Shark Tank Pitch Recap: S 11, Ep 5: Demo Context is King
Air date: 10/27/19
Sharks: Mark Cuban, Daymond John, Kevin O’Leary AKA Mr. Wonderful, Lori Greiner and Guest Shark Matt Higgins
A demo/presentation coach reacts to this week’s Shark Tank.
Shark Tank provides a great example of what real pitches look like, with real reactions from the audience. So, at Demo Solutions, we like to look at Shark Tank pitches the same we would audit any other demo or presentation. These Shark Tank recaps will be a regular feature on the Demo Solutions blog, so keep coming back to see what we think of other episodes.
This won’t be a full recap of every detail that happened – there are enough of those on the web. Rather, on this blog, we’ll be discussing the elements of the Entrepreneurs’ demos that worked, what didn’t, and what they could have done instead.
Before reading our recap, a few disclaimers/things to note:
- We have no affiliation with Shark Tank, Mark Burnett Productions, ABC, or any of the Sharks (but Sharks, if you’re reading this, let’s talk demos).
- We fully understand the pitches on Shark Tank have been edited for TV, so what we’re commenting on might not be what actually happened.
- Just like in real life, our ratings are completely subjective, and a “bad demo” can still get a deal. However, more often than not, a weak presentation will lead to a majority of the Sharks going out, and the 1-2 Shark(s) still in at the end will give a “greedy” offer. And when they give a “greedy” offer, they typically say something like “this is risky” or “I’ll take a flyer” or “I’ll have to do most of the work” – meaning they aren’t sold on the value of the business or the Entrepreneurs.
- Don’t read this if you haven’t watched the episode yet and are worried about spoilers. There will be spoilers. Consider yourself warned!
Asked for: $250K for 10% of company
Demo Killer: They didn’t make it about the audience
The Tailgate N Go team started the pitch by asking the Sharks a “have you ever” question, which is a common tactic, and can be a good way to get someone’s attention. But, the “have you ever” question was about camping, and a few sharks made it clear that they don’t camp (at about 7 minutes, Kevin said “I hate camping. If I don’t have a mint on my pillow, I don’t sleep.”) – meaning this particular opening wasn’t relevant for the audience.
Additionally, I didn’t hear context or benefits in this presentation. They did a nice walkthrough of the product itself, and it looked slick, but they didn’t tell me why I should care. What problem are they solving? Why is this solution? In fact, the first question Matt asked was about how they came to invent this – meaning he didn’t get the context in their demo. Context is key and we explore this more in our Deadly Phrases at Demo Solutions.
How to Kill the Demo? Tell the story. They had a good story to tell about why they came up with it, but that didn’t come until later in the presentation. That would have been far more compelling than a “have you ever” question about camping.
I also would have made the intro much more geared around sports instead of tailgating, as that was the clear use case that they were looking to sell (which was made clear by the fact that Matt was the shark they targeted.
Q&A: Had to defend the value
They did an OK job handling the questions. The biggest miss was when Kevin asked “Why is this worth $2.5 million,” or, put another way, “why are you as valuable as you say you are.” Their response was that they have a patent, which didn’t impress Kevin. And Kevin was right not to be impressed – who cares about your patent (your cool technology) if you don’t have a clearly defined use case for people to buy it?
Offers: Kevin and Matt
Kevin offered $250K as a line of credit at 10% interest, plus 10% equity and a $100 royalty to get his money back. They countered to Matt, who had already gone out (because “avid football fans are already vested in their setup, and don’t want something else) – and this was a risky move. But it paid off, as he offered $250K at 20%.
The Verdict? Deal with Matt – $250K for 20% with a $50 royalty until he gets his money back
Frankly, I was a bit surprised by this outcome. That was a solid deal with a great partner, who had been pretty ambivalent throughout most of the pitch. He mitigated some of his perceived risk with the royalty, but it could have been worse for the Entrepreneurs.
Also: Their website is (currently) down (as of 11:08 CST on 10/29, which is a day and a half after the show aired)
Not a good time to not be able to handle a spike in web traffic…
Asked for: $150K for 20%
Feedback: That intro was just too much
Demo Killer: The team ran into the room with more energy than just about anyone who has ever been on Shark Tank. When employed correctly – energy can very much work to the presenter’s favor as it can engage the audience. The problem here was that these guys were so over the top that it was distracting. So instead of engaging the audience, it just made the intro hard to follow. Which was why the first question they got was when Matt asked “Tell me about the problem that you’re solving.” They still didn’t really explain it, which was why Matt told them later that they didn’t do a good enough job explaining what the “motherboard” can do.
