First and foremost, Happy Holidays and especially a Happy New Year to all of my loyal readers. The start of a new year should be a sign for other entrepreneurs to take the step towards independence. I wish you all a prosperous 2013 with you endeavors and / or inventions.
So this episode was a re-air from the third season but considering it was airing on New Years Day, it gave us another dose of the show prior to the all new episode this Friday. This show gave us a little of everything; seasoned successful business owners looking to partner with someone with global exposure, Inventors with a great product in a fantastic market segment and even a product that might need to go back to the drawing board before it makes it big. Without further ado, lets see how it all panned out….
Inventor: Kevin and Melissa Kiernan
Product: The Last Lid (www.lastlid.com)
Requesting: $40k for 20% stake
The Last Garbage Lid you Might Ever Need
Melissa and Kevin entered the tank to discuss the product that was developed to address a need to keep raccoons from opening and knocking over their trash cans every night. Additionally, they would often lose the lids for their trash cans and apparently you cannot buy just replacement lids for trash cans. After some testing of materials and finding which design was most effective they settled on the elastic banded, polyurethane cover that would replace the need the for the hard plastic covers. They just launched the product, with no sales to date or IP. One by one the Sharks bail out of the pitch until only Daymond is left and he asks the two if they would take a minute to propose a final offer. Kevin said “$40k for 60% stake!”. Daymond agreed.
Feedback: While I love the fact they the Kiernans took a problem and created and tested a solution, I don’t like the resulting product for a number of reasons. First, the sagging fabric will get filed with rain water and make a mess. Second, the fabric regardless of whether it is water proof /resistant will leak the odors which I hate (ultimately promoting more Racoons to come by and check it out). Finally, I am not sure on what basis Daymond thought this idea had a valuation of roughly $67k with no sales and nothing protected in intellectual property in the way of a patent. The concept is a good one but, I think a better and more cost effective solution would involve an elastic domed disk that can be attached to any type of trash can.
Inventor: Amanda Schlechter
Product: The Ledge Pillow (www.ledgepillow.com)
Requesting: $30k for 25% stake
The Only Pillow that Doesn’t Get in the Way…
Amanda entered the tank with a beautiful model by her side to demo the Ledge Pillow, a contour designed pillow for stomach sleepers with large breasts or augmentation. The idea is that many women now have breast implants and as a result cannot not sleep on their stomach comfortably. The company was formed in 2008 and has 83 pillows sold to date. Mr. Wonderful started by telling Amanda that the sales history and the small niche market was not enough to keep him interested. The other Sharks followed by not partnering with the Ledge Pillow.
Feedback: This pitch to me was very tough to watch because Amanda appears to be very passionate of the product yet she has not taking the risk personally to see if the product would sell. During the 3-4 years that the product was out (with a patent as well), she didn’t spend a lot of time or money to perform a market analysis that may have helped to better understand who are the intended buyers. In reality, had she been able to invest more of her own money into advertising to boost sales over the 83 unit mark the pitch may have gone better. I wish her the best of luck and recommend that she take the risk to fully “live” her product 24/7, meaning cold calling store owners, retail buyers in her local market to setup a case study of sales history.
Inventors: Steve Nakisher and Shane Talbott
Product: Talbott Teas (www.talbottteas.com)
Requesting: $250k for 20% stake
Designer Teas by Talbott Teas
The company Talbott Teas was created by the two partners to serve the designer tea market. The products are whole leaf tea blend created by Shane Talbott with a total of 23 different flavors available. The two were fortunate enough to be chosen as one of Oprahs favorite things in 2009 which led to an instant boost in sales. In addition they have appeared on QVC on numerous occasions. Sales history: $100k in 2009, $350k in 2010 and $500k through Q3-2011. They are enjoying a 50% gross profit margin at the moment. Daymond jumps in a regretfully bows out due to a conflict of interest with another investment he is in. Mark is also out. Kevin offers the $250k for 40%. Robert and Lori both drop out and it is left to the Talbott Tea owners on whether to accept. They counter twice and settle on a $250k for 35% stake to Kevin.
Feedback: These two owners are an example of found fundamental Entrepreneurs. Not only do they have great trending sales history but, they are very knowledgable of the business side of things too. I am amazed that there are not more competition out there in this segment aside from Teavana. Not only is tea shown to have health benefits but it easier on the stomach. I think this is a gold mine and I imagine more me-too companies will enter the ring soon. I wonder if the two are full-time working for Talbott or not because the intro video had them talking about their professional background. In any event this is a success for sure, Lucky for Kevin to have gotten such a big piece of the pie for only $250k (or roughly 4 months of sales).
Inventors: Maddie, Margot and Diane Bradshaw
Product: M3 Jewelry (www.m3girldesigns.com)
Requesting: $300k for 15% stake
M3 Girl Designs Jewelry
Maddie, Margot and mom are M3 Designs a unique interchangeable jewelry company out of Dallas Texas. The company was formed back in 2006 when then 10years old Maddie began creating bottle cap magnets which led to the interchangeable bottle cap necklaces. Since the formation of the company, the product has grown to be representing in over 1000 retail stores nationwide! During this time the company has grossed over $5 million in sales revenue and growing. They Bradshaw’s are now looking to grow the business and lower the unit cost to help target the international markets. With the exception of Daymond, the Sharks are all wanting a piece of the M3 business but it comes down to equity and dollars. Various offers get put in front of the girls involving: Kevin+Lori for 40%, Lori+Mark for 30% then finally Lori+Robert+Mark for 30%. The girls talk it over and decide to take the deal if they can get season tickets to the Mavericks. Mark concedes a better deal, Owners box anytime with friends. The deal is done!
Feedback: It is hard to believe but these two young girls are both millionaires! I love how they are talking about college coming up soon. If this business gets any bigger school is going to be a waste of time. At first I didn’t understand the product but after they showed how the bottle caps can be removed and reattached to the necklace charm, I saw how this would appeal to the younger generation. They mentioned that all of the assembly is taking place in their Dallas facility but, does that mean these are all hand made or are they integrating any automation? I think this could be streamlined overseas for very cheap but I kind of think “Made in the USA” may be worth the incremental cost to be honest. Truly inspiring story and I am eager to see how the company grows in the coming years.
Thanks everyone for reading this weeks post. Stay tuned for weekly reviews of Shark Tank. Make sure you follow this blog, like us on Facebook and follow us on Twitter
If you are an Entreprenuer with a great product idea but, have not made any progress with the development, my company Odyssey Solutions can help. We offer a full turnkey suite of services to help turn that great idea of yours into a product. All while you retain all intellectual property. To see our full list of services click the link below.
New Product Development Consulting