Shark Tank Episode Review – New Season September 20th, 2013

Well the long awaited season of Shark Tank is here. I am excited after the marathon build up from last week.

This is a pre-show poll to see who is watching the show tonight.

And now for our weekly reviews of the Shark Tank products and entrepreneurs.

We for the first time had all 5 sharks on the show at one time and it made for some great TV.

First in the Tank

Inventor: Josh Brooks

Product / Company: Postcards on the Run

Asking: $300k for 5% stake in the company

Postcards on the Run

Josh started this company with some help from a couple rounds of Investor contribution (including Selena Gomez). With an initial investment of $1.6mm USD and sales of $450k in 21 months and residual cash flow of $180k remaining, Josh is seeking funding for growth and marketing to further expose his brand. The product is rather unique in that an app is installed onto a mobile phone for free then after paying a $2.49 fee, the user takes a photo and writes a personal message. The results is a glossy 4×6 postcard delivered to the recipient of choice. So far he has 500k downloads of the app and a 180 transactions meaning a conversion rate of 36% (assuming single transactions). In most app-based businesses this would be a very good conversion. I wonder how many users are repeat users or if the drop off is high. That information was not discussed during the pitch. Mark Cuban was rather brutal with Josh stating that he was valuing the company on tech bubble figures. He didnt think it was a good time to invest so he bowed out. The rest of the Sharks soon followed out except for Robert. Robert said that he felt a connection to the product because he thinks his kids would use it and so he offered $300k for 10%. After some back and forth and good negotiating on both parts a deal was struck for $300k for 7.5% stake.

Feedback: Again, I think this product is one that is unique and novel indeed but, I would like to see the future plan for the business (additional streams, ad revenue, etc,…). Josh was proud to state he came from Myspace and he has a strong background in the Social Media segment. Good indeed but having the foresight to see a need to adapt the business plan to address user behavior is even more valuable. I will say that I travel alot overseas and using this app would be a cool way to personalize a postcard for a loved one. I really want to know how things are going after the Tank and to see if cash flow has improved.

Inventors: Lynnae and Ali

Company: Lynnaes Pickles

Asking: $125k for 20% stake

The two women enter the Tank to promote a gourmet pickle business based in Tacoma Washington. Founded on their Grandma’s recipes, they created a brand and a business serving local and nationwide retailers. With $144k in sales in 12 months the girls are looking to get some more money to help boost inventory and grow exposure. They are working with a distribution company now and in 26 states, pretty impressive really. The pickle jars retail for $6.99, wholesale for $4, and COGS is $1.93. The girls talked about Target showing interest in having them in their new gourmet foods sections. The Sharks were not impressed with the financials and the high cost and the uncertainty of the larger market.

Feedback: I always struggle with the food company pitches mainly because rarely is there anything proprietary and the possibility for running into a larger player that is looking to dominate a small segment is all too real. I do think they might be better off approaching a food products manufacturer to see about lowering the costs and then reducing the price point down to $4.99 might make this move faster. Updates anyone?

Inventors: Richard and Albert Amini

Product: Rolodoc

Asking: $50k for 20%

Two Doctors and Brothers Richard and Albert have a company that will hopefully eliminate the need to carry an outdated pager to get in touch with doctors. The pitch was not all that clear as they continued to mention “social media” but with not explanation as to what that all means. The idea is that Doctors would sign up to the website (much like Facebook) then post their specialities and accreditations (I guess). The Sharks ate them alive and within a matter of minutes, the guys left empty handed.

Feedback: If you watched the episode then I wont repeat the things the Sharks had to say but, I will say that as a patient, I find a huge amount of credibility checking that would need to be performed to vet the Doctors. Also, it was unclear as to how the company would generate money. Again, I would guess advertising and membership fees but who knows.

