When Mark Cuban passed on Jamie Siminoff’s request for $700,000 on “Shark Tank” in 2013, he didn’t know it would eventually cost him $28 million.
Siminoff is the founder of Ring, an app-controlled smart doorbell with video, which is now valued at $500 million. If any of the Sharks had jumped on Siminoff’s offer of 10% equity in his company for $700,000, their investment would now be worth about 40 times as much.
At the time Siminoff appeared on the show, his one-year-old product was called DoorBot. The judges rejected him flatly, except Kevin O’Leary. He offered Siminoff a $700,000 loan in return for 10% of product sales until the loan was paid off, plus 7% of all sales in the future and 5% equity. Siminoff declined and left the show without an investor.
Sounds like the end of a sad story, right? Not quite.
After his episode aired, Siminoff says he received at least $5 million in sales and “everything just popped after that.” One of those post-show customers used his Ring app to speak to a delivery driver while sitting on an island hundreds of miles from home. Billionaire Richard Branson happened to see this and, after asking about the technology, invested in Ring.
Branson has helped Ring secure almost $200 million and expand into 100 countries. Next, up is an IPO by the end of 2017. By then, Cuban and the other Sharks’ “no” will have cost them as much as $100 million.
What can we learn from Siminoff’s experience?
1. Never Give Up
While many entrepreneurs would take a “no” from Mark Cuban as a sign to give up, Siminoff saw it as a challenge. Instead of walking out of “Shark Tank” dejected, Siminoff left determined to prove the judges wrong. He rebranded, improved his product’s features, and capitalized on the buzz generated from his appearance.
2. Stand Up for Your Worth
Also important? Not being afraid to walk away from bad money. It’s hard to reject nearly $1 million from an investor, regardless of how many strings may be attached. But Siminoff knew he couldn’t accept O’Leary’s terms, even if it meant he might never get a better offer. He stood firm in his belief that his product had amazing potential, and refused to accept less than he felt he deserved.
3. Be Careful With No
Although $28 million is chump change to someone like Mark Cuban, he probably still wishes he’d jumped at Siminoff’s offer. We can all learn from his mistake. Saying “no” too quickly or without enough research can be costly. Also, you sometimes have to be willing to take big risks (like collaborating with an unproven entrepreneur) to yield the biggest rewards.
Originally published at medium.com