Posted in Small Business Hacks | by: Steve Strauss

Every Successful Business Owner Does These 3 Things, According to a Shark Tank Judge

In the 90s, Lori Greiner’s jewelry kept getting tangled. So she invented a solution: a plastic container with sliding shelves that held more than 100 pairs of earrings.

With the help of a $300,000 loan, Greiner created a professional prototype and pitched JCPenney. They gave her a shot to sell the organizer in their stores, and soon after, she landed a TV spot on the Home Shopping Network (HSN).

Was her $300,000 gamble worth it? Her jewelry organizer sold out in two minutes.

Risky? Sure. Worth it? Definitely.

Greiner now has over 120 patents, upwards of 400 products, and a net worth of over $50 million. She also had the smarts to invest in the Scrub Daddy, the most successful product in Shark Tank history.

I met Greiner last year when I MC’d an event in New York where she was speaking. It was a unique opportunity to talk to her about her life, work, and the rubric she sees successful Shark Tank entrepreneurs follow.

 

Lori Greiner Steve Strauss

 

1. They build their business around something people need and want.

Greiner has one of the best investment track records on Shark Tank. Beyond a gut feeling, she also has a strict definition of what will make a successful Shark Tank investment; the business is built around something people actually need—and will justify paying for.

She tells entrepreneurs to ask themselves if their product or service meets the following requirements:

A must:

– Is useful to more than one small group of people.

– Solves a real problem people have. (If there’s a quicker/pre-existing way to solve it, think of something else.)

– Is affordable to produce or launch.

– Can be easily demonstrated or explained to others.

A nice to have:

– Is consumable, or in other words, people will have to buy more of it when they’re done.

Greiner’s most successful Shark Tank investment to date is the Scrub Daddy, a scratch-free, odor-free sponge that changes its texture depending on the water temperature.

 

 

“The Scrub Daddy to me was a perfect product,” she says in a Business Insider interview. “It was clever and unique. It was different. It was something that people need and want.”

2. They do it themselves. Literally.

One of Greiner’s core business beliefs is that you need to resist the temptation to outsource jobs too quickly. Or in other words, you need to work in the weeds of your business for as long as possible.

While it may be tempting to let other people do parts of the job that don’t appeal to you, Greiner argues that it’s much wiser to first learn every aspect of your business, at least in the early stages. You have to be willing to put in the necessary time and effort to learn how all the various parts work.

In the early days, that meant picking up the phone and calling buyers to take a look at her jewelry organizer herself. After hundreds of calls, she was finally able to land a spot on HSN, which is what catapulted her to success.

When you take things on yourself, you have to be willing to be wrong, to make mistakes. Hey, you might bomb a client pitch, or forget about a huge step in production, or even forget to hit save. This is, in fact, a good thing, Greiner says.

When you have firsthand experience of what can go wrong, you know exactly how to get out of (or at least handle) a tricky situation the next time. Plus, you’ll be able to do a better job prepping other people you eventually bring on board.  

Consider creating a mistakes doc that catalogs all the mistakes you’ve made in your business.

– Write down the mistake and identify which area of your business it impacted, like marketing or customer service. Include times, dates, and who was involved. 

(Example: A marketing email went to returning customers instead of prospective customers at 8:30am on Monday.)

– Explain how you got out if it. 

(Example: We sent a follow-up email saying the previous email was an error and honored the discount included.)

– Recommend ways to avoid it from happening next time. 

(Example: Double and triple check your email lists before scheduling out an email send. Use a different email marketing platform that makes it easier to see which lists you’re sending communications to.)

Once the hard lessons are learned and you know each role in your business inside-out, then you can start hiring people and outsourcing because you will know exactly what the roles entail—and how to make people successful in those roles.

3. They are more than just confident.

We all know confidence is an essential trait for any successful entrepreneur. Leaving a steady job, taking a risk, starting something from nothing—it all requires supernatural levels of that stuff. In Greiner’s case, that meant the willingness to take on a six-figure debt and go on TV (to sell a small plastic box to boot.)

Yet Greiner says that confidence is not enough. Another trait is equally important.

Compassion ≥ Confidence

Confidence, she told me, must be supplemented with equal or greater parts compassion.

To get there, here’s what to do:

Non-stop customer research.

You want to have compassion for your customers’ pain points. Why? Because the number one reason startups fail is because there’s no market need. By talking to your customers (and target customers), you’ll be able to know way quicker if there’s a real need for what you’re doing—or how you can pivot to create something that’s more useful.

When Greiner was building her earring organizer, she even stopped people on the street to hear their gut reaction to her product lineup.

Don’t forget where you came from.

Even if you’re not an investor, you can still invest your time in other entrepreneurs. It can be through one-on-one time, offering store discounts to other business owners, or writing a Facebook post explaining how you overcame an obstacle.

What you give to the world is often times what you will receive in return, even (and maybe especially) in the business world.

As Shark Tank fans know, Greiner is usually the one giving entrepreneurs a chance because she knows what it’s like to have an idea and have no one believe in you. And you never know when that kindness will come back to you.

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What I loved about spending time with Greiner is that she has a big heart and a simple rulebook that helps her decide what makes a winning business: Build your biz around a need, know every role involved, and use compassion to get dialed into your customers’ needs.

Even if you never pitch your biz on Shark Tank, you now know exactly what leads Greiner to say that magical sentence: “I’d like to make you an offer.”

About Steve Strauss

Steve Strauss is a lawyer, speaker, and USA Today small business columnist. He's the best-selling author of 17 books, including The Small Business Bible. You can learn more about Steve at MrAllBiz.