It is a massive understatement to say I am a huge fan of ABC’s Shark Tank. I love love love the show so much because it reveals the reality of capitalism in its rawest form (in an entertaining hour of television none the less). The show packs such a potent punch, it’s like getting an MBA every episode. And there are huge lessons one can learn that can be applied to any commercial real estate deal.
If you need to get up to speed, full episodes are available on Hulu:
You can also find the Canadian version, Dragons’ Den, via Youtube here:
The premise behind the show is this: Five wealthy investors are pitched business ideas from entrepreneurs that need their money, contacts, expertise, and guidance. The investors (sharks) discuss each deal and evaluate if they want to invest or not. The best part about the show that truly makes it massively appealing: The sharks use entirely their own money if they decide to invest. So you get to see exactly what gets them to say yes, what causes them to start a bidding war, and (maybe most important of all) what truly turns them off to a potential investment. I’ve learned a tremendous amount from my MBA, business books, blogs, etc. But Shark Tank seems to act like live theater by bringing to life all of those lessons in one source.
While the businesses on the show may not be real estate related, the sharks have the same exact motivations that a real estate investor would have—preserving and growing their capital while mitigating the risk involved in the deal. Because of this, a tremendous amount can be learned about the motivations and concerns of a would-be investor and how you can better execute your deals after learning or reinforcing that knowledge.
Here’s a quick read via Mark Cuban’s blog (one of the sharks) that summarizes his perspective:
The lessons learned from the show have huge implications for real estate professionals putting together deals, seeking capital, or looking to divest of an asset or portfolio. If you’re a real estate junkie like me, this show is even more important because it creates a roadmap for getting people (investors, colleagues, lenders, etc.) behind your work.
How is a Friday night family-oriented show going to help my real estate career?!?!
Do me a huge favor. Check out these Youtube clips and try to assess exactly why one pitch succeeded and why another pitch didn’t. Success is defined as getting an investment deal done.
And on Canada’s Dragons’ Den:
Lessons from the show
The links above are a very small sampling of the pitches done on Shark Tank and Dragons’ Den (and tons of editing and post-show due-diligence is involved), yet the ones that won and got a deal all did several things the same:
- -They knew their numbers in and out…and knew them deeply.
- -They were able to articulate the value of their idea in less than 90 seconds.
- -They articulated why they specifically are viable business partners.
- -They placed realistic valuations on their businesses and explained why a shark (or dragon), from purely an investment perspective, should be interested.
There are a whole host of reasons why an entrepreneur might not get a deal. But they all center around mitigating risk. The entrepreneurs that lost may turn out to be very successful, but from an investor’s perspective, they weren’t worth the risk of their capital.
As a real estate professional, regardless of what sector you work in, you’ll likely face many of the challenges seen in the clips above. Shows like Shark Tank and Dragons’ Den help pull the veil off capitalism and create a roadmap for executing successful real estate deals.
If you’ve got time, I highly suggest giving the shows a chance. If you watch them with the intention of analyzing how each deal was won or lost, you’ll probably learn (or reinforce) some valuable lessons that can be used on your next real estate deal.