From 8 million viewers to irrelevant: what happened to Shark Tank

Shark Tank went from a TV show that was reaching nearly 8 million viewers an episode, was redefining how a lot of people thought about American business, to today where it's becoming basically culturally irrelevant. And the star who made it all a big thing, Mark Cuban, just announced he was leaving the show. This video, as I go on a walk today, is the rise and fall of Shark Tank.

Oh, and by the way, thanks to ProtonMail for sponsoring this video. More on them later.

And I turn every single one of these videos into a one-page cheat sheet you can download to learn more about the story. Find the one for this episode at girdley.com/youtube. How it all ended up happening actually starts in Japan, of all places. There was a show there called Money Tigers, and the premise was that rich Japanese businessmen would humiliate entrepreneurs on camera. Producers of that show would turn around and license it in many other countries, the first being to the BBC in the UK. And eventually it found its way to Canada as well, but it never made it to the United States until finally a guy named Mark Burnett. You'll know him because he was behind The Apprentice and Survivor, and he was a person with enough cachet to get ABC to take a chance on Shark Tank. And it was a perfect moment in time for this to happen. It was 2009. The Great Recession had just obliterated nearly $14 trillion in household wealth. People were losing homes. It was a bad time. And they were watching rich fat cats and Wall Street banks getting bailed out while their neighbors lost their houses. So you can imagine what the executives at ABC did. They buried the show in their summer schedule where they put shows they expect not to go anywhere. But it turned out that timing and that whole idea helped the show a lot. And that's because fundamentally Shark Tank, the whole format, was a bunch of regular Joes walking in with a big idea that would change their lives and their families' lives. And right at that moment is exactly what Americans needed to watch in a moment of financial crisis. People trying to step up and make a change in a pretty horrible situation. The cast was a different cast of characters. Barbara Corcoran, who was a New York real estate broker mogul. Daymond John, who basically did FUBU. Kevin O'Leary, the guy who would talk Mattel into buying his shady software company for $4.5 billion. And Robert Herjavec, who had made money selling a cybersecurity company. And season 1 turned out okay. They got 4 to 6 million viewers per episode and ABC renewed it cautiously. Then in 2011, 2 people would join the show and it would change everything. The first was Mark Cuban, outspoken owner of the Dallas Mavericks and technology entrepreneur. Lori Greiner would join the same year, both starting as guest hosts and then becoming permanent parts of the cast. And Cuban, it turns out, is the linchpin of what made the entire show work. And he'll come back multiple times in the story and change everything. Stay tuned for that. Thing about the format we don't talk about is what's going on in that room doesn't really happen in real life. While it's great television to push a yes or no decision on a founder and get them to make a call right then, and a bunch of different investors throwing terms out and the deal gets done right at that moment, that's not how real business works at all. Venture investing in high-risk things like the types of deals you would see on Shark Tank Those often take months, if not years, to come together. It doesn't happen in 19, 20 minutes in between commercial breaks. For people like me that were doing real business at this time, and I ran a venture capital fund at this time, which I still do, by the way, they last a long time. The reality is that I would have people ask, "Oh, venture investing, it's a lot like Shark Tank." Well, no, it's exactly the opposite. It's a funny thing about real business. Real business done right is super boring. There's no screaming. There's no reality TV. Like the exact opposite of everything you see on television. But the sad part was Shark Tank was becoming the NBA, a modern NBA for people where they were getting crazy ideas about how business was getting done. And I remember people coming in to pitch us for investment at the time, and I'd be like, hey, this isn't Shark Tank. Calm down. This misconception would come back to bite the show later on, but For now, the summer filler show that was Shark Tank, which barely limped along, it started to see momentum. And a lot of that started when in 2012 a guy named Aaron Krause walked in and he had a product called Scrub Daddy. Shark Lori Greiner paid $200,000 for 20% of the company. That product would go on to do over a billion dollars in sales, the biggest success in the history of the entire show. People started to call this the Shark Tank effect. People with products out there, whether it's a cookie shop or Scrub Daddy, would 5 or 10x their sales just by being on the show and getting that level of exposure. It was free advertising for them. ABC sees the sensation happening. They found the formula with the right group of sharks in there and the right moment in time in America, and they moved it to Friday night at 9 PM, which classically is a place that TV shows go to die. But they wanted to own Friday night. People were staying home watching TV. By season 6 in 2014 and 2015, they were averaging over 7 million viewers per episode. They were winning Emmys for bringing a structured reality program. Crazy. Bombas, Squatty Potty, Cousin's Maine Lobster. Seemingly every person that went on there was getting minted a millionaire. In reality, when you want to communicate something, you could say good ideas matter. But the reality is packaging matters a lot. You can say one good thing about Shark Tank. It was getting people exposed to concepts they hadn't maybe even thought of or even considering entrepreneurship. I mean, heck, that's the backbone of America, and the country would be better off if more people were starting businesses. And here, to be in Shark Tank's favor, they were hoping to do that. But what was happening in the format during these years was that a big problem was getting exposed, which was if you look at the types of products that were showing up on Shark Tank, it was consumer gadgets. Things like Scrub Daddy, Ring went on there. Like these were things that were consumer products. But there's a whole world of business that isn't selling to consumers.

