018 – Shark Tank’s Kevin Harrington Gives Pitching Tips and Explains Why You Need a Shark in Your Tank

Kevin Harrington is an entrepreneur, author, and business executive known as the ‘5 Billion Dollar Man’. In this episode I sit down with Kevin to talk about all things ‘pitching’. We discuss the number one mistake he sees entrepreneurs make, one of the worst pitches he’s ever seen, and how Mark Zuckerberg approached raising money.

  • The number one mistake he sees when someone pitches to him [2:46]
  • Why preparation is the most important part of delivering a good pitch [5:03]
  • His top two questions that people are unprepared for [5:45]
  • The basic questions you need to cover in your executive summary [7:40]
  • The best way to get his attention in an email [9:48]
  • The kind of investments he doesn’t like [12:02]
  • How Mark Zuckerberg approached raising money [13:59]
  • Why it’s important to know what type of investor you are talking to [15:28]
  • One of the worst pitches he’s ever received [16:09]
  • Why he believes in using visuals to sell [18:55]
  • Why you need to ‘Put a Shark in Your Tank’ [21:06]

Quote
Tease, please and cease! How to put together a powerful pitch. Tips from Kevin Harrington

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Guest: Kevin Harrington (@HarringtonKevin) is an entrepreneur, author, and business executive known as the ‘5 Billion Dollar Man’. He is an original shark on ABC’s Shark Tank and the founder of As Seen on TV.

Resources:
ABC’s Shark Tank

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Guest: Kevin Harrington
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Host: Meghan Alonso
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Podcast Transcription:

– [Narrator] Are you ready to master the waves of medical device product development? Well, wax up your surfboard because you are listening to Inspired By Imua. And here is your medical device product development expert, that Hawaiian-hearted hostess who will help you hang ten, Meghan Alonzo.

– [Meghan] E komo mai and aloha. You’re listening to Inspired By Imua, where we help you master the waves of medical product development. Each week, we interview guests that educate, guide and inspire to give you the skills you need so you and your product can hang ten. If this is your first time listening, Imua is a Hawaiian word. It’s spelled I-M-U-A, and it means to advance forward with passion despite rough waves. There are plenty of rough waves in the medical device industry, so keep listening because we’ve got you covered. You’re so lucky to be tuning in today. Many of you have written or called me about the trouble you’re having with fundraising and your pitches and you’re wondering what to do. Well, I hear you there because it’s not easy. That’s why I have brought an expert on today to help. Our guest is someone who’s heard thousands of pitches. He speaks all over the world about giving the perfect pitch. He created the infomercial. And talk about pitching, he was one of the original sharks on the hit TV show, Shark Tank. He’s known as the Five Billion Dollar man, and I’ve teamed up with him not only for this podcast but to co-author his upcoming book titled Put a Shark in Your Tank, especially for you about pitches and product development. Welcome Kevin Harrington. Kevin, are you ready to hang ten?

– [Kevin] You bet, Meghan, and thanks for having me today. It’s a pleasure, looking forward to hanging out with all the listeners today.

– [Meghan] All right. So as I said in the intro, several people have problems with their pitches and they often ask, hey, can you introduce me to more investors? And I know that’s what they’re asking for, asking me for, but that’s not what they need. They need some help perfecting their pitch and just getting their pitch ready in general. So I know you get asked this question all the time and you have plenty of tips for us. So what is the number one mistake you see by people when they give you pitches?

– [Kevin] So let’s talk about pitches. Yes, I get tons of pitches, thousands over the last number of years. Some pitches are people just, they’ve got an idea, they got a napkin and a drawing on it, they want me to help them take that to reality. Others have an existing product, they’re further along and they wanna get ready to start selling it. And then other folks are at a point of hey, look, I’ve got all this stuff put together whether it’s an idea, a product or whatever, but I need to raise capital. So I need to do patents, I need to do prototypes, I need to do molds, I need to do regulatory. I mean, I know you have a lot of specialty and experience in the medical device arena, so you know the one thing you definitely need to make sure is you have capital. So when people come to me looking to raise capital, one of the biggest mistakes they make is they just say hey, can you introduce me to investors, right? Well, look. An investor ultimately is what’s needed, and that’s kind of like, that’s sort of on a scale of one to ten, that’s what you need at the very end, the 10, okay? You gotta start at the beginning. In other words, if you’re in a baseball game, you’ve got to get the first base to second base to third before you can touch home plate. So getting to the investors is kind of like rounding third. So what I say is you’ve got to put your foundation together, you’ve got to put together your proposal, you’ve got to put together your pitch. And so ultimately, we’re talking about creating a perfect pitch, creating a document that then you can rehearse such that when you do get in front of the investors, you need to be prepared to talk to these investors and then we can talk about all of the different types of investors that are out there. But I think just in summary, the most important thing is not just getting the list or names of investors to talk to; it’s putting your package together such that you’re ready to not only talk to the investors but close a deal and be ready to answer all their questions and be in line to raise the capital actually.