Killer Demo: The personal story: During the Q&A, one of the presenters (Jonathan) shared his story of becoming a Microsoft Certified Sysadmin at 17, then opening up a bar. This resonated with Cuban, who had a very similar story.
The verdict? No deal.
They got close to benefits (“we do the repairs in front of you,”) but didn’t quite get there. They also had a number of offerings (a truck, a kiosk, a physical store) and seemed a bit unfocused. The Sharks liked them, but didn’t want to invest in their business.
Asked for $300K for 8%
Killer Demo Intro!
The Golfkicks guys came in on a golf cart, which is certainly engaging (it has movement, and creates some curiosity – why are they on a golf cart?). They also brought Daymond a pair of FUBUs, which was very smart.
They got to benefits quickly – “people buy it because they get to wear their own shoes and feel cool.”
The only thing I would have done differently in the opening demo – the product was clearly difficult to install as users had to drill a pilot hole in their shoes (and who wants to do that?). One of the presenters (Tyler) said “we cheated and put someone in already” when showing the product. But why call attention to that? It didn’t hurt him in the end, but that was definitely a Deadly Demo Phraseâ„¢.
Demo Killer: Q&A: Daymond and Matt went out because they hate golf, and Kevin went out because he thought it was a product, not a company. The Golfkicks team response by talking about the size of the potential market, which wasn’t a particularly compelling answer – there’s a huge delta between the potential market size and the percent of the market that a company has captured.
Offers: Lori and Mark
Lori offered $300K as a loan at 8% with a royalty of $1 to get her money back, plus 5% equity. The Golfkicks team basically ignored her offer to talk to Cuban – which wasn’t a great move. Even if they didn’t like the offer, not responding to her is rude – and while I am not saying they did that because she’s a woman, I have seen lots and lots of demos where a woman asks a question and the (usually male) presenter responds to a man in the room. Not a good look. Lori got frustrated that they talked to Cuban and not her, so she upped the royalty to $2.
Mark: $300K for 15%
The Verdict? Deal with Mark – $300K for 13%
This was a solid deal, and they had a great pitch. The biggest miss here was the audience interaction – they probably could have gotten a better offer if they didn’t ignore Lori.
Asked for: $150K for 10%
Killer Demo: The demo started strong – the presenters introduced themselves as “an olympic athlete, an olympic athlete and…an engineer.” Solid joke and a nice way to engage the audience.
Demo Killers: But, in the pitch, there were 3 things that I didn’t really like. These may sound “nitpicky,” and they are, but sometimes these are the things that make all the difference in your demo. 1) They talked about the size of the “pain” market, which the Sharks normally hate. 2) They used the phrase “FDA Compliant,” which I don’t think means anything in this context. I’m surprised Lori didn’t call them out on it, because she usually is the first to question things like that. 3) They said “The Meteor can benefit you,” but didn’t really said how.
The best part: When Cuban came up and tried it
During Q&A, Mark came up and tried the product, and he loved it. Then, he told them the value of the product – he doesn’t have to get on the floor to use a roller. I would have started with having one of the Sharks try it. It’s risky, but Mark’s “endorsement” is going to be more powerful than anything the Entrepreneurs can say (except for a ton of sales – that usually excites the Sharks)
Offers: Mark, Kevin, Matt, Lori
They pretty much all liked this one. Mark started with $250k for 20%, and made it an “exploding offer.” They were smart not to take it, becasuse they got better offers right away.
Kevin offered $150K for 5%, Matt offered 150K for 10%, and Lori matched Kevin’s offer.
The verdict? Deal with Lori – $150K for 5% (better than what they asked for)
They did a nice job showing the value of the product – even if Lori’s major focus was getting the price down.
Demo Context and Team Narrative are Key in S11, Ep 5
- Having a great idea and solving a problem doesn’t always do it – just ask the guys from NERDiT NOW
- Audience engagement, like when MyoStorm brought Cuban on “stage,” can get buy-in in a way that the presenters simply can’t on their own
- Being rude to the audience usually doesn’t pay off, but if you don’t care about a particular “buyer” like when Golfkicks ignored Lori, it may not hurt your sale
- Looking for more tips on killing your Demo? Start here..
That’s all for this week’s Shark Tank pitch recap. Come back next week for more in depth coaching and feedback of the pitches, presentations and demos from Shark Tank.
Agree? Disagree? Something to add? Let us know your thoughts in the comments below!