What VCs Want: More Lessons from the Shark Tank
Have you ever said or heard said “I'm certain I have a good business idea, but I just can't seem to get it funded.”? Assuming you've adequately vetted the idea, business plan in hand, your pitch perfected, and still no takers, the idea may not necessarily be bad. Rather your proposed business doesn't ‘do a job' the money folks, or venture capitalists (VC), want done.
According to Professor Clayton Christensen's jobs-to-be-done
framework (remember Lessons Learned from Katie Couric), whenever a VC invests money, he or she is hiring that investment to do a job for him or her. It's partly about making money, but it's also about their hiring the business — which is in many ways an extension of their identity — to positively reinforce that identity.
To illustrate my point, let's take another look at the reality show Shark Tank. Four of the five sharks are men. Will Ava the Elephant, a children's medicine dispensing product or Plus Size Women's (Start at Minute 31) clothing appeal to them? Not so much.
Take a look at this clip beginning at 31 minutes: if you are outside of the U.S., click here.
Yup, you got it.
Throughout the series, the male sharks were shrewd, detached. Not so in negotiating a deal with JumpForward, a mobile application that prevents college sports recruiting violations. Robert twirling the pen says everything. Hiring this deal to make money appears almost secondary. One nearly wonders
who is the bait.
For women entrepreneurs:
If your business isn't getting funded, maybe you'll need to bootstrap longer. Or rework the pitch so the VC community sees this as a job they want done; in the ‘outside reality-TV world, 90-95% of VCs are men.
For Male VCs:
Take a look at the deals your peers have dismissed. There is likely some pay dirt amidst the perceived dross for which you'll pay a lot less; maybe even boost your return-on-investment (ROI).
Shark Tank: There Are Boy Sharks, and Girl Sharks
Shark Tank is a new reality show in which entrepreneurs pitch their business ideas to potential investors. There are five total investors or sharks, four men, one woman. I am intrigued by how gender differences (as highlighted in the following clips) seem to inform or influence deal negotiations:
Clip 1: Two female entrepreneurs are pitching a playpen cover called Coverplay. Their portion of the show starts at 30:37. Notice the terms on which the male vs. females are willing to do a deal. Not to say the female isn't tough, but even in driving a hard bargain, listen to how she thinks. Who would you want as a partner? Here's another example of her feminine style, a style you'll note rather befuddles the toughest of the male sharks.
Clip 2: A male entrepreneur is pitching custom energy bars or Element Bars. Female shark bows out early. He negotiates hard. Male sharks are eating out of his hand; he even jokingly offers him a job. Would the male sharks have responded so warmly to a
woman with the same approach? Would a woman have even negotiated?
Clip 3: Titled Pretty the female entrepreneur's product is good enough, but the male sharks are surprisingly eager, like sharks to the bait. She doesn't ask (If women aren't asking for something, we are playing within societal norms of femininity), but situates herself such that the men ask. As the sharks vie for her attention they in effect negotiate on her behalf.
What differences have you observed between the negotiating styles of men and women, including your children?
Having observed these differences, how can you use them to your advantage so as to get done what you need/want to get done in the world?
Whether in our business, civic or church communities, how do we
decide who gets 51%? Or more broadly speaking who has ownership of a
project? When we don't have control, how do we stay engaged?