This favorite RECONVERGE:G2 session returns! The Shark Tank is a process during which teams representing a variety of companies defend an intelligence function proposal at their organizations to three judges who will either accept or reject their ideas. Each team has 15 minutes to make a case, and the judges have 15 minutes to ask questions.
Intelligence Shark Tank Team #1: Wattage Motors
Adam Wedwick, Victoria Lefevers represent lawyers for Wattage.
Wattage works as a low cap market with fears of takeover. Start-up culture with many people wearing may hats; protect IP. Product: Omega (car), Successful, but playing in an unproven market. Wattage is hiring and expanding, but has a lack of talent. They also do business in batteries.
The team wants to create a Wattage market monitoring task force, and would like to divest it across the organization. A commander will be in charge; a start-up mentality of time give-ups of about 15-20% of those to be involved on the team. (The belief is these individuals are already working unofficially in this capacity). Should the team become overwhelmed, they will outsource.
Currently, Wattage is doing such projects ad hoc.
Rationale for task force:
- Not yet ready to hire a dedicated person.
- Good way to get feet wet and assess demand
Task force will assess where to play, address how to win, address concerns about shareholders, and protect IP.
Where should we be playing
Monitor the market to understand existing products and how markets will be affected, and to monitor trends.
How we will win
Wattage needs to remain on top of the competition and differentiate. The market has been growing steadily and the company needs to go on the defense to protect product.
Wattage also works in batteries and is growing the market from the ground up, but cannot assume this leadership advantage will prevail as competitors access the technology and use it to their advantage.
Regulatory affairs challenges exist, but Wattage will grow the battery business by setting the standard upon which other regulations are built.
Another goal is to maximize street value and prevent a hostile takeover:
- Develop relationships with key analysts to tell the story
- Monitor market for investment in EV tech
- Identify strategies that would make Wattage less attractive to a takeover
Protect Wattage IP
- Monitor market for investment in EV tech
- Identify opportunity for the EV market to standardize on existing Wattage IP
- Who benefits?—Direct investors
- How will CI become a key resource for customers/decision makers?—Test strategy and new technology
- How will you maintain relationships—Task force represents the business and decision makers.
4 task force members=15% of their time
- Head of corp/business development: $30K/year
- Other members: $15K/year
Outsource larger projects
- Analyst subscriptions run $10k+
- Contract for market sizing win/loss etc. as needed (0-$25K)
Legal team is requesting $75,000.
Recommendation from Sharks is to have the legal team see product managers and R&D staff. They will need buy in from teams legal group wants to leverage.
Sharks request timeframe for return on investment—legal team says success measure will be based on growth and stabilization of stock price, avoidance of takeover, adoption of Wattage standards and licensing of IP, and ability to identify best pool of talent to meet hiring goals (TBD).
Sharks wonder: What is the value of avoiding a takeover?
Result: Sharks have a conditional “in” with caveat legal team consults with R&D and product managers and provide 12 months for success measures. Sharks have some uncertainty and require time to think.
Intelligence Shark Tank Team #2: The Johnson Brothers Brewing Company
Rostyk Hursky, business venture program and Lindsey Smart, intern, ask for $200,000 for growth initiatives in global market. This company is already marketing in Canada and would like to distribute there representing a $100 million business, $2.7 million in sales at stake. Cost saving is another reason for CI, they are having issues with drought in hops producing areas. They would like to participate with other hop providers; diversification can provide savings. Less tangible benefit is the voice of the customer. Women are becoming more involved in craft brewing and represent 38% of the market; some marketing dollars can be shifted.
They propose that they have seen growth decline and growing competition. They are a local company that wants to continue to grow and represent the local aspect of who they are; a lack of formal presentation to the Sharks results from mutual understanding of one another and full integration of CI through the organization. They are advancing the organization, but have lost track of who the clients are and what they want.
Sharks say, with additional money provided, the company can push things that they currently cannot. Sharks appreciate the team can do more with more money. The team wants to appropriately direct funds to attract business; the team further hopes that with customer feedback program they can discontinue certain non-performing products.
Also, the team would like to partner with other craft brewers and allow the competition to approach this existing company such that this company can take advantage of their distributors, and Johnson Brothers Brewing can get them up to speed on the brewing process: mutually beneficial interactions with the competition.
The team requests a small amount of money and will use it to set up an effective CI function.