Inventors: Cole Edgar and James McDonald

Product: SweetBallz

Asking: $250k for 10% stake

NO IMAGE DUE TO SERVER CRASHING (Good thing normally)

So, these two Texas Entrepreneurs came into the Tank with a cake pop minus the stick called Sweet Ballz. With a background in the food industry and business development, they had a fast launch of the product with a huge deal going with 711. Racking in $700k in only 90 days is the real deal and I loved how dropped that on the Sharks rather nonchalant. The current demand is creating a lead time of 22 days which is tough especially considering the shelf life of 45 days. The money would be used to beef up supply and reduce lead time as well as expand into other customers. The numbers on the company are MSRP $1.99-2.49 with a cost of $0.86. I am sure that with a ramped up production they would be able to drive costs down below $0.50. All five Sharks put offers on the table but it came down to a deal from Mark/Barbara $250k-25% or Kevin/Robert/Lori $250k-30%. The Sweet Ballz go for the Cuban led offer and for good reason.

Feedback: Again a food product but, they say you invest in the man not the product and I think that was the big selling point here. The two guys proved they can get this company growing with solid sales history. I would imagine Cuban pushing the product to all of his businesses and Barbara would be looking at the broader retail deals (supermarkets, pharmacies and department stores). I think this will do well. I am interested in any updates….

Thanks again for reading and please come by again for the next weeks posting.

Sean Yakeley

Odyssey Solutions New Product Development Consulting

Weekly Shark Tank Review – April 26th 2013

I was pleased to see the Sharks back on the air after the unfortunate miss last week due to the Boston bombing coverage.

This was a great show with some very passionate business owners with a lot of drive. I applaud you all for sticking with your products and persevering. Lets get started.

Inventor: Jeff Stafford and Dusty Hollowell

Product: Shell Bobbers (www.shellbobbers.com)

Requesting: $80k for 20% stake

Shell Bobbers

These two long-time fishing and hunting buddies tell the story about how when they were hunting and a shotgun shell fell into the water it floated. It gave them the idea to make the fishing bobber company Shell Bobbers. I liked the method of pitching and how they incorporated the manufacturing into the sales pitch with I thought was very engaging. The cost to make each bobber is about $1 and they retail for $8.99. The sales to date it about $1000 (or 440 units). They have been selling in various hardware stores but need help getting into the larger retail outlets. They hold a provisional patent but, didn’t do a thorough research on existing patents. They have a trademark as well. Kevin started with a rather rough offer for $80k for 50% with a residual profit per until cash is paid back. Mark then offers a straight $80k for 33% and they do the deal.

Feedback: Like I said, the concept is solid and a novelty and certainly the fishing and hunting segment is enormous. I noticed on their website that they have some photos with the Duck Dynasty guys and I was actually thinking about that during the show. The Duck Dynasty guys would be the ultimate endorsers for this product. I believe to get this into the big box retailers, they need to invest in flashy packaging and a good marketing plan to show how to maximize the sales. I would like to see if the Shell Bobber is in the Bass Pro Shops this year.

Inventors: Tracy and Danielle Noonan

Product: Wicked Good Cupcakes (www.wickedgoodcupcakes.com)

Requesting: $75k for 20% Stake

Wicked Good Cupcakes

This Mother and Daughter pair have been making cupcakes in Boston for some time now but, they wanted to expand their sales capabilities and shipping around your conventional cupcake just was too messy and logical. The idea for the cupcake in a jar was born. The pitch is for gourmet cupcakes cooked in the jar and available to shipping and retail. They have sold about $73k year to date with $360k in forecasted sales for this year. The cupcakes have a shelf life of 7-10 days (without preservatives). The cost to make each is $2.15 and sells for $5.95 but with wholesale, they only make $0.85/jar. All Sharks bow out except Kevin who proposes a rather dirty deal of $75k for zero equity but with a perpetuity royalty of $0.50/unit. The girls exit to discuss then come back to negotiate a $0.45 a final deal.

Feedback: While I do think the whole cupcake crazy is going to be short lived once people realize they are loaded with fat and calories but, for sake of the hot segment this is a really creative way of presenting the cupcake. After all, the one thing I hate about cupcakes are that they are messy. The jar solves this by incorporating a spoon. I understand that walking into the tank you are under some pressure to get a deal done but, I would have recommended to play hard ball with Kevin. Kevin’s deal was nothing but a loan with a lifetime commitment, never advised no matter the situation. Because now they are forced to pay Kevin his share for every unit and that means a lot more when the company grows and sales are skyrocketing. All this for a $75k loan!