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If you look at a lot of the wealthiest entrepreneurs of our age, they're making money doing what's called B2B sales, business-to-business sales. Heck, SpaceX from Elon Musk, it makes most of its money by selling rocketry to the government. At least they did early on until they got into the internet. But you see my point, like business to business is how a lot of people did really well. And here Shark Tank just wasn't even talking about that corner of the market. While a lot of what venture capitalists do is bet long term on markets, whether something is going to be the next Uber or the next Salesforce.com, here we just saw a small part of it where these sharks were just basically tools to put small bets into some of these companies that were just going to get famous by being on ABC on a Friday night. And viewed by 7 million people. Interestingly enough, if you look at the businesses that actually performed really well after being on Shark Tank, they were the ones that actually plugged into the Sharks' networks and unfair advantages. Lori was big on QVC. Daymond had merchandising and retail contacts. And Mark Cuban, well, he had a network of a billionaire. The show publicly paid each one of the Sharks $50,000 per episode. And they're rich people. That probably shouldn't have mattered to them. But the reality was their huge benefit was they got massive exposure. And the smart thing all these sharks did was leverage that to make real money. Lori used the show as a QVC feeder for her to get more popular there. Kevin O'Leary did Kevin O'Leary things, which we'll come back to in a second. Daymond John turned it into a speaking career. By the way, speaking, really good business. If you look at what some of those keynote speakers make on the circuit, you'd be— your mind would be blown. $10,000 or $20,000 or $50,000 or even $100,000 for giving a 10-minute speech. Pretty nuts. The people who had put together Shark Tank, they weren't happy to just let everybody else get rich. They wanted to do the same things themselves. One of the things they had done very quietly that came out around this time was put really onerous contracts on anybody that appeared on the show to raise money, whether they did or not. Cuban famously didn't know this existed before he showed up on the show. It was basically you either had to give up 5% of your company before you even appeared to Sony and to the production company, or a permanent 2% royalty. No ifs, ands, or buts. Ironically, here was the same show that had been an outlet for us in the post-Great Recession to feel like entrepreneurship was something that everybody could do and it was a level playing field. And here the show was being exactly the opposite, which was big, rich fat cats taking advantage of individuals. And here's what I'll give you to Mark Cuban. In October 2013, he found out about this and threatened to quit the show. ABC, Sony, everybody, they reversed it and basically released everybody from previous days from the same terms. Ironically, you were watching 3 different things early on in the era of Shark Tank. First and foremost, a TV show that sold advertising. The Sharks themselves leveraging their visibility on the show in order to build their own businesses and side hustles. And then behind it all, the producers and Sony making big money. Without having to do much at all. And crazily, the escape that people wanted from the shenanigans around Wall Street banks and stuff like that that had happened in 2008 and 2009— people thought they were escaping that to a level playing field, and here you were seeing exactly the same thing that happened during the Great Recession repeating itself— a screwing of the little guy. And if you want to see what happens next, it all makes sense because of this financial instrumentation and kind of the screwing of the little guy that was going on. That's when, during season 10 In 2018, ratings started to slip down over half from their peak to 4 to 5 million per episode. Part of that is broadcast TV collapsing across the board as people move to streaming, or in my case, start watching YouTube because it's just better. But there was something else going on. Early seasons of Shark Tank felt like they had an edge. Deals would collapse, people would break down. There was real drama. The show started to get more successful. It started to create a problem. They couldn't be mean anymore. They had to cut out parts of cruelty and stuff like that, because here were these episodes getting shown in business schools, and the Sharks themselves were getting to be big brand names even before they started. They didn't want to look mean on camera. In the end, that made the whole product entirely predictable. There's a problem with predictability. Uh, you want it to be different each time, even though the format's the same. People want to expect surprise. That creates drama. But there was a problem. By season 10, we all kind of knew what was going to happen. You're going to get a royalty offer. A lawyer was going to offer to hook somebody up with QVC. Daymond John was going to talk about FUBU and all that kind of stuff, and Mark Cuban was going to be interested if it was a tech deal, and Robert, he would be a nice guy. Yeah, it just got to be repeated too much. But something else was going on by season 10. There was a problem with a thing called adverse selection, and adverse selection is where you create a system that basically only has negative people showing up