Episode 435: Inside the tank, with Stephen Woessner.
Stephen is the CEO of Predictive ROI and the host of the Onward Nation podcast. He is the author of two bestselling books, speaker, trainer, and his digital marketing insights have been featured in SUCCESS, Entrepreneur, The Washington Post, Forbes, Inc. Magazine, and other media.
Good Morning Onward Nation\u2026I\u2019m Stephen Woessner and welcome to this week\u2019s solocast\u2026Episode 435.
Where we are going deep \u2014 deep \u2014 deep \u2014 behind the scenes of one of today\u2019s top reality TV shows. In fact, the Emmy-award winning SHARK TANK on ABC has become the most successful business reality TV show of all time.
And it because of our incredible guest, Kevin Harrington, that we received a backstage pass \u2013 including Kevin\u2019s lessons learned \u2013 and how \u2013 if we apply what he shared during Episode 410 \u2013 you too can be a shark.
He is exceptional, Onward Nation.
So during today\u2019s solocast \u2014 I am going to distil down all we learned from directly Kevin into five lessons that you can immediately put into practice within your business. No matter if you want to increase revenue by 10 percent this year \u2013 or \u2013 you are the path to building a $100 million company as Kevin has twenty times with his companies \u2013 there is something here for you in this solocast.
I am going to start us off with a sharing some of the highlights from Kevin\u2019s career as an entrepreneur, and then we will dive into the six lessons. Kevin has been a successful entrepreneur over the last 40 years \u2013 he is the exact opposite of an overnight success \u2013 he started working when he was just 11 years old. I will come back to that story in a minute.
As I mentioned earlier \u2013 Kevin is an original shark from Shark Tank. He is also the inventor of the infomercial and \u201cAs Seen On TV\u201d pioneer \u2013 and the story behind the brilliance of that invention \u2014 tie into lesson two this morning.
Kevin is also a co-founder of the Entrepreneur\u2019s Organization and has launched over 20 businesses that have grown to over a hundred million dollars in sales each \u2014 and has been involved in more than a dozen public companies \u2014 launched over 500 products, generated more than $5 billion dollars in sales worldwide with iconic brands such as Jack Lalanne, Tony Little, George Foreman, and the new I-Grow Hair Restoration product on QVC.
And it is because of this track record \u2013 Mark Burnett handpicked Kevin to become Shark where he filmed over 175 segments.
As I prepared for my time with Kevin \u2013 I found one of his quotes that seemed to really speak to who I knew Kevin to be and his path to success. Kevin once said, \u201cIf it doesn\u2019t challenge you \u2013 it won\u2019t change you.\u201d
In looking back on what I learned from Kevin during our time together \u2013 I can confidently say that these words have served like a creed guiding his life\u2026and it started at a young age for Kevin.
So let\u2019s jump in.
Kevin started his entrepreneurial journey working as an 11-year old dishwasher inside his father\u2019s restaurant. At 11\u2026Kevin learned lessons of grit, tenacity, and persistence that he still carries with him today.
For example\u2026
Kevin\u2019s dad had been an entrepreneur his entire life and wanted his son to follow in his footsteps \u2014 but Kevin\u2019s mom \u2014 wanted him to become a doctor or lawyer because her father had enjoyed a successful career in banking.
Kevin\u2019s mom grew up in a household where the corporate life was the norm \u2013 the predictability felt comfortable.
But, Onward Nation\u2026entrepreneurship requires swimming against the norm \u2014 swimming upstream \u2014 it requires us to swim against the rapids \u2014 against the odds \u2014 and to confidently swim toward the white water, and doing so, we need to have great anticipation for the unknown\u2026the challenge of it all.
And sharing his personal story is how Kevin taught me the first lesson of what it takes to be a SHARK.
Lesson #1: SHARKS seek out the challenge.
When someone tells a SHARK that it can\u2019t be done\u2026or that there is an easier, less trampled path\u2026the SHARK sets out to map his or her own course.
Kevin, Onward Nation, is quite comfortable in swimming in the deepest of water\u2026finding the blue ocean\u2026and swimming all by himself if he needs to.
Kevin doesn\u2019t need the approval of his peer group.
He is not looking for validation. He is a SHARK and knows it.
A SHARK, like Kevin, never gets confused thinking they are something they are not. They don\u2019t forget their gifts and talents\u2026or\u2026try to become something they are not.
