You can watch the interview and read the original article written by Steve Schaefer of Forbes here.
It takes a lot to cut a deal with O’Leary, a tenacious negotiator and harsh critic of gimmicky contraptions, but in a recent interview with Forbes he shared the secrets to success and why viewers can expect him to bet on a lot of women founders in the news season premiering Friday night.
There are three keys to getting one of the sharks to buy in, O’Leary says, evident in virtually every case where a deal is reached with the inventors and entrepreneurs pitching their idea.
First, the basic elevator pitch. “In 100% of cases an entrepreneur can articulate their idea in 90 seconds or less,” he says.
Second, the team “can articulate why they’re the right people to execute the business plan.” Plenty of inventors might be able to come up with a great idea; far fewer have the wherewithal to see it through production, distribution and profitability.
Above all though, O’Leary says there’s a single most important trait Shark Tank success stories have in common.
“The one that really matters is the entrepreneurs know their numbers inside out,” he says, rattling off examples like break-even points, market share statistics and margin analysis. “In Corporate America, when you want to be a leader…above all, you need to know your numbers.”
That doesn’t mean O’Leary is infallible. While he holds the crown for the largest exit in Shark Tank’s history — the $14.5 million sale of smartphone photo collection app Groovebook to Shutterfly SFLY -5.71% last year — the product that has proven to be the best revenue generator completely stunned him.
Scrub Daddy is a sponge product funded by fellow shark Greiner. The selling point is that under cold water the sponge is hard and can be used to scrape food residue off a plate; under warm water it’s softer and can be used in more delicate applications.
“I thought it was a piece of crap,” says O’Leary. But after landing a deal to hit the shelves in Wal-Mart, Scrub Daddy is up to $50 million in revenue.
While he missed out on Scrub Daddy, O’Leary has more hits than misses with his Shark Tank investments, and after studying all of them through 2014 he found a surprising statistic.
“One hundred percent of my returns the last six years have come from companies run by women,” O’Leary says, across different sectors and geographies. “There’s an old adage that says ‘if you want to get something done give it to a busy mother,’” he adds, but he’s less interested in how it’s happening – he speculates speculating that women are more mindful of risk and better at time management, both crucial for the small companies in the Shark Tank pool — than about the outcome.
“I don’t care why. I care about the actual financial results. So this year on Shark Tank, I’m investing in a lot of women.”