We all know Mark Cuban has got it going on. One of the original tech bros, he made his fortune investing in early online streaming services. And is super famous for being rich, owning the Dallas Mavericks, being on Shark Tank, and playing himself being rich on Entourage. Well, he’s upset, and not just because he lost his $250,000 investment in Sweet Ballz. Now, I watch Shark Tank a lot. I would not call myself a Super Fan. I prefer my reality TV with drag queens, housewives, a luxury yacht, or at least a good pavlova. But they play it a lot in the elevator in the building where I work. And I am not a stairs gal really. Now Mr. Cuban, and the rest of the Sharks, got upset over scams that claimed their products were featured on Shark Tank. They made a PSA Warning Video for Twitter, and Mr. Cuban baited the agency, asking, “Hey @FTC we have been asking for years for you to stop this. You awake @linakhanFTC?”
Well, this must have gotten some attention, because last week the FTC issued both a business and a consumer warning. The FTC staff dubbed these purported Shark endorsements “testi-phony-als.” The Business Blog, perhaps in response to Mark Cuban’s taunt, noted that it had brought enforcement actions in cases claiming Oprah endorsed diet supps, Will Farrell endorsed a muscle builder, and Bill Gates endorsed a brain pill. (I can sort of hear Chair Khan muttering, “You, sir, are no Oprah.”) But these warnings came swiftly after the Sharks tweeted their video.
Well, I am thinking Mark Cuban has some sway here. So I might suggest he and the other Sharks get back to their roots and support American entrepreneurs in encouraging the FTC to issue more guidance to legitimate businesses instead of sending threatening penalty offense letters or launching gotcha enforcement actions or suing CEOs. We sure try to encourage rational enforcement discretion at this blog, but we unfortunately have not achieved the 8.8M followers that Mark Cuban boasts. A little help here, guys!!??
Let me add my own PSA here, though. Shark Tank is awesome, and the Sharks are all business geniuses. Definitely do your homework to see if a product you are perusing was really featured on the show or just another testi-phony-al. But your homework probably should not stop there. Just as the Sharks sometimes get lured into a dog of an investment like the aforementioned Sweet Ballz, or like Foot Fairy or Toygaroo, even they can get taken in by claims that may be too good to be true. Our hero Mark Cuban, along with four other Sharks, invested $1M in Breathometer, an app that purported to measure blood alcohol levels. Great idea to promote safe driving, but in practice the substantiation of the app’s efficacy fell short, and the Company settled an FTC action of its own, providing full refunds to all consumers.
The Sharks were not named defendants in the case, but the company and the CEO were barred from making unsupported claims and the settlement provided full refunds to consumers. So a little bit of “if it looks so impossibly good it probably can’t be true” cynicism or caveat emptor is a good thing for both the Sharks and us regular minnows alike.