– [Meghan] So you mentioned you’re gonna ask some questions and we want them to be prepared for some of those answers. So again, I would ask you what is maybe the top two questions that you ask when people are unprepared.

– [Kevin] So when somebody comes in and they want to put their, I’ll call it they’re, let’s call it an investment package together, they really need sort of a business plan, an executive summary, something that is short and sweet though that gets right to the meat of it. I’ll get an email from somebody that says look, I know you’re busy, I know you don’t have a lot of time so let me tell you what I’m interested in, and then they write a two-page email and then they have a 50-page business plan. And it’s like they know I’m busy but let me take up the rest of your day, okay? So that generally is a very tough situation to deal with because I just don’t have the time to read a 50-page plan, and sometimes if it’s a two-page email, that’s gonna be something I’ll save for later, and sometimes I don’t get back to it. So the reality is this, you’ve got to be short, sweet, right to the point, and that’s what an executive summary does. Executive summary gives the highlights of what the opportunity is, what’s the industry, what is the problem. I say you’ve gotta tease them up front with some kind of a problem. Give me the problem. Now tell me about how your product or service solves the problem and how it solves it uniquely and the unique aspect of it. Because if it’s a me too product, it may be tough, but how does it distinguish itself from others that are out there? Or if it’s me too, does it get to the problem, does it solve the problem much quicker? Me too, it solves the problem but in two days instead of 30 days if it’s a medical type product. So anyway, you need this kind of quick overview, down and dirty, you wanna cover some basic things. You wanna cover the problem, the solution, the competitive analysis, the risk analysis, et cetera. I could actually spend all day talking about what this needs to be, but basically, an executive summary summarizes the opportunity in a unique fashion and maybe some quick backgrounds on the folks involved, the dream team that’s involved and how you’re going to accomplish this. And then the one thing is what is the ask. What are you looking for, right? I’m looking for some capital. How much capital? What are you giving up, et cetera. So I could just go back to like let’s just take Shark Tank, right? So Shark Tank has been around now, I shot the pilot in 2009. We’ve been seeing the show now on the air for the last, like, seven years. And people, they get three minutes and they have been coached and coached and coached and their pitch has been honed down to where if they don’t have kind of a pretty good summary pitch in three minutes, they’re not gonna get on the air because that season, 50,000 people start out each year and they only pick less than 200 that actually get filmed. So they’ve been through some headaches to get to the point of actually getting on the air. So if you watch Shark Tank, you’ll see you’ve got to follow that kind of system that I just gave you, but you’ve got three minutes to cover it and do a good job so that you don’t get blasted by Kevin O’Leary sitting right there in the middle that loves to take a shot at folks in the process if their pitch isn’t good.

– [Meghan] And you mentioned people emailing you. I imagine that it’s even hard to get noticed in your inbox. So if someone has, there’s tricks you can do with the headlines and the intro of the email to help capture your attention too so you just don’t delete, delete, delete. What are some interesting ones that you’ve seen? Well, I mean every day I get some cool things. For somebody to get my attention, it all depends on kind of the frame of mind that I’m in also. So that’s the other thing to understand with any potential investor. It just depends on when you get them. But I think one approach I’ll talk about that doesn’t work, which is very interesting, like the other day, I got a quick email from somebody that said I saw a deal you did on Shark Tank and how stupid that deal was. If you liked that stupid deal, then you’re going love mine. So that is not the best way to approach someone calling them stupid, okay? Hey, how stupid could you be to do that deal, mine’s a lot better. Like no, that’s a little bit insulting. So look, I got a thick skin so I don’t really care. I may even read further just to see how many other inappropriate things are in that email. But I think what people forget a lot of times is their pitch ultimately is, the goal is to get the shark to write the check. So it isn’t about you, you, you and what you want, what you need being the person pitching, it’s about how can I attract the shark to wanna make the investment, to wanna read this email, to wanna take it to the next step. And ultimately with an email, you’re not trying to get him to read it and send you a check, you’re trying to get him to read it, respond with a yes, I wanna talk more about this or meet you. Or let’s get on the phone. So one of the things that does attract me is hey, I have an opportunity for you that will pay you back your investment in an accelerated fashion so that within less than six months, you’ll have your money back plus a huge return on your investment with very little risk. And so that would land on some really great ears on my side because the kind of investments I don’t like, some people, it just gets down to finding the investor’s sweet spot. Some investors, and I raise money too so I talk to investors all the time. I’ll talk to an investor and I’ll say, what kind of investments do you like? Oh, I like to invest now, hold it for the long term and make big returns over a long term. So I buy now, hold and sell later. Five years. So that’s a long-term investor and that’s great. That’s not me. I like to invest now, make my money quickly because I don’t want to know that four and a half years from now I’ve never received my return and oh, they went out of business, I lost all my money. If I have an arrangement where I get an accelerated payback, I’m either gonna get my money back in six months or not, I can do immediate things to try to get involved and try to see where is my money, where’s my assets? So I don’t like to wait a long time to know whether or not what I’ve done is gonna pay off.

