The road to successful entrepreneurship is long and uncertain, which is why starting a small business requires a lot of personal sacrifice and courage. There’s no telling what your new business will go through before it starts making money, even after the big first steps are taken.
To say the least, the small business owners on Shark Tank had to show how brave they were. Business owners have to be brave enough to put their company and its goal on the line and risk having their hard work turned down on national TV in order to be on the show.
These four “Shark Tank” fails can teach people who want to start their own business a thing or two.
As Netflix did in the beginning, ToyGaroo was a service that rented out toys through the mail. But Phil Smy, ToyGaroo’s software creator, told Failory that the company wasn’t ready for what happened after the show aired. He said, “Because of our new partners, we were closely watched and put under a lot of pressure to “grow, grow, grow.”
The company went out of business because the cost of toys for their fast growing customer base was too high.
It’s not possible that a small business will have such a sudden influx of customers, but this shows how important it is for a business to grow naturally. If you want to keep your small business from going bankrupt, you should take your time and let your customer base grow with you.
No Towels Shown
It’s a cool idea to use a towel and a blanket together to dry off faster and keep you warm while you change clothes. Making a deal with Disney to sell at their parks was too important to the simple but good idea. When Disney saw how much money the product made from online sales, they pulled out, and the business was soon shut down.
The company has come back with a poncho-towel design that is now marketed toward people with disabilities. This is a good example of why business owners shouldn’t depend on the results of one deal to determine how well their company does financially.
James McDonald and Cole Egger got together to start the cake ball company Sweet Ballz. Because of their story, you should always know and trust the people you do business with.
Apple and McDonald had a good idea to add to the cake ball craze of the time, but the problem was how the two business owners were getting along. In the end, McDonald sued his business partner because he started his own company called Cake Ballz and sold the same product without telling McDonald’s.
A restraining order was made against Egger at the end of the ordeal. McDonald’s still has a side business making cake balls, but the deal that could have been is still a mystery and a big chance lost.
This mistake shows that even sharks shouldn’t think that easy ideas aren’t important. Steven Sashen and Lena Phoenix worked together to make a line of minimalist shoes with a simple design for people who like the feel of going barefoot but need the support of shoes.
They chose to show their idea to the sharks after getting a patent for it. It’s basically a strip of special rubber and a cord to attach it to your soles. However, the sharks didn’t like how simple the shoe was and said that anyone could copy it.
O’Leary offered $400,000 for half of the business, but the two turned him down. After that, the business took off and became very successful. Other investors saw the hope in the business and made them deals. In 2021, Xero made a net of $33.6 million. The company has become more famous since then.