Shark Tank is one of the most anticipated shows to watch, capturing the attention of millions of people. When the doors open and the entrepreneurs enter the tank, they have the chance of their lives to partner with some of the greatest entrepreneurs in the world. What’s it like from the Sharks perspective? What happens behind the scenes? I had the privilege to speak with Robert Herjavec about what happens on his side of the tank. Here’s what he told me:
Jay: Shark Tank, for so many entrepreneurs, is like hitting the jack pot. To receive a capital investment and partner with a Shark who has years of experience and connections to take a company to new heights, is like a dream come true. What’s it like on your end as a Shark once a deal is done?
Robert: Shark Tank is certainly a great opportunity. In reality, it is a lot more than a monetary investment. All of us on the Tank have unique experiences and expertise that can really help a young and budding business develop. But scoring a victory on the Tank is like running a small business. Your friends and family only see the good exciting stuff. Then they go home and say “I should do that”. What they don’t see is the 23 hours a day it takes to get there. What you’re watching is a TV show, but once the deal is done its business. We spend hours, days and months working together. It’s not just about the money, it’s an investment to become part of their journey to success.
Jay: Are there discrepancies that you find out after the show that hold you back from closing on a deal?
Robert: You’d be surprised Jay, but we have a harder time getting the entrepreneurs to close on the deal then for ourselves.
Jay: Why is that? They just made the deal of their life!
Robert: True, but that’s not always how they see it. Shark Tank gets millions of views. The publicity for these businesses that people have never heard of before is extraordinary. They wake up the next morning, and their phones are ringing off the hook, people are flocking to their websites, merchandise is flying off the shelves, and they ask themselves, “Why should I give away a percentage of my business?” What they often don’t realize is that like I mentioned, the value of the Shark Tank is more than the capital, it’s the opportunity to partner with professionals who have tremendous networks and connections to help your business. The spike in sales is nice, but ultimately it will be short lived.
Jay: How much do you know about these companies before they walk through the doors?
Robert: We know nothing about them at all. In fact, if we know them, they’re not allowed on.
Jay: So in those quick minutes that you hear their pitch you’re able to decide if they’re worth all that money and your partnership?
Robert: Not at all Jay. The average pitch is over an hour long. The longest was over two hours, and the shortest was 25 minutes. This is a business deal, and it receives the same scrutiny and due diligence like any other would. The magic of TV editing is to be able to put together the exciting parts and create a reality TV show. If they showed you the entire process nobody would watch it.
Jay: What are your personal criteria that you look for when someone presents their pitch to you?
Robert: Every one of us has different points they look for, but I think we all agree that before anything else, the first thing is to sell me on ‘yourself’. No one wants to invest in a wall flower. At the same time replacing confidence with arrogance is an immediate pass. You need the smart balance or what I call humble arrogance to make the right presentation. After that I personally look for the company’s traction, sales and competitive advantage. Another important point that I look for is, how long is a company’s runway? If you’ve got a great product and are doing great in sales, how much further can we take your product? And this is an important point for any small business. You’ve got to look at your business and be able to judge how much room you have to grow. Before my company started doing business outside of Canada, we were at $100M in sales, which we were pretty happy about. But our room for growth was limited. Once we started building connections worldwide, our “runway” became a lot longer. Always look for ways to expand your market
Jay: Would you have benefited from a Shark Tank opportunity when you started out?
Robert: That’s an interesting question Jay. When I got into the cyber security industry, Shark Tank didn’t exist. In fact, I never had any interest in technology in the first place. I needed a job and a friend of mine got me an interview with a security company. I worked hard at it, developed an interest in it, and after a while I loved it. I had no money, and no big Shark investing with me. Even though you see these entrepreneurs following their dreams and establishing a partnership with us, Shark Tank is not for everybody. Would a Shark Tank investment have helped? Hard to say, but you certainly don’t need to follow that model to succeed. Especially today with the capability of the internet and the advancement of technology, anyone can get into any business they want at any time. If you have an opportunity, grab it!
Jay: Slightly off Shark Tank Topic: As an expert in cyber security, how significant is a cyber threat, especially for small businesses who may believe they are too small to be attacked?
Robert: Jay- It’s this simple: The director of the FBI once said, “There are only two types of company’s that exist; those that are being hacked and those that don’t know they’re being hacked”. Everyone is at risk, big or small. You need protection and constant monitoring to protect yourself. Just look at the headlines every day. The businesses we are seeing being breached all had some sort of protection but the lack of proper monitoring caused tremendous damage. If you don’t have a large budget, find someone to partner with that can help you. Cyber security is like golf, if all you want is to be able to hack along, you can do it on your own, but if you want to shoot well you need help.
Robert Herjavec is a dynamic entrepreneur and a leading Shark on ABC’s Shark Tank. Born in Eastern Europe, he arrived to North America on a boat with his parents after escaping Communism in the former Yugoslavia. From delivering newspapers, and waiting tables, to launching a computer company from his basement, his drive to achieve has led him to the fulfillment of a better life for himself and his family. Robert has built and sold several IT companies to major players such as AT&T. In 2003 Robert founded Herjavec Group, and it quickly became one of North America’s fastest growing technology companies. Today, Herjavec Group is recognized as a global leader in information security specializing in managed security services, compliance, incident response and remediation efforts for enterprise level organizations.
Robert will release his third book, You Don’t Have to Be a Shark: Creating Your Own Success to be published by St. Martin’s Press in May of 2016.