By David Henderson
ABC calls it the Shark Tank…Sharks are evolutionarily ancient, the current versions not that much different from when our ancestors diverged from theirs 460 million years ago. They are highly evolved killing machines, programmed for nothing but predation, achieving little else while they live. They are fearsome destroyers. And thus they represent the typical caricature of capitalism.
Yet all who walk out of ABC’s Shark Tank have benefited. Some greatly, moving rapidly from the lower middle-class to affluence. Some slowly, getting advice that they use to improve their ideas or their products and try again. Even the viewers gain, not merely from the entertainment–and the show is hugely entertaining–but from the educational experience of seeing how successful people quickly grasp the value of an idea, see how to make it better, recognize its flaws, search for ways to overcome them. Perhaps from this viewers might begin to appreciate the value added by some who are members of the 1%.
No, Cuban, McLeary, and the others are not Sharks. The term for venture capitalists who invest their own money in promising start-ups is “Angel.”
I loved the part also where Levy discusses the clean way that the angels, aka “sharks,” point out the problem with mercantilism.
Several Sharks are initially interested in McCall’s idea, and his offer of 10% of his new company for $100,000. But then it becomes clear that Donny [McCall] has a secondary goal of making sure everything is made in America, to help his neighbors. McLeary points out it doesn’t help his neighbors if his plant closes because he can’t keep his costs down, and suggests the rack could be made for much less overseas. McCall is resistant, and McLeary is out. McCall pleads with Robert Herjavec, now worth hundreds of millions but born into poverty, whose father was a miner. Herjavec can barely hold back tears telling him how he understands the plight McCall and his neighbors are in, but ends up explaining he cannot invest in a company not dedicated to keeping costs low; that business is different from charity; that his customers have also been hit by the Recession, and can’t afford to pay more; that it is better to make a profit and use it to support his community than to start a business for the main purpose of employing workers.
Levy also suggests what kind of reality show should have the title “Shark Tank.” I leave the suspense to the interested clicker.