Say Goodbye to “Buy One, Get One” and Hello to “Buy One, Get Experience”
by Kim Ryan
A few years ago, I was watching Shark Tank (one of my favorite business-nerd guilty pleasure TV shows) and an unusual contestant came on the show. Unlike the other traditional hopeful entrepreneurs pushing high-tech gadgets that normally have Laurie and the gang fighting over QVC selling potential, this business was experience-based.
The contestant, Melissa Carbone, pitched what sounded like a haunted-hayride on steroids through the Hollywood Hills in Los Angeles, CA. You’ve got to be kidding me, I thought. This is what she’s pitching to the Sharks? Does she not know what mind-bending, innovative products they have seen and that have come out of the show?? She doesn’t stand a chance.”
Some of the sharks dismissed her almost instantly, as expected, but Mark Cuban just as quickly jumped at her offer. He ended up investing, and not just with small chunk of change – Cuban offered Carbone the biggest deal on Shark Tank history: a $2 million investment for 20% of her company. Speculation came instantly from the other sharks, business reporters, journalists, and more – he’s really dumping that much money into a glorified haunted house?
But when Mark made the deal, clearly in full confidence of his actions, he said something that would stick me with to this day: he said he believed that experience-driven businesses were the way of the future.
Fast forward a few years later, and Mark’s haunted investment has now also made Shark Tank history for being one of the most successful investments of all time from the show.
But even before those stats came in, I knew Mark was right. All of his critics couldn’t get past the novelty of the investment, thinking he was going to have to bank on zombies or goblins to be “in style” for his investment to be successful. But Mark knew it didn’t matter; he was banking on the fact that people are increasingly looking to feel or experience something when they spend their money. In this case, a good scare and some goose bumps!
And now more than ever, people are doing just that. “Paint-and-sip” franchises – where attendees pay for a part cocktail party/part art lesson – have become incredibly popular across a variety of different age groups. “Escape room” scenarios where participants have a set time to test their logic and outdo puzzles have started popping up all over the country. Millennial are favoring spending their money on concerts, shows, and events instead of accumulating things. Even when it does come to products, take Lululemon’s famed yoga pants for example, they are changing from logic-driven labels such as “small, medium, and large” to “Hugged”, “Naked”, “Relaxed”, “Held-In”, relating to the feeling and the experience you’re about to purchase.
The possibilities for experience-businesses are endless, and it really seems like Mark Cuban was on to something.