– [Meghan] Yeah, and I’ve actually had guests before that really stressed when you’re talking with someone what’s in it for them and why should they care. That’s a big deal and you don’t want to be thinking about you. And then you also touched on another point of do your homework and research these investors. Don’t just blast a pitch out to everyone. You need to make it personal. It’s almost like if you’re going for a job interview, you never wanna send the same resume and cover letter to every single company. Personal it and make it about them, what can you do for them.

– [Kevin] Exactly. I mean, what I talked about, I mentioned the term investor sweet spot. So think about this. When Mark Zuckerberg was building Facebook, he needed capital. He was a college kid, he didn’t have any money. So he went to investors. Now when he was pitching his investors, some investors say I want a very healthy profit margin and I want to see a company that makes big profits, right? Well, Mark was not telling any investor that hey, give me your money today and at the end of the year, we’re gonna have these big, healthy, profit margins. And if an investor wanted that, that was not gonna be somebody that would invest in the early stages of Facebook, because Facebook was all about scale. It was all about customer acquisition, getting users. So Mark Zuckerberg was telling his investors, look, if I can get to 1,000,000 then 10 million then a hundred million then 500 million users all along that way, what I’m doing is building scale. There’s going to be zero profits because we’re plugging everything we have, every resource, every investment, every dollar back into more customer acquisition so that at some point, we’ll be able to start selling advertising all these people and then we’re gonna make billions. So there’s a ton of investors that are interested in scale and customer acquisition, but that’s not the same type of investor that wants healthy profit margins. So know who you’re talking to because if you’ve got a guy that only wants profits, well maybe you could have converted that pitch to be how profitable this was gonna be after you reached scale, but you need this initial seed money to get to the point of getting those healthy profit margins. So again, it’s all in how you present because you can actually present to many of the same investors, it’s all in how the presentation and the pitch is made.

– [Meghan] Hmmm. So just for some entertainment, tell us about a horrible pitch that you’ve been given. Well, I think that probably I could talk about hundreds of them probably, but I’ll never forget, I go to a lot of events and I was at an event in St. Pete, Florida where we were taking five pitches one morning and they said you got five minutes to pitch. And then at the end, five people are gonna be getting pitches and then there’s gonna be Q&A and we’re gonna pick a winner. Well, the guy that went up second, and I have to say this is why it was so bad because we got a chance to see a reasonably decent pitch first and then he got up second. And as he was rambling and rambling and rambling, and they gave you a one-minute reminder that you had one minute left, so at the four-minute mark it was like, okay, one minute left, well, after four minutes, this guy had not mentioned his company name or what his product was or what he wanted money for, he had just talked about his personal life and where he went to school, where he grew and his job and is this and is that, and I’m sitting there rolling my eyes like this guy has no idea what the heck he’s doing. He’s certainly never rehearsed this. And by the way, if you get five minutes to pitch in front of 150 investors in a room, and that’s what this was and you’re wasting my time with four minutes that are just totally useless energy, shame on you. If you get that five minutes to pitch a room of investors, practice it. Be ready and have somebody critique your pitch before you come and do it. Because you’ve got one shot, and that one shot came and went for that guy. And afterwards he’s like, oh wow, can we get together, Kevin? I’m sorry, I didn’t ever get a chance to even tell anybody what I did or what I wanted. And I’m like, we’ll listen, I’m sorry I’m too busy and I don’t think we’re gonna be able to do that. So at the the end of four minutes, this guy was like oh my god, I didn’t realize how fast five minutes came and went. So I mean that’s embarrassing for him, but listen, you’ve got to know what you’re doing. I mean, Shark Tank, they hold tryouts. They give you one minute to give them the elevator pitch. There’s 800 people sitting in line. You got one minute to pitch and if that one minute isn’t power packed and energetic and exciting and leads to some kind of a motivating point, they’re onto to the next and you’re not gonna get invited back.

– [Meghan] Mm-hmm. So what about pitches where there’s PowerPoint involved? I’ve seen some where they have a few minutes but they try to squeeze in 30, 40 PowerPoint slides. What do you think is the optimal visuals for someone to display?