The Sharks want to have the hops situation resolved and drive expansion into the Canadian market. Partnering with the competition will be secondary. Sharks ask; will this be managed continuously or as a series of projects? Answer is that it will be an ongoing process—plans for 5-6 years out are already under consideration. The Sharks would have more confidence had they seen a road map for this future.
Sharks have some confusion about the situation and would like a more formal presentation with a presentation of numbers. Also, they want a better sense of processes to be set up and other projects beyond year one. Further, the sharks do not understand CI and that is a complicating factor—they want to know how progress will be made.
Money will be provided, but a road map needs to be determined.
Intelligence Shark Tank Team #3: Spengler Grocery
Craig McHenry and Paul Mullin give the presentation.
Spengler is the second largest grocery in the country, and has vast quantity of data—enough to keep them thriving looking inward, management says, without outward assessments. The CI function was eliminated.
Mullin began the presentation by telling a story about the 1986 World Series, in which a team on a hot streak was defeated after the first baseman, Bill Buckner, lost the game with a potentially easy out at first base; it did not happen because the ball went between his legs.
The business application: Who are the Bill Buckners of business? Kodak, Atari, Boarders, Dec, Polaroid—all market leaders who failed.
The opportunity for the Sharks is:
- A subscription to license personalized intel services for the next 12-month budget cycle
- You can bid on between 30 and 60 G2U (each unit equals 1% of a $2.5 million function)
- Depending on your interest and the number of G2U you bid on, your investment would be somewhere between $750K and $1,500K
Spengler is thriving, but a preliminary STEEP analysis shows external forces might impact the company. E-commerce buying and aging customer groups are examples.
Three-D printing can be impactful in shipping and product lines. In the economic side, are we in recovery or headed for another recession?
Who is monitoring the supply chain? And, what will happen with the results of the election?
Sharks want to know—what is so advantageous about their CI system? How will it help?
CI Team says, who is telling you truths?
Sharks say, the customers do.
CI Team says, are we asking the right questions of our customers?
Sharks say they can predict behavior based on their loyalty program and are stubborn that they know what is happening and their real-time data will maintain market advantage.
CI Team says—what about those consumers that are not current customers?
Sharks ask—how do we get there?
CI Team says—we put the team together, watch for unusual events, track and monitor trends. Answers will come from looking outside the company, not at internal data.
Sharks believe they have very granular data at their disposal, and question the superiority of any data the CI team might present.
CI Team indicates that without understanding what is driving the data, the circumstance of owning it is irrelevant. The CI team does not want to replace the existing process, but add on to it, and say past success was a result of the contributions of the CI team. They believe they can cut CI costs, grow efficiencies, but still be advantageous to the company.
Sharks want to know what is the incremental benefit offered by their proposal?
CI Team indicates this is a 2.0 development because they are making it very personalized; activity will be directed by the management team.
The cost for the function will be between $2.5 million. Physical space is not required, nor any new investments.
Measured success will be based on input: Number of projects and questions answered—but mostly that outputs will be measured by qualitative and quantitative value. This will require Sharks discuss the CI team’s achievements.
After the $2.5 million investments, the return on that is expected to be three times it—on quantitative and qualitative data.
The Sharks still believe they do not have significant problems that need addressing by a CI Team. They want a list of tangible deliverables. They want to know how the CI team will direct wins.
CI Team says they can help to remove bias of other players; this would be helpful, per the Sharks. Further, since they are not focusing on big data and social media, Spengler is left with a gap—and the team will address external to the company and external to the customer issues.
At the end of the day, this CI function is about not dropping the ball.
Sharks are willing to consider the project but are reluctant to fund the entire amount. They felt they did not enjoy adequate return on investment prior to cutting the pre-existing program.
After some time to deliberate, the Sharks made these proclamations:
- Wattage had great economy of the situation—they knew their audience and corporate culture.
- Spengler Grocery had a great story line and captured attention; great tie in.
- Johnson Brothers Brewing Company had a great value proposition and was clear about it from the beginning.
- The Shark Tank is a great practical exercise for CI workers—a good learning opportunity, and thanks to the participants.
- Presenters in this situation must adjust on the fly; respond to pushback.
- Know your audience, profile your executives.
- Get to your point; pitch your story in five slides or less. Provide data.
The winner of this year’s competition was The Johnson Brothers Brewing Company!