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Swimming with Sharks in the Great Recession
January 19, 2012  | By David Sicilia
 

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[NOTE: The episode previewed in this article actually will air this coming Friday, Jan. 27 at 8 p.m. ET on ABC. So there's still time to swim with Sharks. - DB]

Sometimes a TV show -- even a reality TV show -- can break the bonds of its premise. Shark Tank, which returns to ABC Friday, Jan. 20 at 8 p.m. ET, had a pretty good premise to begin with. The season premiere, though, serves up a couple of engrossing surprises.

For newcomers, the show's formula (created in Japan as Dragon's Den by Nippon Television, and imported two years ago) is that wannabe entrepreneurs get a few minutes to pitch their ideas to five "sharks" -- wealthy businesspeople looking for new investment opportunities. After the pitch, the sharks circle and bite: What are your materials costs? What would prevent anyone else from offering the same service tomorrow? What were your first-year revenues? How do you plan to distribute this?

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The capital-hungry contestant comes in with a proposal -- an offer to sell, say, a 25 percent stake in the enterprise for $85,000. The sharks are Barbara Corcoran (real estate); Robert Herjavec (tech); Daymond John (branding and fashion); Kevin "Mr. Wonderful" O'Leary (venture capital); and Mark Cuban (HDNet/Dallas Mavericks), who appears determined, on this show and elsewhere, to celebrity brand himself a la Trump. "Queen of QVC" retail innovator Lori Greiner will also circle the tank during three upcoming episodes.

One by one, the sharks either bail out -- the trademark terminator phrase on this series isn't "You're fired," it's "I'm out" -- or they counter-offer, as in, "I'll give you $50,000 for a 40 percent stake in your company." Losers walk away with zilch. Almost no one gets what she or he originally asks for. For those in between, we get to wonder who got the better deal. In the program's first two years, the sharks collectively sank (sorry) some $4 to $5 million of their money into new ventures.

The fun is in:

1) Vetting the business pitches along with the sharks. Who would ever want to buy that?! Or, how do I sign up?

2) When the sharks get snarly. In this episode, they call one pitchman "nuts," "absurd," and "insane."

3) Watching the sharks nip at each other. Think American Idol, with investment portfolios.

4) The real-time negotiations. One segment in this week's season premiere is high art. These sharks are not about to be oversold or out-negotiated, and it is a numb-skulled contestant who thinks otherwise. So watch as Mark Cuban outmaneuvers Dave Greco, who wants $90,000 for a minority stake in his corporate salesmanship system. Cuban offers a less generous package, adding, "You should take the deal and shut up." Greco does neither. None of the sharks like Greco's mobile apps strategy. In the end, bits of Greco flesh float in a reddened sea.

The way the show is pitched, we are supposed to hate the sharks.

"The only thing that really matters," announces the opening title sequence, is "money." And the sharks are not merely rich, they're "filthy rich." All this amid the Great Recession.

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But the sharks are reasonable people, good at what they do. We can learn 11 times more about business from this program than from The Apprentice -- 111 times more than from The Celebrity Apprentice. While Trump and his slicked-back minions and addled has-beens are off conducting group therapy, the sharks here are asking shrewd questions.

Speaking of the Great Recession, the season premiere, in its final segment, turns downright riveting.

It features Donny McCall and his "Invis-a-Rack" -- a hideaway rack for carrying long things over the bed of a pickup truck. Folds up and hides away in seconds, as Donny demonstrates.

A soft-spoken, polite man from North Carolina, Donny tells the sharks how his wife didn't like the ugly permanent racks he was using, and "the Lord handed me this idea." The product will be made only in America, Donny insists. He wants to create jobs back in his hometown, where unemployment and suffering run deep. He can barely get the words out.

The sharks sit in silence.

But then they push him on the outsourcing question. What are his current production costs per unit? Suppose he could produce the Invis-a-Rack overseas much more cheaply -- cheaply enough to be picked up by a major distributor? Donny gives a couple of reasoned justifications, but his deeper motives are clear. God, country, community.

As the sharks continue, we, the audience, hear compelling arguments about the realities of globalization, and how an entrepreneur needs to first make sure the business is a success before he tries to change the world. Daymond John even has a slogan for this: "Make it, Master it, Matter." In that order.