– [Kevin] There’s some people that do not like PowerPoints. I happen to be a big believer in using visuals because keep in mind, I’m 30 years doing television products on TV, As Seen on TV, and if I had to try to sell a product without any visuals on TV, it’d be pretty tough. So I believe that visuals can be very powerful. I don’t mind a little video, but if you’ve got a three-minute pitch, you’ve got to be careful not to load it up to too fast and furious. You gotta give people time to digest and understand. So I think visuals can be very powerful. Charts, graphs, couple little teaser videos maybe. I actually enjoy watching a little bit of visual because this shows to me, it’s easy just to get up and talk for three minutes, but try to put together a powerful presentation with a couple quick little videos and that shows me somebody really put together a powerful pitch. So I have no problem with somebody doing that. But I think it’s gotta start. It’s almost like an infomercial. It’s got to have a starting point, a middle and an ending and a close. So as I say in a pitch, you gotta tease, then you please then you seize. You tease with an attention-getting opening problem. You please by solving the problem with magical transformations, and you seize by giving an irresistible offer. And if you can do that in three minutes using PowerPoints and using visuals, that can be very powerful.

– [Meghan] Great. So those are some good takeaways. Tease, please and seize. So don’t forget that. Let’s talk a little bit about the book as we wrap up. So like I mentioned in the intro, we have a book coming out this fall about pitching. Most of the book will be about pitching. I’ll have a little bit that goes into product development after you get the money from your pitch, so go into a little bit more detail about that.

– [Kevin] Well, so the book that’s coming out’s called Put a Shark in Your Tank, and the basic concept is that, the concept of a shark in your tank is like having a mentor or a coach in your business, right? So we’re talking about pitching, we’re talking about raising money here, we’re talking about product development. So when I first started 30-plus years ago, I didn’t know how to pitch, I didn’t know how to raise money, I didn’t know how to develop product. But I’ve now done it hundreds of times and I’ve raised hundreds of millions of dollars over the years in the process. So I go to a lot of trade shows, I go to 25-plus trade shows a year and I develop products, I develop pitches and partner with people. I invest money in projects, we build businesses and we raise capital. So Putting a Shark in Your Tank is helping people take their business to the next level. It’s mentoring them and coaching them on doing all of the above. And Meghan, you’re in a very specialized industry of developing medical products. You’ve got manufacturing there, you’ve got prototyping, you’ve got patenting, you’ve got governmental regulation, you’ve got FDA, you’ve got all kinds of very specialized areas that are very important. So I’m sure, as you help people do product development in your area, you’re putting your shark in their tank because you’re the expert in that arena and so that’s what folks are looking for. A lot of times, inventors, they develop things and they invent things out of necessity around the house or in their business or with some kind of a medical condition that they have or someone that they know have. So it’s being able to help those people take their product to the next step because you’ve got the experience and you’ve dealt with getting 510applications or medical device applications or international requirements to get approvals to sell products in foreign countries and things like that. So that’s what I’ve been doing for the last 30-plus years. I know that’s part of your expertise in business, is helping people create, taking their ideas to the next step. And so that’s kind of what Putting a Shark in Your Tank is all about.

– [Meghan] Mm-hmm. Yeah, I’m excited for that to come out. It’ll be arriving late this fall, probably November. So we’ll keep you posted on that. Until then, thanks, Kevin, for joining us. I know you brought a ton of value for our guests. Again, tease, please, seize.

– [Kevin] Thanks for having me, Meghan, and look forward to working with you on the book. And for all those listening, thanks for being part of our day today.

– [Meghan] So I hope you enjoyed that interview. I was just amazed the whole time with what Kevin had to say. You should jump into our Facebook group. It’s Inspired By Imua. A lot of people are in there just sharing their journey what they’re going through. We can all help each other. It doesn’t necessarily have to be an expert. So I look forward to seeing you in there. Until the next episode, imua!

– [Narrator] Mahalo for joining us. If you’re new to riding the waves of medical device product development, or if you’ve been in development for a while already, Inspired By Imua is here to surf with you. Wanna be a master of the waves? Text hangten, that’s all one word, H-A-N-G-T-E-N to 4422. We’ll send you the most common wipeouts companies make in product development so you can avoid them and reach master wave status. Again, that’s hangten to 4422. We publish a new episode every Tuesday, so catch us at inspiredbyimua.com. Imua!

About the Author

Meghan M. Alonso

Meghan M. Alonso, referred to by Shark Tank’s Kevin Harrington as a medical device development expert, is known for her award winning medical device podcast, Inspired by Imua, the chapter she wrote in best selling book “Put a Shark in Your Tank, and her valuable connections in the medical industry. According to the Huffington Post, she helps clients navigate the complicated process of bringing their ideas to the marketplace. She’s a patriotic military wife, pet parent, founder and co-founder of 4 successful companies who thrives on guiding medical device and IVD companies through development and manufacturing.

When she isn’t helping others, Meghan is hard at work on her MBA she is pursuing from Auburn University, staying active with her adorable husky Abby, crossfitting, enjoying great restaurants and fine wine with her husband, and soaking up the sun the nearest beach.

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