This week’s Shark Tank featured a third update on the Daisy Cakes company which first aired in Season 2, Episode 6 of the show. Kim Nelson, the entrepreneur behind the company, started the company based on her great aunt Daisy’s cake recipes, and has since seen much success. She landed a deal with Barbara Corcoran, who has continued to help grow the company to the point where they are expected to generate $3 million in sales this year. However, this week’s update also highlighted a recent setback the business had.
As a result of making poor hiring decisions, the quality of her cakes deteriorated, and Kim’s company lost $150,000. In response, Kim has decided to return the company back to its city of conception in South Carolina, where she hired a new team of bakers to bring the quality right back up to par. Barbara has of course been at her side every step of the way, and continues to guide her through the good times and bad times, offering her golden words of wisdom and years of experience in growing businesses.
Shark Tank has inspired thousands of entrepreneurs to start businesses based on their dreams and passions, and has made it easy for aspiring entrepreneurs to understand what the American Dream is all about. Many entrepreneurs that get on the show truly epitomize this Dream, and inspire fans to build up the confidence they need to get their companies off the ground. In some cases though, the show has also made it seem easy to start a business and be successful. A broke entrepreneur can walk into the Shark Tank, close a deal, and be featured as a millionaire in an update a year later. Everything can seem breezy from this angle. And that is why this particular update on Daisy Cakes was so important.
There is an old saying which many of the Sharks have voiced themselves, that “if it was easy, everyone would be successful”. In truth, this strongly reflects what is considered by many as the fundamental principle of business strategy: “If everyone can do it, it’s difficult to create and capture value from it”. While business may come naturally to some, business in general is never easy, and that’s where so many people are mistaken. New entrepreneurs start companies with the expectation to be profitable and successful immediately. Then, when complications arise, they are shocked and upset, often times leading them to quit within a few short months. What they don’t realize though, is that these setbacks define what business is all about. And the ones who are successful, are the ones who fall and get right back up.
There are millions of things that could go wrong in any business. Suppliers could mess up on filling orders, competitors could win over accounts you were hoping for, and the business could even grow too rapidly for itself. In the case of Daisy Cakes, because of its rapid growth, quality control was overlooked and the company took a pretty big hit. But it didn’t break them. And that’s what this update has to teach us all. Setbacks and downfalls occur in business, and the only way to recover is to face the facts and do whatever it takes to get back up on your feet. Because when it comes to business, what doesn’t kill you has to make you stronger. Otherwise, you fail.