Our heads are with the sharks, our hearts with Donny.

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Suddenly, Robert Herjavec is talking about how his father, who passed away last year, had toiled in a factory his whole life. Herjavec -- an American success story -- knows exactly what Donny is feeling and trying to do. He, too, can barely get the words out as his chin quivers.

This moving and informative set piece on global capitalism could not have been scripted any better. It's a compelling piece of television.

In the end, does Herjavec, or do any of the other sharks, buy into Donny McCall's venture?

Dive in.

20 Comments

Eileen said:

So happy to read this. I absolutely love Shark Tank, and I've missed it these past few months.

The reason I'm a fan is simple. Of all the "reality" shows, this one is actually about people with ideas. I like to think of it as the "Thinking Person's Reality Show". I'm intrigued by the ideas people come up with, and they are usually things we've all thought about but never took the time or money to create. Sure, some of them are crazy, but some are just fantastic.

Babara Corcoran is a personally terrific success story, and she's really the soft touch here. But it only endears her to me; she actually funded a woman's homemade cake business with the caveat to simply send her $1 each time the woman sold a cake.

Robert Herjavec is always the voice of reason; he's able to think it through, and even when he's not in a funding mode is always the gentleman. Kevin's bark is much worse than his bite. This is tv, after all. Damon Dash is just a smart, gentle soul. Mark Cuban, eh, can't tell if he's for real or not, but he plays it up and that makes good viewing.

I was planning to watch this on Friday, but now my interest is more than piqued. Thanks so much for your positive spin.

I particularly like when they do a follow-up to a business they've invested in. Great to see the success stories. I've also recently see ads on tv for items they didn't fund, but I'm sure the exposure on Shark Tank worked to their benefit.

Comment posted on January 19, 2012 8:52 PM
 
 

Robert, I'm so sorry to hear about the passing of your father.My father passed away last year too. I spoke to Dad the day Global interviewed me for receiving the manning innovation award. That day knowing how thrilled I was, I re-assured him it was all going to be OK. Next morning he passed away. Like your father, my dad worked at a factory all his life. Sometimes I think he held on until he knew I was going to be OK. Within one day I had experienced one of the highest & for sure the lowest point of my life.
Contrats to Donny McCall and his "Invis-a-Rack" and his 2010 SEMA award. They say the simplest things are the best ! Brilliant.
Donny, all I can say is keep taking the high road. One thing for sure, what goes around will either come around in this life or the hereafter.
Either way the road ahead will not be easy but it will be worth it all.
Dialed in for the 27th. Cheers !

Comment posted on January 26, 2012 6:50 PM
 
 
Stephanie said:

I won't be watching this show again. Herjavec and the other sharks refused to invest unless the Invisarack would be made in a foreign country so they could make bigger profits on the backs of under-paid, under-aged, repressed workers. The factory Herjavec's immigrant father worked in was AMERICAN and its products were MADE IN AMERICA. The sharks got rich in AMERICA - they should invest in AMERICA. I won't invest another minute watching these bloodthirsty sharks.

Comment posted on January 27, 2012 9:19 PM
 
 
Randy said:

Great product & idea but the Sharks are right ...you really need to get the price down.

$700 is way too high! That's 3 weeks take home pay after tax and everything else.

How much do people in SC make?

Comment posted on January 27, 2012 9:23 PM
 
 
Tom Nick said:

Donny,

Just got through watching you on Sharks. Thanks for staying with the USA!!!!!!!! If everyone had your backbone, things would be a darn sight better!!!!!

