanding and skills), and the right you (passion and perseverance). When these align, hustle becomes a powerful catalyst for success.

Remember, hustle in the right direction. Work hard, but also work smart, ethically, and strategically. Your effort should drive you towards your vision, not just keep you busy.

2.Do your homework

“Do your homework” is a crucial lesson for entrepreneurs, both on Shark Tank and in the real world. Successful business leaders like Elon Musk, Steve Jobs, and Jeff Bezos are known for their meticulous research and preparation. Before launching SpaceX, Musk spent years studying rocket science and space technology. Jobs’ attention to detail in product design and user experience set Apple apart from competitors.

In negotiations, knowledge is power. When Zappos founder Tony Hsieh sold his company to Amazon, he had thoroughly researched Amazon’s culture and values, ensuring a smooth transition. Similarly, when negotiating with investors or potential partners, understanding their background, interests, and past deals can give you a significant advantage.

Customizing your pitch is equally important. When pitching to different audiences, successful entrepreneurs tailor their message. For instance, when seeking funding for Airbnb, Brian Chesky and his co-founders created personalized cereal boxes for potential investors, demonstrating creativity and market understanding.

Remember, thorough preparation not only impresses potential partners but also builds your confidence and credibility. Whether you’re in the Shark Tank or navigating the global business landscape, doing your homework can be the difference between success and missed opportunities.

3.Know your business.: what does that mean exactly?

“Know your business and industry better than anyone else in the world.” –Mark Cuban

This is the fundamental principle that separates successful entrepreneurs from the rest. It means having a deep understanding of your numbers, industry, and market landscape. Successful Shark Tank pitches demonstrate mastery of key metrics like sales, cash flow, and customer acquisition costs. But it goes beyond numbers – it’s about truly grasping your industry’s dynamics and challenges.

Take the story of Scrub Daddy, a simple sponge that became a multimillion-dollar success. Aaron Krause knew his product, market, and numbers inside out, impressing the Sharks and securing a deal. Conversely, the Rolodoc pitch, dubbed the worst in Shark Tank history, failed because the founders didn’t understand social media – the very core of their business.

Before diving into entrepreneurship, immerse yourself in your industry. Study successful competitors, understand market trends, and identify unique opportunities. This knowledge will not only help you make informed decisions but also inspire confidence in potential investors and partners. Remember, in the world of business, knowledge truly is power. Arm yourself with it, and you’ll be ready to face any challenge that comes your way.

4.The best businesses solve real problems.

The entrepreneurs that succeed in landing a deal usually have one thing in common: their business solves a real problem. Typically, the problem the entrepreneur sets out to solve was one they experienced themselves.

This principle extends far beyond Shark Tank, with countless real-world success stories. Take Airbnb, born from the founders’ struggle to afford rent, which revolutionized travel accommodation. Or consider Uber, which emerged from the frustration of not being able to hail a taxi easily. Even tech giant Apple began by addressing the need for user-friendly personal computers.

Conversely, businesses that fail to secure funding often don’t solve an actual problem. They’re either novelty products or solutions to non-existent issues. Remember the infamous Juicero, a $400 juicer that simply squeezed pre-packaged juice?

The lesson is clear: successful entrepreneurs identify genuine pain points and create innovative solutions. Whether its Spanx addressing women’s undergarment needs or Beyond Meat tackling environmental concerns, these businesses thrive because they meet real demands. As an aspiring entrepreneur, focus on solving tangible problems. Your personal experiences can be a goldmine of business ideas. By addressing real issues, you’re not just creating a product; you’re providing value and improving lives.

5.Investors buy into people as much as ideas.

The Sharks on Shark Tank consistently demonstrate that a passionate, likeable entrepreneur can be just as crucial as a groundbreaking idea. This principle extends far beyond the show, as evidenced by real-world success stories.

Take Sara Blakely, founder of Spanx. Her infectious enthusiasm and relentless drive impressed investors and customers alike, propelling her shapewear company to billion-dollar success. Similarly, Elon Musk’s unwavering vision and charisma have attracted investors to his ambitious ventures, from Tesla to SpaceX.

However, not everyone is a natural-born presenter. If public speaking isn’t your forte, consider partnering with someone who complements your skills. For instance, Apple’s Steve Wozniak, the technical genius, found his perfect match in the charismatic Steve Jobs, who could captivate audiences and investors.

Remember, authenticity is key. Investors can sense genuine passion and integrity. Be honest about your strengths and weaknesses. If you’re not the front-facing type, focus on honing your expertise and finding a partner who can effectively communicate your shared vision. Together, you can create a dynamic team that appeals to investors and drives your business forward.

6.Don’t be blinded by passion.

“I think passion is overrated. Everyone has a lot of passions. I have a passion for sports – a passion for music. That doesn’t make it a business, and that doesn’t make you qualified to run the business.” –Mark Cuban

Passion is the fuel that drives entrepreneurs, but it’s crucial to balance it with objectivity. Successful business leaders like Elon Musk and Steve Jobs were passionate about their visions, but they also listened to market feedback and adapted accordingly.

Consider the story of James Dyson, who created 5,126 failed prototypes before perfecting his revolutionary vacuum cleaner. His passion drove him forward, but his willingness to learn from each failure ultimately led to success.

Similarly, Airbnb’s founders faced numerous rejections and setbacks but remained open to advice and market needs. They pivoted their initial concept multiple times before finding the winning formula.

The key is to use passion as a motivator while remaining receptive to constructive criticism and market realities. Conduct thorough market research, seek mentorship, and be willing to pivot when necessary. Remember, even the most successful entrepreneurs have faced failures and learned from them.

