Shark Tank’s Steve Baxter, Janine Allis, Andrew Banks, Naomi Simson and John McGrath. Source: Supplied
MILLIONAIRE entrepreneur Steve Baxter sold his first business to Malcolm Turnbull. A couple of years later, he sold his second business to TPG — for $373 million.
Now an early-stage tech investor, Steve has helped launch a host of companies in the past three years which together are worth more than $100 million.
The proud Queenslander also appears on Channel Ten’s Shark Tank, where budding young entrepreneurs pitch business ideas in between dramatic musical stings and extremely long ad breaks.
News.com.au sat down with Steve in Sydney last week to discuss his experience on the show, his favourite Shark (it’s Janine), and all that other stuff you don’t see on TV.
Speaking through a fine paper mesh woven from copies of Ten’s nondisclosure agreement, Steve also revealed why he didn’t like the show at first.
What was the experience of filming like?
“It’s like being at a casino in Vegas. You’re on a big soundstage all day with no windows. Doing the show it’s like being inside the sausage factory looking out. You’re sitting there in front of the lights and people just come up and start talking to you. Lots left with investment, lots left with advice.”
“It’s like being inside the sausage factory.” Source: Supplied
So what was the best piece of advice you gave?
“To just stop. There was one chap who spent an extraordinary amount of his own money developing his business without ever testing the idea in front of a single customer. It was honestly something no one would ever want — I knew very early on it was a solution looking for a problem. He had spent $400,000 of his own money, it was staggering. We pleaded with him to stop and take a good hard look at what he was doing.”
Is there a lot we don’t see on the show?
“We spoke to some of them for over an hour. Over four weeks of filming that’s a lot of advice, and most of it doesn’t make good TV. There’s a lot of wonky business advice: ratios of business to expenditure, staffing levels, that kind of thing.”
“Most of it doesn’t make good TV.” Source: Supplied
Did you have a favourite pitch?
“It was a cracker. It’s actually my best investment ever. It was a co-investment of either $150,000 or $240,000, I can’t remember. I actually have a team of people who work on this stuff for me.”
What about the shark-repellent surfboard?
“I liked that. Obviously Dave didn’t secure the investment he was looking for but he’s been knocked off his feet with interest since the show. I’ve got business associates in WA who I’ve hooked him up with to help.”
And what about 14-year-old Daniel Baise?
“‘A’ for effort. But I think he’ll come back from CES surprised at what the rest of the world is doing. There’s a saying, there’s no such thing as yesterday’s technology.”
“If you don’t have a grasp of your numbers you’re in trouble.” Source: Supplied
What’s an immediate turn-off for you in a pitch?
“Definitely in the first half of the pitch, if you don’t have a grasp of your numbers you’re in trouble. There’s a spidey sense aspect to it. Also, tractionless ideas — ideas that haven’t been tested in front of a customer. Rent Resume was a perfect example. Split focus is also a big turn-off. One guy was asking for all this money, but then had another business he was going to work on at the same time. As a general rule though, don’t make it boring and safe.”
So it has to be a tested product? You never invest in ideas?
“I have invested in ideas before, but I wouldn’t say they’ve been my best investments. Nothing proves a desire like actual sales.”
Were there any funny stories from filming?
“One thing I’ve learned is that TV people will do whatever you ask. They look after you extremely well. They feed you to death, too. There’s food everywhere. Anyway I had one assistant who was very enthusiastic, always asking, ‘What can I do for you?’ So one day as a joke I said, ‘Get me a fridge full of craft beer and Cherry Ripes.’ Sure enough it showed up in my trailer. The beer was great. I was still eating Cherry Ripes by the time we finished filming.”
“Don’t make it boring and safe.” Source: Supplied
Who is your favourite Shark?
“Janine. She’s dangerous that lady. She has a laser-like approach to business, she can drill right in. We have a lot of fun on the show — you’re sitting there for hours, so you play up like in school.”
Had you watched Shark Tank before you joined?
“I had seen the US version and didn’t like it. I felt like they were pretty rude to some of the contestants. But after I was approached to be on I went back and watched some of the later seasons, and it seemed like they’d toned that down a bit.”
Were there any pitches you regret not buying into?
“I honestly wish I’d invested in the Cricket Cooler. For me a tick-or-flick question is, ‘Are the founders taking too much in wages?’ But [with a better understanding of the business] I’d loved to have done that one.”
“Nothing proves a desire like actual sales.” Source: Supplied
Have you got any tips?
“Three pitches brought alcohol. One got funding and another made a few sales [to the Sharks] on the spot. So that’s a 33 per cent success rate.”
Can you tell me why Mobile Tyre Shop’s Travis Osborne failed his due diligence?
“That’s a confidential process, but it covers a lot of things: the integrity of the entrepreneur, the veracity of the numbers, any detail we’ve been told in the pitch, really. For a number of reasons we didn’t go ahead with the offer.”
So what do you make of his claim to have secured $1 million-plus in funding?
“Good luck to him. Out of morbid curiosity I’d like to know the details.”
How do you think the show is going? Will it be back next year? Will you?
“One thing I’ve learned is nothing’s ever bad in TV land. Everyone always smiles and says things are great. But from what I understand of these things the ratings have been good.”
Shark Tank airs on Channel Ten on Sundays at 8:00pm
frank.chung@news.com.au
