Shark Tank's Kevin Harrington Explains the 'Wow' Factor That Prompts Investors to Take Action
With decades of successful investments behind him, former "Shark Tank" star Kevin Harrington has the experience necessary to spot a hit when he sees it. Not only do his past investments include the infamous Flowbee and the George Foreman Grill, but he’s also known as one of the first entrepreneurs to utilize the infomercial to help build sales for products. His background steers him toward products that can be placed on shopping channels, which often gives him a return on his investment within six months to a year.
"It’s a lot riskier in tech," Harrington says. "You have to get that massive traction because there’s no cash flow in the beginning. When you get into tech, it’s a lot more difficult in terms of when does the money come back."
Harrington has found that a successful app starts with having a strong product, but true success relies on getting the word out to generate downloads. Once a product has engaged him, he looks beyond that to determine whether it has what it takes to keep those users coming back on a regular basis throughout the app’s lifetime.
More than 50,000 pitches.
Over the past couple of decades, Harrington estimates he’s heard 50,000 pitches through a combination of private meetings, consumer good shows, trade shows, and other opportunities. With technology, he considers not only how many downloads an app might get, but how often consumers are likely to use the product.
"I’m not your typical Silicon Valley kind of investor," Harrington says. "I generally invest with my own dollars. I’m not sitting on billions to invest. I’ve made a lot and invested a lot."
A product that captures Harrington’s attention often solves a common problem. One example is his investment in Appnotch, which turns any website into an app quickly. Not only did the app have the "wow" factor Harrington looks for, but it also fits into his own world, which helps him personally connect with it. He had a similar reaction when he was approached by a couple of young entrepreneurs who pitched a motion-activated, light-up toilet.
"The toilet bowl illuminator is one of those 'spoofing' kind of products that’s getting a lot of attention," Harrington says, comparing it to his previous investment in the Flowbee, which was spoofed in the hit film "Wayne’s World." "When people say 'What is it that excites you about going to these trades shows and taking all these pitches?' Well products like this are what excite me. When someone comes up to you and says 'I’m going to illuminate your toilet bowl,' and than a few months later you’re selling millions of them."
It can be difficult to explain the "wow" factor that gets investors to fund a startup, but having a product that personally connects is a great start. Some of the best products solve problems that many people have in common. Whether it’s an app, a piece of merchandise, or a useful service, entrepreneurs should consider whether an investor would see it as personally usable before pitching. That not only increases the chance of funding, but it makes it more likely that the investor will fully believe in the investment and that passion will translate to success.
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