ENT 630: Wk 5-Reactions to It’s a Jungle in There
Every time I’ve ever watched the show, Shark Tank, I’ve actually watched no less than four episodes in a row. Curse you CNBC Prime! Stop luring me in with your savvy investors, entrepreneurial sob stories, and brilliant business ideas. In spite of the manufactured drama, I have learned a lot of helpful tips for entrepreneurs and investors by watching this campy show.
One of the questions the “Sharks” ask entrepreneurs quite frequently is, “are you doing THIS (insert business venture) full time?”. Typically, they ask this question to measure the entrepreneur’s commitment to the company, level of comfort with risk, and generally to see if the person is “all in.” I’ve even seen Kevin O’Leary turn down adorable kids with thriving businesses because school takes up too much of their time and he would rather invest in an entrepreneur, founder, or CEO who can devote all of their waking hours to the business.
This concept of investors only investing in the company if they believe in the entrepreneur behind the company is not unique. We all might roll our eyes at Kevin O’Leary, but Schussler in his book, It’s a Jungle in There, echoes this same exact sentiment in chapter 15: Marketing Yourself to Market Your Product. He says, investors often ask him, “How invested are you in your idea?” (p. 110) Schussler says it’s easy to say “I’m invested 100%”, but when you show them, you are invested by your actions they can’t help but be convinced. Not everyone has to turn their home into a rainforest café prototype or spend millions of dollars mocking up restaurant concepts in a Minneapolis warehouse. There are easy, no-brainer things you can do to show how serious and dedicated you are to your ideas when meeting with investors. Schussler has strong ideas about sending the right message to investors through:
- Physical appearance- wear a suit
- Hand Shakes– know the right balance
- Body Language- act interested; nod your head up and down, etc.
- & Business Cards- convey your concept through the item you leave behind
Don’t forget, not all meetings are scheduled. You might meet an investor at a party, on an airplane, or in the elevator. Always be ready to impress. Make an impression by making the person laugh or tell a story. Stories stick with people and leave an impression. And finally, if you are at a point in your entrepreneurial journey that you can quit your day job, you are approximately 50%* more likely to make a deal on Shark Tank if you are “all-in.”
*success odds calculated purely from my “expertise” in binge-watching Shark Tank. Not statistically valid.
ENT (630): Wk 2: What are you willing to risk for your ideas?
In his book, “It’s a Jungle in There”, Steven Schussler, serial entrepreneur and founder of the Rainforest Café, speaks candidly about his tolerance for risk. On a scale of 1 to 10 he’s a 15 on his propensity toward high risk ventures. As a young man he was repeatedly turned down for jobs in his desired field of radio and TV advertising. Steven decided to dress as superman and have himself delivered in a barrel to his “would-be-boss’s” office. The picture he paints is quite hilarious and you should read it for yourself. Spoiler alert: he gets the job.
While vivid and funny, this scenario brings up big questions for an entrepreneur. We ask ourselves: what am I willing to risk for this venture? For this idea? For a chance at success? For the answers, we must search our souls (and/or study our own cognitive bias) and decide what we are comfortable with.
For the bigger question of: how do I begin to analyze this risk? The good news is, there are resources to guide you. Well respected analysts publish articles on risk, business strategies, and entrepreneurial endeavors on a regular basis.
The word risk implies a certain amount of assumption. However, not all assumptions are healthy or accurate. Four great risk assumption “don’ts” are outlined by Scott D. Anthony for HBR. Here are the big four flawed assumptions and how they relate to Steven Schussler’s Superman approach:
- Assuming that taking action is the biggest risk. – Steven had more to gain from donning the superman suit than to stay in his dead-end job and keep getting turned down in interviews.
- Believing that good entrepreneurs seek out risk. – Steven didn’t try to find the hardest path possible. He tried many traditional avenues like sending out his resume, calling stations, and interviewing for positions before pulling his superman stunt.
- Celebrating failure to encourage risk taking. – Steven never celebrated an uncalculated failure because he didn’t take one. He did his homework on his “would-be-boss”, had interviewed with the man several times before, and knew he had a sense of humor.
- Thinking that rewarding success will boost risk-taking. – This assumption doesn’t fit Steven’s superman scenario, but it does fit a later anecdote in the book where Steven starts a side business and is fired for calling in sick to his day job. His risk taking was boosted by his failure rather than his success.
Avoiding these common four assumptions is a great starting place for gauging entrepreneurial risk. Combine these “don’ts” with extensive research and an awareness of your own cognitive biases and you will be well on your way to setting realistic expectations for the risk you will assume in your next venture.