"Please, no hot sauce" Shark Tank investor Kevin O'Leary opens up about today's retail start ups

Shark Tank's Kevin O'Leary made his feelings crystal clear about one particular product category during a panel at Shoptalk Spring in Las Vegas.

"I don't want to see another hot sauce — I can't take it anymore," O'Leary declared with characteristic bluntness.

Elaborating:

"To think that you can break into an ancient category that is hardly growing with another hot sauce — that's a definition of living hell on Earth. There's so many people that think they can break into the hot sauce market. Sure, it's a multibillion-dollar market: Every iteration of hot sauce has been done a thousand times, so please, no hot sauce."

As chairman of O'Leary Ventures Management and a key investor on ABC's hit show Shark Tank, Kevin O'Leary has evaluated countless pitches from hopeful entrepreneurs seeking funding for their retail startups. His hot sauce fatigue reflects a broader challenge in today's retail landscape: standing out in saturated markets where genuine innovation is increasingly rare.

Shark Tank investor Kevin O'Leary comments on changing scope of retail advertising

In today's competitive retail environment, O'Leary emphasized that investor focus has shifted dramatically toward measurable metrics. Gone are the days when a compelling story alone could secure funding.

"Investors have gotten very savvy about this space over the last four or five years," O'Leary explained.

The first thing they examine is whether a company has figured out how to "take their story and build a community," which he describes as critical for consumer goods and services.

But community building must translate to financial viability. The rise in customer acquisition costs (CAC) has become a major hurdle for direct-to-consumer brands as social media advertising expenses continue to climb. Referring to the return on ad spend (ROAS) metric that measures advertising effectiveness, O’Leary warned:

"The whole deal is CAC and ROAS now because if you buy into a company that hasn't figured out CAC — they basically go bankrupt, advertising themselves into oblivion"

Perhaps Kevin O'Leary's most unexpected advice came regarding advertising channels. Despite the digital revolution, he strongly advocates for television advertising as an underutilized opportunity.

According to O'Leary, any brand spending over $50,000 monthly on advertising should be testing television campaigns. This recommendation comes from his firsthand experience with WonderAds, a TV advertising agency he helped launch last year.

"Television, in many ways, is better than social media: The person is captive. It's that lump sitting on the sofa," O'Leary stated with his trademark directness.

Explaining:

"You're not competing with scrolling up and down, doom scrolling on your phone. You're saying, 'Oh, I'm watching this thing. Now there's an ad that means something to me.' This s--- works. That's what I'm telling people."

The strategy appears to be paying dividends for Kevin O'Leary's portfolio companies, with television accounting for approximately 40% of their advertising spending.

The future of retail success

For entrepreneurs hoping to avoid Kevin O'Leary's hot sauce aversion, the path forward appears clear: focus on genuinely innovative products in growing categories, master customer acquisition costs, embrace testing across multiple advertising channels, and measure everything.

His parting advice was characteristically blunt:

"If somebody tells you that you're spending your money to build your brand and you're not getting a really high ROAS and a low CAC, they have no idea what they're doing. Avoid with extreme prejudice."

While hot sauce entrepreneurs might need to look elsewhere for funding, Kevin O'Leary's insights offer valuable guidance for retail startups navigating today's challenging market. The message is simple: tell a good story, build a community, but back it all up with solid numbers.

For the "Shark" infamous for his direct approach, the recipe for retail success in 2025 requires more than just heat – it demands measurable results.

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Watch Shark Tank on ABC Fridays at 8/7c and stream the next day on Hulu.