“So how will your product dominate the market over the next couple of years?”
As I sat across from Peter and processed his question, I wondered whether I might fail miserably in answering him. As a product manager, answering this question should be simple, right? It should be reflexive!
Up until that point, I thought I had done a decent job discussing the vision of our product with our investor. I had demoed well, discussed our roadmap and validated the product-market fit. However, Peter was doing what investors do: Seeking world domination. I took a deep breath and laid out a vision that tied together my beliefs around the product, business model, market needs and competitors. I thought I had done a decent job and — fortunately — my peers would validate that belief later on that day. Phew.
That same night, I decided to unwind in front of the TV, settling on a “Shark Tank” rerun. “We’ve seen this one, right?” my wife would ask. “The one with ‘Squatty Potty’? Oh yeah, more than once,” I replied. “Never gets old.”
For the uninitiated, the format of “Shark Tank” goes something like this: Entrepreneurs pitch their businesses to a panel of investors (“sharks”). They lead off with an uncomfortable, contrived jingle that was definitely coerced by the producers. This is followed by a Mark Cuban signature eye-roll. Then, a flurry of tough questions, some regurgitation of hard numbers and personal stories around perseverance. Ultimately each pitch ends with an investment decision from the sharks, which is most often a hideous royalty offer from Kevin O’Leary. (Despite my snarkiness this is easily my favorite show.)
In comparing my “pitch” earlier to what I was watching on the screen, my gig didn’t seem so bad. I was pitching an established product to one guy in a small room. On my television was a father of five pitching a keg built into an arcade game that would be broadcast to the world.
On the other hand, the objective was the same, wasn’t it? We were both trying to convince an audience (whether it be one person or a panel of billionaires) that our business had a healthy future. Shouldn’t we be comfortable pitching our products to a “shark” in front of a worldwide audience?
Most of us won’t get that chance. So for fun, I decided to put together a simple test to run any product through the “Shark Tank” gauntlet. For each shark, there’s a question based on his/her area of focus. For added measure, there’s a common question that spans the entire group.
To take the test, give your product/business a grade of 1 (weak), 2 (average) or 3 (strong) for each area of focus. Add them up, and see where your product sizes up.
Now entering the tank, you …
- Mark Cuban. Cuban loves the innovative stuff. He is constantly trying to identify pillar companies that will create new markets or disrupt existing markets. He embodies “go big or go home” and can sniff out true innovations against the “wantrepreneurs”. How innovative is your product? Will it revolutionalize your market?
- Lori Greiner. The “Queen of QVC” is one of my favorite personalities on the show. She’ll make offers only when the product appeals to the mass consumer market. While niche markets and products have their time and place, they won’t scale to Lori’s satisfaction. How vast is the market need? Is your product solving a common problem?
- Daymond John. Daymond hails from the manufacturing and fashion industry and knows a thing or two about turning a profit based on tangible goods. Often on the show, he’ll dig deep on costs of goods sold. In today’s business ecosystem overpopulated with unicorns, it’s tempting to chase only the revenue. Daymond is disciplined enough to pay attention to the profit model. How much money does your product cost to make? Will the costs of supporting the product/business someday lead to insolvency?
- Kevin O’Leary. Yeah, sure, Kevin’s all about licensing and royalty fees and often makes pretty terrible offers to desperate founders. However, he’s also the one paying better attention to barriers to entry such as patents and opportunity for imitation. How protectable is your business or product? Would it be difficult for others to replicate your business model in short time?
- Barbara Corcoran. Barbara — more than the other sharks — will make gut-feeling investments because she believes in the investor’s story, passion or energy. How strong is the culture at your company or group? Is the energy level high enough to weather through the hard times? For established companies, do your peers have passion for the work you’re doing around the product?
- Robert Herjavec. Robert will gravitate toward “cool” products (which is different than “innovative”). A cool product will be memorable, different and get a new friend’s attention at a cocktail party. How does your product size up to your competitors in terms of differentiation? Is the brandstrong?
- All sharks. Sales, sales, sales. Show me the money. Revenue numbers are asked for on almost every “Shark Tank” pitch. After all, there is no better signal of product success and market validation. Are folks willing to pay for your product?
So, how’d you do?
7–11 points: “And for that reason, I’m out …”
12–16 points: “I’m going to make you an offer, but you’re probably not going to like it…”
17–21 points: “This rarely happens, but all five sharks would like to make you a deal…”