After 4 years in the tank, the sharks invested over 20 million dollars in 109 companies, with the average deal valuation totaling $465,850. There are a lot of lessons to be learned about entrepreneurship, investing and selling from the show. In this ebook, we'll explore 5 of these sales lessons. In this 20-page ebook we'll discuss the following ideas: Prospects buy into you just as much as your product or service Negotiation tips and tricks Setting the appropriate deal expectations The rise of the sales consultant Why passion always wins We’ll revisit some of the most memorable episodes of Shark Tank, and what sales lessons you can apply to your own business. More info: http://www.getbase.com

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Before we “dive” in
While the average Shark Tank viewer may watch for entertainment value, the
hit ABC show also provides an education on how to successfully sell your
product to high-profile prospects. In this ebook, we’ll explore 5 important
sales lessons we learned from Shark Tank. Before we “dive” in, let’s learn a
little more about the sharks.
Image source: Rise Interactive

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Prospects buy into you as much
as your idea or product
Real passion and loyalty for a product is a salesperson’s number one asset.
When you’re trying to convince someone that what you have is worth their
money, they can’t just believe in the product, they have to believe in you.
Image Credit: Shark Tank Blog
When Shane Talbott and Steve Nakisher, the founders of Talbott Teas, pitched
their designer beverage company on Shark Tank, they already had an
amazing product. The company had increased from $100,000 to over
$500,000 in sales over three years, with 50% profit margins. The Shark Tank
investors loved the idea and the numbers, but were still reluctant to invest,
citing business conflicts or lack of personal interest in the product. Those who
didn’t bow out immediately kept asking questions, and the real tipping point
came when the Talbott and Nakisher revealed that they had invested
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$300,000 of their own money in the company. Even Mark Cuban’s eyes
widened when they said that, and what he said next was the most telling
analysis in the whole episode: “So you guys…, you believe!”
The fact that Talbott and Nakisher had personally invested so much in their
company made it clear that they were in it for the long haul. They knew they
could take the company all the way themselves, and they were able to prove
that to their potential investors. In the end, Kevin O’Leary offered to invest the
$250,000 the Talbott Teas founders were looking for, but only for a whopping
40% stake in the company; twice what the founders had offered. O’Leary is
known for rarely changing his offers after they’re on the table, but in this case
he ended up reducing his equity requirement by 5%. His reason? “‘cause I
really like you guys.”
The Talbott Teas founders took the deal, and eventually sold their company to
Jamba Juice for an undisclosed amount, in a deal that never could have
happened if Talbott and Nakisher hadn’t been able to go beyond business
metrics and prove that they were 100% personally invested in the product, and
had deep enough domain expertise to see it through.
If you need more evidence that investors will buy into a person just as much
as an idea, look no further than Shark Tank episode 302 and Steve Gadlin’s
hilarious business, I Want To Draw A Cat For You.
Gadlin set himself apart from the crowd instantly with a literal song and dance.
Though his musical business pitch was whimsical, Gadlin clearly knew how to
sell himself. When potential investor Robert Herjavec asked how the business
could go from $9,000 to $100,000 in sales, Gadlin answered, “By working
with me on this, you’re partnering with one of the most creative minds, period.
I strike gold in very unpredictable ways.”
Repeatedly during his pitch to the Sharks, Steve acknowledged that while his
cat-drawing business is the hook, the real investment is in Steve himself, and
his ability to generate creative ideas that make money. Gadlin’s commitment
to selling not just a business, but a partnership, paid off big time. Mark Cuban
couldn’t resist, and offered $25,000 for a 33% stake. Steve walked away with
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an investment that was more than double his company’s total profits. More
importantly, he walked away with a billionaire business partner, which is
exactly what he wanted.
Selling Yourself
The founders of Talbott Teas and I Want To Draw A Cat For You both knew that
making the sale required more than a stellar business idea. To get the money
they came for, they had to make the Sharks feel good about working with
them. That can be tough to do, but it worked, and their businesses have
become two of the most incredible success stories in Shark Tank’s history.
Plenty of salespeople can make friends with a buyer, but maintaining the
relationship is what can really boost sales, and there are a few tried and true
ways of doing it.
