There’s no denying that ABC’s entrepreneurial reality hit “Shark Tank” has become a TV game-changer and cultural phenomenon. “I’m so proud of what we’ve built here,” Kevin O’Leary says, “to see 11-year-old girls getting interested in the structure of financing venture capital — it’s inspiring.” We caught up with the author and mogul to learn what it takes to survive and thrive as a startup in 2016.
1. Keep it simple
Don’t underestimate the importance of a strong elevator pitch, O’Leary is quick to stress. “An entrepreneur should be able to articulate the opportunity in 90 seconds or less,” he says. “They need to know exactly what they want to do and be able to explain the opportunity very quickly.”
2. Pivot for success
Pivoting is the ability to recognize that the pursuit of a specific idea, direction or product is no longer the correct path for a business to follow. This skill set is crucial for companies operating in the hyper-competitive online marketplace. “The truth is that running a business is really hard,” he adds. “You have to be able to pivot, particularly if you’re a startup.” In the heat of the moment, this can be more difficult than expected.
3. Count your coins
Understanding cash flow is one of the most important aspects of being a CEO. “Never waste money in the startup phase,” O’Leary urges. Keeping the pulse of how much cash is left and whether that will carry the company through to successful financing has never been more consequential.
Why do so many young entrepreneurs fail? “Their growth projections are wrong,” says O’Leary. “Their revenue projections are wrong and they run out of money; that’s why 8 out of 10 businesses fail.”
4. Know your competition
If you look at the foundations of successful startups, very few were started in imitation of another startup.
“If you’re talking about something like a hot sauce, or a food product where the ability to get shelf space is practically zero — that’s not really interesting for me,” he explains. “I tend to be focused on the product, the service, the market and of course, the people. But right out of the gate if it’s an overly competitive space: that’s a huge negative.”
5. Master your emotions
Emotional reactivity can influence perception and behavior. “Don’t get emotional about business,” O’Leary advocates. “Understand what it’s all about. Don’t let your emotions make decisions — let the numbers decide for you.”