What You Can Learn From "Shark Tank" And Its Recent College-Student-Themed Episode

By Melody Chi on February 25, 2015

Okay, so, “Shark Tank.”

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For those of you who don’t know, that’s not Animal Planet’s newest spin-off. Rather, it’s a show produced by ABC in which candidates pitch their product to a panel of self-made millionaires and billionaires, called “Sharks.”

The purpose? To gain funding from and sometimes even the partnership/guidance of at least one Shark to help their business grow.

Side note: You can watch “Shark Tank” episodes on ABC’s website here.

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The most recent episode, episode 20 of season 6, was a themed one that focused on products developed in college by college students. As a university alumna, this gave me a wonderful opportunity to analyze the show and the episode specifically for what other college students can learn from both.

First, however, I feel that I have to review this episode, especially because it contains a controversial segment that sparked an intense fight among the five Sharks.

Let’s give you a quick introduction to the 5 Sharks on the panel for this episode:

1.) Mark Cuban

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2.) Kevin O’Leary

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3.) Daymond John

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4.) Lori Greiner

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5.) Robert Herjavec

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Likewise, I’ll quickly list off the products that were featured.

1.)    LuminAID: a solar-powered, inflatable light that can be used to provide illumination in emergencies.

2.)    Taaluma Totes: travel backpacks made from unique fabrics representative of countries across the world. The funds from the sale of each backpack funds a microloan for a person in the country that the fabric is sourced from.

3.)    Keen Home: a smartphone–or tablet–controlled air vent for your home that helps you to separately control the temperature of every room in your house.

4.)    Scholly: a scholarship app available for high school, college and grad school students. The app allows you to search a database of thousands of scholarships for ones that fit you based on various criteria, such as GPA, state of residence, or intended major.

Now, the controversial product that got the Sharks into a feeding frenzy was Scholly, the scholarship app. Scholly cofounder and CEO Christopher Gray asked for $40,000 of funding in exchange for 15 percent equity (basically, 15 percent ownership of the company).

The amazing part wasn’t that he got exactly what he wanted from two Sharks, Lori Greiner and Daymond John, but that they didn’t even let Gray finish his explanation before, as another Shark Kevin O’Leary put it, “[forcing] $40,000 down his throat like a goose for pâté.”

Basically, Greiner and John unbelievably didn’t even let Gray describe his app’s algorithm or how many scholarships his database contained before interrupting and offering him a deal.

O’Leary said that Greiner forced Gray to take the money like a goose is force-fed for pâté. (image via Tim Dutton on flickr.com)

The other Sharks understandably put up a fuss, declaring that Greiner and John were taking pity on Gray by offering him a deal without hearing all about the drawbacks of his company or his future plans for it. Even Gray himself wanted to explain more about his business and hear the offers from the other Sharks.

What’s my opinion about all of this, you ask?

Well, there didn’t seem to be any indication that Greiner or John felt bad for Gray, although I think it’s obvious that all of the Sharks could relate to his story of growing up in a low-income family.

The Sharks, however, have shown in previous episodes (and even this episode) that no matter how much they empathize with a candidate and a candidate’s mission, it’s ultimately all about two things: profit and business. If it won’t make them money, they don’t care much that it’ll literally help starving kids in Africa.

The Sharks only care about money. (image via Philip Taylor on flickr.com)

In fact, there was no evidence that Lori Greiner and Daymond John were motivated to “help” Gray by anything other than greed. In my opinion, Greiner saw a great opportunity to make money and swooped in to make a deal that Gray pretty much couldn’t refuse.

She did this before the other Sharks could get into the bidding and potentially make her grant a less advantageous offer or could “scoop” the deal with Gray from her hands. It appears that, once Greiner jumpstarted the bidding, John felt that waiting for the other Sharks to get into it was foolish, and he jumped into her boat (which accompanied going along with her justifications).

