Shark Tank… An Interesting Lesson in Business

06 Jun

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…


Posted by on June 6, 2012 in sociology


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7 responses to “Shark Tank… An Interesting Lesson in Business

  1. buffetcakes

    June 6, 2012 at 6:26 PM

    i love shark tank!


  2. Jeff

    June 7, 2012 at 11:15 AM

    Again, Trokspot covers pop culture, and my ears perk up. Let me preface my comments by saying that I love Shark Tank, and your post got me thinking about it a little more analytically. I have a different reading that may counter some of your points or just highlight an omission from your analysis, but thanks for getting the ball rolling. I’m sure you’d admit, the show has more potential for analysis (criticism) than explored above.

    The show itself probably functions to show quirky inventions, even quirkier inventors/businessmen, and American innovation (have their been foreign “fish”? I don’t recall). I’d have to disagree that it allows us to “learn some interesting insights into what it takes to get an idea/product to market”. Perhaps it does on some superficial level; we know Cuban’s got “connects” with sports, Damon with clothes, and the one woman with QVC/HSN. But the filtering process and criteria (See Hirsch 1972) are obscured. The products taken before the Sharks certainly have to fall into three categories. First, there are actually market viable products. This is how everyone makes money from the show; offering a platform for new products that should “work” out in the market. Second, the iffy ones that may shaky on getting a “yes”. This provides the entertainment of the negotiations, etc. that power the show as well. Last, and probably most important, are the terrible ideas. These are the William Hung’s of American Idol. They come on the show to be berated for not having sales, a business model, or even a good idea. We get little insight as to what those things would entail. Also, other tinkerers are out there seeing those people and saying, “I’ve got a shot.” Probably not, which is a point I’m sure you agree with, but I think that this last group is a vital part of the show.

    I’d probably go out on a limb and say that Shark Tank operates in this weird space of cultural production where traditional ideals of neoliberalism are slightly contested. Sure, we get the introduction of the Sharks as “self-made” and coming from nothing to something seemingly by themselves. The ability for everyone to do that is, as you point out, unlikely. However, let’s remember that those ideas are merely in the introduction of the show. The Sharks highlight themselves as exceptional individuals; that’s why they are Sharks! The main focus of the show is to contest this neoliberal idea of individually-driven success. The Sharks are there to provide insight, capital (very important, no?), and access to their structural benefits. The collaborative effort certainly contests the notion that everyone must act alone in pulling themselves up by their bootstraps. In addition, the traditional capitalist on the show, Kevin O’Leary, is often chided when he attempts to skirt collaboration in pursuit of self-interest. Think about how many times in the show you hear something to the effect of “You need me on this deal” or “I don’t have anything to offer this deal, I’m out”?

    Also, the functionally-driven view of innovation (i.e., “After all, necessity is the mother of invention and once we are able to find that need and then fill it”) probably neglects a lot of political economic structures at work in the production of cultural objects, no?

    I think the Winner-Take-All reading is possible. It makes sense. The Sharks are always looking for a deal that rubs them the right way, for sure. I just think there is a little more to it than 5 rich people trying to get richer. On a related note, have you read Hacker and Pierson’s (2010) “Winner Take All Politics”? It’s a pretty quick and good read about money and politics. As always, keep up these posts, I love ’em. Perhaps one day I’ll start JeffSpot, or its equivalent.


    • trokspot

      June 7, 2012 at 12:59 PM

      Hey, discussion on Trokspot…exciting day! First of all, I’ll give you a chunk of the credit for this post, as you first introduced to me (2 summers ago?). Without cable, I’ve recently gone back to it and watched a lot of the online episodes. I’ll also go with you on the fact that the analysis I presented was on a superficial level – though I’d like to think that it still made some poignant points that might at least cause your casual reader (of which I have very few) to at least re-think shark tank in some ways.

      A few things in response…

      I do think that we learn some interesting insights in what it takes to get a product to market. Perhaps this is just me, but I often think that people have this notion that someone has a great idea, goes to work in his/her garage and shows one prototype to a company who loves it and the inventor makes it big. Here we often hear about the amount of time that went in (usually several years), the amount of money that went in (at least 10s of thousands, often upwards – again which shows the barriers of entry to “anyone” with a great idea), licensing agreements, patents, trademarks, meetings with companies to potentially take on the product, production of the product, previous sale numbers, price points, what it costs to build the product, profit margins, how/where they’ve already marketed the product, etc etc. I would make the argument that to the average viewer, there are at least some insights among that list and the many other things not listed that are new and interesting to consider that move beyond the “from my garage to Wal-mart’s shelves” model that I am assuming a lot of people have.