Inventor: Arron Lemieux

Product: nPower PEG / Tremont Electronic (www.npowerpeg.com)

Requesting: $2million for 22% stake

nPower PEG

Arron is a passionate individual looking to revolutionize the way we consume power. His company Fremont Electric has invented a Faraday induction-based personal charger for mobile electronics. The nPower PEG is a unique product that has a backing of 5 or so utility patents. The black cylindrical tubing houses a induction coil and concentric magnet that with motion will create a charge that is stored in the integral battery. Your device can then be plugged into the device to gain as much as 25% charge. he retails the product for $199 and has sold about 1300 units so far but the cost is a bit high. He explains the end goal is to apply his concept to mass power generation in the way of floating wave buoys. While the Sharks are all intrigued by the idea, they are also confused at how the personal device will lead to the large scale development. Kevin even comments that he would be interested in licensing the idea to a company like GE but he would not want to do all of the leg work. No deal is made.

Feedback: For all of the pitches I have seen on the show, this one has the most potential wide spread impact on the world energy consumption. The problem with the pitch is the valuation of the nPower PEG (nearly $10million!) that really is an investment for the development of the wave generation device. There is no clear track record for the wave generation system but, I do think Arron is more than knowledgeable so I do think he is the right man  for the job. I only wish he instead approached the Sharks for the small device only and requested much smaller investment to get that product rolling and into the masses. Later taking the profits and investing into the next generation systems. It is all about how you present the idea. Arron you can always send me one of the products and I can personally review it for you.

Inventor: Nate Holzapfel

Product: Mission Belt (www.missionbelt.com)

Requesting: $50k for 20% stake

Mission Belt

Nate developed his adjustable belt without the holes after he struggled to find belts that didn’t wear out and that had more fine adjustments than the normal 1 inch increments. He has been selling the belts through various smaller retailers and has sold $39k so far. The belts cost him $5.50 to make where he retails them for $39.95 and wholesales for $15. He is a very good salesman and this no more evident than when he tells the Sharks about when he arrived to LA and immediately went door to door to sell 20 belts! Lori, Robert and Kevin all bow out. Daymond offers the $50k for 40% stake for the purpose of licensing the belt to fashion companies. Nate negotiates the stake down to 37.5%.

Feedback: Watching Nate really is inspiring to anyone with a product idea. There are three things needed for a successful product-based business; proprietary concept, profitable model and a passionate leader. Nate certainly has the last one nailed down. They dont make sales guys like him anymore and it is a pleasure to see his passion and drive. I am sure his biz will be a success especially with Daymond backing the product. I am very impressed he has driven the costing down to $5.50 which is a very tough thing to do without mammoth volumes. I will say that I have seen this belt design before on the golf circuit (different company). That doesn’t mean it can’t make it, it just means marketing is where he will need to differentiate himself.

Thanks again for reading and please come by again for the next weeks posting.

Sean Yakeley

Odyssey Solutions New Product Development Consulting

The Importance of Performing Patent Research

Probably the most important step in invention validation is the patent research. The purpose of performing such study will not only bring to light some of the competitive products and what specifically they claim as innovative but, it also will determine if you can pursue your idea without infringing on an existing patent.

The entire patent system is incredibly cumbersome and intimidating to most people and frankly, the search tool is very difficult to understand so I wanted to help shed some light on how a patent search is normally performed.

Step One: Gather a detailed summary of what specifically your idea does and more importantly how it works (or the planned mechanism to the best of your ability).
This sometimes is easier said than done. I often have clients that will come to me with an invention idea but, they have not fully envisioned how it will work (meaning mechanically). They know what consumer problem or need it addresses but, as far as the detailed workings are concerned they have not gotten that far. In order to perform a good patent search you will need to have done some upfront work in conceptualization or at least a good sketch to show how your product will function.

Step Two: Start with a basic keyword search.
This is sometimes the easiest step to help narrow the search down. What I recommend is starting with an online search tool such as Google Patents (www.google.com/patents) and type in a 3-8 word phrase that best describes your product such as “Adjustable Hair Dryer”. Normally, this is will yield a long list of results based on the most accurate matches. You will normally only need the first couple of listings to see how the similar “prior art” or previously filed patents are categorized within the United States Patent and Trademark Office.