They are acutely aware of who they are and they revel in it for all of their competitors to see.
And because of Kevin\u2019s self-awareness\u2026he knew at avery early age that entrepreneurship \u2014 and the uncertainty \u2014 the challenge of it all suited him perfectly.
He learned the ups and downs of running a business working alongside his dad. Kevin\u2019s father was his first mentor \u2014 someone who gave Kevin the right challenges to conquer at the right time. To push his son \u2014 to show him what needed to be learned \u2014 what needed to be mastered \u2014 and how to be successful so that when it was time for Kevin to swim out into the deep blue ocean to see his own challenges\u2026he was ready.
Kevin used the story of his next adventure in life to teach me the second lesson of what it takes to be a SHARK.
Lesson #2: SHARKS seek out opportunity.
By the time Kevin was ready to own a car, and then later to attend college, there wasn\u2019t enough money to go around. His two older sisters and brother had already gone off to college and the family budget was stretched.
Kevin realized that if he was going to have a car and to attend college \u2014 he was going to have to pay his own way.
So what does a SHARK do, Onward Nation?
He searched the waters for opportunity. He needed to find an opportunity that would help him fund the next step in his journey.
To buy his car\u2026Kevin started a driveway sealing business.
Not easy work\u2026but the grit, the tenacity, the persistence he was learning was becoming part of his DNA\u2026and he accomplished his goal.
But\u2026because Kevin grew up in Ohio\u2026his driveway sealing business was seasonal summertime work. So he looked at the market to seek out a new opportunity\u2026something he could do year-round. And that landed him in the heating and air conditioning business because of the steady stream of year-round opportunity.
Great catch.
So during his freshman year in college, Kevin started an HVAC company and it was a success. As a freshman\u2026he had 25 employees and was generating $1 million dollars a year in revenue. And just for context, Onward Nation \u2014 that was back in the 1970s, which would equal $6.2 million in today\u2019s dollars.
All the while\u2026Kevin was a college student. Super impressive!
After college\u2026it was Kevin\u2019s ability to seek out opportunity that fueled the acceleration of his career to become one of today\u2019s top business owners.
When Kevin was in the heating and air conditioning business \u2014 he would travel around the country to different trade shows looking to learn and to seek out the next opportunity.
He would go to home shows and heating and air conditioning shows \u2014 and it was at one of the home shows that the inspiration for his next opportunity hit him.
So then Kevin told me the full story behind his invention of the infomercial.
He watching one of the exhibitors at a show sell a knife set and was impressed with the demonstration and the entrepreneur\u2019s ability to sell the small audience watching the demo on the benefits of the knife set. But, the entrepreneur was only pitching 10 people at a time\u2026and yes\u2026eight people out of the 10 would want to buy at the end of the demo\u2026but it was still only 8 sales.
That compelling demo flashed Kevin back to his recent experience as a brand new cable subscriber. He had asked the cable company to give him all the channels they could \u2013 the biggest package available \u2013 which was 30 channels back in the early 80s. He got a 24-hour news channel, CNN, a 24-hour movie channel, HBO, 24 hours a day of sports, ESPN. Rock solid awesome.
But, when he turned on the TV late one night\u2026for what he thought would be 24-hours of national geographic shows\u2026it wasn\u2019t there\u2026all he saw were color bars.
So Kevin called the cable company and said, \u201cHey, I just got your 30 cable channel package but I\u2019m looking at all the channels, but Discovery is not coming through. Is there a technical problem? What\u2019s happening?\u201d
They said, \u201cOh, Discovery is only an 18-hour a day network. We, as the cable company, deliver the channels that we get. We don\u2019t produce anything. We\u2019re just a delivery vehicle. They give us 18-hours a day. We put up the bars, so you know there\u2019s nothing that supposed to be there. It\u2019s six hours a day of dark time.\u201d
That\u2019s when the lightbulb went off for Kevin.
He asked the representative at the cable company if he could come down and talk to somebody about putting something on the network during the dark time that they could both make money at.
So let\u2019s go back to the home show\u2026Kevin watching the knife demo \u2013 cutting through a Coca-Cola can \u2013 a powerful visual demonstration. The knife set was called the \u201cGinsu\u201d and Kevin knew it would be perfect for TV \u2013 and could fill the empty inventory that the cable company clearly had.
