With Black Friday upon us, it’s time for the annual media laments about America’s greedy businessmen. You know the drill — stores open up too early and stay open too late, all to make a quick buck off of an overly commercialized holiday; is there nothing these scrooges won’t do to get between us and our wallets?
If you want to be reminded of why American business is one of our country’s greatest assets, not something to bemoan, spend your Black Friday evening watching “Shark Tank.”
The ABC show, now in its fourth season, may seem just another silly reality program, a chance for megalomaniac billionaire Dallas Mavericks owner Mark Cuban to insult little people coming to him for a handout. In fact, it’s one of the most informative and optimistic shows on network TV.
Entrepreneurs stand before five sharks — some combination of Cuban; real-estate mogul Barbara Corcoran; QVC’s Lori Greiner; technology innovator Robert Herjavec; FUBU founder Daymond John, and venture capitalist Kevin O’Leary — pitch the idea for their company and then offer the sharks a share of it in return for some investment.
Economist Todd Bucholz says that this is actually a pretty good approximation of what goes on when entrepreneurs meet with venture capitalists. In fact, he says:
“Take two people who have an idea to start a business — people with similar education, background and networking capabilities. If one of them watches ‘Shark Tank’ for six months and the other watches ‘American Idol’,” then “the former will have a clear advantage.”
A former senior White House economic adviser who’s launching an educational-software company, Bucholz says that people who watch the show will be “forced to confront questions they might not have thought about — including profitability and reach and which potential partners they should do business with.
“In fact, many of them will realize that their schemes are hare-brained. Just because everyone’s told you you’ve made the best ice cream, doesn’t mean you’ll knock Baskin Robbins off the shelf.”
Richard Karlgaard, the publisher of Forbes magazine, says that when the sharks ask questions like, “What’s to prevent me from going home and making the exact same product?” they’re offering potential entrepreneurs a vital lesson. For some, the answer lies in understanding patents and intellectual-property law.
Others, though, need to understand what Karlgaard calls “their unfair advantage” — the thing that can give them a real leg up over others in a chosen field.
“I think it’s a great question for people to think about. What are they really good at? Your unfair advantage is more likely to be in a place you’re passionate about. Where you’re willing to work 80- to 100-hour weeks. Most people aren’t willing to work that hard.”
Even for those not thinking of going into business, “Shark Tank” is a useful corrective to our collective impressions about American business.
With all of the news of Twitter and Google and Facebook, you might get the idea that entrepreneurship today is basically a matter of creating apps. In fact, many of the products presented on “Shark Tank” are tangible goods — from grilled cheese sandwiches to bottles of nail polish (that also include nail polish remover).
“A lot of people want to build lifestyle businesses,” notes Karlgaard. They want “the freedom and autonomy” that come with privately held businesses. That QVC’s Lori Greiner is one of the sharks reminds viewers that American entrepreneurs aren’t all based in Silicon Valley.
And they’re not billionaires either. Some “Shark Tank” contestants have scrimped and saved for years, even decades, to get to this point. Cuban, for his part, always seems to offer special encouragement (if not always cash) to the entrepreneurs who haven’t taken on enormous debt, who “hit the pavement” and sell their products door-to-door, or at least retail store-to-retail store.
We should not take the American spirit of entrepreneurship for granted, says Diana Furchtgott-Roth, a former chief economist for the Labor Department, who grew up in Britain.
One year, she and her brother came up with an elaborate scheme to buy blue jeans in the States and sell them out of their dorm rooms for more than twice the price. Her mother, she recalls, was “deeply embarrassed.” In other countries, says Furchtgott-Roth, “the money you earn is not as good as the money you inherit.”
Watch a few episodes of “Shark Tank,” and you’ll remember why we parted ways with those ideas a few hundred years ago.