Google Patents Search Tool

Step Three: Identify the best fit Class and Sub-Class categories.
After finding some relevant matches you now can see how they have been categorized within the USPTO database. All patents are stored in a Class/Sub-Class style of organization. This means the classification for the product type and the below more detailed category. If you look at a patent you will see the “Current U.S. Classification” listed as shown below. The first number is the Class and the second is the Sub-Class. Using tools like Google Patents you can also click these numbers and you will be directed to a definition listing at the USPTO.gov website. Once you have made it to the definition page, there will be a red letter P that signifies all patents filled under this Class/SubClass. Click the P and you will then see all patents.

Google Patent Selection with Highlighted Areas of Interest

Displaying all Categorized Patents

After looking through a number of matching patents I will normally save the PDF versions to my computer to more thoroughly review them later on.

Step Four: Dig deep to find flush out any overlapping prior art.
This is the part that is often best to have an expert assist you because the standard patent language is often very “lawyer-friendly”. However, once you have your set of patents to look through there is really only two areas of interest that need to be reviewed; Drawings and Claims. The drawings are a graphical representation of an embodiment of the invention and can help you in understanding the language that is written in the claims. The claims are the set of specific characteristics of the invention that are thought to be unique and therefore patentable. You should start with claim 1 and read through it slowly to see if your invention at all covers the same details. If not, proceed to the second claim. Claims can be written as independent or dependent (based on a previous claim). For this reason, if the primary claim appears to be different from yours then under most cases, the subsequent dependent claims can be skipped. You would continue this process with all relevant prior art until you have clearly identified all concerning claims. The other thing to note is that while there may a patent in the system, it doesn’t mean it is still valid. The Inventor must stay current with the required maintenance fees to keep the patent active in the system.

NOTE: while a patent search is important, there are still no guarantees that a Patent Examiner will approve your patent. The proposed invention must be truly novel and non-obvious through the eyes of the reviewer.

Step Five: Proceed on or back to the drawing board.
Don’t be discouraged if at first you find some existing patents that appear to be blocking you in your pursuit of product development. This just means you need to further refine the product design or add some unique functionality that is not already covered by the existing products. This would be a good time to consult a seasoned Industrial Designer or Product Development Consultant to help you get back on track.

I hope this has been informative to my readers and if you have any further questions, please submit a question in the comment section below and I will respond.

Best of luck to all you Innovators and Entrepreneurs.

Make sure you follow this blog, like us on Facebook and follow us on Twitter

Sean Yakeley

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

Shark Tank Weekly Review – Episode 412 January 4th 2013

Happy New Year to all the loyal Shark Tank viewers and Odyssey Solutions followers!

Before I go into this weeks episode, I wanted to first start out with a brief word of advice for anyone looking to develop a product. While sales history is certainly good, market analysis is far better. What I mean is that to understand how big the potential is for a product you must first know the ins and outs of the market you are trying to attack (including the competition). Now this may seem like a no-brainer but, in addition to knowing the sales of the cumulative competition you really should look at that the intended target market. Sometimes this is not always clear, as you are hopefully creating a new market through gaps in the competitions offerings. Whether you are pitching the Sharks in the Tank or meeting with some potential Investors, knowledge is key. This episode showed us that a good product will attract the right Investors.

Now on to the review…

Inventor: Doug Marshall

Product: Gameface (http://www.thegamefacecompany.com/)

Requesting: $400k for 25% stake

The GameFace Company by Doug Marshall

Have you ever gone to a sporting event and wanted to express yourself with your favorite team logo? Wouldn’t you want to celebrate Halloween with a mess-free costume? Well Doug Marshall has come up with a very novel idea to address both. The GameFace non-toxic face masks are a simple, clean and easy way to show your pride. Doug started the business a number of years ago and is now expecting to gross revenues of $100k+ this year alone on his company. The company is fully independent and operates as a side job with his wife. Margins appear to be pretty solid even in the wholesale realm. Daymond is out. Robert is also out and expresses his disinterest in doing business with Doug on such poor sales. Kevin offers a mixed offer of cash, loan and royalties. Finally Mark and Lori jump in with an offer of $1 MILLION for the entire company and an $80k/year salary for 5 years. After some talking with his wife, Doug then settles on a $450k for 35% with 80K/year salary and he still retains ownership.