So Kevin\u2026following his own lesson\u2026and wanting to find his next opportunity went up to the entrepreneur doing the demonstration and said, \u201cHey, let\u2019s turn the camera on. Capture your pitch that you just gave selling those knives. We\u2019re going to put on that downtime on Discovery channel.\u201d
Onward Nation\u2026Kevin started locally in Cincinnati, Ohio and bought up the excess programming inventory.
And then when they had proof of concept\u2026Kevin went to Discovery Channel at the network level and said, \u201cHey, I\u2019ll program six hours a day for you\u201d, which turned into a long-term contract and that led to a deal with the Lifetime network.
Then boom. Acceleration.
Onward Nation, Kevin\u2019s imagination and his pursuit of opportunity gave birth to the infomercial at a time when the market was ripe for disruption. Kevin went on to work with Jack Lalanne, Tony Little, Billy Mays, and even George Foreman with his popular Foreman Grills.
And all of this was years before QVC ever started.
But a very key piece in this lesson, Onward Nation, is that Kevin realized there were significant opportunities on the front-end and back-end of the infomercial business.
For example, he signed contracts with inventors of products and pitchmen to create the right TV presence, the right story, the right direct response marketing to consumers\u2026but\u2026Kevin also realized there was money to be made on the back-end\u2026in the customer service\u2026in the manufacture and distribution of all the goods, too.
So when Kevin approached a business owner with an opportunity to join his portfolio of products\u2026he was providing an A to Z solution that was very compelling and provided built-in marketing and distribution.
And then it went viral, Onward Nation, before \u201cviral\u201d was even a thing.
Kevin shared with me how one opportunity built on and led to the next. They took it viral not only in the US then went to England with Rupert Murdoch\u2026then to Italy\u2026then into Spain\u2026into Germany\u2026to Sweden, Latin America, and Japan.
Their distribution went worldwide viral through the TV networks with an 800 number on the back of it. Kevin\u2019s system generated hundreds and millions of dollars over several years.
And they were able to do that because Kevin and his team were not just creating content for stations \u2013 they also manufactured the products, imported the products, created a phone center to accept orders, set up a fulfillment center to ship the goods, a bank to cash the credit cards, a customer service center to handle the customer service.
Kevin capitalized on the opportunity to create a complete front and back end marketing and distribution machine. He was the pioneer behind the catchphrase \u2013 \u201cnot available in stores.\u201d And that ensure that all of the dollars for their products flowed through their own front and back end system. Direct to consumer. Brilliant.
And once the system was built \u2013 he achieved scale by recruiting as many products as possible \u2013 and because of the results he was creating for his partners \u2013 they would often introduce him to the next ones. One of them said to Kevin, \u201cHey, did you meet Billy Mays? Billy has a product. I\u2019ll introduce you.\u201d
Kevin was able to tie up the rights to all of them with all of their ideas, all their products. Kevin and his team created an industry but it started with seeking out an opportunity and then not being afraid of the enormous challenge that it represented. Lessons #1 and #2, Onward Nation.
And Kevin still applies this same level of curiosity today by attending 25 to 30 trade shows a year. I interviewed him just days before he left for CES in Las Vegas. He speaks at the events\u2026meets with business owners in his portfolio of companies\u2026and then is always on the lookout to be pitched the next opportunity.
Let\u2019s move to Lesson #3, Onward Nation: SHARKS are relentless.
SHARKS never stop swimming toward their goal \u2014 because if they do \u2014 they will suffocate and die.\u2028
And that makes a SHARK relentless. They have a strong will to win. But their will to win isn\u2019t because they just want to survive \u2013 no \u2013 a SHARK is driven to thrive. Even if that means they will collect battle scars along the way\u2026each scar is just additional experience.
A SHARK\u2019s relentless pursuit to thrive is what has made them the undisputed top of the oceanic food chain. A Great White shark will nearly eat anything. And if a competitive feeding frenzy ensues \u2013 the SHARK with the strongest, most unrelenting will is the one who gets the most meat.
\u2028It is their relentless nature\u2026their relentless pursuit of an opportunity\u2026that produces incredible success.
Onward Nation\u2026don\u2019t you think it is reasonable to think that Kevin Harrington received some naysayers who listened to his idea about pitching products on TV at 2:00 in the morning\u2026who giggled a little bit. I can almost hear the skepticism now. Oh come on, Kevin\u2026who is going to buy something they see on TV? How many people are actually awake that late? If people were actually interested in watching TV that late\u2026don\u2019t you think the networks would already have programming?\u201d
And yet\u2026he relentlessly did it anyway. Because that is what SHARKS do, Onward Nation.
