Most people I talk to are familiar with Kickstarter or SharkTank. Both are awesome ways to leap your idea or business forward quickly, however, to get started with either you have to be in completely different stages. Having had clients interviewed by SharkTank producers and having been on the Kickstarter train, it becomes obvious that there is a time and place for both types of “jump starts.”
Just starting out
If you have an idea for a product or service, but that’s as far as you have gotten then you have to first jump the very first hurdle of entrepreneurship - ideas are worthless. If your father and grandfather both tell you that the first step in building out a profitable idea is to get a patent, they are terribly wrong. There is a ton of reading and thought leaders that will help you snap out of this daze, so I’m not going to dive into that.
If all you have is just an idea, Kickstarter is probably your best bet. Kickstarter only requires the following pieces:
- Product or service prototype
- ~2 minute video
As simple as that sounds, there is definitely an algorithm on creating a successful Kickstarter campaign. Tim Ferriss’ blog post outlining the Soma Water Filter success has a good outline of what is needed.
The prototype can usually be created in a garage, through a professional design firm like Ottermatics or a freelancer (eLance is pretty good).
SharkTank will not take you if all you have is an idea, their producers usually hunt for compelling products or services which have already been validated.
Stuck with a product and inventory
The other stage of entrepreneurs I usually encounter is a person who has sold a couple of units but has yet to get widespread traction (distribution) or notoriety. This is where SharkTank can really help out, but don’t forget that it’s a show first and an “incubator/accelerator” second.
SharkTank is interested in seeing traction and a good story/product. Meaning, the entrepreneur should have already sold 100 units/subscriptions of the product and is just stuck as the business is not scaling. If that sounds like your business, you should apply to SharkTank. The producers love a good story (fit for TV), so if you are a firefighter, struggling mother or anything that might be interesting to watch your chances are pretty good in making it through the first cut.
However, there are some heavy price tags with this approach:
- SharkTank (the show) takes a percentage of the company
- The sharks usually take a huge bite of equity and sales. At the end of the deal, the entrepreneur might not even be running the company.
I strongly advise my clients against going with SharkTank, usually if you stick with a blend of Kickstarter and Venture Funding, you should have all the money you need. The question then becomes whether the entrepreneur can use it effectively to produce the four digit growth that we have come to expect from a startup.