The Shark Tank cast knows business. On each episode, they suffer through the good, bad, emotional, and even absurd business pitches in order to find that golden “I wish I had thought of that" nugget from hopeful entrepreneurs.
If you’re like me, you’ve probably wondered how these self-made business leaders make such swift assessments of other entrepreneurs' concepts or creations.
Sure, the Sharks can dish it out to the business hopefuls who appear on the show. But how do they use data and analytics to back up their judgments on potential business ventures and investments? Here are their stories.
Author, investor, and tactical entrepreneur, Mark Cuban founded HDNet, MicroSolutions, and Broadcast.com. Since 2000, he has owned the Dallas Mavericks.
How Cuban uses Data: Mr. Cuban was one of the first team owners to deploy adjusted plus-minus (+/-) ratings to capture each player’s overall value. This advanced statistical approach works by estimating a player’s effect on the game while controlling for the performance of his teammates and opponents. During the 2005 NBA playoffs against Houston, adjusted (+/-) ratings helped the Mavericks come back from a 2-0 deficit.
Cuban's Business Insight: “I think what has allowed me to be successful is that I can absorb more information than most and drill down to the key business elements of that information and make faster decisions.”
Many may argue that Mr. Wonderful is the most ruthless shark. Besides knowing great wine at a great value through his ownership of O’Leary Fine Wines, he also knows how to use data and analytics.
O’Leary's Business Insight: "My money is like little soldiers...I send them out to war, and they come back home with prisoners."
Investor, TV personality, author consultant, speaker and businesswoman, she’s founder of the Corcoran Group Real Estate in New York City, which began from a $1,000 loan she took from her boyfriend.
How Corcoran uses Data: In 1981, Corcoran used data from the number of real estate sales over six months to calculate the first-ever “Corcoran Report.” The Corcoran Report continues to help broker real estate deals.
Corcoran's Business Insight: “Innovation and creativity are the juiciest parts of running a business.”
Businessman and tech guy Herjavec is no stranger to analytics. He launched his first tech company, BRAK Systems, in 1990, which was sold to AT&T in 2000 for $100 million, and then helped negotiate the sale of RAMP Network to Nokia for $225 million.
How Herjavec uses Data: Today, he thwarts hackers and cybercrime as CEO of the Herjavac Group, a Canadian startup which is now the world’s largest independent pure-play cybersecurity services company. In overseeing other businesses, he leans on an analytics team to develop specific strategies.
Herjavec's Business Insight: “Risk in business, as in life, can be managed, but not avoided. If you try to avoid risk, you’ll never achieve all that is possible within your abilities."
Expert in urban fashion and sportswear revolutionary, Daymond John is founder, president, and CEO of FUBU.
How John uses Data: As a retail mogul, John not only uses data to analyze traditional sales of his clothing and apparel line FUBU, but also for projected sales based on cost of the product and marketing. If the sales are web-based, he knows based on a certain number of visits how many will convert to sales. He also uses InfusionSoft CRM to figure out how his team can follow up on online customers who abandoned their online shopping carts.
John's Business Insight: “I take my time. People say they can see me thinking. When I first got into business, I made a lot of bad decisions. If I miss 10% or 20% of opportunities because they’re in a timely manner, then it is what it is.”