1. Keep in touch
A recent Forbes article suggests that selling to your existing customer base is
the best way to increase sales overall. Once you have built a trusting
relationship with a buyer, their willingness to buy more in the future
skyrockets.
2. Follow up promptly
The first time you get in touch with a potential buyer, make sure to tell them
exactly when you will follow up with them. Make a promise, and keep it
quickly. This is one of your best opportunities for earning trust. As Craig
Rosenberg elegantly wrote in a blog post on sales development teams, “your
buyer wants you to follow up.” Research done by Velocify also indicates that
following up on a lead quickly can massively increase your conversion rate.
Tell them you’ll call, and do it! It all boils down to trust.
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3. Treat your customers like friends
Don’t spend all your time trying to sell to the customer. Steven Van Belleghem
illustrates this point beautifully by citing the example of Tupperware Parties
hosted at customers’ homes. These parties were wildly successful at selling
kitchen supplies largely because they created space for friendship and
camaraderie between the seller and the buyer. Buying is often more of an
emotional decision than a reasoned one, and buying from a friend feels good.
All the goodwill and relationship-building in the world won’t help if you can’t
meet your buyer’s needs. Shark Tank has some excellent examples of how
negotiating with the buyer’s needs in mind can help you make the sale.
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Learn how to negotiate
If you know what is important to your buyer, you are in a great position to
negotiate. Figuring out exactly what your buyer values most in a deal allows
you to focus on their needs while still providing you tons of leverage to
negotiate the terms you want.
Image Credit: Local Living
When Aaron Krause pitched his innovative, texture-changing sponge
company, Scrub Daddy, on Shark Tank, three of the Sharks made offers, and
immediately started trying to outbid each other. The bidding war that broke
out among the Sharks gave Krause an amazing level of insight into just how
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desirable his company was, and a good negotiator can always turn that kind of
insight into leverage.
The Sharks’ bidding war wasn’t the only negotiation tool in Krause’s belt. He
had previously had great success selling Scrub Daddy sponges on the home
shopping network QVC, and one of the Sharks, Lori Greiner, has a major
reputation for investing in QVC products. Greiner’s status as the “Queen of
QVC,” along with her aggressive bidding for Scrub Daddy, made it clear that
she placed more value on the product than any of the other Sharks. Before it
became obvious that Greiner was the best Shark for this deal, Krause
exercised several well-known negotiation tactics that helped him secure more
advantageous terms.
1. Never accept the first offer
Krause flatly refused Kevin O’Leary’s offer of $100,000 for 50% equity in Scrub
Daddy. This was a powerful tactic because it showed that Krause wasn’t
desperate to make a deal. Power negotiation expert Roger Dawson outlines
the reasons for always rejecting first offers on his blog, but what it boils down
to is that if you take the first offer, you aren’t negotiating. And if you aren’t
negotiating, you should be.
2. Focus on the other side of the deal
Krause knew that Lori Greiner was “the queen of QVC,” and it came up before
any offers were on the table. If he hadn’t known about Greiner’s special
interest in his product, Krause might have been tempted to accept one of the
many lucrative offers from other Sharks. Because Krause understood what
Greiner was after, he was able to bide his time and allow the other Sharks to
sweeten the pot repeatedly, eventually pushing Greiner to give Krause much
better terms than she initially offered.
Negotiation expert Ed Brodow offers Ten Tips for Negotiation in 2014, and
half of them are about focusing on the other person, listening to them, and
knowing what they want.
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“Do your homework…,” Brodow suggests, “The more information you have
about the people with whom you are negotiating, the stronger you will be.”
3. Don’t be afraid to ask for what you want
Krause really proved his negotiation chops in the final moments of his spot on
Shark Tank after rejecting deal after deal and watching the offers skyrocket.
Lori Greiner laid down an ultimatum: $200,000 for 25%, if Krause accepted
immediately. If not, Greiner would bow out. Even under intense pressure,
Krause made the important negotiation decision to ask for what he wanted.
He asked Greiner to lower her equity requirement to 20%, and she took the
deal.
Hockey legend Wayne Gretzky famously said “You miss 100% of the shots you
don’t take.” You will never get what you want without asking, so if you want to
negotiate, you have to ask for what you want. No excuses.
