I commonly see the sharks pitching the āvalue of having shark on your teamā when negotiating deals on the show. I wonder what you think the value of having a shark is in dollar terms. Is it worth $50k? $100k? $1m? What value do you put on having a shark (separate from the value of the money they are contributing. Think excess value)?
Personally, I do not place much value on having a shark.
I work with PE firms and they similarly pitch the value of the operations partnerās experience. In reality, that āexperienceā results in a once annual meeting with that partner where he sets KPIs and targets, and then a monthly meeting with a PE associate who tracks your progress against those targets. I see the value of these meetings, but itās not something I would pay for the pleasure of experiencing.
Another thing I hear the sharks say is āWhen I call (insert distributor here) they pick up!ā Yes, that is generally the way phones work. One person calls, and the other person picks up. Jokes aside, of course the buyer picks up. Itās literally their job to find products for the store. Itās what they spend all day doing. A company like Walmart isnāt going to miss out on a winning SKU just because they havenāt heard from Damon on it. They also arenāt going to buy and stock a losing product just because their friend Kevin OāLeary asks them to really nicely. These stores have processes in place to find new products and do not depend on the sharks for this function.
Finally, I often hear āthe power of the tankā get confused with āthe value of a sharkā. I agree that going on national television and doing a great demonstration is very valuable for a B2C company. The tank gives business a huge amount of free publicity. Itās like a free 10min commercial, with the added benefit of not being framed as a commercial. However, you get that value by being on the show. Doing a deal doesnāt provide any excess value in this regard.
What do you think? How do you value having a shark on your team? Do you think I missed something? Or oversimplified any of the points? Iād love to get a conversation going.