Rufflebutts, Persephone, and the Battle of the Sharkettes
Like technology, fashion is an industry which is constantly changing due to styles and market trends. Clothing companies have to always be on their toes looking at what the latest trends are so that they can meet and fulfill consumers' expectations. They therefore have to offer many styles as well as different colors and variations of each piece of clothing, each one known as a SKU, or a Stock Keeping Unit. After asking how many SKU's Rufflebutts has, Kevin O'Leary was completely blown away with their response, that they have 2,700 SKU's in order to keep their product line fresh and hip. This response knocked Mr. Wonderful into "Kevin the Mythologist" mode in which he began reciting the story of Persephone in Greek mythology where Zeus's daughter chased after all the colorful flowers until it destroyed her. Although at first the story seemed completely irrelevant, the lesson it taught was that the company should not chase after new products and varieties, but rather keep the line simple and basic to avoid falling to the "Devil of Inventory". With so many SKU's in the company, Kevin felt the business wouldn't be successful and went out. Mark and Robert admitted that they didn't know anything about the latest styles or fashions, and so because they couldn't add any value, they went out as well.
Then there was the Battle of the Sharkettes. Season 5 of Shark Tank is the first season in which Barbara and Lori sit on the panel simultaneously. Having two female Sharks on the panel brings a whole new dynamic to the Shark Tank, and a lot more whining and cat fights. This particular cat fight experience was enhanced in this pitch, as Lori and Barbara were the only two investors left interested in making a deal. From the start, Barbara said that she didn't want to make an offer until Lori did, out of fear that Lori would just undercut her. Shrewd Lori waited it out until Barbara made an offer, and then did exactly what Barbara said she would do. She undercut Barbara's offer of $600,000 for 12%, and instead only asked for 10%. This was disgusting of Lori to do, but then again, she's called a Shark for a reason.
Once both their offers were on the table, Barbara and Lori began trying to sell themselves as better strategic partners than the other one. Barbara claimed that while Lori merely sells product, she builds power brands. Lori laughed this off saying that she build a $500 million power brand, and added that her experience was in retail, whereas Barbara's was primarily in real estate. (For all of you who were unsure, this is called a cat fight.) Finally, Kevin firmly requested that they both stop talking and that Amber and Mark go outside to make a decision. They came back with a counteroffer of 8%, and ultimately settled with $600,000 for 9% - congratulations Lori!
This pitch was really phenomenal for multiple reasons. The fight between Lori and Barbara and the mythology lesson from Kevin were fun to watch and rather amusing. But what was really astonishing to see in this pitch were the negotiating tactics and strategies used by the entrepreneurs. Amber walked into the Shark Tank with confidence and answered every single question flawlessly and without missing a beat. It almost seemed as if she already knew what the Sharks were going to ask her.
Wait a second.
After four seasons of Shark Tank shouldn't every entrepreneur know what the Sharks are going to ask them? Shouldn't every person with a half-a-brain pitching to the Sharks watch each and every previous pitch to better prepare them for the live grilling session? It is about time we got to see an entrepreneur walk into the Shark Tank fully prepared to answer every single question and negotiate like a professional. Amber and Mark knew exactly what to say and when to say it, and clearly strategized in terms of the cards they would play. They brought their kids into the Tank to charm the Sharks and warm their hearts. They told the Sharks that they completely value and respect each of them tremendously. They negotiated not on their behalf but on the behalf of their kids, saying that every percent they give away is coming out of their children's future accounts. That is called strategy. That is called negotiation. And that is called an entrepreneur who deserves a deal from the Sharks. Job well done!
Overall Performance: Presentation: 49/50. Strategy: 25/25. Product: 22/25.