Of all the startup investments Barbara Corcoran has made in her eight seasons on “Shark Tank,” about two-thirds of them have flopped.
But, she explained in a recent Facebook Live Q&A at Business Insider’s New York office, the remaining one-third have made her a lot of money.
The common trait of the entrepreneurs who have made Corcoran money? “They’re not so smart.”
Making deals with unintelligent business founders may sound like a bad approach, but she’s specifically referring to the way they carry themselves when things get tough.
Corcoran said that every business, whether it becomes a success or failure, inevitably runs into a major obstacle, and that moment is Corcoran’s test of whether or not she can trust them. The two-thirds of her entrepreneurs who will lose her money react by blaming someone or something and go sulk “for a number of days, or sometimes weeks,” she said. “Those are the people, that I now know as an experienced Shark, who are never going to make it in business. The minute someone starts feeling sorry for themselves, they are not an entrepreneur, because you don’t have that luxury in life.”
Here’s where that “stupidity” comes in.
“You almost have to be too stupid to lay low when you’re smashed,” Corcoran said. “If you want to be an entrepreneur, you have to have a low enough IQ so that you bounce back up and say, ‘Hit me again.'”
Corcoran is partial to non-MBA types because she prefers working with someone who will not overanalyze risk, and who will ignore safe choices to plow through the difficulties of building a business. “They’re smarter on their feet; they’re smarter at recovering; they’re not book smart,” she said. “I don’t even know if they have a high IQ, but guess what — they’re natural-born entrepreneurs.”
She gave an example of a moment where she knew that she would have a great partnership with two of her favourite “Shark Tank” entrepreneurs, Cousins Maine Lobster founders Sabin Lomac and Jim Tselikis.
For a Season 7 update on the deal Corcoran struck with Lomac and Tselikis in Season 4, a “Shark Tank” production crew travelled to Maine to report on the company’s franchise expansion.
Corcoran explained in the Q&A:
“I’m thinking, ‘How do I get their brand in this update? And so I say quick, you’ve got two days to do it — get giant chef hats, put them on your 50 employees. Puff them up with garbage bags! … And I want “Cousins” in bright red letters across the band.
“They got that done overnight. I don’t know how they did it — 50 hats done; delivered on time. The producer walks into the set, looks at all the employees with the giant chef hats and says, This is no good. Get rid of the hats. Too much.’ And Saban turns and says, ‘I’m sorry, it’s our company policy. We never let our cooks take their hats off.’
“I looked at Saban, I thought, ‘I love you, baby. I love you so much! You’re going to make me so much money.’ And of course, he makes me so much money.
“That’s called smart on your feet.”
You can watch the full Facebook Live Q&A below.
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