The answer to that question changed for me in recent weeks. I used to think the answer was an entrepreneur having a great idea, being really smart, or hard working. While investors and business partners respect those traits, they aren’t at the top of the list.
At this point, you might wonder what else is there. My friend Julie had been talking about a show she watches, and I started a series recording but never got around to watching any episodes. I randomly decided to tune in one Friday night and ended up binge watching 6 episodes…probably not the smartest decision, but the show is fascinating.
That show is Shark Tank, which airs on ABC every Friday.
How Shark Tank works
In case you’re not familiar with Shark Tank’s format, entrepreneurs come on the show and pitch a panel of investors aka “sharks” to invest (using their own money) based on what the entrepreneurs think their company or product is worth. The sharks not only put up capital, but they partner up with the entrepreneurs to help take their business to the next level. These sharks are successful entrepreneurs themselves and now global forces in their respective industries, so just having access to their contacts can catapult a business from a modest cash inflow to multi-million dollar growth engine.
Who wouldn’t be interested in seeing how this is done?
After taking in more than a dozen episodes, a few themes emerged.
Sharks love desperation
Every week you see the entrepreneurs asked some of the same questions:
1. What are your sales?
2. What are your sales in the last 12 months?
3. What are your projected sales over the next 12 months?
4. How much does it cost to produce your product and how much do you charge for it?
5. What’s your cost of acquisition for each customer?
That being said, you also see a mix of results with sometimes similar metrics, but those aren’t the most important measures. As it turns out, the most compelling trait of an entrepreneur. The thing that appears to win over sharks more than any other characteristic is desperation. People have come into the Shark Tank and left with deals purely based on the fact that something about that particular entrepreneur’s desperation resonated with them.
Do you want to know why sharks love desperate entrepreneurs? They know that desperation gives you the kick in the pants you need to get your business off the ground. I don’t know who said it first, but one of my favorite quotes is “Good is the enemy of great.” When you’re not desperate, you don’t take the risks necessary to generate the returns a shark needs to want to invest in your business.
When you don’t have your back against the wall, you might get careless with how you spend your time. Or worst yet, maybe you decide to just shut everything down because running your own business is way harder than you thought it would be.
Desperation makes it a guarantee you’re either going to win at what you’re doing or die trying.
Some people invest purely based on the business owner, not the business
Want to be successful as an entrepreneur? Want to convince someone with tons of cash to spend to invest in your business? Hustle like your life depends on it and watch your success grow.