Comment posted on January 27, 2012 10:07 PM
 
 

Im so disappointed with the show that aired tonight, Jan. 27, 2012. The Invis-a-rack is a great idea. Your Sharks are why America is Struggling!!!! They sell the USA out on a daily basis all in the name of business and the bottom line(money). They have lost touch with reality and what people in the USA really think. Im sorry Robert lost his dad and that he was an immigrant worker, but everyday thousands of Americans have to go home and tell their families that they lost their jobs and livelyhood to a foreign country. Everyone knows that made in the USA products last longer and are of a much higher quality. Saying that our Economy is Global is CRAP!!! We Have a failing Economy because everything is made Globally all in the name of Business. The old saying YOU GET WHAT YOU PAY FOR is true. Cheaper isnt better, Its just cheaper. Until people like your sharks figure out that the US Economy wont get any better if we keep losing jobs to other countries the US Economy will continue to struggle. The Invis-a-rack was a really good idea and I will support anyone who puts GOD, COUNTRY and COMMUNITY ahead of the almighty dollar!!!

Comment posted on January 27, 2012 11:03 PM
 
 

I seen the show tonight and as a fellow Noth Carolinian (I own a home not far from Sparta)I am so proud of Donny sticking to his guns about the Invis-a-rack being made in the USA. I am sick and tired of these companies that make the excuse that in order to have a thriving company they need to relocate to another country. The reality is that they are the ones that are greedy and are using and abusing humans. They are hiring cheap labor for a profit. There is NO OTHER country in the world that has the record of protecting human rights as we do. There is no other country that has given immigrants the opportunities that SHE has. Go to China. Go to Japan. India. Russia. These countries won't even give their own countrymen an opportunity to better themselves. They definitely don't give American goods a fair shake when it comes to importing our goods. Personally, I go out of my way to buy American made products. Donny will definitely get an order from me. PS I wouldn't trust those sharks to be able to make a good business decision. I think Donny will be better off without them.

Comment posted on January 27, 2012 11:05 PM
 
 

I'm interested in Donny McCall's product. Can you send me any contact info.

Comment posted on January 28, 2012 12:34 AM
 
 

I am a Marine. I believe in this country. I proudly support your fight to employ Americans. I defend our freedom, you defend our right to work in a free economy. I would and will gladly donate money to your business (though I do not have money to buy a full bed system). Please let me me know what monetary value will help you out.

God bless you and God bless the United States of America

Comment posted on January 28, 2012 2:04 AM
 
 

I believe this product can be made for $100.00 IN BOX!

Invis-a-ack isnt manufacturing they are assembling, bring the manufacturing to your hometown and you could mop up the market quick!!!

I love the product, but the plan is simple.

It can be made In america for $100-$150 or ASIA for $50 PLUS SHIPPING ($75).

Stay AMERICA and just source till your price gets better!!!!

Comment posted on January 28, 2012 11:18 PM
 
 
K.V said:

I just saw Donny on shark tank.

I was very impressed with his integrity and product and his demeanour.

But I wonder if perhaps you can help your family, neighbours, town and country once you become wealthy too.

So perhaps the business itself doesn't have to be the only vehicle available to help your country

Perhaps once you have the money, you can build schools, hospitals....open other businesses and so on

I wish Donny the best of luck in all his endeavours.

Comment posted on January 29, 2012 1:23 AM
 
 

This was compelling television. Kudos to Donny McCall for sticking to his guns to manufacture in the US, and to Mr. Cuban for backing him up. Outsourcing is certainly not a necessity for most large scale manufacturers. While the example of Apple was brought up, Apple has also made hundreds of billions in profit. So there is a balance between needing to make profit and being patriotic and making sure the country that provided you all the opportunities you have does not sink into the abyss. These "sharks" are, by definition, greedy and selfish, and its disturbing they could not look past it.

Comment posted on January 29, 2012 7:30 AM
 
 
Frank said:

The Shark Tank is a great show and all the Sharks bring their great and unique flavor to the show. Although they were correct in their evaluation of Donny's business model, they took the easy approach and hence missed the opportunity. This is a very unusual time we live in and we all need to do our part to bring jobs back to our country. So what if it takes a little longer to reach profitability, or we make a little less per unit, at least if we all share the responsibility we have to our home we will all share in the rewards of job creation.

Donny, after being in the finance business for over 20 years, the one thing I did not agree with your approach is that you should not only sell directly. You need to jump start the business and gain economies of scale by selling through distributors who already have a national sales network even if it means lower profit margins than direct sales. Then take these contracts you secured from these distributors and get purchase order financing. This will give you the money to make the products they order without even giving up any equity or very little equity in your company. Hopefully more people will follow your lead and not only employ more people but also make this country a manufacturing powerhouse once again. The best of luck to you, your family and your town.

