Hello readers, thanks for stopping by our weekly review of Shark Tank. This episode had a nice diverse range of Inventors and products and services. This weeks Shark were: Kevin (Mr. Wonderful), Barbara Corcoran, Daymond John, Robert Herjavec and Mark Cuban. Below you can read a brief summary of the pitch and also my feedback from a product development strategy stand point. Please as always feel free to leave comments and subscribe for future posts.
Inventor: Jackie Courtney
Product: Nearly Newlywed (www.nearlynewlywed.com)
Requesting: $35k for 10% stake
Jackie Courtney (Fashion Editor and Entrepreneur) led off the show by entering the tank with a dress model wearing what appeared to be a wedding gown. She approached the display and greeted the sharks. She immediately began telling a story about how most women have an idea of what dress they want but, often cannot it. She tells the sharks that her company Nearly Newlyweds is a online boutique for wedding dresses where women can come and purchase the high end dresses of their choices for a fraction of the retail cost. She tells that not only are the dresses discounted but her company guarantees a buy back at 50% the purchase price. She further explains that her company operates essentially as a consignment and has little to no out of pocket expenses. Furthermore, when she purchases a dress she already has 30% profit built in. Her current sales are 4 dresses but she is limited by inventory at the moment. Jackie also mentioned that she is working with Klein Felds on an exclusive partnership. The money would go to more inventory for her company. Barbara jumped in rather quickly and said she was out because it was too early to invest in as there was little track record. Robert immediately followed out. Daymond said he was not interested. Kevin then said that he would offer $35k for 40% stake so that he had a larger influence on the company (even saying he would have offered 51% and fired her, harsh). Mark bowed out since this was not his expertise. Jackie regretfully turns downs Kevins offer and leaves empty-handed.
Feedback: Considering I know nothing about wedding dresses except that my wife looked amazing in hers, I turned to her for some opinion on Jackie’s business model. We both agreed that it was very unique and most likely appealing to some women but, that most women she knows are particular about keeping their dresses and not buying used. Having said that, there is definite value in this market segment as women are wiling to spend exorbitant amount of money on wedding dresses. The biggest issues for me is the amount of inventory needed to satisfy all of the women that come to the website. The partnership with Klein Felds is a great idea and I think this will not be the last time we see Nearly Newlyweds. Best of Luck Jackie!
Inventor(s): Nathan Buffett and Shane Cianciolo
Product / Service: CorksAway (www.corksaway.com)
Requesting: $105k for 20% stake
Nathan and Shane entered the tank in see captains uniforms with a bottle of wine and tray of appetizers. They then offered both to all of the Sharks and all accepted the free booze and food. Nathan and Shane then talked about how their company CorksAway was an exclusive cruise with food and wine. The cruises are much smaller that what is currently offered. They also said that they offer different themed excursions such as: beer cruise, wine and mimosas, etc,… Next they talked about the appetizer they were presenting as the Pesto Tort. They had made $250k over the past year on one boat (not bad). They said that the endeavor is part of a 4 stage plan:
Stage 1: Growth of the CorksAway cruises
Stage 2: Franchising for $175k including the cost of the boat (boat only costs $35k)
Stage 3: Food retail of the Pesto Tort
Stage 4: Indoor cruise in Las Vegas
This eclectic presentation and business plan was not what the Sharks were interested and they all regretfully did not offer anything.
Feedback: I think the biggest issue with the pitch is actually the lack of focus on the primary initiative of growing the cruise business. The 4 stage plan was a turn-off to any investor because it displays an appearance of looking down the road for the next thing as compared to focussing. I do like the cruise idea but, the franchise concept is probably the best idea considering the minimal capital. I just think the $175k is too much. It would be better if the price to buy-in was more like $100k and they received a back-end royalty on all cruise sales. This to me would bring more interest to the table. Best of Luck!
Inventor(s): David Powers and Scott Tindel
Product / Service: Tietry (www.tietry.com)
Requesting: $100k for 25% stake
David and Scott are Attorneys and both wear ties on a daily basis, they mentioned that they spend a lot of money on ties and wanted to offer a service that allowed people the option of having a different tie whenever they wanted. The business model was compared to “Netflix for ties” and they guys said that other products would be offered eventually such as cut links, etc,… The way the service works is the user pays a monthly membership such as $15.99 and they will receive a tie in the mail. They wear the tie and return it. After a few more days a new tie arrives and the process is repeated. Currently they have zero advertising and yet have 110 subscribers with a retention rate of 85%. They mostly rely on referrals at the moment and have no new clients in the pipeline. Robert is first to drop out then, Kevin says he will offer half ($50k) if and only if he gets another shark to come in with the rest and state the stake requested. Barbara also drops out. Daymond then says he is particularly not interested because the guys didn’t come in with a great deal of passion for he fashion side. Mark then says he is out and that means Kevin has to withdrawal his offer too.
Feedback: While compared to Netflix, this is a very inventory dependent and I would imagine the people that do not renew the program it is mostly due to selection. This means David and Scott would need to have an enormous inventory of various patterns and colors to satisfy all buyers. I think there needs to be an extensive study performed on the most common ties by color, brand and pattern to determine exactly the best product to stock. Also, I would imagine the company retains rights to charge the user for the full value of the tie in the event it is not returned on time and in good condition? Not bad really but it needs to have some of the bugs worked out to be a return, low-risk model. Good luck guys!
Inventor: Rob Dyer (Marine Major)
Product: RuckPack (www.ruckpacks.com)
Requesting: $75k for 10% stake
Rob in full camouflage military uniform, enters the tank and approaches the display. He begins by telling a story about his military experience and saying that one of the biggest challenges of being in a remote location and up long hours is the nutrition. So he developed RuckPack nutritional shots. The idea behind the shots is they are loaded with nutritional content and not caffeine as the Snipers would not like the jittery feeling. He wants to translate the marketing to the civilian but he is out of inventory. The mixture is proprietary. The shot currently costs him about $0.80-0.85/bottle to make and he sells it for a couple of dollars but, would like to drive the costs down to improve his margins. All of his profit goes into inventory orders (paid upfront, ouch). He has invested $90k and holds 40% stake in the company while the remaining stake is held by various military families. He has 80,000 units arriving soon and 20,000 units of the caffeinated version. He is only in a few stores at the moment and needs to grow. But, he needs more inventory to handle demand. Daymond bows out, Barbara also says she is out. Kevin says he will offer the whole amount requested. Mark is out too. Robert then says that he thinks Rob Dyer needs more money to build inventory and he offers $150k for 20% with Kevin splitting the investment. He accepts the offer.
Feedback: First off, Oorah! Thank you for your service, we are deeply grateful. I like this product for a number of reasons 1) it is a proven high demand segment 2) margins can be high and 3) the military spin without caffeine is great. I don’t like energy shots for the main reason that I don’t know what is inside and having read the latest claim that 5-Hour Energy shots may have led to some deaths. This however it a nutritional shot. The fact that he already has a lot of demand that he cannot fill is a good sign. I do wish to see him work out agreements with the suppliers to allow Net30 or Net60 credit terms to free up cash flow for other investments. I don’t doubt that RuckPack will be on shelves soon in a store near you. Great job Rob!
Thanks everyone for reading this weeks post. Stay tuned for weekly reviews of Shark Tank.
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