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Don’t Let This Deadly Sin Rob You of Your Success: How “the Best Product Ever” Failed ‘Shark Tank'

Don’t Let This Deadly Sin Rob You of Your Success: How “the Best Product Ever” Failed ‘Shark Tank'

Today I want to step back from the Biggest Challenge at Work to talk about a life challenge we all face from time to time. We are all human. Weakness in the face of temptation is our nature. Sometimes we stand up to the challenge. Sometimes we succumb to temptation. And sometimes, we don’t even recognize we are being tempted.

We spend so much of our lives planning and striving for success. But what happens when we get what we want? Do we know what enough looks like? Do we have a plan for dealing with success?

Recently, I saw an old episode of Shark Tank. It’s one of their best moments. It’s also almost too painful to watch, especially when you know how it’s going to end. In this episode, a young man comes on the show to raise funds for his product: the Plate Topper. The Plate Topper is a clear plastic lid that suctions onto a plate to cover and store leftover food. It’s a well-designed product with all the characteristics the sharks are looking for.

It’s cheap to make, and the margins are mouthwatering. It solves a real (first) world problem: nobody likes using saran wrap. It serves an enormous market: just about anyone with a kitchen. The inventor has thought through an entire product line: the Plate Topper comes in four convenient shapes and sizes. Finally, it comes with a pre-order from Wall-mart, Amazon, and other equally impressive retailers.

The sharks are in awe. No snubbing their noses at the product. No beating down the valuation. No poking holes in the supply chain. All they want to know is how such a stroke of genius occurred in a mortal man. And just when you think they couldn’t be any more impressed, the inventor takes their breath away yet again. He has an engineering degree from Princeton and is an MD on leave to develop his business.

On this high note, the bidding begins. The inventor is seeking $90K in exchange for five percent of his business. That’s a valuation of $1.8M. Mr. Wonderful is first to speak. He tries to entice the inventor with a no-equity offer. Lori is next. She offers $900K for thirty percent. That’s a $3.0M valuation. Lori thinks his business is worth 40% more than what he asked for! Next, Damon jumps in with $1M cash for a thirty percent stake. A $3.3M valuation! Mark and Peter are on the sidelines, waiting to make their moves.

It looks as though the inventor has won the game. All he has to do is sit back and decide which shark he wants as his partner and how much equity he is willing to part with. And this is where the show takes an unexpected turn. Instead of taking or countering the offers, the inventor goes into a full-blown meltdown. He tells the sharks he is changing his valuation. But he refuses to give them the number. The sharks are first bewildered, then disgusted. One by one, they take back their offers and pull out, until Lori is the only shark willing to make a deal.

Lori has scaled back her offer to $90K for a five percent stake. The inventor doesn’t seem to realize what just happened. He is still trying to get the male sharks to compete with her. The sharks circle the wagons around Lori. It’s her or nobody, they tell him. Lori looks hurt; the inventor has not so much as looked in her direction. But she sees blood in the water, and the shark in her prevails. She gathers her willpower to throw out one last offer. $90K for eight percent of the business, a valuation of $1.1M. Take it or leave it.

The panicky inventor capitulates. Lori walks out with eight percent of the Plate Topper. At the top of their bidding, the sharks valued this deal at $264K. Lori will pay only one-third of that amount. What happened? Why did the Princeton-trained genius miss out on a deal of a lifetime and settle for a fraction of its worth?

If you ask me, greed, pure and simple.

As the sharks bombarded him with offers, greed visibly overcame the inventor. Insanity took over his ordinarily disciplined mind and made him lose all touch with reality. It was not a pretty sight. Even Mr. Wonderful, who proudly admits to being a greedy bastard, was shocked and dismayed. The sharks took no time to bring the inventor back to his senses. They told him to take his Plate Topper—"the best product we’ve seen on the show”—and shove it. Only Lori was willing to forgive his youth and inexperience… for a price!

You don’t need to be on Shark Tank to get a greed attack. There are plenty of opportunities in our everyday lives. For example, many people have invested in cryptocurrencies. We all know it’s a bubble, but we’re unwilling to take our money and run. We want it to go higher. When the bubble bursts, many people will wish they had quit when they were ahead. Some will learn their lesson, and some will require another, more painful one, to tame their greed.

Companies, too, are vulnerable to greed, which comes in all shapes and sizes. We’ve heard a lot about Enron and Wells Fargo. Recently, Google was implicated in a more exotic form of greed. It wasn’t about profits. In fact, Google’s practices most likely hurt its bottom line.

Everyone knows that women and certain minorities are under-represented in the tech world. It’s not going to change overnight and, despite our best efforts, some stats may not change at all. Nonetheless, Google, who already sits on top of the Fortune’s list of best places to work, decided it would break all records in this area. What makes them greedy is not the fact that they set an ambitious, even unrealistic, goal. It’s that they made hiring women and minorities into a blood sport.

Suddenly, fairness in hiring and promotions became irrelevant. Internal rules were bent. A class-action suit against Google alleges that laws were also broken. All reason swept aside to maximize a number. How is this different from Enron pushing its stock price up at all costs? Or Wells Fargo harassing employees to meet insane cross-selling goals?

It doesn’t matter whether you’re greedy for money or diversity stats. In fact, in the heat of the moment, our brain cannot distinguish between the two; all it sees is a number. It’s why we never get tired of watching sports. And it’s the premise behind gamification—tricking employees into treating work like an addicting game.

It’s okay to use scoreboards to get employees to track their productivity stats and compete with each other. But let’s be clear: greed is never your ally. It doesn’t play well with the rest of your corporate values. As soon as you allow it in the sandbox, it dominates all the other players. In other words, greed makes you believe the end justifies the means. And that’s when all hell breaks loose.

Today’s lesson is this. Be a tough negotiator. Grow your company’s stock price. Cross-sell. Hire more women. But don’t sacrifice common sense and common decency as you do so. Don’t be greedy. Else, the sharks will eat your lunch.

____

If you like to avoid the pitfalls of human nature, you might like my book, because it details the seven deadly sins of people management.

Tim Eisenhauer
Written by Tim Eisenhauer

Tim is president and co-founder of Axero Solutions, a leading intranet software vendor. He's also a bestselling author of Who the Hell Wants to Work for You? Mastering Employee Engagement. Tim’s been featured in Fortune, Forbes, TIME, Inc Magazine, Entrepreneur, CNBC, Today, and other leading publications.

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