Feedback: It is so easy to be wowed by a $1 MILLION buy-out offer for your product. However, getting paid is not always the best solution. I especially loved to hear Roberts’ story about how it took him so long as an Entrepreneur to earn a $100k salary and that he always held out for to see the project through. I admire Doug here. He didn’t succumb to the temptation of a big upfront check instead he stuck it out to see his project on to success. Mark and Lori once again showed they are the choice partners for consumer products (especially sports-related ones).

Inventors: Dan Grimm and Brant Myers

Product: Arkeg (http://www.drinkngame.com)

Requesting: $100k for 33% stake

The Arkeg Drink n Game Console

Ok so this is a new one for me. I like beer and gaming so why not combine the two? That is what these two guys decided to do with the Arkeg. Dan and Brant both spoke so highly about the ability to sell one to any man cave or game room but the price point may be the limiting factor. The price tag of $4k with 20 units sold to date. The Sharks don’t buy into the deal and they guys leave empty-handed.

Feedback: I just don’t think the product attracts a wide enough audience to begin with to be on Shark Tank. Sure I would love to have one but at $4k! No thanks. My entire home brewing setup along with my XBOX 360 was far less.

Inventor: Dan Rothwell

Product: Dura-tent (http://www.duratent.com)

Requesting: $50k for 30% stake

The Dura Tent

Tired of pesky flies getting into your picnic or barbecue? The Dura Tent is an innovative approach to keeping the flies and their harmful germs off of your food. The combination tent and mosquito netting works to protect the food you spent so much time preparing. He sold 50k units at the time and has 3 patents total on the product. As he kept going on about the sales figures and costs the numbers weren’t adding up to what he said. Robert and Mark were out. The rest of the Sharks followed. No deal.

Feedback: The product is fairly good but as Lori said, the name just doesn’t translate to function. First rule of naming “phonetically communicate what the product does or what problem it solves”. So many people purchase on impulse and marketing is what drives this. He said that a Marketing consultant recommended he not focus on the act of what the product does. I find that odd. Anyway, the best way to name your product is to get out a white board and write all words associated with the problem on one side then on the other side the words associated with the solution and see if you can combine any two. At least it is a start.

Inventor: Megan Gage

Product: Hot Tot (www.hottot.com)

Requesting: $50k for 15% stake

Hot Tot Child-safe Haircare

If you have a child then you can see where Megan is coming from. To put just anything in the hair of your young child is so dangerous considering you don’t know what is in the haircare products. She sought out a solution to this problem with Hot Tot. While initially focusing on the kids boutiques shops she now is working towards the high end salons as most of the buyers are women. Her sales are $20k so far but she has $7k in purchase orders waiting to be filled. The margins are very good. All of the Sharks are out except Mark. He offers $75k for 40% stake and she takes it.

Feedback: I really liked seeing Megan speak about her passion in child haircare. I thought of myself when I started working on products. Define-Solve-Sell. While she is still very new and maybe the biggest need is Marketing, Mark will surely help her.

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

Sean Yakeley

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

 

 

Shark Tank Weekly Review – Episode 402 December 7th

Hey there fellow Shark Tank fans. This week was a double dose of Shark Tank as we saw the new episode air on Tuesday and a re-air episode air at the end of the week. Although this is an episode from back in September of this year, it was very entertaining and provided plenty of interesting learning points to take into account.

