Between being aggressive as a shark and empathetic as a dolphin, what should business leaders choose? Namita Thapar, one of the judges of the popular reality show Shark Tank India, has the answer in her latest book The Dolphin and the Shark. Thapar digs into the pages of season one of the show that piqued the entire nation’s interest in entrepreneurship to fetch the most important lessons. From how to get a pitch right, what to do once you have the deal, how to build a strong team and a brand that shines to the role of mentors, Thapar has covered it all for budding entrepreneurs.
Here is an excerpt from the book:
‘You never get a second chance to make a first impression.’ This is one of the most brilliant quotes I have come across and it is absolutely relevant for this chapter. The founder gets limited time with investors and they have to plan, practice and make that unforgettable first impression. While ‘substance over style’ is definitely true—substance is paramount—the magic and impact of the right style cannot be discounted in today’s world. Especially when attention spans are short and there is a clutter vying for that limited attention! At Shark Tank India, the Sharks saw 8–9 pitches per day, each with an average time span of an hour per pitch (the edited 10–12-minute version is shown on television). It was important for pitchers to have the pitch concise yet interesting enough to not only hold our attention but also walk away with a deal!
As I mull over all 198 pitches and the sixty-two that walked away with funding, there are several commonalities that stand out among those that finally got funded. So, here are few key ingredients that make a perfect pitch:
1. Solve a deep-rooted problem: Investors want to understand the purpose and scalability of the venture. The founder should be able to clearly articulate the problem and specifically state the Target Audience Market (TAM) that is impacted by the problem. For example, since I am from healthcare and understand the affordability and accessibility gap in our country, The Renal Project (affordable dialysis service) and Spandan of Sunfox Technologies (portable low-cost ECG) appealed to me as both are out to solve these important problems. Both had a great handle on the statistics and spoke passionately about wanting to make a difference.
2. Narrate your personal journey: This is the most important success mantra. A founder must nail this part! Investors ultimately invest in the person; they make a bet on their vision and for that, their personal journey must touch investor hearts. Educational background, family, who inspired them or what incident in their life inspired them to take up this journey, setbacks and learnings along the way. The investors must be able to understand and feel this emotional connect. Passion and conviction should shine through their eyes when the founder is speaking. When Jayanthi Bhattacharya spoke about how her hemp products came about due to her sister’s illness and painful journey, it showed us how important this venture was for her as a cause. Likewise, for Pandurang Taware of Agro Tourism, he had been at this mission of helping farmers for the past sixteen years. He is a farmer himself and understands the importance of showcasing the cultural diversity of rural India and, in the process, helps farmers augment their income. He has won so many awards and worked with the government on important policy changes. Though I didn’t invest on his venture at the Tank, his personal journey and persistence stayed with me. I approached him after the show and am thrilled to be investing in his venture.
3. Know your numbers: Now this one is a non negotiable. Just like understanding emotions is important, understanding numbers and the business plan is equally important for investors. A good founder must be so hands-on that basics like selling price, gross margin, SKUs, shelf life, sales mix, etc., must be answered with absolute clarity. They must also be able to answer questions around customer insights and competition and their differentiator in a convincing manner. Fumbling around these basics or not having the right numbers in the head shows lack of thoroughness and attention to detail. By far, the most important number a founder has to get right is the valuation they ask for. We saw good businesses that got rejected as the founder asked for unreasonable and often beyond ridiculous valuations. Investors want to know that this has been thought through well. Here, the example that comes to mind is the venture with healthy chips and dips, #Tagz. I lost to Ashneer but I was super impressed by the founders’ grasp on their business basics. Often, things happen too quickly at the Tank and post the show, you get more time to think through the venture. I approached the #Tagz team after the show ended and invested in them. I was absolutely right. Their due diligence was the most efficient and quickest due to their sheer grasp and preparedness where their numbers and accounts were concerned.
4. Stage of business: At Shark Tank India, prototype stage businesses did not get much interest from the Sharks. The post prototype yet pre-revenue businesses were interesting but then again, there was always the lingering doubt that the product market fit had not been proved through a launch and consumer insights were still missing. The winners were the ones who had launched and had seen reasonable sales to get investors intrigued.They could show a clear path to scale and profitability. I passed on interesting deals like Good Good Piggy and Sabji Kothi as they were only in the prototype stage but Brainwired was one company where I made an exception. Firstly, their journey touched me. They lost their cow, Gauri, who they were very attached to and the doctor’s words stayed with them—had they detected her illness early, Gauri could have been saved. This inspired them to launch their AI-enabled livestock health monitoring system. They did not have any revenue but they had firm orders from various state governments and private organizations and I had the confidence that they would implement and deliver.
