"Here's the killer," according to O'Leary. "You have to know your numbers. How big is the market? How fast is it growing? How many competitors are there? What's the breakeven analysis?"
Of the pitches from a number of Harvard MBA candidates, O'Leary told CNBC's "Squawk Box" this week, he's seriously looking into a couple of them.
O'Leary said he also warned the students about "the real world," by telling them about an experience he had.
"When I was their age ... a guy like me walked in and said, 'You guys have no idea in terms of what's going to happen. You think you're sitting here and you're so smart,'" he said. "I remember looking down at him and saying, 'What a beep this guy is.'"
"His whole point was experience is worth 10 times an MBA," O'Leary recalled. "I thought he was such an arrogant 'you know what.' [But] he was 100 percent right. And that is the lesson I try to impart on these students."
"Don't assume anything until you get outside and see what the real world is going to do," he stressed. "The real world is a nasty, nasty place."
Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."