This weeks Shark: Daymond John, Barbara Corcoran, Mark Cuban, Robert Herjavec and Kevin O’Leary

So lets get started with the review…

Inventor: Derek Pacque

Product: CoatChex (www.coatchex.com)

Requesting: $200k for 10% stake

The CoatChex Ticketless System

The pitch here is for a unique ticketless coat check system that would eliminate the confusion of the dated ticket system. Essentially, you enter you phone number and name and the module then takes a snapshot of you for the system and you hand over the jacket. Then once you are ready you only need the phone number and name to claim the coat. Derek has zero sales to date and is heavily invested by his past professor from college. He would like to franchise the system and sell each for $1500 upfront. He has been in touch with some regional developers to get the word spread but this model was not very attractive to Mark Cuban. Each coat would check for between $2-5 each time. He would claim a 15% profit share on all business with the franchisees. Derek also mentioned that he has a patent on the system of ticketless exchange (this could be used in other venues and platforms such as concerts and valet, etc,…). Daymond, Kevin, Barbara and Robert all chose to go out. Mark is left and he offers $200k for 33% stake. Derek has to step out to discuss with his partner which advises him to turn it down. To everyones surprise he leaves without any funding.

Feedback: The main lesson here is that working with a partner can sometimes lead to disastrous business decisions. Mark would have added far more value than the relinquished equity. Stubborn Entrepreneurs take a lesson here. Aside from the results, the product is very good especially the non-coatcheck concepts. I looked over the website and they have spent some good money on the web developing and marketing but, without knowing whether they secured any funding outside of the Tank they may not have anything on the backend.

Inventor: Jay Kriner

Product: BevBuckle (www.bevbuckle.com)

Requesting: $50k for 10% stake

The BevBuckle

Jay entered the tank and begins to pitch his product idea the BevBuckle, a hands-free beverage holder / belt buckle. He said the product is patented and he spent the past 4 years traveling around to music concerts and venues resulting in 4000 units of sales worth $340k in revenue. The buckles cost $10 to make and they sell for between $35-110 (depending on the finishes). His pitch was going well and the Sharks all seemed interested. Jay then pulled out two envelopes (one with the list of retailers including Urban Outfitters and the second listing the major raceways in the country). He said that they all had shown interest in the product. The main problem now is that his last manufacturer delivered 26% defective products. Daymond drops out and so does Mark. Robert offers the $50k for 75% stake. Kevin says he would offer the $50k for no equity but with a 12% royalty off the top of each sale. Barbara then jumps in to offer the $50k for 51% operating stake. After a few moments, Jay choses to go with Barbara.

Feedback: This is one of these ideas that you see and say “why didn’t I think of that?”. From the looks of them, they appear to be pretty well made and included a magnetic closure to keep it shut when not in use. These would be great in college, concerts, sporting events, you name it. The manufactured cost of only $10 is really reasonable and this would allow him to sell them wholesale for between $18-60/unit. Not bad for profitability. I still don’t know if $50k is enough to make much of an impact as I think he really needs a couple hundred thousand to get orders rolling for retailers. This is considering the normal credit terms being 60-90 days. I hope he has found a reliable shop to work with to keep the defects down too. Jay, please send me a sample if you wouldn’t mind!!

Inventor: Todd Miller

Product: Bodywalking (www.bodywalking.com)

Requesting: $100k for 10% stake

BodyWalking Institute

Todd is a certified massage therapist that came up with his own take on the message. He decided that walking on the human back is far more beneficial to the body for the pressure points and relief of stress. His company developed a training program for other massage therapists called the BodyWalking Institute. He has performed 30 training sessions in 7 years and recorded revenue of $1500 per session. The pitch doesn’t impress any of the Sharks and they all opt to back out.

Feedback: I was confused here with what exactly Todd was pitching since body walking massage has been around for a long time. I have gotten one on a number of occasions. It didn’t sound like he manufactures or designed the walking frame which was using to supper his weight during the massage. I just don’t see the target market being that big. I can tell you that the walking massage is not for everyone as it can be far too much pressure and some people have a problem with feet as well. Todd if you are out there please provide a follow-up pitch here to the readers and hopefully you can help clarify some of the questions. Thanks

Inventors: Maria Curcio and Veronica Periongo

Product: Buggy Beds (www.buggybeds.com)