Time for Lesson #4: SHARKS never stop learning.
And because SHARKS never stop learning \u2014 they are excellent problem solvers \u2014 and they pivot when necessary, and consequently, are on the front-end of the disruption.
SHARKS are early adopters to new tech so they can continue their position of market leadership and being at the top of the food chain. But they also help set the new trends and can be excellent teachers if we are willing to watch and learn.
For example, when Kevin attends a trade show\u2026it is often in the role of being the keynote speaker. And he is there to share content about the disruptions he is seeing in the marketplace \u2013 where is the market headed. He can share those types of insights because he never stops learning \u2013 he doesn\u2019t rest on his laurels \u2013 his relentless nature of being a SHARK demands that he continue to learn \u2013 to continually perfect his craft in order to be the best expert he can be.
And his thought leadership is highly sought after because the \u201cAs Seen On TV\u201d industry is in the midst of a serious disruption. For example, I learned from Kevin that there are 50 percent fewer viewers on TV today than there were 10-years ago.
Let\u2019s take a deeper look.
When shows launch today \u2013 if it\u2019s good \u2013 it will receive 5 to 6 million viewers \u2013 and maybe 7 to 8 million viewers if it is really good.
And if you go back just 10 years, those same shows would be doing double that.
But, today\u2019s audience is gone. They are either on YouTube, Hulu, Netflix, Amazon Prime, or getting their content on their iPads, iPhones, etc.
Kevin described it as \u201ccord cutting\u201d and it is taking place at a very rapid rate right now. And because of that\u2026industry associations are turning to Kevin \u2013 who built such incredible success around TV with his empire of products and back-end fulfillment systems \u2013 to now teach what is next. And because Kevin saw the trends coming \u2013 because of his study and learning \u2013 he smartly pivoted.
As a result\u2026he is profiting within completely different platforms because he has learned what the consumer wants \u2013 and \u2013 where they want it.
Kevin urges today\u2019s business owners to \u201cFollow the eyeballs. They\u2019re on Facebook. They\u2019re on Pinterest. They\u2019re on Instagram. Which is why 80 percent of Kevin\u2019s business comes from digital channels versus 100 percent coming from his TV presence just 5-years ago.
Lesson #5: SHARKS are decisive
Onward Nation, when was the last time you watched Shark Week on the Discovery Channel and you saw a shark being indecisive?
Did you see it hesitate?
Did you see it circling around an opportunity and never taking action to either strike or move on?
Living in fear and not knowing if they should move in to investigate and then decide if they should eat it or not doesn\u2019t happen in the wild.
No?
Why?
Because sharks in the wild are decisive. And SHARKS in business share that same trait with their oceanic counterparts.
How often have you seen Kevin and his fellow SHARK investors inside the Shark Tank waffle around a deal? Never. It doesn\u2019t happen.
Within minutes, they decide if they will \u2014 or won\u2019t invest \u2014 in someone\u2019s dream. They don\u2019t belabor a point\u2026they are either in or they are out. They are decisive about an opportunity.
When they see an opportunity\u2026they move.
I have been a fan of SHARK TANK for a long time \u2013 so during our pre-interview chat \u2013 I asked Kevin if he would be willing to take us behind the scenes of SHARK TANK. I was delighted when he agreed.
So here we go, Onward Nation\u2026way\u2026way\u2026way\u2026behind the scenes. It is as if Kevin gave us an all access studio pass. Here are some of the highlights.
Shark Tank is filmed on a soundstage on the Sony movie lot in Culver City, California \u2013 just outside Los Angeles \u2014 where all the original big movies with Clark Gable and today\u2019s biggest Hollywood blockbusters are filmed. Gulp.
And during the shooting of the first several episodes, the Shark Tank soundstage was physically right next door to the soundstage where Robert Downey Jr. was filming the first Iron Man movie.
So at lunch, Kevin and his fellow SHARKS were at lunch, and the Iron Man cast and crew was also at lunch. There were hundreds of crew and staff there, and the Sharks were like, \u201cWow, there\u2019s Robert Downey Jr. \u2014 Hey, we\u2019re from Shark Tank.\u201d And the reaction from everyone was \u201cWho the heck are you guys?\u201d
Onward Nation\u2026nobody knew what Shark Tank was at that point. It was brand new. I am so glad Kevin shared that insight \u2013 because \u2013 it illustrates so perfectly that even one of the biggest shows on TV \u2013 had to start somewhere and that somewhere was at the bottom.
