Lessons for Investors from the Shark Tank
The wildly popular TV show Shark Tank offers lessons that investments in the right companies can be highly profitable.
If you want to generate wealth by owning a share of a company, you may want to think like a Shark.
Here’s what the business-savvy Sharks know as they scrutinize investment opportunities:
• Look for disruptive technology. Find game-changing innovation. Assure that the intellectual property upon which the company is built is patent-protected.
• Look for a proven market. Make sure that the product or service solves a buyer’s pressing problem. Further, gather evidence that the buyer has an incentive to make the purchase.
• Look for the right team. The process of bringing a product from the white board to the marketplace requires a specialized skill set. Make sure that the team principals know how to build businesses.
To illustrate these points, here are three companies that would almost certainly excite the Sharks. All three companies leverage licensed intellectual property developed at universities. The teams include industry experts and serial entrepreneurs who have built companies.
The problem: Aircraft component failures cause flight delays, flight diversions, and cancellations. They also lead to accidents and death.
The cost of the problem: Worldwide airline maintenance costs run about $40 billion a year. Further, component failures cost millions of dollars in lost productivity, aircrafts, and property.
The solution: Predictive Aviation offers a breakthrough artificial intelligence to accurately predict probable aircraft component failure. This significantly reduces the airline client’s maintenance costs and increases overall safety. Low direct operating costs are keys to airline profitability.
The problem: The trucking industry actively seeks ways to reduce fuel consumption. A large portion of the power consumed by class 8 trucks is used to overcome aerodynamic drag. The reduction of this drag force would increase fuel efficiency and decrease engine horsepower requirements.
The Solution: Plasma Stream offers an innovative mechanic solution that decreases fuel use by 10-20%. Just as geese fly in a V formation to lower the overall work of resisting drag, Plasma Stream offers proprietary mechanical ways to reduce drag and improve fuel efficiency.
The problem: Many costly cases of iatrogenic central-line associated bacteremia result from a systems problem: clinicians’ poor knowledge of and adherence to hub cleaning protocols. Inadequate cleaning of the hub and port system results in the introduction of bacteria when a new fluid is infused through the line.
The cost of the problem: Cases of central line-associated bacteremia cost hospitals $9 billion; further, they lead to death in 25% of cases.
The Solution: Wipe-Rite offers a wipe with a clearly recognizable indicator of compliance with hub-cleaning protocol. When sufficient amounts of pressure have been exerted on the hub, the clinician sees a color change.
Each of these is an example of a company you could potentially invest in. Before you make any investments, conduct your own due diligence. Make sure that any investment is right for you.
Owning a piece of a start-up company offers a way for you to make socially responsible investing choices that can support your own passions — while making the world a better place.