Over the past seven seasons, “Shark Tank” has grown into a phenomenon.
Not only is it an Emmy-winning reality show, but it has created recognisable brands like Scrub Daddy, which Shark Lori Greiner has helped take to $US75 million in total sales over the past three years.
The show is both an entertainment product and a prominent launchpad for hundreds of American startups, requiring a careful combination of high-level production and management.
Through several interviews with the Sharks, we’ve learned some interesting behind-the-scenes details hidden from viewers. We’ve collected them below.
A televised segment lasts about 10 minutes, but it uses footage from a pitch that, on average, lasts an hour. In season four, Plate Topper founder Michael Tseng was in the Tank for two and a half hours, the longest of any entrepreneur.
Unlike a typical pitch, the investors know nothing about the entrepreneurs or their products before they enter the room. It's a technique that allows viewers to learn about both the people and their companies along with the Sharks.
The footage editors take out contains the 'unsexy' material, where the Sharks and entrepreneurs get into financial minutiae that the typical viewer would either not understand or care very much about.
The production process is both efficient and demanding.
The past few seasons have had 29 episodes each, and shooting was split over a week in early summer and a week in early fall. The investors see 6-8 pitches per day, and days can last up to 12 hours.
Robert Herjavec said that when he and the Sharks are in their chairs, 'We're cold, we're hungry, we're miserable.' It's why, he explained, it's necessary that entrepreneurs grab their attention and excite them as quickly as possible.
When it's time for entrepreneurs to give their pitches, they walk down a corridor and stop on an 'X' on the floor of the Tank for the ideal shot. They are then required to stand silently for 30 seconds so that the camera crew can gather footage of the entrepreneurs and the Sharks smiling back at them, edited together to set the scene of a new segment on the show.
Appearing on 'Shark Tank' gives entrepreneurs the chance to introduce their business to seven million viewers, a fantastic opportunity for a sales boost even if none of the Sharks decide to make a deal.
But pitching in front of the cameras is not a guarantee that anyone beyond the show's crew will ever see it. Mark Cuban told CNN's Brian Stelter earlier this year that about 20% of the pitches they see never make it on air.
It's up to the producers' discretion to decide if there is enough drama in the unsuccessful pitches to warrant air time.
When a Shark gives an entrepreneur a handshake or hug to seal a deal, that's not part of a contractual obligation.
After shooting wraps, the Sharks and their teams do due diligence to ensure that all of the entrepreneurs' claims are substantiated and that they do not feel deceived in any way.
If everything checks out, they see if the entrepreneurs still want to close the deal -- which is not always the case, as when the founders evREwares declined Mark Cuban's offer of buying 100% of their company after initially agreeing to it on camera.
Daymond John told us that the closing percentage of deals made on television has been increasing each season, and is now up to 80% for season seven. He credits it to the steady rise in the calibre of entrepreneurs who appear on the show.
There's a psychiatrist that meets with every entrepreneur after they give their pitch, regardless of outcome, to ensure that they are feeling well. Keep in mind that these are regular people, typically with minimal to no media experience, getting in front of a panel full of millionaire/billionaire celebrities to give a presentation that potentially millions of people will see.
The magnitude of that was so overwhelming for one entrepreneur this season, Barbara Corcoran said, that he got in front of the investors and fainted. She wasn't on set that day, but the news immediately spread through the 'Shark Tank' crew.
'He just like hit the floor!' she said. 'You won't see that, though. And too bad, because it would make for great TV.'
'Shark Tank' is a well-polished series, and so the Sharks have concealed ear pieces that have them connected to the producers on set.
That doesn't mean the show is 'staged,' however. The Sharks invest their own money, and the producers don't force Sharks to make deals they don't want to make.
They will, however, occasionally nudge the investors to compel entrepreneurs to clarify an aspect of their story for the benefit of the audience, very similar to the way producers get cable reporters to do the same with their sources.
The show's producers hold open casting calls throughout the country, and typically hundreds of entrepreneurs show up to give a brief pitch to members of the production crew.
The producers then keep their favourites in mind as they continue to narrow down their list of contestants for a particular season.
Aside from applications, 'Shark Tank' has scouts that monitor crowdfunding sites like Kickstarter and attend trade shows to find young companies with interesting businesses and dynamic founders they think will pop on television.
For example, scouts asked xCraft business partners JD Claridge and Charles Manning to showcase their hit Kickstarter company to the Sharks, and the resulting pitch worked so well that all five Sharks decided to join in on a $US1.5 million deal.
As 'Shark Tank' grew increasingly popular, the investors -- especially Cuban and John -- became aware of 'gold diggers' who either applied or accepted a producer's offer to be on the show simply to get a 10-minute commercial.
For example, Singtrix founders Erik Berkowitz and John Devecka indirectly admitted on Twitter to using the show for publicity after their season six appearance. Their initial ask of $US1.5 million for 5% equity may have been reasonable in a different setting, but anyone who has seen an episode of the show knows that the Sharks aren't willing to become hands-on investors for such a high price in return for such a small stake. The investors offered the $US1.5 million at different valuations but refused to budge.
The Sharks hate these types of entrepreneurs, even when they like their businesses, because they consider the segment to have been a waste of their time and energy.
Entrepreneurs used to have to give up equity or royalties to appear on the show, until Mark Cuban helped end the policy.
For four seasons, 'Shark Tank' had a requirement that all entrepreneurs who agreed to appear on the show had to give the show's production company Finmaxx either 2% royalties of operating profits or 5% equity.
After a year of being a cast member, Cuban approached the producers in late 2013 and told them he wasn't going to participate in the show unless they removed this clause. He believed that it was discouraging talented entrepreneurs from appearing on the show and had a predatory nature to it.
Because Cuban had already emerged as a fan favourite, the producers retroactively removed the clause.
Each episode features a brief update segment highlighting the ways 'Shark Tank' alumni have flourished since appearing on the show.
While the producers are in charge of scheduling these segments, the Sharks have the ability to pitch their favourite companies so that they can benefit from the likely sales boost following the update.
Corcoran told us that she loves the updates as a way to bring positive press toward her best performing investments and it's why she pitches more than her fellow Sharks. 'I'm the queen of updates!' she said. 'I know how to pitch an update better than anybody! And get it bought, boom, booked.'
'Shark Tank' has its roots in a late night show called 'Tigers of Money' that aired in Japan in 2001. The set was sparse, the investors rude and condescending, and rather than pitch, entrepreneurs practically begged for cash and never expected to see the investors again. It was a strange, sadistic show, but producers in the United Kingdom saw massive potential and created 'Dragon's Den' in 2005.
The British show became the model for pitching reality shows that now exist in about 30 countries. Sony Pictures Television owns the format and licenses it to networks.
Mark Burnett, the reality television showrunner behind massive American hits like 'Survivor' and 'The Apprentice' decided to bring the show to the US as 'Shark Tank' in 2008, using it as a way to get Americans interested in small businesses after they lost their faith in huge corporations during the Great Recession.
The best 'Shark Tank' investments yield the investors millions of dollars in profit every year, and so, beyond the spectacle of the television series, they take their investments very seriously.
They each have teams dedicated to helping them manage their 'Shark Tank' investments, and will stay in regular contact with their entrepreneurs during crucial parts of the year.
For example, Greiner said that she makes herself personally available to each of her entrepreneurs, and Scrub Daddy founder Aaron Krause told us that she has been available via phone or email for valuable insight at all times of the day, including the middle of the night.
The show and its responsibilities have become integral aspects of each of the Sharks' careers, despite their other businesses. John said that he spends about 12 hours working on things related to the show every week.
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