Shark Tank India is a very famous TV program in India. Ever since its launch in 2022, it has been the favorite TV show of all age groups. In 2023, its second season was aired, and that too became very poplar.
The show has received praises from all corners, as it is beleived to have lit the flame of entrepreneurship in India. In addition, it gives the aspiring business men insights into how they should pitch for an investment, besides giving them various lessons on how and what investors look for in a business.
In this article, you will learn about various lessons from Shark Tank India. These lessons are very important if you are looking forward to raise an investment, either from the Shark Tank India or from any other party.
What Is Shark Tank India?
Shark Tank India is one among the most loved and most watched reality TV shows in India. This show is inspired from Shark Tank US and is hosted by SET India. In this program, the entrepreneurs from all corners of India come and put their business ideas before a panel of judges, called Sharks.
This program is such a hit, that it has set everyone talking about entrepreneurship and startups in India. It has acquainted people with the abc of startups and how business ideas are put before the potential investors to raise an investment. It has also provided insights into the parameters that investors look into before putting their money into any business idea.
The discussions about the business ideas are so insightful, that Shark Tank India can be likened to a short business course. The sharks are knowledgeable and experts in their fields, and have a good command over, what can be a top notch business and what can not.
After watching Shark Tank India, we have deciphered these 5 important lessons, that the newbies, or the entrepreneurs who want to raise investment from it, will find useful. These lessons are:
- Suitably value your business.
- Always Hunt for a scalable business
- Get a cofounder, unless you are an al-rounder.
- Learn to value and respect the Sharks
- Learn to say “NO”.
These lessons are discussed below:
1. Suitably Value Your Business.
The investors follow the golden rule of “Bhav Bhagwan Che”, and it is very important from the business perspective also.
When Gaurav Goyal sought a mind blowing valuation of 1200 crore for his ice cream business called Gopal’s 56, the sharks were taken aback. Even though, they loved the products of the company, but what kept them from investing in Gopal’s 56, was the 1200 crore valuation of the company.
Ashneer Grover, taught him a tough lesson about valuation of a company by saying, “If you are making sales of INR 4.5 crore in a year, it will take you 70 years to achieve sales of INR 300 crore from one shop. And you are asking INR 300 crore from us for a 25 per cent stake. This makes us feel like you are being silly. There is no business in this. Even if you come to us 10 more times, I will say no”.
Remember that, you should valuate your business suitably, if you don’t want to be looked down as a silly or an unprofessional businessman.
To evaluate a company, you should consider the following important parameters:
- Asset Valuation. Your company’s assets include tangible and intangible items.
- Historical Earnings Valuation.
- Relative Valuation.
- Future Maintainable Earnings Valuation.
- Discount Cash Flow Valuation.
2. Always Hunt For A Scalabe Business
If you go through any of the episode of Shark Tank India season 1, you will always see the sharks checking whether the business ideas presented before them are scalable or not. Sometimes, the entrepreneurs wowed the sharks with their presentations, but when it came to scalability, they found none of the sharks interested in their business ideas.
Take an example of “Ethik” business idea presented by Pankaj Khabiya and Bharat Ranka in the shark Tank. This business is about manufacturing vegan leather items like shoes, wallets and belts. The founders had asked for 15 lakh rupees in exchange of 5% equity in their company. The products, their quality and craftsmanship impressed the sharks.
The idea was altogether rejected by the sharks, with Anupam Mittal calling it a “joke” and Ashneer Grower terming it “no business” at all. The main thing that irked the sharks was the scalability issue with the idea.
If you have any business idea, and want to check whether that is scalable or not, you should check if the following characteristics are present in that idea or not;
- Low Customer Acquisition Cost.
- High Total Adressible Market (TAM).
- High Gross Margins and Profits.
- Less barriers, both regulatory as well as legal.
- Easy and cheap product distribution process.
- High customer retention and low returns.
3. Get a cofounder unless you are an allrounder
You should get a cofounder unless you are an al-rounder, which you in most of the cases, can never be.
In Shark Tank India, there were many entrepreneurs, who were advised by the sharks to get a co-founder. In general, investors love such companies which are run by a team rather than a single person.
By having a team in your company, you will have division of responsibilities, better decision making, risk sharing and complimentary skills.
In general, if you want to know whether a given person is a good choice for being your cofounder or not, you should look for these qualities in him/her:
- Common Vision. Your cofounder and you should share a common vision.
- Shared Core Values. Your partner should have the same core values as you. Otherwise it will lead to conflicts every now and then.
- Ambitious and dedicated nature.
- Entrepreneurial spirit. Your cofounder should be productive and ready to take calculated risks.
- Trustworthy nature.
- Complimentary skillset. If he does not solve any such problem, that you too can’t, then there is no point of him being on board.
- Independent thinker. Your cofounder should have the acumen to look at any problem through different angles and be able to develop multiple solutions.
- Open to correction. He/she should put his ego below the greater motive of company.
4. Learn to value and respect the sharks
Remember, that the sharks sitting over there are your potential investors, and you should hence respect them. They are likely to put their resources into your company and help you grow big.
You might have a specific shark as your target, but don’t reveal it openly. Give all the sharks a chance, and then make a decision.
When Bummer founder put his offer before the sharks, he saw four sharks interested in his venture. In response, the Bummer founder tried to give more importance to Vineeta Singh and Aman Gupta. This infuriated Ashneer Grover, and he had to have a lesson for his life.
If you are in front of potential investors, follow the steps given below, to get respect:
- Be open to communication with all of them.
- Show them that you value them.
- Show gratitude, no matter what.
Having a balance between wanting to have a particular investor and respecting the other potential investors, are the foundations of a good ethical business and potentially a successful one.
5. Learn to say “No”
Just because you are getting some investment, does not mean you should accept it. You should go well prepared and have a sound idea of what should be the minimum possible value of your venture. If you are confident about your business and the sharks value it lower than that, you should have the ability to say no.
Remember, the two co-founders of Moonshine Meadery, a company that manufactures mead-an alcoholic beverage made from fermented honey. Their pitch impressed all the sharks.
Their ask was INR 80 lakh in exchange of 0.5% equity in the company. The sharks countered with an offer of INR 1 crore, against 2.5% equity. The founders calculated the merit of the offer and finally rejected it. The reason they cited was that the counter offer put their company’s valuation to what it was two years ago.
The faith in their product and the art of saying no in the face of a great offer, will eventually put them on the path of success.
These were some important lessons from the Shark Tank India. We are sure that you will like and share this article with your friends.