Negotiation tactics can help you in almost any sales or business context.
Knowing how to meet the other party’s needs while securing terms you are
happy with is vital. That doesn’t mean you should use your knowledge to push
your buyer or investor into a deal they aren’t comfortable with. Getting what
you came for without being greedy fosters goodwill and will earn you not only
the business, but the respect, of anyone you work with.
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Don’t be greedy
If you’re in business, it is safe to assume you’re there to make money, and
nobody is going to hold that against you. However, it is important to go into
any deal knowing your own expectations, and what kind of terms you’re
willing to walk away with. Managing expectations is a key factor if you want to
consistently close sales with no regrets.
Image Credit: Caroline Tran
When Hanna and Mark Lim pitched their Made-in-America straw cup for
toddlers on Shark Tank, they got a fairly positive response, with several of the
Sharks making tantalizing offers. When the bidding got aggressive, though,
they hesitated too long. It quickly became obvious that they weren’t going to
get their initial request of $100,000 for a 15% stake in the company. Several of
the Sharks made similar offers for 40% offers, and Daymond sweetened the
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pot by offering the same amount of money for 30%, but he backed out when
the Lims hesitated for too long. Because they were unable to decide quickly
enough to accept the best offer, the Lims ended up taking $100,000 for 40%
of their company, with the investment split between two of the Sharks.
While the Lims didn’t take the best offer from a monetary standpoint, they
ended up with two investors that they had strongly desired to work with. By
accepting that they weren’t going the get the numbers they were after, they
were able to secure an acceptable investment, and two extremely smart and
experienced advisers.
Managing your own expectations in any business deal is vital, but it is also
important to anticipate the expectations of your buyer. Kevin O’Leary threw
the Lims a curveball when he said he’d invest in their company if they would
offshore their manufacturing, compromising their Made-in-USA ethic. Because
the Lims didn’t have a strong argument for why manufacturing Lollacups in the
USA was important, they were put on the defensive, and had to deal with
changing expectations on the fly.
Forbes offers five tips for managing client expectations, one of which is to
anticipate client needs before they even know their own needs! The Lims
failed to anticipate the general hostility of the Sharks toward their Made-inUSA requirement, and they lost ground because of it. However, their
willingness to compromise on equity and valuation helped them get a solid
deal in the end.
When managing expectations, either your own or your client’s, it can be tough
to avoid getting caught up and trying to predict every possible outcome.
Flexibility and an understanding of your own needs should always come first.
As Yaro Starak, author of the Blog Profits Blueprint, writes, “There is always
room for improvement, so know what is ‘enough’ for your own needs.”
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Solve their problem, don’t sell
the solution
The role of the sales person is evolving, and instead of having a fixed product
to sell to everyone across the entire swath of humanity, savvy business people
need to focus on the actual needs of their buyers, and develop products from
that starting point. That’s exactly what Travis Perry did with his Chord Buddy
product. The invention didn’t start as a business or a moneymaker. It started
as a way for Perry to teach his daughter to play songs on the guitar.
Image Credit: The-Shark-Tank
Perry’s personal experience with attempting to teach people to play guitar
provided massive benefits when he decided to create the Chord Buddy
device and the learning system to go with it. He had struggled with his music
students quitting out of frustration, and he knew that the inability to play a
recognizable song quickly was one of the problems that discouraged new
guitar players the most. That knowledge allowed him to build a product and a
set of tutorials that struck right at the heart of the problem. By making it easy
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for new guitar players to learn actual tunes quickly, Perry helped give them the
motivation to keep going until they had developed actual skill.
There’s a vital sales lesson here: know your customer. Know them better than
they know themselves, and give them exactly what they want. Many
entrepreneurs talk about the importance of “doing what you love,” but the
Chord Buddy story illustrates an even more important practice: do what your
customers love.
Modern businesses operate in a transforming landscape with highly informed
and connected consumers who demand real relationships and trust with the
companies they buy from. Travis Perry intuitively understood and capitalized
on some of the biggest trends influencing salespeople.