And they had to work like crazy to make the show a success. But not without needing to conquer number of intimidating moments along the way. And just like Kevin taught me during this interview \u2013 \u201cIf it does challenge you \u2013 it doesn\u2019t change you.\u201d
For example\u2026
The ceilings within the soundstage were 60-foot high with 16 cameras and a crew of 150 people bustling about!
Now, Kevin came from a television business \u2013 he shot many infomercials and being in front of a camera was easy for him. But, a big expensive shoot in Kevin\u2019s world before Shark Tank was five cameras \u2013 and now he was on the Sony movie lot inside a soundstage that cost $1 million to build with 16 cameras and a 150 person crew.
There\u2019s the challenge Kevin spoke about, Onward Nation.
This was Hollywood. This was ABC, Sony, and big time Mark Burnett. He produces the biggest and the best from Survivor and all that.
Using Kevin\u2019s words\u2026it was a little bit intimidating. But then Mark Burnett came over to Kevin and asked, \u201cKevin, tell me how you feel. What\u2019s going through your mind right now?\u201d
Kevin said, \u201cWell, it\u2019s a little intimidating, Mark. I\u2019m not going to lie to you. I\u2019m sitting here. I\u2019m looking at 150-person crew, 16 cameras, Sony music movie lot. Mark, I feel really good because I know what is happening here\u2026the entrepreneurs who are coming in\u2026they\u2019re going to be pitching me and this is what I do every day in my business.\u201d
Then Mark Burnett said, \u201cKevin. Just put blinders on. Don\u2019t think about the cameras. Don\u2019t think about the crew. Don\u2019t think about anything. I want you to focus on the entrepreneur coming out, giving you the pitch. What would you do if that was in your office?\u201d
Kevin told me\u2026 \u201cStephen, That\u2019s when it all came together.\u201d
Because of Mark\u2019s words, Kevin had a peaceful feeling and he could just focused on his expertise and what he did best.
But there was also another form of risk to the SHARKS themselves.
At that particular time, ABC had not committed to air SHARK TANK. So Mark Burnett still had to negotiate for distribution of the show.
So the reality was \u2013 that the SHARKS were investing in deals that had no guarantee of distribution on TV.
Kevin is one of the original SHARKS who helped forge the show because we went all in \u2013 he wrote checks to companies that were coming on SHARK TANK with no guarantee of distribution \u2013 no guarantee of getting eyeballs for those investments.
So for the SHARKS \u2013 it was a very risky proposition. They were investing hundreds of thousands of dollars of their own cash into deals that may never be seen by anybody on TV. The initial episodes were pilots.
Fortunately, selling to the networks is a skill for Mark Burnett. He got it sold into ABC, and the show launched in 2009, and the rest is history.
But SHARK TANK \u2014 as well as Kevin Harrington\u2019s incredible career \u2014 are great illustrations of how there is no such thing as an overnight success. Onward Nation\u2026it takes grit, persistence, and tenacity to make your dreams a reality.
Don\u2019t give up \u2014 keep pushing \u2014 don\u2019t ever quit.
So with that\u2026
I want to thank you for taking the time to be here with me today. It is an honor to have you here \u2014 thank you for tuning in \u2014 your time is sacred and I am delighted you chose this episode to be what you listen to, study, and take with you on your morning run, or maybe Onward Nation has become part of your daily commute, or in some other way has become part of your morning routine.
However our daily podcast fits into your daily routine \u2014 I want you to know how much I appreciate you sharing some of your invaluable 86,400 seconds you have in your day with me and the strategies we learn and share each day from today\u2019s top business owners.
And please continue to let me know what you think of Onward Nation\u2026good or bad\u2026I always want your feedback. My direct email address is stephen@onwardnation.com \u2014 and yes \u2014 that is my actual Inbox. No fancy filters or filing system and I read and reply to every single email.
So please let me know how you think we are doing. I look forward to hearing from you.
We will be back tomorrow with an interview with Cameron Herold, the top-rated lecturer at the EO / MIT\u2019s Entrepreneurial Masters Program.
Until then, onward with gusto!