Great teachers often say they learn more from their students than the pupils do from their instructors.
One of the most rewarding parts of being a guest “Shark” on season 11 of Shark Tank was the opportunity to amass new lessons about entrepreneurship. (The finale airs tonight, May 15, on ABC—check your local listings.)
I was on the receiving end of some truly compelling pitches (some I am still kicking myself for losing) and a few real flops. I closed a couple deals I am proud of. I learned a ton from my fellow Sharks. In all cases, the experience prompted me to home in on one key reflection I want to share with entrepreneurs looking for funding as well as investors looking for companies to support. When asking yourself “What is more critical, a solid product or a solid entrepreneur?,” the answer is always “You must have both.”
There were those times in the tank when an entrepreneur would really blow me away. This was clearly a smart, capable, passionate person, well equipped to face the trials of entrepreneurship, but I could sense that the product was not going to make it. The person was great, but the product lacked sufficient differentiation or was not solving a real pain point, and so this was a no-go.
Then there was the other side of the spectrum: an awesome product that filled a marketplace void and delivered a compelling value proposition, but the leader was unable to demonstrate the strategic mindset, resourcefulness, grit, emotional intelligence, or integrity that are necessary to make any company a long-term success. “And for those reasons,” I found myself thinking or sharing, “I am out.”
So what does this mean for you as a start-up entrepreneur? As you evaluate when to seek investments, remember: a strong team and a solid product are both necessary—and neither is sufficient without the other. As you ponder when to start rolling out your product or service, aim to optimize your mousetrap before investing in acquiring consumers.
I often talk about the three phases of entrepreneurship: Creative, Critic, and Crusader. At the outset, you want to think outside the box, brainstorm, and dream big. Then, once all the crazy ideas are out on the table, you need to be honest with yourself, question, and scrutinize. Play devil’s advocate and poke all the holes you can before you head out the gates and become the Crusader. It is in the Critic phase when you have a unique opportunity to pause and make your product and your team the best they can be.
It is always the case that you want to put your best foot forward, all the more so in the age of COVID-19. A silver lining in this very difficult environment may be that you are forced to take time to refine your concept or build out your team.
Evaluate whether you truly have both assets in place. If the answer is no, try to put in the time and effort to flesh both out. Test how many consumers would truly reorder your product or service and ask them how you can optimize it. Concentrate on making something that people want to have and keep coming back for. When it comes to your team, hire people who complement you. Maybe you have the marketing skills but not the sales; maybe you’re creative but not organized. Focus on bringing on team members who possess the strengths you don’t, and fill up those voids.
And if you are pressed to find investors before optimizing your product or team, having practiced sufficient introspection to recognize your precise gaps and opportunities can go a long way. Self-evaluation is a tremendous skill for entrepreneurs, and a candid assessment could save the day.
Daniel Lubetzky is the founder and executive chairman of KIND, a global snack company based in New York, and founder of the Kind Foundation.