America is experiencing a startup boom. More than 5 million businesses were founded in 2022, a 42% increase from pre-pandemic levels, and the U.S. Census Bureau recently reported that the number of new businesses remained steady in the first nine months of 2023.
What does it take for a founder to develop a product or service, raise capital from investors, and transform from a small company into a larger enterprise in times of unprecedented business creation?
During an event co-hosted by Harvard Business School and Harvard Innovation Labs, renowned entrepreneur, investor and ABC Shark Tank shark Kevin OLeary answered these questions in front of a packed audience in Klarman Hall. When OLeary spoke with Reza Satchu, senior lecturer in business management at HBS, he touched on a range of topics, from how he built his personal brand to the elements of a successful presentation. Throughout the conversation, OLeary encouraged listeners to pursue entrepreneurship.
The hardest thing [about entrepreneurship] it’s not a failure because you will fail. Most entrepreneurs fail many times before they succeed. You have to take the first step. Every day you will make important decisions and improve your managerial and executive skills. And that becomes very valuable, OLeary said.
OLeary also said that as an investor or startup founder, failure is inevitable. He noted his dealings with FTX, a multibillion-dollar cryptocurrency exchange that collapsed in 2022. OLeary recalled an interview he gave to CNBC shortly after FTX’s failure in which he offered venture capitalists’ perspective on the startup’s failure.
He [Sam Bankman-Fried] he paid me $16 million on FTX and I was exhausted. But what did I say? [to CNBC] I was a venture investor. I hit zero on eight out of 10 trades for a variety of reasons: market movements, lack of execution excellence, sometimes fraud, which is being alleged here and being dealt with this week as we sit here. All these reasons reduce the transactions to zero. For me it doesn’t change anything. The next morning I’m still going to invest, OLeary said.
While OLeary doesn’t expect all of his startup investments to be successful, he stressed the importance of hearing from founders before making an investment. When evaluating the entrepreneurs who appear on Shark Tank, OLeary explained that he aggressively challenges founders’ business plans because it is his way of looking out for their best financial interests. OLeary used the same approach when evaluating eight Harvard student entrepreneurs who presented to him at the Klarman event:
How does anyone know you even exist? – OLeary asked in response to one student’s suggestion.
How do you get people to ditch giant brands like Nike and try something they’ve never heard of? he asked another.
OLeary awarded the top prize to Crop Diagnostix, a venture focused on building an artificial intelligence platform that helps farmers understand plant health. The prize included a $100,000 investment from Searchlight Capital Partners, as well as a consulting session with OLeary.
Do you want to move to North Dakota? OLeary asked, questioning Crop Diagnostix co-founder and CEO Brandon Chi, MBA 24, about the company’s focus on the state. If you give me $100,000, I’ll be there tomorrow, Chi replied without hesitation.
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Image Source : news.harvard.edu