Although the other Sharks truthfully might’ve been somewhat irritated over missing an opportunity to put forth an offer for such a tempting company, I think they were more aggravated over the fact that Greiner didn’t follow the Shark Tank honor code—that is, she didn’t follow the correct procedure that consists of taking turns asking questions, which allows all of the Sharks to analyze a candidate and his business value.

Greiner’s fellow Sharks were also appalled that Greiner obviously hadn’t had time to finish analyzing Scholly’s total value (taking into account its advantages and drawbacks) before making an offer, which Shark Robert Herjavec plainly said was a foolish business move and not even a respectful charity offer.

Thus, Lori Greiner and Daymond John’s greed and violation of the honor code was the blood in the water that led to the Shark feeding frenzy.

What do you think?

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If my analysis confused you, BusinessInsider.com provides a helpfully concise overview of the Sharks’ argument over Scholly here.

Now that I’ve given you a play-by-play of the episode, we can move on to how this applies to college students.

Aside from learning that even the simplest or most ridiculous ideas can be profitable, there are several concepts you can acquire from this episode and the show “Shark Tank” in general.

1. Start early (so time can be on your side!).

image via Steve Grosbols on flickr.com

One of the main reasons the college candidates were able to get face time with the Sharks on this episode in the first place is that they had spent at least a year (and usually much more than that) thinking up and developing their ideas.

This meant that they had had time to work through a lot of the bugs that plague start-up businesses and had already come up with detailed plans for their futures.

In fact, the problem that all of the Sharks had with Taaluma Totes was that the founders had only been working on creating the business for one year, which the Sharks felt was not enough time to experience and deal with all of the ups and downs a company inevitably experiences.

Think about it: if you start a business or create a product earlier in your life, such as in college, you gain experience doing so earlier than many others even begin thinking of such things.

Then, when you’re ready to launch (or re-launch) a successful business or product, you already know exactly what direction you’re going and what you’re going to run into, including any potential fall-backs and how to handle them.

Also, as difficult as it is, if you start to save up money in college then this can quickly become a nest egg–through the power of time and interest, that is–that you can use to fund your ideas.

2. Take advantage of your college’s resources.

Business competitions are great ways to snatch up grants. (http://www.noozhawk.com)

Some of the candidates applied for and received grants or patents from their schools to fund their ideas.

For example, Anna Stork and Andrea Sreshta, the creators of LuminAID, used “business plan competitions and grant competitions” hosted through their school, Columbia University, to raise a whopping $195,000 and create their physical product.

The LuminAID ladies also filed two utility patents for their designs under their college (in exchange for 2 percent of their company) so they could avoid having to front their own money for the patents.

Similarly, Ryan Fant and Nayeem Hussain, the inventors of Keen Home, went to the New York University Stern School of Business. They took advantage of their university’s “amazing entrepreneurship program” and landed an $18,000 grant from the Entrepreneurs Challenge business competition to use as seed money.

3. Be realistic.

Crowdfunding resources like Kickstarter can help you raise money for your business. (http://www.oyunfest.com)

This can apply to every step of life, but let’s stick to the business aspect. When trying to start a business or create a new product, be as blunt with yourself as you can so you can avoid problems in the future.

For instance, be frank when estimating how much money you will need to put into the business, as well as how much money you yourself can personally dedicate to it.

If the latter isn’t much, ask yourself if you will, for example, need to use a crowdfunding campaign to fund your idea, like the creators of LuminAID did. The LuminAID ladies gained an amazing $50,000 to use for their product through a crowdfunding campaign, which is all the more impressive when compared to their initial goal of $10,000.

Also, although this may seem like tough love, ask yourself questions you think the cutthroat Sharks would inquire of you. For instance,

i. Is your idea truly fulfilling a need (will there be demand for your product)?

ii. Is your idea scalable? (Essentially, can you successfully and efficiently make your business into a large-scale enterprise, or does it only work as a small business?)

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