Entrepreneurs score on 'Shark Tank'
||Jonathan Miller '08 says the "Shark Tank" experience was a "great validation" of his Element Bars business concept. Photo © Chris Guillen
Jonathan Miller '08 and Brian Duggan '05 land deals with investors on reality TV contest
By Matt Golosinski
Selling an investor on a business idea is tough.
But try making that pitch on a Hollywood set under hot lights in front of five seasoned venture capitalists all looking for any sign of weakness. Now add the pressure of delivering before a large studio audience, knowing that millions of television viewers are also watching to see whether you stumble or succeed.
Two Kellogg alums rose to the challenge this fall as contestants on ABC's reality TV show "Shark Tank," which pits entrepreneurs against "sharks" — savvy potential investors. Jonathan Miller '08 and Brian Duggan '05 each scored big wins for their respective startups, showcasing their ideas in a compelling fashion and then grinding out negotiations to land the best deal.
"The experience was exciting and very intense," says Duggan, co-founder of Jump Forward, a high-tech provider of innovative recruiting and compliance software solutions for the college sports industry. Though Duggan appeared on the Oct. 20 season finale for just 10 minutes, the actual negotiations lasted about an hour and a half. In the end, he and co-founder Adam McCombs walked away with $600,000 in exchange for a 50 percent stake in their company.
"A lot of people think this is just for TV," Duggan says. "The truth of the matter couldn't be more different. Yes, the producers are looking for a good idea that's appealing to a broad spectrum of the viewership, but every business that goes on the show is vetted through an extensive group of third-party attorneys to ensure this is a bona fide deal."
The sharks are the real deal too: multimillionaires with extensive entrepreneurial experience, reluctant to part with their cash.
Miller, president and founder of Element Bars, a Chicago-based company that produces custom energy bars, also hooked a shark. In the show that aired Sept. 13, he negotiated a $150,000 investment and a 4 percent licensing royalty for a 30 percent stake in a business he created while still a Kellogg student. He had tried previously to raise about $30,000 through bank loans but was turned down.
Both Kellogg grads say their prime-time victories are helping to raise their ventures to new heights, thanks to valuable exposure, feedback and financial support.
"As an entrepreneur, you don't have scheduled performance reviews, so it's difficult to know exactly how you're doing," Miller notes. "So going on 'Shark Tank' and getting up in front of venture capitalists to defend myself and my business is a great validation of the concept."
Plus the show was good for business, he says: "We sold more bars in the 24 hours after 'Shark Tank' than we had in the first six months of this year, and we already had been on a pretty good track."
Duggan's win has put Jump Forward in the national spotlight, too. "It's a major benefit to the company; we're now getting calls from some of the largest sports programs in the country." Fame's downside? Duggan's team must now sort through hundreds of messages each day, separating legitimate opportunities from those that provide no real value — including offers from competitors posing as would-be partners.
The alums credit Kellogg with helping to sharpen the skills to manage these challenges. Miller urges other budding entrepreneurs to focus on solving real problems and to be ready to develop more than one idea. Duggan advises having plenty of cash reserves — "three or four times what you think you'll need" — and doing extensive market research to fully understand the real and potential competition.
Swimming with the sharks took more than a good business idea, the grads admit. It took courage and confidence. "Certainly coming out of a program like Kellogg helped give me that confidence," Duggan says.