What I Learned From "Shark Tank" — by Dan Lynn

By Dan Lynn

One of the greatest challenges for a technology entrepreneur is scaling sales. Even if you have an incredible application, it can take far too much time and money to create awareness and win customers. Most startups don't have the funding to build a real sales organization — and even if they did, the cost to acquire each new customer can be extremely high. This is exactly the challenge we face right now with one of the companies we're building, in the marketing technology space.

Marketing is going through an incredible transformation driven by technology — both the technologies customers use to engage with companies (internet, mobile, social) and the technologies companies use to engage with customers (the "marketing stack": marketing automation platforms, CRMs, demand-side platforms, and more).

Much like Apple did when it created the App Store for the iPhone, many of these platforms have recently "opened up" to let entrepreneurs build applications on top of them. It's a smart move: rather than doing all the innovation themselves, the platforms let outside entrepreneurs drive it for them. And that creates a tremendous opportunity — suddenly you can tap into these much larger players and grow through their customers, their sales teams, and their marketing. Honestly, this isn't something I was smart enough to focus on twelve months ago.

As an entrepreneur, I love watching Shark Tank. The business ideas, the passion of the founders, the back-and-forth between the sharks and the entrepreneurs, the valuations, the negotiations, the deal structures, the deals — all of it fascinates me.

I was recently watching an episode featuring Lord Nut Levington, a company innovating in the peanut market with seasoned peanuts. During the questioning, Kevin O'Leary challenged the company's ability to scale: "You are going to have to replace some linear footage in major retailers against a guy that has 80% of the market." In classic Mr. Wonderful fashion, he was essentially telling them he'd "crush you like the cockroach that you are."

In response, the company's founder, Sanjiv Patel, fired back: "In fact, in our industry, it is very common that entrepreneurs (people like me) create brands. It is the role of the multinationals, the larger companies, to then scale those brands."

Mark Cuban responded, "Well said." Robert Herjavec added, "That's a great answer."

And it really was a great answer. Although he was talking about the food industry, he had described exactly the opportunity in front of us and every other technology entrepreneur. It's precisely what's happening in our space right now with these platform integrations. Every application can take advantage of it — and the best, most innovative ones, the ones that add the most value, will become acquisition targets for the larger players.

So thank you, Shark Tank, for helping me see it.