Shark Tank is a reality television phenomenon featuring 6 multi-millionaires who
ID: 424965 • Letter: S
Question
Shark Tank is a reality television phenomenon featuring 6 multi-millionaires who give an audience to entrepreneurs hopeful to gain their financial support and business know-how. The show provides a good depiction of the types of concerns and potential investors may have of entrepreneurs. It has been suggested that if you make it out of the tank, you can make it anywhere.This assignment asks you to watch an episode of Shark Tank (current or past) and provide a brief analysis on two of the ideas pitched by entrepreneurs. Your analysis should be written in paragraph form, 2-3 pages in length (not including cover and reference pages) and include the following:
Name of Product Product Use Name of Entrepreneur(s) Describe the “deal” the entrepreneur(s) presented? What was the outcome of the deal? Did a shark bite? Using concepts from the text and other resources, analyze the “deal” and sales pitch made by the entrepreneur(s). What would you recommend the entrepreneur(s) do differently if you were given the opportunity? Was the feedback given by the sharks consistent with the concepts as highlighted in the textbook? Support your positions accordingly. Differentiate the approaches of the two entrepreneurs you selected, what did you observe? Using the strategies suggested in the text, rate the level of effectiveness of both entrepreneurs.
*Note you can watch old episodes of Shark Tank at http://abc.go.com/shows/shark-tank/episode-guide or you can search your local listings. Shark Tank is a reality television phenomenon featuring 6 multi-millionaires who give an audience to entrepreneurs hopeful to gain their financial support and business know-how. The show provides a good depiction of the types of concerns and potential investors may have of entrepreneurs. It has been suggested that if you make it out of the tank, you can make it anywhere.
This assignment asks you to watch an episode of Shark Tank (current or past) and provide a brief analysis on two of the ideas pitched by entrepreneurs. Your analysis should be written in paragraph form, 2-3 pages in length (not including cover and reference pages) and include the following:
Name of Product Product Use Name of Entrepreneur(s) Describe the “deal” the entrepreneur(s) presented? What was the outcome of the deal? Did a shark bite? Using concepts from the text and other resources, analyze the “deal” and sales pitch made by the entrepreneur(s). What would you recommend the entrepreneur(s) do differently if you were given the opportunity? Was the feedback given by the sharks consistent with the concepts as highlighted in the textbook? Support your positions accordingly. Differentiate the approaches of the two entrepreneurs you selected, what did you observe? Using the strategies suggested in the text, rate the level of effectiveness of both entrepreneurs.
*Note you can watch old episodes of Shark Tank at http://abc.go.com/shows/shark-tank/episode-guide or you can search your local listings. Shark Tank is a reality television phenomenon featuring 6 multi-millionaires who give an audience to entrepreneurs hopeful to gain their financial support and business know-how. The show provides a good depiction of the types of concerns and potential investors may have of entrepreneurs. It has been suggested that if you make it out of the tank, you can make it anywhere.
This assignment asks you to watch an episode of Shark Tank (current or past) and provide a brief analysis on two of the ideas pitched by entrepreneurs. Your analysis should be written in paragraph form, 2-3 pages in length (not including cover and reference pages) and include the following:
Name of Product Product Use Name of Entrepreneur(s) Describe the “deal” the entrepreneur(s) presented? What was the outcome of the deal? Did a shark bite? Using concepts from the text and other resources, analyze the “deal” and sales pitch made by the entrepreneur(s). What would you recommend the entrepreneur(s) do differently if you were given the opportunity? Was the feedback given by the sharks consistent with the concepts as highlighted in the textbook? Support your positions accordingly. Differentiate the approaches of the two entrepreneurs you selected, what did you observe? Using the strategies suggested in the text, rate the level of effectiveness of both entrepreneurs.
*Note you can watch old episodes of Shark Tank at http://abc.go.com/shows/shark-tank/episode-guide or you can search your local listings.
Explanation / Answer
Mellisa Butler is the Founder and CEO of Lip Bar and Rosco Spears is the creative director. Lip Bar makes custom vegan lipsticks in varied shades in a cruelty-free manner. The inspiration behind the product was cocktails. They asked for $125,000 for a 20% stake in their brand. No shark bit on this deal, moreover everybody criticized them for various reasons. The margins they were making were great, beauty is a multimillion dollar industry and the messaging behind the brand was also great. Despite this, just because of the low confidence levels in the business aspect of things, the founder couldn’t justify the value created by the product. The idea did not look scalable as Mellisa made the lipsticks in her kitchen. This practice raised some serious concerns with all the judges. Identifying the exact need that the product or service has targeted is very important and sticking to only one message while communicating with the consumers may have gotten this brand a little ahead in the competition. The margins were huge but the competition was intense as well and without figuring out the product, the growth strategy looked precarious.
Yuen Young and Peter Young were the founders of ‘How do you roll’ sushi restaurant in Austin, Texas. They are following a franchise model and have targeted to set-up 40 stores out of which 15 have been opened and 2 are corporate stores. The restaurants offer a fast-casual, create your own sushi restaurant which can customize your sushi i.e. they combine the food quality of a sit-down restaurant with the convenience of a grocery store. They target the affordable food customer who wants to cut down the hassle of going to a sit-down restaurant for a quality sushi experience. They offered a 12% share in their corporate company which owns all franchises for $ The founders substantiated the idea by rolling a custom made sushi for a shark in a short time. They had experience in the family restaurant business. Featured rolls
The founders bagged $ 1 Mn for a 20% stake in the corporate entity with a promised pay-out to the investor every year depending on the annual cash flows.
Their presentation was very structured and had the required depth in terms of finances and economics of the business. The operations were already running successfully and the fact that they had an investor for $ 6.6 Mn for a 75% stake, substantiated the model further.
If the founders could have reproduced some market research for sushi restaurants or similar no frills, quick serves then the other sharks would have also gained interest and they could have negotiated the deal without the annual payout.
They started franchising 2.5 ago. 2 corporate stores. 1 yr oldest franchise. 10-12$ average bill. Cash flows $250,000 per year only due to royalties. 40 total. 15 open.
Contrasting this pitch with the Lip Bar one, we can notice that the numbers and the distribution channel holds importance while deciding on investments only after a pitch. The product offered has to target a specific need of a consumer and that needs to come out in the pitch. Lip Bar had a unique proposition but that could have been replicated by any other brand as well. The more valuable proposition of a vegan, cruelty-free approach didn’t come out during the pitch. Lip Bar pitch also lacked nos. and market share aspects. The Lip Mobil was an untested concept as well.
As learnt in the course, the Angels invest in the entrepreneurs and not solely in the idea. The confidence and the research of Melissa, founder of Lip Bar, failed her when the judges vehemently disregarded their product. They could have worked on an idea to prove the quality of the product to the judges who couldn’t try the lipstick on. This could have been a simple market survey or a customer story video. The sushi entrepreneurs worked on the experience part and also made sure that the judges gained confidence on their venture by showcasing their background as a part of their family business.
Summarizing, the Lip Bar founder should have stuck to explaining the idea, RoI and growth strategy. The preparation itself would have made her more confident on the stage and she could have contradicted the snubs of the judges by facts.
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