The road to successful entrepreneurship is long and unclear, which is why it takes a lot of personal sacrifice and courage to start a small business. Even after the big initial steps are taken, there is no telling what your fledgling business will go through before you see profit.
The small business owners featured on Shark Tank put their courage to the test, to say the least. In order to be featured on the show business owners have to be brave enough to put their company and its mission on blast and have their hard work be possibly rejected on national TV.
ToyGaroo was a service that rented out toys through the mail, like Netflix’s original business model. In an interview with Failory, however, ToyGaroo’s software developer Phil Smy said the company wasn’t ready for what followed the show’s airing. He stated, “Because of our new partners we were under close scrutiny and high pressure to “grow, grow, grow.”
The cost of toys for their rapidly growing customer base was too much to handle, and the company went under.
Though it’s unlikely for a small business to experience such a sudden surge in customers, it exemplifies the necessity for organic growth in a business. It’s especially important for a small business to take its time and grow alongside its customer base so the business isn’t overwhelmed with demand.
This interesting idea combines a towel with a poncho to dry off faster and cover you up while you change clothes. Though the idea was simple and effective, it hinged too much on a deal with Disney to sell at their parks. After Disney saw the profit margins of the product’s online sales, they dropped out and the company was shut down soon after.
Though the business has reemerged with a poncho-towel design that’s now marketed toward people with disabilities, it’s a good example as to why business owners shouldn’t hinge the financial success of their company on one deal’s outcome.
Sweet Ballz was a cake ball company that was co-founded by James McDonald and Cole Egger. Their story is why you should always know and trust who you’re getting into business with.
Though McDonald and Egger had a good idea to add to the cake ball fad of the time, the issue came from the business owners’ relationship. McDonald eventually sued his business partner because he went behind McDonald’s back and started his own company that offered the same product under the name of Cake Ballz.
The ordeal ended in a restraining order being filed against Egger. Though McDonald still runs a cake ball business on the side to this day, the deal that could’ve been will remain a mystery and a huge missed opportunity.
This mistake is a good example why even the sharks shouldn’t underestimate simple ideas. Lena Phoenix and Steven Sashen came together to create a brand of minimalist shoes using a simple design for people who want the feeling of walking barefoot with the protection of a shoe.
After patenting their design, which is essentially a strip of special rubber and a cord to fasten it to your soles, they decided to pitch their idea to the sharks. The sharks, however, weren’t impressed with the shoe’s simplicity, claiming that anyone could copy it.
O’Leary offered $400,000 for 50% of the company and after the pair declined the shark’s offer, the company blew up with success. They got offers from other investors who saw the potential in the company — Xero’s net revenue was $33.6 million in 2021 and the company’s popularity has only grown since.
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Photo Disclaimer: Please note some photos are for representational purposes only and may not reflect the exact product mentioned.