As a writer and a television viewer, I have a general disdain for “reality television.” While the benefits to the producers and studios are obvious – very low cost of production, easy marketing, a format that encourages longer-than-usual commercial interruptions – the attraction to the general population eludes me. It is a lazy and often-vacuous form of escapist entertainment; filler. So, while I had a general dislike of the format, I never actually had any animosity toward Shark Tank in particular (though, when my mother would watch it, I found myself disgusted as one of the investors is a smirking, cocky man with a fratboy douchebag mannerism that was virtually identical to a former employer of mine, so I could have had an antipathy toward it had I actually been invested enough to care). In fact, as the third season of Happy Endings (reviewed here!) burned off its final episodes on Friday nights recently, I was surprised to find that ABC actually kept my wife and I watching into Shark Tank. There were times I actually enjoyed the show, especially as we would watch the effect the show had on some of the featured businesses (we watched as one of the companies that sought investors went from about 3000 Facebook “likes” to over 10,000 one evening).
However, the more I watched Shark Tank, the more queasy I became. Last week, during a rerun of the show (which was new to my wife and I as we were not watching when it originally aired), my issue with the show crystalized and the concepts behind my disgust with Shark Tank have remained vital enough within me for the past several days, inspiring this article.
I realized that Shark Tank is not only terrible television and a particularly banal form of “reality t.v.,” but it is destructive, reactionary, capitalist propaganda that undermines the spirit of free enterprise and the ability for inventors and entrepreneurs to succeed.
Other reality television shows are straightforward with what they are, even if what they embody is absolutely horrible. Reality television shows have given underage drinking by bimbos and idiots mainstream exposure, as well as glamorized infant beauty pageants, teen pregnancy, and ethnic and cultural (or, more accurately sub-cultural) minorities. But, complaining about stupid behavior on Jersey Shore is idiotic; the premise of the show is dumb people doing dumb things. Most reality television shows are straightforward about their intellect-insulting programming and viewers get exactly what they are told when they sit down to watch such things. Shark Tank is far more insidious and far more destructive.
Shark Tank, for those who have not seen it, is a television show where each week, three to four inventors or entrepreneurs pitch a product they have developed or have an idea for to a panel of five millionaire and billionaire entrepreneurs. Make no mistake about it, the four men and two women (who are swapped in depending on when in the season the episode was shot – I’ve yet to see an episode with the panel where both women investors are on at the same time] who sit in judgment of the inventors are the 1% we hear so much about. Through hard work, ingenuity, and investors of their own when they were developing their own businesses, they built multi-million dollar and billion dollar fortunes and businesses of their own. On Shark Tank, the viewer is told, they are given the opportunity to invest in the products, inventions, and concepts from emerging entrepreneurs who either need the seed capital to make their idea into a reality or take their business to the next level. After an initial presentation, the five entrepreneurs inquire about the business model, actual product, inventors and their process or just pick apart the presentation before they either declare that they will not invest or they make an offer. All of the people who present on Shark Tank come with an offer, a request to make of the potential investors, though many of them do not have as firm an idea about what they would use that capital for. This, usually, makes the investors nervous and they lambaste the inventors until or after they leave (without getting a deal). The show notes that these five investors are using their own personal wealth to invest and are thus under no obligation to invest, making them sound like they are being magnanimous when they do.
Here, however, is what actually happens on Shark Tank with the average pitch/episode. First, the episode has a pitch that is either one that one of the investors takes or is a near miss (“but you’re on the right track”) type pitch. Then, there is usually an idea pitched that is a flat-out terrible idea that none of the investors go after. Usually, then there is a product that either is a decent product with a bad business model or has a company that is already headed in the right direction, but is denied funding by the investors because they just do not think the person pitching actually needs it. The episode often ends with a buy because, well, that’s just good television.
What is actually happening on Shark Tank is that the fiefs are coming to beg from the wealthy nobility. Common people, most of whom have invested their own life savings in an idea for a product, come to beg for funding to develop or expand from people whose personal wealth and assets would be difficult to spend in a single lifetime. Most of them are not business people, they are creative people looking for an opportunity (and, to eliminate any potential accusation, I have never applied to appear on or pitched any product/idea for Shark Tank) and they are coming, hat in hand to ask for money or help from those who have more than enough and are figuring out how to use it (except, not really, as I’ll get to later). They present each potential investor with samples of their product, so whether or not the investors actually spend a dime, the budding entrepreneurs are out their products – and the potential investors often take multiples and they chow down on any food put in front of them!
The two things people pitching on Shark Tank seem to want most are funds to help their floundering business produce more or the business savvy and contacts that the investors represent to help their little companies reach a larger market. The investors (I refuse to call them “sharks” as the television show does) are a particularly unimaginative bunch. They are all looking for the next big thing, but they are looking for the next big thing they clearly recognize and fully understand; if they were Hollywood producers, this would be a panel of producers who only invests in the sure-thing blockbuster that they could film in Vancouver (they would not, for example, invest in a sleeper hit like The Hangover based upon the pitch or a romantic comedy intended as counterprogramming during Summer Blockbuster Season to get the dollars from women, mature audiences, or people who just don’t like big budget special effects-driven movies). As a result, watching Shark Tank for weeks, one watches the investors turn down opportunities where they are blind to the obvious potential – like energy generation from waves hitting the shore – or anything that might take a real investment of time or work (a brilliant pitch was made to them for creating a chain restaurant utilizing the parasitic lionfish, where the developers had an infrastructure, made a powerful analogy to how crabs and lobsters were originally perceived, and every one of the potential investors loved the taste of the lion fish, but because the endeavor would have involved changing public perception and educating the marketplace, none invested – though in the long term, it seemed like an incredible investment as they would have had the infrastructure in place for when lionfish became a delicacy and exploded in price).
