This blog (Lessons from the Shark Tank) is one that I actually agree with, except…
I have to discuss point 3.
3. You can’t help others until you’re successful. This is the hardest lesson to swallow. There was an entrepreneur who was trying to revive his small town with a manufacturing company. He was making a great product but at a loss because the cost of labor was so high. The sharks wanted to be partners with him, but they wanted to manufacture the product in China. The man said absolutely not- it went against his beliefs.
I sympathized with the guy because when I first had the idea for BeddyBye I had grand plans of reviving manufacturing in NYC, and hiring new parents as consultants, and providing state of the art free day care and the list goes on. Daymond John, CEO of Fubu, is one of the sharks and he asked the entrepreneur how long he could continue making the product at a loss, and the man said a few more weeks. At that point he would be broke, and couldn’t help himself let alone his town. Daymond stated that if the product was made for less money he could then hire sales reps, website developers, customer service, office managers, and so on. He would be able to help a lot more people if his focus was on success rather than martyrdom. Damond said “first you have to make it, then master it, and then you can matter.” You’ll be able to do a lot more good once you have some money behind your beliefs. Just look at George Soros.
The part that the sharks never even looked at was the single most important. Why did the distributors want to set the price on another man’s product? he can be profitable AND manufacture in the States, he will just have to charge more than the “Car-Zones” want to price it at.
It’s a genuinely good product, with lots of possibilities for expanding the product line. The hard part is convincing the box stores to sell it for what it’s worth, rather than letting them do what Walmart does and force their will on a manufacturer. If I had the money he would have had my investment, because I know where I could successfully market the product at the price he needs to get, and I know people who can help make it happen.
The idea that you have to be an iceberg (some jobs in US, manufacturing outsourced or based overseas) to be successful in America is just plain wrong. Apple does employ a lot of Americans, but those are 49,000 jobs which fall into mostly only two categories: High-Skill, and Retail. So, you either have to have an advanced degree (or massive experience) to have a hope in heck of making a real livable income as an Apple employee here.
The reason our economy is in so much trouble is exactly this. We have built a service-only economy, which cannot work. We have a widening rift between the rich and the poor, only because people without college degrees cannot get long-term reliable employment that will pay all of their bills. There are also VAST numbers of people who have a degree, but can’t get employment in their field due to saturation. Some of that is poor choices in direction, but it’s mostly that everyone is expected to go to college now. There simply aren’t enough well paying jobs to go around in a service economy, because all the money flows out.
There is so much focus on college in this country, that we have forgotten what allowed the prosperity of the 1900’s and victory in WWII… Manufacturing excellence. China knows this, and they protect it with the ferocity of an angry bear.
All of that said… I don’t believe he can’t get it done for $150 per unit here. Rather than buying pre-built parts and assembling them in Sparta, NC, he could just have them manufactured in one location which saves on all that shipping. His problem is not his unwillingness to move production overseas, it’s his unwillingness to move production away from Sparta.
I’ll refine this more later, with some fact checking and all, but I’m just too tired to manage that right now, as I have been awake for 16 hours and slept poorly last night.