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Kevin O'Leary, the coveted Shark Tank investor, known to his fans as Mr. Wonderful, keeps appearing in podcasts and interviews to share his expert opinions on topics such as finance, business, and politics. In one such interview, which was posted on his Instagram account on May 24, Kevin discussed the parameters one needed to tick to be assured about their product.
He referred to people who would take their family's say about their product, and said that it was wrong because the product needed to get approval from the strangers buying it. Explaining how the family sales didn't count, Kevin said,
"It's kind of irrelevant because it has to be tested by the arm's length market."
Further in the interview, the business magnate shared how a product was usually scaled and how its journey changed with the sales.
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Shark Tank judge Kevin O'Leary says family sales don't count
In this interview, which was posted on the Shark Tank investor's Instagram account, Kevin opened up about entrepreneurs' mindset when it came to family sales. He said that very often, when one came up with an idea for a product that solved a problem, they assumed that many people were going to want it.
He added that it might or might not be true because these entrepreneurs start by selling it to their families, which, according to Kevin, was always the case. He stated that it was easy to sell something to one's uncle, mother, or sister, and that's why it was irrelevant. Kevin implied that the members of one's family would buy anything from them, so they needed to test the product in the market.
"That's where social media comes into play," Kevin added.
He said that on social media, the inventors of the product could start building a community of users who would buy the product to solve the problem. He then began to explain how it worked in terms of sales.
According to the Shark Tank investor, whether it was zero or a million, it still served as proof of concept. This was a time when a company sought to determine how many people were interested in their product and how many were likely to pay for it. They also needed to assess if they could acquire those customers and retain them profitably.
Once a business achieved one million in sales, its target would shift to selling five million. In this stage, a business would start building the infrastructure that would support the sales and the distribution of the product. Once the company sold those five million products, it was easy to get to 50 million. The business that could sell 50 million could sell half a billion.
The Shark Tank investor said that the key here was in the first million sales, where the company needed to prove that the people wanted the product. In the caption of the post, Kevin reinstated the same thing, saying that everyone's mother loved their product.
It wasn't a "big deal" until strangers wanted to buy it with their own money. He believed that the entrepreneur had proven nothing till then. He added that until they had gotten their first million in sales, the company wouldn't know if it was a business or just a hobby.
For more updates on Shark Tank investor Kevin O'Leary, fans can follow him on his official Instagram account, @kevinolearytv.