So, what Shark Tank is actually about is five ultra-rich people looking for ways to increase their wealth (and maintain their wealth by diversifying their portfolio to mitigate potential risk to their already established investments). They do this by playing the odds and exploiting the good ideas desperate non-business people bring to them.
This point was driven home with the most horrible clarity on last Friday’s episode (Season 4, Episode 14). In that particular episode, none of the investors seemed eager to spend (though the one who actually tried the Xero Shoes admitted that they were exactly as comfortable as the developers claimed, though none of the others seemed to believe) and then entered Rabbi Moshe Weiss of SoundBender. Weiss had an impressive pitch for an iPad accessory that was funny, educational, and instantly proved the product’s value to the investors (how Apple so poorly designed the sound system on the iPad to make such a product necessary should get some engineers fired!). While Weiss was a bit heavy-handed on the shtick (we get it, you’re a rabbi!), he had smart, well-conceived answers for every question the potential investors asked him. Some of the investors actually admitted he gave one of the best presentations the show had ever seen.
Rabbi Moshe Weiss came to Shark Tank with a fully realized product, a production company, a small distribution network, and a clear work ethic and drive to succeed. He asked for $54,000 in exchange for 26% of his company. His product, the Soundbender, cost around $1.00 to make and sells for $12.95. Those margins made several of the investors stop in their tracks, their eyes widening in excitement (one could almost see the dollar signs in their eyes). Weiss wanted $54,000 in exchange for 26% of his company on a product with incredible profit margins made in the U.S.A.
$54,000 for a multi-millionaire or billionaire is not a lot of money. In fact, in analogous terms, the impact of $54,000 on a multi-millionaire or billionaire is roughly equivalent to a dinner for two at Red Lobster for a couple making $15,000/year. Yes, you notice it, but with a little moving around or planning, it’s really no problem once a year.
So, what happened? One of the investors wanted to buy in in order to take the production overseas to make each device for about four cents each. As if six times the cost was not enough profit (figuring wholesale in the $6 range)! So, unadulterated greed was out right away when Weiss took a moral stand and said no to that offer. Another potential investor went out when they demanded a royalty and Weiss noted that that would deprive the company of the capital needed to grow exactly when they needed it. And at that point, it seemed like one of the potential investors actually got it. When that offer was made, Robert Herjavec looked downright horrified and stated, “We’re not here to suck the blood out of companies.” For a moment, I actually cheered. When one of the investors made an offer, $54,000 for 40% of the company on the contingency that Walgreens actually places an order for the product and distribute it. Weiss, who seemed uncomfortable with that, turned to Herjavec who made the same offer . . . without the contingency. Weiss turned him down and went with the other investor.
For at least one presentation, Shark Tank was exposed for exactly what it was: a cesspool of greed where those who have exploit those who do not have for everything they can possibly get. None of the investors took Weiss up on his offer of $54,000 for 26% of his company even though the ability to recoup that investment and make profit seemed possible to almost all of the investors (the fact that licensing the Soundbender to Apple to make even more money never came up was astonishing). One wanted even more money out of the deal, one wanted money back faster and it came down to two investors, one who wanted a guarantee that the investment was the “sure thing” it seemed like, the other . . . it is hard to say what Herjavec wanted from the deal. But, instead of either taking Weiss up on his offer or offering only to take a 35% stake in the company (and, to be fair, Weiss was given the opportunity to make a counter offer to the investor who he finally went with and he completely blew it), Herjavec still asked for more than Weiss originally wanted to give.
Shark Tank is not about helping emerging businesses; it is watching the rich exploit those who do not have the resources to make their dreams (or business ideas) come true. Watching Shark Tank is like watching poor people at OTB wait for the keno numbers to be called and the look of desperation on most of the inventors who appear on Shark Tank as they wait for any of the investors to actually treat them like their idea is something of value is often heartbreaking to see. As was eloquently phrased in Capitalism: A Love Story (reviewed here!), Shark Tank illustrates perfectly how capitalism perpetrates itself because the majority of people do not fight the system. The developers on Shark Tank are, for the most part, not looking to stop the exploitation of inventors like themselves; they are looking to get the capital to become the exploiters (or, as one was living out of her car, simply survive). And they are at the mercy of the investors to make it happen.
Never one to simply complain about a phenomenon, I come with solutions. Shark Tank is cancerous programming of the most insidious kind. It encourages the hopeless to follow a dream just long enough to have it dashed on national television by people who have the resources to change lives, but seldom do and (almost) never without exacting a particularly high price for their financial aid. So, the first solution is to simply stop watching Shark Tank. If you have a product you’re looking to get developed, don’t take it to Shark Tank.
What we need is a program called Angel Investors. I checked the IMDB, there is no show now, nor in the past called Angel Investors. Here’s the pitch: Angel Investors would be like Shark Tank, but the panel would be made up of Angel Investors, people who have a lot of money and feel a sense of social responsibility toward the entrepreneurial spirit that got them where they are now (hell, there could be a whole reality show that focuses on trying to cast such a show!). The criteria would be simple: these angel investors would have to have the financial ability and business savvy to develop business ideas that were pitched to them. They would have to be people who were willing to use their connections to further the interests of the businesses they were investing in and they would have to approach the deals with the understanding that they wanted to foster ingenuity and business instead of exploiting good ideas or products other people have developed to fill their own coffers. In fact, a good casting decision for Angel Investors would be to find investors who are willing to put their profits from successful businesses they shepherd back into new businesses that come to the show.
Given a choice between the two, where would you rather bring your product and which would you rather watch?
© 2013 W.L. Swarts. May not be reprinted without permission.
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