As someone who works with entrepreneurs on a daily basis, there’s no escaping Shark Tank. It’s an incredibly popular show that’s really revitalized and popularized the world of entrepreneurship and brought it to the masses. Because of this popularity, the show has become something of a haven for up-and-coming entrepreneurs. If you can make it on to Shark Tank, your idea must be good, right? What’s even better is that the show can provide much needed exposure for entrepreneurs, and even if the idea isn’t met with an offer from one of the “sharks,” these entrepreneurs are often later flooded with offers and business propositions from investors who’ve seen the show. This has come to be known as the “Shark Tank Effect.” But is it real?
There have been plenty of examples in which entrepreneurs pitched their products/services on Shark Tank, turned down great offers, and still managed to forge successful careers from it. For example, when Derek Pacque appeared on the show to pitch his company CoatChex to the sharks, he walked away from a $200,000 offer, and yet he managed to find great success. Since his appearance on the show, CoatChex has grown exponentially both financially and personnel-wise. The company received a cash infusion of $1.2 million dollars and has been used at a variety of events, such as New York Fashion Week and even the Super Bowl.
Unfortunately, however, not every single situation has been so fruitful. Shelly J. Ehler’s story is the perfect example of this. Ehler founded her company Show No Towels, pitched it to the sharks and was even offered an investment of $75,000 from Lori Greiner, which she accepted. Like most other entrepreneurs, Ehler watched her episode air live on television and checked her inbox afterwards to see that it was flooded with emails. The only issue is that these emails, as motivating as they were, only featured a handful of actual orders. And although she continued to receive a steady amount of orders, they were never as frequent as they could have been.
After only one year of working with Lori, Ehler had decided to cut ties with her shark investor. Two years later, Ehler completely closed the company.
But the largest piece of evidence that proves that the Shark Tank Effect is real is the ability for a company to succeed even without offers. There are a bevy of other situations in which entrepreneurs were not even given an offer on the show, and yet, due to the Shark Tank Effect, they managed to persevere and become successful. For example, Shawn Davis, founder of Chef Big Shake, asked the sharks for a $200,000 investment and wasn’t offered a penny. Now, Davis’ seafood chain is standing tall with well over $1 million in revenue. Julie Busha, creator of Slawsa, was never offered a deal from any of the sharks, however, her delicious concoction is widely available across the country. Finally, let’s not forget Dave Alwan, whose company Echo Valley Meats was rejected by all of the sharks, and after some restructuring and strategizing, Alwan’s company increased profits from just over $100,000 to a little over $1 million. In fact, the company fared so well that Alwan was asked to come back onto the show and pitch Echo Valley again, which he did. During his second visit, he did take a deal from Mark Cuban for $150,000 for 25% of the company’s mail-order business.
While stories like Ehler’s are very real, they are not the best representation of what Shark Tank can be. Shark Tank is a major stepping stone for entrepreneurs, and the “Shark Tank Effect” does appear to work. That being said, it can only work with a solid strategy and a truly great product, service or idea in place.
It’s possible that Show No Towels was not the greatest idea. It is also possible that Ehler was not prepared for long-term success. Regardless, there seems to be proof that the Shark Tank Effect is very real, and very powerful.