Passion combined with adaptability and perseverance is the true recipe for entrepreneurial success. Let your enthusiasm drive you forward, but always keep your eyes and ears open to opportunities for growth and improvement. This balanced approach will help you navigate the challenging but rewarding path of entrepreneurship.

7. Know your numbers.

This is the golden rule echoed throughout Shark Tank, and it’s a lesson that resonates far beyond the show. In the fast-paced world of entrepreneurship, passion alone isn’t enough to secure investments or drive sustainable growth. Successful entrepreneurs like Elon Musk, Jeff Bezos, and Sara Blakely have all demonstrated the power of understanding their financials inside and out.

Consider the story of Spanx founder Sara Blakely, who started with just $5,000 and grew her company into a billion-dollar empire. Her intimate knowledge of her numbers allowed her to make informed decisions and pitch confidently to investors and retailers alike.

Similarly, when presenting to potential investors or partners, being able to articulate your revenue, costs, margins, and projections shows that you’re serious about your business and have a clear path to profitability. It’s not just about impressing others – having a firm grasp on your financials empowers you to make strategic decisions, identify areas for improvement, and capitalize on growth opportunities.

Remember, numbers tell the story of your business. By mastering this aspect, you’re not just preparing for a pitch – you’re setting the foundation for long-term success in the global marketplace

8.Be humble.

This is a crucial lesson for entrepreneurs worldwide. While confidence is essential, arrogance can be detrimental to business success. Take the example of Zappos founder Tony Hsieh, who famously maintained a modest lifestyle and prioritized company culture over personal gain. Similarly, Patagonia’s Yvon Chouinard built a billion-dollar company while staying true to his environmental values and living simply.

On the flip side, the downfall of WeWork’s Adam Neumann serves as a cautionary tale. His extravagant lifestyle and inflated ego contributed to the company’s spectacular crash. In Shark Tank, investors often shy away from entrepreneurs who prioritize personal luxury over business growth.

Humility allows entrepreneurs to remain open to feedback, learn from mistakes, and build genuine connections with customers and investors. It fosters a growth mindset and helps create a positive company culture. As Richard Branson once said,

“A business has to be involving, it has to be fun, and it has to exercise your creative instincts.”

By staying humble, entrepreneurs can focus on what truly matters: building a sustainable, impactful business that solves real problems for customers.

9.Focus on the customer, not on yourself.

This is a crucial lesson from Shark Tank that resonates across the business world. While personal passion is important, successful entrepreneurs understand that their primary focus should be on solving customer problems. Take Airbnb, for example. The founders didn’t just create a platform because they loved travel; they identified a gap in the market for affordable, unique accommodations.

Similarly, Uber’s success stems from addressing customer pain points in transportation, not just the founders’ desire to build a tech company. These companies thrived because they prioritized customer needs over personal ambitions.

On Shark Tank, we often see that the most successful pitches are those that clearly demonstrate a deep understanding of the target market. Entrepreneurs who can articulate how their product or service solves a real problem for customers are more likely to secure investments.

Remember, your personal story matters, but primarily as evidence of your insight into customer needs. As you build your business, constantly ask yourself: “How does this benefit my customers?” This customer-centric approach will not only impress investors but also lead to sustainable business growth and success in the global marketplace.

10.If you’re not making money, it’s just a hobby.

Kevin O’Leary’s famous saying, “Any business that after three years isn’t profitable isn’t a business, it’s a hobby,” rings true for entrepreneurs worldwide. While passion is crucial, profitability is the lifeblood of any successful venture. Consider Amazon, which took nearly a decade to turn a profit but had a clear path to monetization. Or look at Airbnb, which faced initial skepticism but became profitable within four years by solving a real market need.

Contrast these with countless startups that burn through capital without a viable revenue model. The key is to differentiate between a hobby and a business early on. Hobbies are enjoyable pursuits, but businesses must create value and generate income. Successful entrepreneurs like Elon Musk with Tesla or Sara Blakely with Spanx didn’t just follow their passions – they identified market gaps and built profitable enterprises.

Remember, profitability doesn’t always mean immediate success. It’s about having a clear, realistic plan to generate revenue and scale. So, while you nurture your passion, always keep your eye on the bottom line. That’s what separates thriving businesses from expensive hobbies.

11.Just because your friends and family love your idea, doesn’t mean it’s a good idea.

Entrepreneurs often fall into the trap of relying too heavily on positive feedback from friends and family. While their support is valuable, it’s crucial to remember that their opinions may be biased or sugar-coated to avoid hurting your feelings.

Consider the case of “Elephant Chat” on Shark Tank. The creators invested $100,000 in a product they believed would revolutionize relationship communication, only to face rejection from all the sharks. This illustrates the importance of seeking objective feedback and conducting thorough market research.

Successful global entrepreneurs understand the need to validate their ideas beyond their immediate circle. They seek input from industry experts, conduct surveys with potential customers, and analyze market trends. Companies like Airbnb and Uber faced initial skepticism but persevered by continuously refining their ideas based on real-world feedback.

Remember, constructive criticism is invaluable. Embrace it as an opportunity to improve your product or service. Seek out mentors, join entrepreneurial networks, and participate in startup incubators to gain diverse perspectives. By challenging your assumptions and remaining open to feedback, you’ll increase your chances of developing a truly viable and successful business idea.

Darpan Sachdeva is the CEO and Founder of Nobelthoughts.com. Driven by a profound dedication to Entrepreneurship, Self-development, and Success over an extended period, Darpan initiated his website with the aim of enlightening and motivating individuals globally who share similar aspirations. His mission is to encourage like-minded individuals to consistently pursue success, irrespective of their circumstances, perpetually moving forward, maintaining resilience, and extracting valuable lessons from every challenge.