Advice From a Shark Tank Shark
An original Shark Tank shark explains how eCommerce companies should be thinking about building their brand and investing in marketing.
If you’ve ever been flipping through the channels and landed on CNBC late at night, there’s a chance you’ve seen Kevin Harrington on your TV screen. He was one of the original sharks on Shark Tank — hand-picked by producers due to his impressive investment portfolio.
But if you go back a few more years and saw an infomercial for a George Foreman Grill or a Tony Little Gazelle, you were actually seeing Harrington there, too. Maybe not physically, but Harrington’s fingerprints and dollars were very much present in those “as-seen-on-TV” specials.
Harrington was the pioneer of the television infomercial, and, therefore, the direct-to-consumer industry. So when the internet emerged, it should come as no surprise that Harrington moved his sales online, too.
“Amazon started in ’94, and I was in business for a dozen years before Amazon ever started,” Harrington says. “I was selling products direct to the consumer, and in the nineties, we started putting websites into our infomercials and all of a sudden, we found a certain percentage of the people didn’t want to call the operator. They wanted to go straight to that website [and] get all of the details. We found a whole new area of business between websites and Amazon and digital.”
Since first breaking into the world of business and entrepreneurship, Harrington has been involved in more than a dozen public companies, and launched more than 500 products generating more than $5 billion in sales worldwide. Recently, he has focused on investing in companies, especially in the eCommerce industry.
When he is deciding on where to place his bets, Harrington says there are a few things he looks for in companies. The first is whether or not they have a marketing plan. He also says that there is no excuse for a company to not have a budget for basic ad spend.
“If they don’t have the budget, I’d recommend that they go raise some money and get a budget,” he says. “Don’t tell me as an entrepreneur, ‘I don’t have the budget.’ Because for five grand, you can test and you’re going to find out that maybe you bring in $25,000 in sales off a $5,000 spend, that self-liquidates, makes money and you’re in a big profit position. So, you have to figure out a way to test the digital forces out there.”
If there is a digital focus, and a proven ability to generate ROI on ad spend, Harrington says his interest in then piqued.
“The most ideal client or investment for me is when I come into a company that is spending money and actually making money on the spend, but they don’t have the money for the media, they don’t have the money for the inventory, so they need capital. That is a perfect thing for me because once we plug the capital in, the sales are going to start blossoming and there actually will be self-liquidation…. It’s like an investment into the future profit.”
Getting any sort of investment has always been a challenge in entrepreneurship. And when it came to exiting or finding a buyer for your product or company, in the past those opportunities were few and far between. Today, though, Harrington says that there is more opportunity than ever for young entrepreneurs.
“I’m seeing entrepreneurs start a single product business, get it on Amazon and then somebody comes along, wants to buy them,” he says. “This is pretty cool because you don’t have to have a $100 million business, a $50 million business or even $10 million. You could be doing two, three million dollars a year and someone might be willing to pay you eight or $10 million for that…. There are exit strategies for entrepreneurs today, unlike the old days where it was a lot tougher to find somebody to buy an old asset that you had.”
There is risk to every opportunity, though, which Harrington has learned throughout his career. But, big risk means big reward, and having the right strategy — and maybe even a mentor — are assets. Harington speaks about all of this in his episode of Up Next in Commerce (as well as in his new book, Mentor to Millions).
Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Learn more at salesforce.com/commerce