If you’re a real entrepreneur then I’m sure you’ve watched an episode or two of Shark Tank. I’ve been a fan of the show since the beginning and have watched every episode. Sometimes my kids watch it with me and I enjoy the small business lessons embedded into the program that they may pickup at their early age. While some people say it’s all showbiz and not much real biz, I disagree. There are many lessons an entrepreneur can learn by watching Shark Tank.
- You need to be able to explain your business to an outsider within 2 minutes or less so they understand exactly what you’re doing and the size of the opportunity.
- You need to know your numbers inside and out.
- Have a clear plan to reach your goals.
- Be realistic with expectations and back them up with real numbers.
- Sometimes they simply bet on the person even if the original plan is flawed but can be fixed.
- Look for synergy.
The other reason I love watching Shark Tank is because I got to experience a similar situation as an entrepreneur presenting my business to potential sharks with real money. Not once, not twice but three times. Sure this was in 1999 and 2000 before the show first aired, but this was the REAL DEAL where the winner of one event received a $5 million investment!
After spending my time as an entrepreneur presenting my business plan to potential sharks on one side of the table I also got the pleasure of BEING A SHARK on the other side of the table for many years as well. This was a fun experience reviewing business plans, watching entrepreneurs present their business to me and fighting with my fellow sharks on which business was the best to invest in.
While Marcus (The Profit) likes to focus on People, Product and Process I had a similar approach during my shark days. I looked at the size of the market opportunity, the entrepreneur’s plan and finally at the entrepreneur. Did they have the skills and drive to get it done?
Listen to today’s eCommerce Story Time podcast to hear all the juicy details from my adventure.
In early 2000, the biggest business plan competition of them all offered a grand prize investment up to $10 million hosted by Hummer Winblad Venture Partners called “February Madness”. With Mr Hummer’s experience as a professional basketball player, it was designed like the popular “March Madness” basketball structure with 64 teams (business plans) being chosen out of 100’s who applied. Then each team competes head-to-head in their bracket to move on while the loser being eliminated. There’s no loser’s bracket here, when you lose, you’re done so it’s all on the line.
Qualifying student teams hail from a diverse range of schools, including Harvard, Columbia, University of Tokyo, London Business School, Wake Forest, MIT, Stanford, University of Nebraska, University of Miami, Purdue and Claremont McKenna College. For the complete list of qualifiers, visit the tournament Web site at http://winbig.humwin.com. Source
You see that? University of Nebraska representing in the top 64, I made the first cut! I then went head-to-head and continued to win each bracket until I reached the sweet 16 stage. At this point we travel to our regional bracket of 4 and present head-to-head to Hummer Winblad representatives who make the final decision on who moves to the final 4. I organized my team, fine-tuned my Power Point slides and off we went to Louisville, KY. It’s show time!
We had 30 minutes to present and another 15-20 minutes for questions and answers. My team each did their part, the opportunity, the team, the plan and the numbers. We felt like we knocked the cover off the ball. We knew we identified a huge market opportunity and we felt we had a unique approach to the market and I was also confident in my ability to get it done. There’s nothing the judges couldn’t like and based on their expressions during the presentation I knew we had their full attention. I figured we had already won this thing and just needed to go through the steps to get to the $10 million finish line.
Dupsky said he had thought his team had a fairly good chance to continue in the contest and possibly receive investments from Hummer Winblad. Source
The first eBay drop off store. This was the core of my 1999/2000 business plan. I was going to open small retail locations in strip malls all across the country where people and local businesses can drop off items that we would sell on eBay for them and charge a commission. I also had plans to reach out to local businesses to help them liquidate their surplus inventory as this was an area I had real-life experience with in my corporate career. It was the first ever eBay drop off store idea of its kind. Documented, planned and all the numbers crunched in my 20-30 page business plan ready to fund and conquer the world!
After presenting to the Hummer Winblad judges they said they liked my business plan overall and see the large market opportunity. They simply stated, it’s a lot like Overstock.com but on eBay. Those are two big trends combined together. I liked their view on my business. They said the one part they didn’t like about my business plan was the idea of opening retail locations across the country to “acquire inventory”. They said this was the one and only thing that they didn’t like about my plan. The simple reason was due to the higher overhead and complexity to manage in addition to the larger need for investment capital to grow. They said if you came to us with a plan to open distribution centers across the country and acquire surplus inventory from companies in bulk and then sold it on eBay, I think we would be in love with your entire business plan. They felt this was a better approach to the market. At the time, I was a little hesitant to take their advice as I spent months researching and building my idea but I told them I’d be happy to make adjustments to the plan if they were my new partner.
While flying home and having time to think about the feedback I received during the business plan competition I started to look at things in a new light and started to agree with the judges that opening retail locations will be a heavy load to lift before even producing my first sale. I was already producing sales without a retail location. Maybe I need to re-think this part of the plan.
After all 4 regional competitions were over, it was time for Hummer Winblad to announce the winners moving onto the final 4. I was disappointed not to make the cut and my pursuit of the $10 million was over. However I was more committed than ever to pursue my vision with some minor modifications. At this point I had a team of 3 interns helping me “build the business” and things were getting very real very quickly. More great stories to come on this stage of my eCommerce/eBay business adventures.
So who won the competition you ask? Sure, I can’t end the story here without telling you who actually won. The winner of the February Madness business plan competition was MyDrugRep.com from the University of California at Irvine. A business focused on helping doctors learn about new and existing drugs and order samples. They received a $5 million investment from Hummer Winblad. You can read more here.
I feel I received valuable advice and learned many lessons worth millions in my mind during these business plan competitions. In some ways far more valuable than receiving the money.
Things are heating up at this stage. I hired 3 interns to help me transition from a hobby seller into a real business. Watch for future episodes as I share these exciting stories and valuable lessons with you.
Cheers to selling smarter,
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