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Guest: Emma Cohen, Founder and CEO of Final Straw and a client of CEO Coaching International.
Episode in a Tweet: The creator of Final Straw wasn’t dead in the water after she turned down two “sharks” on Shark Tank.
Quick Background: If Emma Cohen and her collapsible, reusable straws sound familiar, you probably caught her appearance on the TV show “Shark Tank.” After a successful Kickstarter campaign, Emma stood face-to-face with sharks Mark Cuban and Mr. Wonderful himself, Kevin O’Leary, to try to secure an investment. And not only did Emma field multiple offers from the sharks … she actually turned them down!
On today’s episode, recorded live at the 6th Annual CEO Coaching International Summit held in Santa Monica, CA, Emma Cohen and her coach, Chris Larkins, discuss where she got the courage to make such a difficult call and stand her ground against the sharks. Fans of “Shark Tank” are going to enjoy Emma’s behind-the-scenes peek at how the show really works. But the lessons Emma learned are going to help all entrepreneurs who are fine-tuning their pitches and deciding how much an injection of much-needed cash is really worth.
Transcript: Download the full transcript here.
Key Insights from Emma Cohen on Swimming with “Sharks” on Shark Tank
1. Grab your audience.
You probably know that I believe in the power of making a strong entrance. But if your marketing can’t deliver new business, then potential investors – and customers – will tune out.
“Shark Tank’s” producers only gave Emma Cohen four weeks to craft her presentation, but she absolutely nailed it. In about a minute, she stated the problem her product solves (reducing waste from the 5,700 disposable straws Americans use every second), displayed total mastery of the relevant facts and figures, made a strong case for her value proposition, handed out a good – if imperfect – prototype (more on that later), and then drove home her point by dropping 5,700 straws from the ceiling.
Emma was clear, concise, authoritative, and attention-grabbing. When you get up in front of investors, you need to present yourself and your company likewise.
2. Know what you’re worth.
“Shark Tank” uses a simple but effective gimmick to dramatize the venture capital experience for TV audiences: entrepreneurs enter the tank with a valuation of their businesses in mind and offer to sell the sharks a percentage.
When Emma offered the sharks 5% of Final Straw for $625,000, they balked at Emma’s evaluation. Kevin O’Leary offered her $625,00 for 10% and a $2 commission on every straw she sold. When Emma turned that offer down, Mark Cuban dented her valuation even more by making what he called a “sharky” offer: $625,000 for 25%.
Emma knew which sharks were going to be on her episode ahead of time, and she had hoped to make a deal with Cuban. “I went in there a little bit cocky, not going to lie,” Emma recalls. “We just made $2 million in a month, and it was like everyone wanted to talk to us and work with us. And then to go on there and have a bunch of sharks basically say, ‘Your business is shit, this is a total consumer behavior play, and you’re just one product,’ was a pretty big hit to the ego and to the self-confidence. But ultimately, the way Mark prefaced his offer by saying it was a sharky offer, that’s him basically admitting that this isn’t a great decision for me to make. So, though I would definitely entertain the idea of being in business with Mark Cuban, and it would be, I’m sure, wonderful, I still need to stay true to my values, to what I know the company’s worth, and to what I know we can accomplish.”
Another speaker at the 2019 CEO Summit, Sarah Dusek, faced a similar crossroads when her upscale camping company was desperate for cash. Both women had the courage to turn down some BIG checks because they knew, deep down, that the partnerships would compromise their values and hurt their long-term visions for success.
“It was very clear that Kevin didn’t understand who we are as a company, and what our mission is,” Emma says. “He called us ‘a mission with a product’ as an insult and I was like, ‘Wait, yeah, that is what we are.’ We’re on a mission to educate people about single-use plastic, about its devastating effects on the environment, and then give them tools to reduce their waste. So, if someone’s going to use that as an insult, it’s very clear to me that that’s not someone I want to be in business with. I’m in a great place where I can choose who I want to work with, and I don’t want to work with people that don’t get why I’m doing what I’m doing.”
3. Be receptive to feedback.
Emma walked out of “Shark Tank” empty-handed. But she appreciated the fact that she’d just spent an hour listening to a group of very successful businesspeople discuss her product and her company.
“I listened to everything that they said,” Emma says, “and I’ve pretty much incorporated every bit into my business. And that’s something I do not only with the sharks, but I do with my customers.”
For example, when shark Lori Greiner of QVC fame examined her prototype straw, she said, “It’s sticky.” That was because Emma had been frantically spray-painting her straws ahead of filming, but she took Greiner’s point regardless and refined the product’s look and feel.
The sharks also worried that Emma’s company was really just one product. Today, Emma is working on a line of “foreverables,” a new market category meant to replace items we typically use and throw away. Naturally, to complement her forever straw, Emma is working on a replacement for the plastic fork.
“The sharks made a big point about how this is a really big consumer behavior change play,” Emma Cohen says. “And so if I can hit the marketing, to the point where people want to identify with my product, and identify with my brand, that’s where we’re going to define the success. The sharks are so smart, and so on point with what they say, and so I’ve taken it as I got five mentors for an hour, and now I’m just putting all those bits into my company.”
1. Sell with sizzle, back it with substance. If you don’t make a killer first impression, you might not get a second.
2. Know your value. Only the CEO can put a price tag on what her goals and ultimate vision are really worth.
3. Know what you don’t know. Your business isn’t perfect. Be open to ideas that could make it better, and ultimately, BIGGER.
Transcript: Download the full transcript here.
About CEO Coaching International
CEO Coaching International works with the world’s top entrepreneurs, CEOs, and companies to dramatically grow their business, develop their people, and elevate their overall performance. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 500 CEOs and entrepreneurs in more than 40 countries. Every coach at CEO Coaching International is a former CEO or President that has made big happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $1 billion, and many are founders that have led their companies through successful eight and nine figure exits. CEOs and entrepreneurs working with CEO Coaching International for three years or more have experienced an average EBITDA CAGR of 66.4% during their time as a client, more than five times the national average. For more information, please visit: https://www.