I hate the Shark Tank show because it is corrosive to business and innovation. It is a complete display of what is wrong with capitalism. A few ‘masters’ of the game in their ‘capitalist wisdom’ determines who will likely succeed or fail. That is not how innovation is supposed to work.
We should never allow the few to determine the chosen. Before the democratization created by the Internet, record labels and media companies were the arbiters of the success of many. Many other gatekeepers are there for many other professions.
While we supposedly live in a democracy, our corporate structures are mostly dictatorships for many industries. That is why I will continue to preach that privatization of what government normally does is a usurpation of power by the few that too many of us tacitly accept.
But first, the incident that drew my wrath. CNBC, the bastion of unfettered capitalism described Melissa Butler’s, saga with Shark Tank. She is a 32-year-old woman who had an idea specifically to fulfill an ignored niche by cosmetic companies that follow the tenets of capitalism where many less advantageous areas are left unserved because the easy profits are harder to come by for those who are solely interested in an easy-to-make dollar.
How this 32-year-old ‘Shark Tank’ reject got her lipsticks on the shelves at Target from CNBC.
When Melissa Butler, 32, took her line of custom-made, vegan lipsticks — in bright colors from pink and red to green and purple — on ABC’s “Shark Tank” in 2015, she was laughed out of the room. “The chances that this is a business are practically zero,” Kevin O’Leary said in the episode. “You only have so many minutes on Earth, don’t waste them trying to sell lipstick.” Fellow shark Daymond John added, “You are never going to create anything new in this world. It’s lipstick.” Sharks Lori Greiner, Mark Cuban and Robert Herjavec took a more subtle approach, but also declined to invest in Butler’s cosmetics company, called The Lip Bar. Butler was devastated.
“They were really cruel to us,” she tells CNBC Make It of the episode, where she appeared with her creative director Rosco Spears. But the experience only further ignited her ambition to succeed, Butler says. And it taught her an important lesson about persistence that would years later allow her to land The Lip Bar’s products on shelves at 142 Target stores across the country. “At the end of the day, if I stopped my business after one ‘no’ — even a public ‘no’ — then maybe I shouldn’t have started,” Butler says. “I couldn’t allow someone else to be the authority on my dream.”
Melissa Butler saw an unfulfilled need. “I was really frustrated with the beauty industry,” she said about the lipstick choices she had. “I hated the excessive amounts of chemicals, I hated the lack of diversity, I hated that if you wanted to get a high-performing product you had to spend a million dollars.” To the ‘geniuses’ at Shark Tank, because other major corporations had not tackled that, there was no profit to be made and those affected by that lacking, to hell with them. The lack of a moral compass of capitalism where it is profit at all cost means many are left unfulfilled if they do not fit the norm.
But Melissa was strong. She did it her way and built her business anyway without using the capitalist modal. She did it the free enterprise way. Unfortunately, most people do not have her make up. That rejection would be tantamount to the death of a good idea because false masters said it had no potential.
We must remember, capitalists, are not necessarily intelligent. They know how to play one game that they are trained to play. And generally, there is no metric for all of their unrealized failed calls.
We are taught in America that growth is everything. Businesses can have a steady state profit that pays employees a good wage and pays investors a solid dividend for the use of their capital. But if a business is not growing, expanding according to the capitalist modal, it is a failure where sharks move in to destroy. It is foolish and unsustainable because there is a point where things reach a steady state and maintenance is what is optimal, not growth. Growth at that point is solely for the benefit of the capitalist class who makes money on capital without expending labor or intellect.
I have a software company that investors called on many times for the sole purpose of capitalizing on it without regards to what its long-term growth potential would look like. I thought it was unethical then because these guys knew nothing about the business and would have likely bankrupted my small company after fooling a few into buying stocks that would ultimately be unsupported by its revenue potential.
Free enterprise is not capitalism. The capitalism we currently have is mostly a fraud that is being realized as it extracts more and more from most to satisfy the growth and wealth of a few. I only wish everyone could see beyond the pretty indoctrinating facade and understand that our decline is not mostly because of our everyday politics but because of a fraudulent economic system that does not reward intellect and labor in the aggregate but charlatan bankers and financiers who play with paper.
Unfortunately, Melissa, the Shark Tank reject may not have learned her lesson. She is still indoctrinated by our system that is on a collapsing trajectory.
In July, The Lip Bar brought in its first outside investment from the New Voices Fund, which invests in ventures owned or managed by women of color, and is backed by Unilever.
Organic growth is much better than selling one’s soul to the parasites that are investment firms.