5. Touch and feel the product/technology: Avid Shark Tank India watchers must have witnessed the delight with which we ate all the goodies that were served to us by food business entrepreneurs! Nothing gets Sharks to truly grasp the business more than trying out the product—whether it was tasting the food, feeling the fabric of fashion wear products, checking out the packaging, logo design, using skincare products, trying out the shoes, etc. It was also important to check the simplicity and style of the user interface of their technology, their app and website. Some of you will remember Aman and Anupam trying electric two-wheelers of Revamp Moto and Vineeta zipping around in the EV from Booz. The ability to try and test the products gave a different kind of confidence and connect with the venture.
6. Stay open to feedback: This is one of the most important points investors look at. When we invest in an entrepreneur, it’s going to be a long journey and we want to be associated with people who are humble, hungry to learn and open to feedback. Very often, we saw Sharks loving the venture, getting impressed by the financials but passing on a deal just because they didn’t like the founder’s attitude and found them too defensive with mindblocks when it came to listening to Sharks’ suggestions. When Aishwarya Biswas of Auli felt she didn’t need a co-founder, many Sharks passed on the deal assuming that she would be a founder who would not be open to new thinking. But I invested in her as I felt that she had gladly accepted a few other suggestions on marketing and finance when we had pointed those out to her. Different Sharks, different styles, and different perspectives on the same founder.
7. Master your negotiation style: When Sharks offer a valuation, they fully expect the founders to counter offer. But it’s the manner of the counter offer and how they negotiate is what offers priceless insights into the founder’s mind. Often, founders were adamant and didn’t budge from their valuations, and sometimes, the Sharks caved in. Some Sharks let the deal go. Often, it seemed that the founder was open but some mentor or advisor was quoted as not allowing the valuation. This was a put-off and made several Sharks sense that the founders lacked independent thinking. Bummer and Thinkerbell are great examples. Sulay and Sanskriti didn’t budge on the valuation as they were very clear that they would not down-value their respective start-ups compared to what they had raised in their previous round of investment. Such clarity of thought is impressive, even if it means staying adamant on that last 0.1 per cent in the negotiation round. Here are a couple of tips around negotiation: where there is a prior investor, founders can be firm and not down value at the Tank, citing the anti-dilutive clause in the shareholder agreement. Where there is no prior investor, the founder can use the multiple commanded by a similar type of company that has fundraised to peg their own range for valuation.
8. Create a splash: The drama quotient, what they wore, use of the right props, displays, use of short films, dance and music to convey the essence of the venture was done effectively by many founders! The Sharks just loved this and our faces would light up. The pitch has to be concise but the enthusiasm and energy must be contagious. Animated faces and energetic body gestures are ways to keep Sharks engaged. Humour is a great tool and makes you more likeable and memorable. Beyond Snacks did this incredibly well. He walked in and enacted ‘Greasy Anna’ in his red lungi to show the unhygienic conditions in which most banana chips are made. Then he tore his black T-shirt to reveal a yellow T-shirt with the Beyond Snacks logo (a perfect colour match with his chips packaging) and brought in a Kathakali dancer in an elaborate costume to serve chips to us! It was the same with the Nuutjob girls who walked in dressed as men with beards and the whole shebang, itching their private parts to demonstrate the need for male intimate hygiene products! Now this is drama and creating a splash.
All these stories are from Shark Tank India Season One. Shark Tank India not only gave founders an opportunity to present to Sharks and get funding but also the platform to showcase their venture to millions of viewers globally. This is a once-in-a-lifetime opportunity to market your brands. We’ve heard of websites crashing and founders facing stockouts within hours of their episode airing. Such is the magic of Shark Tank India, a unique platform that must be optimized by perfecting one’s pitch. The lessons here have Shark Tank India references to make it easy for everyone to relate to them.
However, these insights are relevant for all entrepreneurs. It is important to take a step back and internalize that there is a whole world of investors and a fabulous start-up ecosystem awaiting all these bold and driven founders. They are excited to partner with them and invest in them. Hopefully, what I have shared in this chapter, will prepare entrepreneurs for this exciting world and bring a smile on their face, confidence in their hearts and spring in their step as they get on stage to face the bright lights shining on them.
(Excerpted from The Dolphin and the Shark by Namita Thapar, published by Penguin Business, August 2022)
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