Wisp Was One of The Best ‘Shark Tank’ Segments In a Long Time. It Was Proof There Is Real Risk In Entrepreneurship.

There was something a little odd about the timing of tonight’s new episode of Shark Tank. If you, like me, were trying to balance a series of Sunday night errands between pitches and were expecting the usual four segments to be spread evenly over the hour, you might have been surprised to see that by 20 past the hour two pitches were already over. At first I thought there might be five this time, but once Eben Dobson, the proprietor of Wisp, came out, it became obvious his story was getting a bit more time.

As so it should. Because it gave a rare glimpse into something you rarely see on Shark Tank: that you can have a great product, go viral, convince people to invest in your company, and still end up teetering on the edge of closure.

On the surface, that doesn’t sound too out of the ordinary. There have been lots of businesses that have come on to the show looking for a bailout, althought they rarely say that until there’s been some serious prodding. In the case of Wisp, he also didn’t say he wanted a bailout, and indeed, at no point seemed to think he needed one.

But the numbers got increasingly alarming as the pitch went on. He had investors he had yet to pay back. A hefty amount of debt, substantial inventory, and a modest amount of cash in the bank. He was looking for investment, but he already had 22 other investors. Twenty-two.

Here’s what made the pitch really stand out: at some point, he responded to the panel’s disbelief by saying something along the lines of: “how do you recommend I get out of this?” It was a sincere question, a polite question, from a business owner looking for advice. At that moment, it became clear he’d fallen into a situation he just didn’t know how to get out of. That’s not something you see very often on Shark Tank or even on its sister programs around the world.

If you are in a lousy situation, how do you get out of it? Really, it’s a life question, placed squarely in the entrepreneurial context. And the sharks seemed to want to help. Barbara Corcoran had already given a clever assessment — I’m paraphrasing from memory here — “You get an A for effort and an F for execution, and I think you know that.” At the end, Kevin O’Leary would offer to pony up the money — a not-unsubstantial $500,000 — and Lori Greiner offered to help sell the product (an efficient and easy-to-use broom), although she declined to put up any money.

At the end, that was the death knell of Wisp on Shark Tank. Dobson said yes to O’Leary, but asked him to make sure he “kept Lori’s number,” at which, O’Leary was eventually out — after Lori’s participation was not guaranteed and Dobson asked what else O’Leary would bring to the table (his offer was $500,000 for 50 percent, while Dobson was asking for 10 percent). You have to suspect O’Leary was lukewarm on the deal to begin with — it was a lot of money, and the information they knew about the company was unsettling, let alone what might come up during due diligence. He was maybe looking for a reason to be out. O’Leary didn’t fight too hard to salvage the deal — but then Greiner was pretty adamant she was not willing to risk any of her money, just lend her name. (In exchange for what, exactly?)

The whole segment was a reminder that entrepreneurship comes with real risks. It’s not just devoting your time and passion to an idea. A few crises and you can be financially ruined, and it may be harder than it seems to get your life back on track.

It could be summed up, I assume — I say, “I assume” because I have never started a company but have learned A LOT from being self-employed — by what another entrepreneur on tonight’s episode, Kate Field from The Kombucha Shop, said: “I don’t know what I don’t know.” Not knowing what you don’t know, but still being responsible for whatever comes even if you didn’t see it coming, is both (again) a risk in life — and a risk in entrepreneurship.

Let’s use this first-person account from Inc. as an example. Back in 2013, Laura Zander of Jimmy Beans Wool published a cautionary tale about how you can be in the middle of a business boom and still get into trouble. What happened? When things were going well, Zander and her husband/co-owner reinvested most of their profits back into inventory, which was quickly sold. What they didn’t realize is that the inventory, even though it was only held for a short period of time, was considered taxable income. The tax bill was larger than their available cash, and she and her husband had to use personal savings to pay it off.

A new entrepreneur might not anticipate such a situation. Such an entrepreneur could end up with a messy balance sheet, even though customers are lining up out the door.

That’s why the usual tagline of the Shark Tank updates, how much a company is currently doing in sales, only tells part of the story. The show would be wise to flesh out these tales a bit more, not only because they are instructive, but because the “Decade of Dreams” narrative is a bit stale. The core audience knows it’s more complicated, and it might be worth it for the show to dive a bit more deeply into those complications.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.