      I like your point about the three groups that come on the show – those with definitely good products (when the sharks fight among themselves to back it), those with some potential but maybe not quite there yet (for the right deal, 1-2 sharks may take a stab), and those which probably aren’t going to work out (those that the sharks often berate/dismiss quickly). As you point out, this last group is probably for entertainment value more than anything else.

      I also like your analysis (that goes a bit deeper than mine did in the post) that in some ways we do learn that you can’t just “make it on your own.” As you point out, the entire reason the fish are coming to the sharks is because they realize that they need help (i.e. more capital, and in some cases, business guidance/expertise, or connections). While I certainly get that, I would say that my point about “making it on your own” starts before that point. We are usually led to believe that these fish have – up until they’ve entered the shark tank – made it on their own: they had a great idea/product and through their individual work and dedication, made that product work and now need that final push over the top from the sharks. My point is that it ignores their structural location and resources to get the product even that far – i.e. having the luxury of being able to invest lots of $$, take time off from other jobs, a partner/spouse who can support them while they work on this, travelling to different road shows/display events etc, and the general knowledge of what it takes for an idea to become a product (i.e. business plan, getting a trademark agreement, advertising your brand, getting a deal with a manufacturer, etc.). These are some of the barriers of entry that I was trying to point out – it certainly favors those with resources (time, money, connections, business know-how – we both know certain groups disproportionately do not have access to these things) over the pure ideas. So those watching who may think “All I need is that one great idea” are actually falling victim to an ideology of a system in which anyone can make it, when in fact it might be better stated that “anyone who already has access to plenty of resources can make it” (our good old pal Marx and ideology and ideas of false consciousness here…)

      That was one of the main points I was trying to make (and hopefully at least catch people’s attention). The other was the Sharks as benefitting from this show and the format of it (“winner take all”). I completely agree with you that “the show is a little more than 5 rich people trying to get richer”. The show – as you point out – is interesting and has a lot of entertainment value that highlights American innovation and sometimes quirky inventors/innovations that are fun to watch. But a consequence of the show (even if it is an unintended one – which I believe it is) is that these 5 rich people DO get richer. They are put into a position where an entire television staff/crew seeks out some of the best innovations/ideas from across the country and they are given the first opportunity to invest in them. They are put into a position where they basically cannot lose. And so these sharks are basically able to pick and choose among the finest fish in the country with very little of their own time, energy, resources spent trying to find them. They are fed in the most efficient way possible (for them) which leads to the rich getting richer.

      Alright, this is way too long. I like your comments though. And I do love the show. Always entertaining. And I’m looking forward to Jeffspot!


  3. Jeff

    June 7, 2012 at 1:29 PM

    I agree. Certainly not everyone can become the next big inventor. I was just pointing out that we get a tacit understanding of the multiple steps in the process from basement to storefront. I know that once a person on the show says, “I own the patents/trademarks…”, “I have distribution…”, or “I have a licensing agreement with…” it’s money in the bank. But those processes are out there in abstraction. I think that only furthers your point. You need capital, flexibility in your schedule (time), and technical knowledge of the system. And that third group may further serve as building false consciousness (I was trying to avoid using that) because they “got that far” without any of those things. I wonder if the shows producers go to any length to make the fish seem relatable. As you point out, they probably aren’t too relatable to those watching. But, then, I bet they are comparable to the people that think they should explore inventing the next Roomba.

    I was really trying to add to the conversation more than critique it. Thanks for giving me a venue.


    • buffetcakes

      June 7, 2012 at 2:51 PM

      No, I absolutely agree. And I think that you added some nuance and complexity to what I probably glazed over in my post which I appreciate. I didn’t mean to come off as defensive or anything in my reply.

      I like the conversation, and agree that there’s more to the show than initially meets the eye (or my initial post). Fun to critique and debate. It would be fun to have more and more voices on here to do that than even just the two of us (though I enjoy our conversations obviously). Once trokspot goes global, it’ll make the debates even better. haha.


      • trokspot

        June 7, 2012 at 2:53 PM

        (Buffet cakes was obviously me – Em’s pseudonym from her computer…)


  4. trokspot

    June 7, 2012 at 4:51 PM

    Was also just thinking of this – could be an interesting out of class assignment/extra credit or something analyzing some of the points we’ve both made (would need further development).

    Have students watch an episode and give an overall analysis of the of the 3-4 products/ideas that are presented. What is the overall avg amount of time that was spent developing the product, avg overall $ put into it, etc. Then potentially try to fit each product/idea into one of the 3 categories that you mentioned (market viable, iffy, dismissal) and come up with a few reasons as to why it fits that category. Why/why weren’t the sharks interested?

    I’m sure you could think of several other points of analysis as well, but it could be a fun/different way for students to apply some concepts or exercise some critiques….



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