Comment posted on January 29, 2012 4:42 PM
 
 

Mr. McCall.
Thanks for sticking to your guns!
What these bloated "Globalists", with money as thier God, don't realise is: "When no one here has a job(and the global jobs pay peanuts) who will buy their product at ANY cost?!"

Comment posted on January 30, 2012 11:23 AM
 
 
Anonymous said:

Just so we're clear Robert's father and the family, emigrated to Canada, NOT America. He is not an American success story...he's a Canadian success story. His father worked in a factory in CANADA. That's another reason why Robert wouldn't be interested in saving American jobs, because he's not an American. In fact, Kevin O'Leary is also Canadian.

Donnie proved that integrity and dignity are much more important than money.

The sharks may be wealthy, but Donnie is RICH.

I'd rather be rich like Donnie!!

Comment posted on February 2, 2012 4:59 AM
 
 
sheri said:

Donny, I was incredibly impressed with both you & your product. You have created a product that is unique, easy to use, & fills a void in the market.
You have wonderful values & your motivations are commendable. I'm a Canadian, and I've always thought of America as being rich in steel & manufacturing.
I could not disagree more with the Sharks advice to take your business over seas. You have a great business plan and strong values, which I'd hate to see corrupted by the Sharks greed attitude.
Yes, their way could make you rich, but your way would make you & many more Americans comfortable. Comfortable is something the Sharks can't understand.
Stick to your guns, Donny. You'll make it.

Comment posted on February 4, 2012 9:52 AM
 
 
Stan Poe said:

Hello: Donny McCall is to be commended for both his ideals and his stand on just how he wants to move forward with HIS invention(s).

The Sharks can, many times, be idiotic in their approach and interaction; but most seem to think them "on a different" level that "us". -They're NOT!

Comment posted on February 6, 2012 8:06 AM
 
 
R Camp said:

Unfortunately for Donny the Sharks are right. While Donny displayed admirable determination to make his product in His hometown Sparta, NC, the realities of start up costs are too great for Donny's Company to become profitable in the near term with small amount of money that he asked for.

The only viable way for Donny to realize his dream is to begin manufacturing offshore and once he has enough product volume being sold consistently in the USA, he can begin to make second generation versions of his product in America, but probably at a higher price point. However, the difference will be that Donny will have his distribution network in place o that he can afford to make a litte less profit on each unit sold, since he will make up for it with volume. Only at that point can Donny afford to make his product in the USA and remain a profitable Company.

The sharks are not being greedy, but like all investors they want to see a Clear path to getting their money back and make a profit. Without that there is no reason to invest unless investors just want to donate money and hope for the best.

Like Ronald Reagan once said "America's brighter days are still ahead," but we won't be returning to a low cost manufacturing base for cheap products we all buy at Walmart today, but are made offshore. No, America can only compete when the price points are high enough on more expensive items with profit margins large enough to employ American
Workers.

I wish Donny the best, but until he can make enough money through sales volume, his chances of succeeding without going offshore will be difficult unless maybe the State of NC gives him a grant to fund his business through the growing pains...Good Luck!

workers.

Comment posted on February 6, 2012 2:36 PM
 
 
Sandra said:

Donny,
Watched you on Shark! Stick to your guns, Those guys stink. Anyone who would send jobs overseas and not keep them here should be out on the street and homeless! That is why we are in trouble now and no jobs here. Your time is just around the corner, and you will reap what you sow. Make sure we all know when it happens!!! And also let Shark know.

Comment posted on February 6, 2012 11:14 PM
 
 
Jon F said:

I'm afraid I have to disagree with most of these comments. Donny didn't know what he was doing, as evidenced by his inability to answer the Sharks.

Wanting to keep jobs in America is not a strategy, it's a goal. The whole point of pitching to venture capitalists is to convince them you have a sound strategy that's worthy of their investment.

Donny seemed like a nice guy, and smart, but he appears to have confused strategy and aspiration.

Comment posted on February 7, 2012 5:39 PM
 
 
 
 
 
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