to it. 2010, getting in front of investors was kind of tough. There wasn't much cash floating around. The Great Recession had sucked up a lot of it. But by 2018, the internet and a bunch of different services for everything from AngelList to Y Combinator, heck, to local angel groups— we started one here in San Antonio— people just had options to raise money. And I remember talking to somebody at the time, they were like, "Hey, should I try to get on and raise money on Shark Tank?" I was like, "Look, if you think it'll help you to be in front of 5 million people, great. But otherwise, you're giving up a lot just to be on a TV show." So that meant that great deals didn't need to go on Shark Tank anymore. In fact, Great Deals had huge incentives not to be there, made worse by the publicity problem from the early days when they'd been screwing people just to get on the show. And heck, to show you that that's real, I didn't even know that it changed and Mark Cuban had made them change. I thought they were still screwing people the whole way through. Yeah, just rough. That's how bad the PR incident had been. But then the PR was about to get worse, and that was because of Kevin O'Leary. 2022, it came out that he had been promoted over $15 million. To promote FTX, which had turned out to be a huge scam when basically all of the scamming Ponzi scheme stuff got, got made public. Because of that, billions was lost. Sam Bankman-Fried, the guy who was behind it— maybe I should do a video on the rise and fall of that one— basically went to jail alongside of other folks. And there was Kevin O'Leary tied to the entire thing. And Mr. Wonderful, he was a big part of Shark Tank. And you or I was supposed to like Shark Tank because, well, supposedly the Sharks knew everything about business and they were trustworthy. Heck, guys like Mark Cuban are definitely that way. And so O'Leary taking $15 million to shill what turned out to be a pretty obvious scam basically broke the entire premise of Shark Tank. These guys are so smart and doing real business. Why was Kevin O'Leary himself getting scammed? And heck, if you went and looked at this point on Reddit or TikTok and people analyzing old episodes of what's going down on Shark Tank, people were pissed. Here's founders giving up 40% of their life work for a couple hundred thousand dollars, and then the Sharks hauling ass and disappearing. Then the news came out that roughly half of those deals that got done on camera never actually got papered. It was all just theater. Audience thought they were watching real deals, and it was just, well, all make-believe. And that's when the guy who had turned out to be the linchpin that made the entire thing work In late 2023, Mark Cuban announced he was leaving the show and would be— well, his last one would air in 2025. He had just sold the Dallas Mavericks, arguably at a pretty bad time because, well, he left a lot of money on the table. He's building a company called Cost Plus Drugs, and he wants to spend more time with his teenage girls. He saw what we had all started seeing, which was the best founders weren't applying. The show had run its course. It was getting kind of boring. And look, the show isn't dead. It's still a thing. But Season 16 is a far cry from where it once was, pulling 2.5 to 3 million per show in terms of viewers. But Season 17, well, it's a tough time to be, uh, creating TV shows, and ABC has already renewed it for Season 17. Ironically, Shark Tank is one of those shows that killed itself by actually being so successful, by democratizing and bringing into people's homes the ideas of entrepreneurship and basically saying that anybody can do it. Here, look, here's this guy with the Scrub Daddy thing. You could do this too. It had basically democratized entrepreneurship to such an extent that all these resources had popped up that made it to where Shark Tank wasn't even needed anymore. And if you can go get money from other sources and everybody was kind of familiar with the idea of investing in high growth and high risk type startups or even mom and pop businesses, well, Shark Tank suddenly wasn't getting good founders anymore. And suddenly wasn't a good show anymore. And look, the other thing in favor of Shark Tank, which we could take away for any small business, is the art of selling. And selling things that people want to buy is the way to fix almost every single business problem. There's a great line, which is, "There's no business problem that more sales won't cure." That's pretty true. There comes a time when you're running a business where you're like, "Hey, what do I do today?" Well, if you ever have to ask that question, the thing you should worry about each and every day when you wake up is, How do we sell more stuff profitably? And that's what you should go spend your time on. I'm working with a great CEO of a brand new business right now. You know what he does every single day? He spends the first 3 hours figuring out how he can go sell more stuff before he goes and works on anything else. And the amazing thing is he's doing pretty darn well. He's got more business than he can handle. In the end, if that's the lesson that people learn from Shark Tank, well, I'm glad Mark Cuban and those guys got in there and started playing pretend and make-believe with all those entrepreneurs, because maybe it did leave the world a better place. All right, that's it for this video. If you enjoyed it, let me know in the comments below and encourage me to make more. Catch you next time.