A Shark's tale: The King of Infomercials on how he made millions

Kevin Harrington, founder of TVGoods, discusses generating £500m in sales from infomercials, expanding into the UK and his time on Shark Tank, the US equivalent of Dragons' Den.

A pioneer of the US infomercials industry in the early eighties, Kevin Harrington's first entrepreneurial venture began 27 years ago when he founded Quantum International. His business, financing direct TV marketing product launches, grew to $500m in annual sales and distributed to over 100 countries but being a success in the US wasn't enough, Harrington explains. 

In 1990 I was sitting with a library of about 100 infomercials and I said, 'What's the next frontier?' I'm one of these guys with the entrepreneur in me, always thinking about where I can go from here," he says. "If we can watch movies made in the US that go all over the world, why can't we do that with infomercials?"

Harrington set up his first UK office in London's Soho that same year, hiring 75 employees and expanding internationally from his UK base. At a time when no other company was creating infomercials outside the US, Quantum International was opening offices in Europe, Asia and Latin America. Confirming Harrington's success, Quantum International later became a business case study at Harvard University.

However, Harrington says he was heavily criticised for his decision to expand internationally: "When I was an entrepreneur in 1990 and we first launched here in Europe, everybody in the US said I was crazy. I had my hands full doing about $80m a year in sales and already working about 12 hours a day but I thought 'the rest of world hasn't seen these products'.

The entrepreneur side of me wanted to see if we could do it. Initially it was painstaking, but after the shows ran in England we kept the same for the rest of Europe, dubbing it into another language. We didn't have the expense of production and it proved to be the eureka moment that paid off and took me to $500m.

If I had listened to everybody who was saying how stupid I was to be going international I would have never built this business. It turned out to be the smartest thing I ever did," he says.

Shark Tank

Harrington eventually sold Quantum International and after additional entrepreneurial ventures – HSN Direct with the Home Shopping Network, Reliant International, the Entrepreneurs' Organisation and the Electronic Retailing Association – he appeared as a judge and investor on US TV show Shark Tank in 2009.

The show is based on the Dragons' Den model of entrepreneurs pitching for investment. "The very first version of Shark Tank was different from today; it has changed to have more of a Dragons' Den look and feel," he says.

Initially, in the early episodes, the Sharks were all behind a big counter and up high on a pedestals but that didn't seem right. So they brought us down on the floor right in front of the entrepreneur, much like you see on Dragons' Den.

"More than 50,000 people approached Shark Tank to get on the show, but they took less than 500 so where did the other 49,500 people go? We got a lot of phone calls, not as many as 49,500, but around 15,000."

Harrington explains how appearing on Shark Tank helped him from a product flow standpoint: "Last year I had over 15,000 enquiries from product owners who came through my website, from that we've had this tremendous flow of products. I now have a team of people who go through these products admissions and then we partner with the right people in taking these people around the world," he says.

TVGoods

A novice in the TV retail industry, Harrington knows he has a formula that works. Using his 27 years TV retail experience as well as his time assessing products on Shark Tank, Harington raised $20m capital from his own investment and investment banking connections to set up his new retail venture TVGoods.

A wholly owned subsidiary of As Seen On TV, TVGoods is a US-based direct response marketing and retailing firm. Harrington identifies, develops and markets consumer products in his latest venture, providing a one-stop shop for investors and entrepreneurs attempting to send their product to market.

Proving his critics wrong, Harrington successly launched over 100 products with more than 20 producing over $100m in sales. Previously working to endsorse the products and brands of Tony Little and Billy Mays, Harrington most recently struck a deal with rapper 50 Cent, launching a set of wireless headphones through TVGoods.

Speaking of the US retail market, he paints a grim picture for start-up entrepreneurs. The average $20 price for his products means people can find the affordable amount to buy the products they want, a tactic that continues to grow his business. But for first-time entrepreneurs, he says the situation in the US is tough.Start-ups are pretty much unbankable unless you have secured assets so that's why people end up coming to people like ourselves because we bank start-ups, that's our business; we're a venture marketing company.

It is very difficult for a start-up to walk into a bank and lend money unless you've got a business that's already running, that's selling product and doing very well. It's not easy getting capital," he says.

UK expansion

Harrington this week opened a new UK office. He explains: "The UK is a great pathway to the rest of the Europe. I've done a lot of business here for many years and know a lot of people."

Keen to work with British entrepreneurs, Harrington has £9.5m to invest in new product ideas, which will then be sold via TVGoods produced infomercials and As Seen On Tv. "Just like we do in the States, if someone has a product we put up the money to finance it," he says.

Coming out of the US, it's an English-speaking market, a testing ground for the European market place," explains Harrington. "Not everything in the US will work around the world but if it works in the US and then in the UK, that's a good sign that it’s going to work in Europe."