A blog post by the Millennial CEO notes that “value is rooted in information
and creativity.” Translation: companies can’t peddle the same old stuff any
more. As Daniel Newman writes, “businesses need to think about how they
can prove that they are delivering the value they promised during the sale.
This is the key to building positive rapport and retaining customers into the
future.” Perry’s Chord Buddy promises an extremely specific timeline for
delivering a well-defined, desirable outcome. No wonder people love it.
The same Millennial CEO post notes that “trust tops the list when it comes to
building successful, sustainable customer relationships…”
Perry’s Chord Buddy grew out of his own experience, and buyers are much
more likely to trust someone who created a product from scratch because it
made their own life better.
The startup sage and Y Combinator founder Paul Graham once wrote that a
good way to get business ideas is to “look at something people are trying to
do, and figure out how to do it in a way that doesn't suck.” That’s what Travis
Perry did with Chord Buddy, and every business will have to apply some
version of this formula to succeed in the future.
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A salesperson’s job isn’t just to sell any old product anymore. Every
salesperson is selling a better life to their buyer. The product is just a tool that
helps them get there.
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Demonstrate your passion
You have to be passionate to build and sell a product. Period. The advice to
“follow your passion” to career success has become a cliche, but it is true that
unless you have the personal, emotional investment to stick with your idea
through tough times, you’ll crash and burn. The same rule applies to sales. If
you don’t truly believe in what you’re selling, and prove it to your buyer, they’ll
walk away every time.
Image Credit: The Shark Tank Blog
When Raven Thomas pitched her confectionary company, The Painted Pretzel,
to the Sharks, her personal investment and passion for the product quickly
became her number one selling point. Kevin O’Leary was quick to point out
that the market for chocolate covered pretzels is saturated, and that he could
easily find someone else to manufacture Thomas’ exact product for less
money. Mark Cuban disagreed, arguing that The Painted Pretzel is
differentiated by Thomas’ passion and commitment to the business. Cuban
was impressed that Thomas had singlehandedly grown The Painted Pretzel
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into a company with hundreds of thousand of dollars in sales over a period of
four years. She had also walked away from a two million dollar deal because
she didn’t have the funds to fulfill the order. It was clear that Thomas was in
business for the long haul, and would keep going with or without a Shark’s
investment.
“You put your heart and your soul and your love into it, and you care about the
business,” Cuban argued in Thomas’ favor. “It’s called sweat equity…”
Moments later, Cuban put his money where his mouth was. He offered
Thomas $100,000, the exact amount she was seeking, for a 25% stake in The
Painted Pretzel. Cuban’s words, and his pile of cash, proved that even when
you’re pitching to billionaires, passion sells.
Of course, not everyone is trying to sell equity in a company. It is just as
important to be passionate when you’re selling a product or service. Every
purchasing decision is based partly or completely on the buyer’s emotions,
and a passionate seller will be much more likely to appeal to a buyer on an
emotional level.
Sales expert Nancy Bleeke suggests combining emotion and logic when
addressing a potential buyer’s concerns:
“After hearing an objection, paraphrase what you heard them say and then ask
for clarity which will help you, and them, identify the emotions involved. Is it
fear, frustration, concern, excitement, or other emotions driving the objection?”
A salesperson who has passion for what they sell will be able to empathize
with the buyer’s emotions about the product, and empathy is a powerful tool
for completing sales and building business relationships.
Susan Payton’s list of sales lessons that she has learned by owning her own
business also emphasizes the importance of passion. She writes:
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“My passion is what helps me sell projects. Clients see that I love what I do,
and they’re eager for me to apply that enthusiasm to their own marketing
needs.”
Raven Thomas’ experience on Shark Tank showed that not only do you need
to have passion, you need to prove it! Potential investors, buyers, or clients
need to be able to feel your passion and excitement in their bones and
understand that you’ll use that passion to help them get whatever they need
from the deal.
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Conclusion
After 4 years in the tank, the sharks invested over 20 million dollars in 109
companies, with the average deal valuation totaling $465,850. There are a lot
of lessons to be learned about entrepreneurship, investing and selling for the
show. In this ebook, we explored just 5 of these sales lessons Hopefully, you
can take them back and apply them to your own sales teams or companies.
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