Behind those smiling faces lurk some serious shark teeth! The Shark Tank has taken the country by storm. It's a wildly popular reality show that has been picked up for a 22 episode fourth season. If the over 40,000 would be entrepreneurs who auditioned for the show are any indication, the Shark Tank will be on the air for a long, long time. Each week, four entrepreneurs pitch their businesses to the venture capital “sharks,” five wealthy investors who invest their own money if they think the business is viable. It's great TV- sometimes the Sharks fight amongst themselves and sometimes they berate and belittle the entrepreneurs.
Reasons Shark Tank Reality Show Is Bad
1. The show creates a pseudo-dependent attitude on the part of viewers and business owners. All over the internet I read about companies that want to be on the show and many seem to imply that their businesses won't make it “unless we get on Shark Tank.” A large part of that type of reasoning comes from the individuals, but Shark Tank helps foster (or is it fester) that attitude. It isn't the reality show's fault business owners think that way- certainly a well run business doesn't need the Shark Tank- but the show's existence does create the space for that mindset.
2. This reality show paints an unrealistic picture of the Venture Capital process. Both Kirk and I (and many of the entrepreneurs we have spoken to for this site) have presented to Venture Capitalists to get start-up funding. While the process isn't all daisies and sunshine, there is no infighting and there are no personal attacks. The pseudo viciousness sometimes portrayed by the Sharks is funny for the viewers, but it can be overwhelming for the entrepreneurs on the show. The producers recognize this as they provide a psychiatrist to speak to each entrepreneur after taping. ABC certainly doesn't want people jumping out of windows after being turned down by the Sharks! Good TV or otherwise, at the end of the day, it is never kind to ridicule people.
3. The reality show creates a “wantrepreneurism” culture. I get a TON of email from “wantrepreneurs” who “need” funding to get their idea off the ground. They are either not serious, don't know how to go about getting started, or are just hoping some angel investor takes their idea and turns it into a million dollar business. There will always be lazy people who don't act on their ideas, whether Shark Tank is on the air or not. An idea is useless unless acted upon. NOBODY will fund an idea without some blood, sweat, and tears behind it. If you want investors or partners, you must take action! Shark Tank creates the illusion that just having the idea is enough. That stifles the old-fashioned work ethic involved with starting a business. Certainly the show doesn't create that mindset, but once again it provides the vicarious outlet for those inclined to wait and see.
4. “Winning” on Shark Tank doesn't solve a small business' problems. First of all, many of the deals that get done on TV either don't go through at all or get so drastically changed that they'd be unrecognizable once completed. Only about 30% of the deals that occur on the show get finalized, and even that doesn't guarantee success (just look at Toygaroo). Even so-called “success stories” aren't necessarily happy endings. While Rick Hopper of ReadeRest is now a millionaire, he gave away 65% of his business to get there. I am sure he's not complaining, but what would an additional 5% mean to him? What about 10% or 20%? It makes me wonder. There are examples of entrepreneurs who wouldn't give in to the Sharks' undervaluing of their businesses (think ScottEvest or Copa Di Vino). These businesses “lost” on Shark Tank (and their owners were ridiculed by the Sharks), but they carried on and are both doing quite well. Megan Cummings had her deal fall through for You Smell Soap and she couldn't be happier for it. Now she doesn't have to give half her profits to Robert Herjavec! People need to realize this is TV and many of the so-called “happy endings” are “made for TV moments.”
5. The Sharks are not infallible. They may be called Sharks, but they're just people like you and me. They make mistakes, they have problems, they have failures. Go read a Dallas sports section and see how many mistakes Mark Cuban is accused of during basketball season. Check Kevin O'Leary's mutual fund performance. Wanna bet Barbara Corcoran came out on the wrong end of a real estate deal or two? Or Lori Greiner picked a “lemon” to show on QVC? Even Daymond John must have a few “ugly” designs he regrets going forward with. Do you think Robert Herjavec's company write perfect software the first time out without any bugs? They are human beings with human frailties. While the Sharks are more successful than most people, believe me: they have made mistakes- they are not perfect. To believe that they are is naive.
6. Shark Tank reality show portrays a “money first” culture. From the opening segment when Kevin O'Leary hisses “MONEY,” to each individual entrepreneur's pitch, money is the driving force. I do realize money is the desired end result when starting a business and the Sharks don't want to lose their hard-earned dough, but the ostentatious obsession with money and the idea that the bottom line is the only thing in the business process can be a tad nauseating at times. When Donny McCall told the Sharks he was willing to make less money on the bottom line by manufacturing in the USA, the Sharks scoffed and did not fund his idea. Donny saw a greater purpose and, due to keeping his own values in his business, gained fans AND sales. He's running in the black now and he's put Americans to work. The “money first” culture would have him manufacturing in China, leaving a few dozen Americans without employment. I am not one to preach corporate welfare (or any other kind for that matter), but I do believe businesses need to find a way to make things here in the USA again or we will find ourselves living in a second-rate country. While there have been instances where the Sharks have supported US manufacturing, the overall message is “make it cheap to make a profit.” This mindset is not good for our country.
None of these reasons will bring down small business and Shark Tank is certainly not the devil incarnate laying in wait to destroy American business in general. There are, however, these underlying issues that do bother me sometimes. I am a BIG fan of the show and I will watch despite the things that bother me about it. Let's all try to be realistic about what it is: it's just a TV show- a very good TV show- but still a TV show.
Read my post on 6 Reasons This Reality Show is GOOD for the American Psyche