Wednesday, October 15, 2014

10 things learned while building sharkalytics (part II)


#5 In Shark Tank history, there have been three no-deal episodes
You might think it'd be a downer to watch a no-deal episode, and it can be, so it was surprising to find three such episodes[1], one in each of seasons 3 through 5. It wasn't always that the pitches themselves fell flat, sometimes the entrepreneurs and the sharks just couldn't reach an agreement at the end.

#4 On the flip side, there hasn't been a single episode where all companies struck a deal
In our last post, we remarked on how 49% of Shark Tank pitches result in a deal[3]. Turns out that's also the tendency for individual episodes, not just the series collectively. The vast majority of episodes (59 out of 97, or 60.8%) are structured to feature four pitches, two of which land a deal. The next most common format is four pitches with three deals, which has happened on 16 episodes. Curiously, the chart below indicates that there have been a few incidences of episodes with 40% pitch success rates. These occurrences are the result of early episodes in season 1 which sometimes featured five, rather than four, companies.

There's also the odd instance of a 67% success rate episode, which happens to be the one time that there were only three companies pitching. Fans of the show probably remember that episode (season 4 episode 8) as the PlateTopper episode, the most drawn-out pitch in the show's history. According to post-show interviews, such as this one with Mark Cuban[4], it took two and a half hours to film the pitch. PlateTopper did eventually strike a deal with Lori Greiner, but it ultimately fell through after taping.[5]

#3 The largest investment made on Shark Tank was...
A $2 million investment in Ten-Thirty One Productions, a company that creates, owns, and produces live attractions in the horror genre. The next two largest deals are not far behind: $1.75 million for Rugged Maniac, an obstacle course event series on a national scale, and $1.25 million for Hy-Conn[6], which supplies super-fast connectors for fire hydrants and garden hoses. You might think these would have been group deals, given their size, but you'd be wrong. See point #2.

#2 The sole investor in each of Shark Tank's three largest deals was Mark Cuban
Cuban was the sole shark investing in Ten Thirty One Productions, Rugged Maniac, and Hy-Conn. Adding up to $5 million altogether, these three deals account for 36.5% of the $13.7 million that he has invested on the show.[7]

#1 Nearly a third of all deals are group deals
Out of the 194 deals we've catalogued, 64 of them, or 31.9%, are group deals. Is that more collaboration than you expected to see from such a competitive set of individuals? What's even more surprising is who collaborates most often: Kevin O'Leary, who has shared 21 of his 30 deals, 70.0%, with another shark. That lucky shark happens to be Robert Herjavec 61.9% of the time. Maybe their past experience working together has something to do with it. Both investors were on the panel of the Canadian predecessor to Shark Tank, called Dragon's Den.

Actually, the shark that has gone into the largest amount of group deals is Mark Cuban, who has 29 group deals, but he also has more total deals than any other shark. His group deals account for just 49.2% of his total 59 deals, which is still nothing to sneeze at.

By comparison, Barbara Corcoran and Lori Greiner are, let's call it "less collaboratively inclined". They each have just 18 group deals to their name, which represents 43% (Barbara) and 44% (Lori) of their total deals. Although they have a somewhat lower ratio of group deals than the other sharks, they're not far off from Daymond's 23 group deals (51% of total), and he's been on the show longer than either one of them, so as time goes on we'd expect their stats to catch up with the group.[8]

Footnotes:
[1] In case you don't believe us, here are episode recaps for each of the three deal-less episodes highlighted here:
[2] Bonus fun fact: This was Copa di Vino's second appearance on Shark Tank, the first was in season 2. Needless to say, the company did not reach a deal on either attempt.
[3] This stat and all others as of season 6 episode 4. As a reminder, deal stats are based on deals struck on air, disregarding whether they were completed after the due diligence process. Where noteworthy, as with Hy-Conn and PlateTopper (both mentioned in this post), we'll call it out for the benefit of our readers.
[4] Mark Cuban Reveals The Best And Worst 'Shark Tank' Pitches And More, businessinsider.com
[5] Lori Greiner on a Reddit AMA, reddit.com [6] Ten Lessons I Learned from Shark Tank, techcrunch.com
[7] Although the Hy-Conn deal is known to have fallen through, we don't exclude it from this calculation because we wouldn't know how many of the other investments also failed to close, and hence should be excluded too. As such this number is only a representation of what deals were seen to close on TV, without prejudice as to what may have happened after taping.
[8] Daymond has appeared in 82 episodes, while Barbara has appeared on 68 episodes and Lori has been on just 44 so far.
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