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What’s it like to walk that long hallway with the intimidating music, diving head first into a pool of hungry millionaire investors, hoping quietly that you don’t forget any details of your pitch? What’s it like to be on ABC’s Shark Tank? My friend Kate Field knows and she’s going to spill the tea on the whole experience.
I’ve had a Shark on the show, the incomparable Barbara Corcoran, but now it’s time we hear about the experience from a business owner’s perspective. Kate Field pitched her business, The Kombucha Shop, in the Shark Tank. The prep was intense, but Kate told me she could talk for DAYS about the research and number crunching that went into her pitch for Shark Tank, and why that process is helpful for any business owner, not just one looking to impress Mr. Wonderful.
This is an episode about knowing your numbers, fine-tuning a pitch, and what it’s really like to be on Shark Tank.
Is this a scam?
Kate walked me through the humble beginnings of The Kombucha Shop, of putting together her first batch of 25 kits, and the incredible thrill of receiving an order for the product she made that wasn’t from a family member or friend. The Kombucha Shop started with $800, almost all of the money Kate had to her name at the time, and a simple Squarespace website.
Her first profits went right back into the business and she increased the number of kits she assembled with each round. Before long (and press play to hear the full version of events) Kate was turning out 100 kits, and then 500 kits… It all grew from the first investment she made in herself and her business.
In early winter 2018, Kate received an email from someone claiming to be a producer on ABC’s Shark Tank. “I instantly think that it’s a scam!” Kate laughed, “And I just deleted it.” A few days later, the producer followed up again, ensuring her that he was truly interested in talking about Kate applying to appear on the show.
After speaking with the producer and hearing that they were interested in her story, the company she had built, and the product she was selling, Kate decided to try it. It took her months to even get herself to record the audition video, and despite her delay in submitting she said, “They loved it and they took me on as a finalist.”
Behind the Scenes
As soon as she was accepted as a finalist, it started a 60 day timeline to prepare for her pitch to the Sharks. Something interesting she shared about the behind the scenes process is that there was no guarantee she would even make it to the show. They told her to take it week by week and try her best.
Part of the preparation was digging deep into her financials. Kate had to put together hundreds of pages of documents and answer rigorous questionnaires so the Sharks and producers can do their due-diligence up front. They want to, “make sure your company is legit and that it’s really ready to go on the show and ready to be an investable business,” Kate explained.
Her preparation was intense. Kate even formed herself a Shark Tank team because taking on something of this scale and appearing on national television, she wanted to feel as ready as possible. “ ,” she said.
Hundreds of Episodes
Kate and her Shark Tank team watched hundreds of episodes of the show, cataloging the top questions they asked people, noting the answers that made the Sharks drop out, and learning the Sharks themselves and what they each look for in a business.
After the research phase, Kate moved into a studying phase. She used flashcards to study up on the questions and answers they’d noticed through their research. She also held practice panels and she’d assign her friends different Shark characters so she could work through her pitch like a dress rehearsal. “My friends got VERY into this, it was fun!” she said.
When she got to LA for the taping, things started to feel very real. The producers still told her that she could be sent home anytime. She had to remind herself that at the end of the day, it was a reality show and they were concerned with making it entertaining. That seemed to take the edge off as she entered the tank.
Want to know what it was like once she walked into the tank? Spoiler alert: That intimidating music isn’t actually playing as contestants walk in… Press play for more behind the scenes of actually taping the show.
Knowing Your Numbers
Kate had rehearsed her pitch front and back, she was prepared for whatever the Sharks wanted to throw at her, and she’d done all the research into what they look for and what turns them off. But the most important preparation Kate did was digging into her numbers.
“Knowing my numbers from a deeper place, than just the stats and data,” Kate explained was key in nailing the hardball questions the Sharks threw at her. “I had spent many months deep in the financials of the company. Knowing the trailing 12 months, specifically is really important.”
The Sharks are interested in the previous years of the company and they want to see the change and growth over time, but what it really comes down to for investors is the trailing 12 months. Kate dug into her revenue and cost of goods, which allowed her to find her gross profit. Communicating the cost of doing business was key in getting the Sharks on board with her business.
You have to know those numbers deeper than just memorization or recitation. “When they ask you more nuanced questions… you have to just know [those numbers].” Things like cost of acquisition and percentage spent on advertising and marketing are all things the Sharks (or any investor) wants to dig into and so you should, “train yourself to think in those numbers,” Kate explained.
More from this Episode
“The way I run my company post-Shark Tank is totally different because I spent so many months really thinking about the numbers,” Kate explained. Press play to hear how the eye opening experience of digging into her numbers revealed areas of her business that could be changed, eliminated or improved to impact the overall growth of the company moving forward.
This episode is packed full with behind the scenes info about Shark Tank along with some great advice from Kate about the show, as well as just considering an investor (without a reality TV show).
Kate wanted to offer listeners of the show a little treat. You can get 20% off your order at The Kombucha Shop with code: goaldigger.