I’ve recently gotten more and more interested in the show Shark Tank that airs on ABC. The way the show works is this: Inventors/entrepreneurs come onto the show with the opportunity to give a sales pitch to entice one of the “Sharks” to invest in their business/product. The “Sharks” hear out the presentation and if they believe that the business/product is worth an investment, then they begin to negotiate – how much money they are willing to invest as well as how much equity (% ownership) they want in the company for their investment. Sometimes no one is interested in the business/product, and sometimes all of them want a piece of it, which leads to the Sharks fighting among themselves. Overall, it’s an interesting show because you get to see some pretty neat ideas/products (“Why didn’t I think of that!?” is a frequent reaction), as well as learn some interesting insights into what it takes to get an idea/product to market.
There are also a couple of interesting aspects of the show to consider from a sociological perspective that I’d like to point out to keep in the back of your mind at the very least as you watch this show.
Who are the “Sharks”
The Sharks in the show are the panel of individuals (there are 5 in each show) who are the potential investors in the businesses/products being pitched. They are described as “self-made” millionaires (and in Mark Cuban’s case – billionaire), who have all been incredibly successful themselves in business. The typical panel consists of Mark Cuban, Daymond John, Barbara Corcoran, Kevin O’Leary, and Robert Herjavec. Each of them is described as coming from humble beginnings and building his/her fortune from scratch. While some of these claims could probably be debated (did you really do all that completely on your own?), I won’t argue that here. Let’s just assume that statement is true for these five panelists (a mighty assumption)… This still represents the exception rather than the rule. By this I mean that only a tiny tiny number (a fraction of a percentage) of individuals would be able to share that rags-to-riches story, yet it’s made to appear that it could happen to anyone…
How the Rich get Richer
One of the things to consider about the show is the idea of structural opportunity and the “winner take all” system that it perpetuates, which in turn leads to the rich getting richer. Here’s the way the game works: five already-rich panelists are privy to and get the first crack at investing in some of the best, most developed business/product start-ups across the country. The show actively recruit these individuals who have shown early success or at least the potential for success, which, in effect, weeds out a lot of the “junk” for the sharks. Therefore, they get to sit in on this panel and have a chance to invest in already screened and filtered businesses/products – they know that what they are seeing isn’t just fluff (admittedly some of the ideas/products have less potential than others). The point is this – simply by being placed on this panel and through the structure of the show, these already-rich individuals are given fantastic opportunities to invest and make even more money. That also describes the “winner take all system”: once I have money/capital, then I am able to obtain more and more money/capital through investment and buying power. It also provides a buffer for failure, so that the more I obtain and “win” the less I have to worry about one potentially risky or not guaranteed investment not paying off. Basically, the rich (the Sharks) get richer, with little potential to fail.
The (American) Inventor’s Dream
One of the things that we love to think is that “anyone can make it.” As soon as we get that one great idea, we’re going to turn that into big bucks and we’ll be set. After all, necessity is the mother of invention and once we are able to find that need and then fill it… Well, this is a great sentiment, but it doesn’t mean that anybody with a great idea/product can make it. You see over and over that the people who come onto the show have already invested 10s of thousands (and in some cases 100s of thousands) of dollars into their product/idea. They have careful business plans and projections (if not they are usually dismissed quickly), they’ve been able to drop everything else to pursue this dream/product, they’ve travelled to different shows/events to show off their product and test it, they’ve already had samples manufactured and produced… In short, they’ve had the money, time, connections, and other resources to put into their idea/product before arriving in the Shark Tank. In many cases they have something to fall back on (or a spouse/partner who makes enough for them to pursue this idea/product). Even if they fail, they know that all is not lost. What does this mean? Well it certainly limits the pool of people who are able to “make it” through the pursuit of their dreams. It’s not just the quality of the idea that anyone might have, but whether the individual has the resources necessary to back that idea and turn it into something more than simply a dream or idea. The American/inventor’s dream is only a possibility for some.
So while I enjoy the show and find it entertaining, it is certainly something to think about and consider – who is being made rich, how/why, and who has the opportunity to present their ideas with the potential to become rich as well. It’s certainly not the case that anyone with a great idea can make it (at least on this show). And it is the case that this show helps out those Sharks in a big way… By providing some of the best fish available, it ensures that these sharks will be extremely well-fed in the most efficient way (for them) possible! Do they really need that extra help…