“Mark Cuban knows how to navigate the ‘Shark Tank’”
Interviews by Michael Aaron Gallagher of StayFamous.Net
You may not see it right away, but celebrity billionaire Mark Cuban (owner of the Dallas Mavericks) is more than just an energetic, hands-on business leader. He’s also a perceptive negotiator, who can navigate the rough waters of market uncertainty and find ways to edge out the competition, while identifying business deals with true market potential.
On his last episode of the ABC reality series “Shark Tank,” Cuban met entrepreneur Jeff Stroope, captain of the fire brigade and creator of a new type of hose connector that reduces the amount of time it takes to connect a fire hose to a hydrant. His company HyConn, LLC set out to reinvent the way fires have been fought for the past one hundred years.
“I’ve got a quick connector for a fire hydrant,” Stroope said in a recent interview. “Basically, what it does is it connects a fire hose to a hydrant in three seconds. Your standard time is about 30 seconds…. You can disconnect in one second. So it’s a tremendous savings of time. It started out as trying to figure out a way to be able to connect to a hydrant faster and that’s kind of where it grew from.”
In 2009, Stroope set out to find investors for his product. After watching the first season of “Shark Tank,” he logged onto ABC’s website (abc.go.com) and was eventually asked to present his idea to the sharks.
When Stroope entered the room with Mark Cuban, Daymond John, Kevin O’Leary, Barbara Corcoran, and Robert Herjavec, he was asking for a $500K investment for 40% equity in the business. After revealing his home version of the product for the standard garden hose, the sharks began to see the mass market potential of his product.
Although he was a guest shark, Cuban didn’t waste any time getting down to business. He offered Stroope $1.25 million to buy the company, with a three-year employment deal worth $100K each year and a 7.5% royalty on the profits thereafter. Despite another offer on the table, Stroope eventually accepted Cuban’s deal.
“My plan is they’re going to be in every fire department across the United States,” Stroope said afterwords.
By securing the deal with Stroope, Cuban outbid the other sharks and picked up a product with long-term earnings potential. I recently had the opportunity to talk to Cuban about his experience on the second season of ABC’s “Shark Tank” and what advice he has for other entrepreneurs looking to cash in on their ideas.
Michael Aaron Gallagher: “Have you personally learned any lessons about business as a result of ‘Shark Tank’?”
Mark Cuban: “You know, it’s interesting, I have learned quite a bit because each of the sharks has a different orientation towards business and we all kind of play to our own strengths… Robert has different strengths than Kevin. Well maybe Kevin doesn’t have any strengths but he likes to pretend he does… Daymond has certain strengths. Barbara has certain strengths. And so, you know, I’ve learned to really pay attention to them, which I always try to do. But I really try to pay attention to their styles… Barbara is very empathetic and that works very well for her. And you can see why, people who work with her or companies she’s invested in really want to do well for her… Daymond’s got a whole process already in place. He’s like an assembly line of fashion. Where he’s got the manufacturer, he’s got the distribution. He’s got the financing already in place. And so all he’s got to do is find the right deal and put it right through his pipeline. And I didn’t have one of those and I want one. So, you know, I’ve learned from these guys really how to streamline all the elements in doing these types of deals. Whereas before, because I dealt typically with tech (almost exclusively with technology and entertainment) each deal kind of took on its own life form and so I think I’ve learned to kind of streamline things, and run it through more of a specific process. Because I’ve seen it work so well for those guys.”
Michael Aaron Gallagher: “What advice do you have for people who enter the shark tank?”
Mark Cuban: “Be prepared. You know, and I say this not just for coming into shark tank but anybody who’s an entrepreneur. When you walk into the room, you have to know your business better than anybody in the world. Because there’s somebody out there competing with you and wanting to kick your ass.And those are the words I use literally. And if you’re not prepared and you’re not ready for people to compete with you then you’re going to lose. And I think that’s a mistake that entrepreneurs make. They think just the idea and just the effort, and whatever else is going to put them over the top. When in reality, anybody who shows any level of success, it’s like a magnet to other people who want to try to take that business away. And for me that element of fear of knowing that I’m competing with huge companies always motivates me. And I think people coming into the shark tank need to recognize that if it’s a good idea and you can’t do well, one of us may even compete with you. So you have to be prepared and you have to be ready to compete.”
“Mark Cuban knows how to navigate the ‘Shark Tank'”
Copyright © 2011 by Michael Aaron Gallagher
Photograph Courtesy of ABC
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