Inside the Shark Tank
Georgetown graduates compete in the sport of entrepreneurship on TV and beyond.
By Mike Carlson
It is June 2014, and Randy Goldberg (B ’00) is sweating under the hot lights of the Shark Tank set. He uses a folded handkerchief to dab at his upper lip. His brow furrows and unfurrows as he eagerly explains his business.
“I was sweating, but I wasn’t sweating the decision,” Goldberg, co-founder and chief brand officer of Bombas Socks , says of the experience two years ago. The stage lights are hot, he notes, and inevitably the producers choose that sweating clip for dramatic impact. Ultimately, though, that one moment of effort is but one of many in the Bombas success story.
For many Americans, scenes such as this define entrepreneurship, thanks to ABC’s reality show Shark Tank. In this highly charged atmosphere, hopeful entrepreneurs — including Georgetown University graduates — pitch their ideas to a panel of successful investors known as “sharks.” The goal? Secure funding and guidance to take their brainchildren to the next level.
The show is an entrepreneurial juggernaut all its own. It is so watchable that it draws about 7 million viewers per episode. There are versions in dozens of countries (the American iteration is an adaptation of the BBC hit series Dragons’ Den, itself inspired by the Japanese program Money Tigers). Even reruns of Shark Tank have been known to outperform CNN programming, according to The Hollywood Reporter.
Entrepreneurship in the United States grew more than 17 percent between 2010 and 2015.
Entrepreneurship is on the rise, and not just on TV. The 2016 Kauffman Index of Startup Activity shows that U.S. entrepreneurial enterprises have grown for the third consecutive year, and 2016 has so far seen the most robust year-over-year increase across the past decade. According to the Bureau of Labor Statistics, entrepreneurship in the United States grew more than 17 percent between 2010 and 2015.
Shark Tank producers have captured this zeitgeist for America’s viewing audience. In turn, the show has had a profound effect on a few business-oriented Georgetown alumni.
BRIGHT LIGHTS, BIG MONEY
For Goldberg and Bombas, the show provided a springboard.
“People were like, ‘I saw you sweating on national TV,’ which is not the No. 1 thing you want someone to say, but the show has been really good for the company. That is all we care about.”
For the passionate and articulate Goldberg, talking about any part of the sock business or the mission of Bombas Socks is no sweat at all. Bombas donates one pair of socks to a homeless shelter for every pair that is sold. Goldberg and his partner, David Heath, started the company in 2013, when they launched what is still the most successful apparel-related Indiegogo campaign in history. They were fully funded in 24 hours.
The partners consider their appearance on Shark Tank a grand slam. After a few tense moments, Goldberg and Heath signed a deal with a shark, or investor—in this case, apparel magnate Daymond John.
“When we aired in September 2014, we had done $600,000 in sales,” Goldberg says. “Since then, we have done over $10 million in sales. We just hit our millionth pair donated.”
The Bombas team thought it might take 10 years to get to that point. Instead, it took two and a half.
“I think Shark Tank deserves some of the credit for sure, and I think making a great product and having a real reason to exist are the other reasons,” Goldberg said. All the sweat and effort paid off.
PERSONAL POWER
When Christina Bernstein (C ’11) made the long walk down the studio hallway and into the Shark Tank, she was alone except for a model wearing her invention: the Boobypack.
A fashionable sports bra with waterproof pockets that can hold money, ID, and even a phone, the Boobypack is dubbed “a fanny pack for your rack.” A clever product design and tagline goes a long way.
So does sharing real personality. Bernstein engendered some warmth from the sharks when she told them she had been living off money she inherited when her father passed away.
“I felt an immediate shift when I got a bit choked up talking about my dad,” she says. “The show’s producers have sculpted entertainingly tough personas for the sharks, but I think underneath all the theatrics, the sharks are compassionate people who reward sincerity.”
“Even though you’re not supposed to say this on air, the most valuable aspect of Shark Tank is the publicity it gets you. Having 8 to 9 million viewers hear about Boobypack has been the most valuable part of the whole experience.”
– Christina Bernstein (C ’11)
Like Goldberg and Heath, Bernstein also made a deal with a shark. On air, she sold 25 percent of her company to Barbara Corcoran for $80,000. Like the guys from Bombas Socks, swimming with the sharks was a transformative experience for Bernstein.
“In the month post-Shark Tank, we made almost as many sales as we did the previous year,” says Bernstein, who had sagely trained 10 customer service reps to field emails the weekend she debuted on the show. “It was an insane surge that held steady for a long time. We still see spikes whenever our episode re-airs.”
REAL OR REALITY TV?
An appearance on Shark Tank is a valuable commodity for young companies. According to Goldberg, 30,000 people apply each season. Out of 170 that are filmed, only 100 make it to air.
Success stories abound. Each episode features a vignette in which the sharks check in with contestants-turned-partners, all of whom are deliriously happy about their good fortune at signing a deal. Ultimately, though, the money and mentorship that come with signing a deal are insignificant compared with the opportunity to appear on television.
“Even though you’re not supposed to say this on air, the most valuable aspect of Shark Tank is the publicity it gets you,” Bernstein says. “Having 8 to 9 million viewers hear about Boobypack has been the most valuable part of the whole experience.”
Exposure on Shark Tank is an accelerator for a company like almost nothing else in the business world. But some would say the Shark Tank express elevator to success presents a rather skewed portrait of real-life entrepreneurship.
“There are a lot of parts of that show that do not map to reality,” says Jeff Reid, professor of the practice at Georgetown McDonough and founding director of the Georgetown Entrepreneurship Initiative . “One of the downsides is that it portrays entrepreneurship as just being about consumer products. And that is a tiny fraction of what startup companies are all about.”
Reid, who created an Entrepreneurship Advisory Board at Georgetown McDonough with investor, philanthropist, and Georgetown alumnus Ted Leonsis (C ’77) as chairperson, also notes that not every company needs to have investors, even if the sharks make for good TV. And for those that do, negotiation with investors happens very differently in real life compared with on the show.
Still, while conceding that the sharks try to inject some drama into the negotiations, Goldberg feels the show portrays entrepreneurship as accurately and honestly as the format will allow. He believes his experience on the show has reliably tracked his real-world journey, he says.
“These are real conversations that you are having in that room,” Goldberg says. “There were no interruptions; there were no producers in the room; there were no pauses. These are the same conversations we have had with a lot of investors when we go out and raise money and talk to people.”
“Investors are investing in the person, without a doubt. That is the most important factor in an early-stage company.”
– Jeff Reid, founding director, Georgetown Entrepreneurship Initiative
Confrontation can happen in the real world, and even non-TV investors will bring their egos into the negotiations, but rarely with the dramatic flair seen on Shark Tank. At one point in Goldberg’s pitch, investor Kevin O’Leary scoffed at the market share of Bombas Socks, calling Goldberg and Heath “sock cockroaches” before dropping the show’s oft-repeated rejection tagline: “I’m out!”
“For the people who I am coaching to be successful in life, would I have them walk away from a conversation that is accusatory and aggressive? Absolutely,” says Shaun Johnson (C ’07), co-founder of the Startup Institute and an entrepreneur-in-residence at the McDonough School of Business. “If you don’t have an optimistic investor on your board, what is your business going to be? So I wouldn’t encourage the students I work with to seek out overly confrontational conversations.”
Shark Tank does get one important real-world factor right: The person is as important as the product. Bernstein and Goldberg were polished, prepared, and informed. Their innate competence was clear through the sweat and the tears. That carried more weight than any sales figure they quoted.
“Investors are investing in the person, without a doubt,” Reid says. “That is the most important factor in an early-stage company. You might like the idea or the products, but it is the team that has to execute. Ideas are relatively cheap. Execution is really difficult. It is about taking the idea and making something of it.”
Published in Georgetown Business Magazine, Fall 2016