Requesting: $125k for 7% stake

The Buggy Beds Detection System

Maria and Veronica came to the Tank prepared to talk about one of the biggest outbreaks in our country today, bed bugs. They developed a patented, trademarked system of early detection of the nuisance bugs. The product incorporates a non-toxic glue inside of a plastic housing that attracts and traps the bugs for verification that the presence exists. They launched the company roughly 6 months ago and have had numerous tests conducted to validate the product. They price from $6.99-8.99 but cost only $1.35 to make (not bad). They have already booked $150l in sales with $100k of that being profit. They had been selling exclusively on Home Depots website and Burlington Coat Factory but have been expanding over the past couple months. They said they once has an offer for $5 million for the buy-out of the patents and trademarks but they declined. All the Sharks are interested and asked the ladies to step out of the room so they could discuss an offer amongst themselves. Kevin started by offering $250k for 25% with Daymond joining. Barbara then wanted to fly solo and offered a single offer of $150k for 15% but after the women couldn’t decide, she pulled the offer. Then Mark proposed a full 5 Shark offer for $250k and 25% and the offer was accepted.

Feedback: This product is addressing a very large problem that is becoming more and more prevalent in hotels and homes across the country. I am amazed at how fast their company has grown in only 6 months and yielding very good profit margins. The fact that the patent and trademark is registered in so many countries (very thorough and expensive but worth it) they were not messing around on this project. These could really be sold in so many stores (Home Depot, Lowes, Bed Bath and Beyond, grocery, convenience stores, etc,…)  in addition they could partner with all of the major hotel chains which would be huge. I am interested in knowing how the Sharks have helped the company and what the year to date revenues would be. Reviews seem to be mixed on HomeDepot so I would be interested in hearing some user feedback.

Thanks everyone for reading this weeks post. Stay tuned for weekly reviews of Shark Tank.

Sean Yakeley

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

 

Shark Tank Weekly Review – Episode 409 December 4th Holiday Episode

Happy Holidays Shark Tank fans. The much anticipated holiday episode of The Shark Tank aired this evening and as expected, the show was very entertaining. We saw some great product pitches with solid sales, some niche business models that need more time and some hard headed Entrepreneurs that didn’t want to listen to the Sharks had to say. As always read through and make comments with your takes on the products and whether you would purchase any on your own.

Lets get started…..

Inventor: Lucinda Lent and Juliet Boydstun

Pitch: The Coop (www.thecoop-la.com)

Requesting: $150k for 15% stake

The Coop LA

The pitch began with the two ladies describing how they met and how once they became Mothers, the options for social locations for their children and themselves was limited. Most of the play areas were dirty, outdated and with no focus on the Mothers. They came up with the idea for The Coop, a modern play spot for kids with a coffee bar and deserts for the parents. They opened the first location after securing a $125k loan from a bank. They cater to high end clientele and movie stars but want to roll out the idea to all budgets. The typical cost for a 2 hour party rental is $595-4000 and weekend sales are typically around $5k currently. They recorded $350k in revenue and booked between $125-150k in profit after taking in a salary (pretty nice!). They would ideally like to franchise the concept and the money would help fund another location. Kevin said he was very impressed with the numbers but he would be out. Daymond added that he wouldn’t be able to add anything to the business and for that he would have to be out. Robert followed out. Mark thinks the business is god but it needs more time and he worries about the price and the amount of competition, he was out. Last was Barbara who offered an iterating counter-offer. She would give the $150k for 15% with a personal guarantee to be paid back in 2 years. After some discussion between the two ladies, they took the offer. Congrats!

Feedback: Well I can tell you as a father of a 3 year old daughter, this business is one that parents (Mothers especially) will pay for. Take a look at Gymboree or the Little Gym, while they are competition they do not offer a parent friendly aspect which is unique. I do agree with Kevin in the idea that they need to test a few more locations (outside of LA because LA is not a good representation of the rest of the country because of the amount of affluent citizens). I already have noticed Barbara doing a good job of promotion of The Coop on Twitter and Facebook which will have an immediate impact. The reality of the loan terms are pretty harsh with the fact they need to pay in full the loan in 24 months for relinquishing 15% stake in the company but, the marketing they will get from Barbara is worth it. Look forward to seeing The Coop come to Texas!!

Inventor: Donna McCue

Product: Fat Ass Fudge (www.fat-assfudge.com)

Requesting: $250k for 5% stake

Fat Ass Fudge

The flamboyantly energetic Donna McCue entered the Tank to pitch her unique fudge company to the Sharks. What makes the product so unique is that it is Lactose Free, Gluten Free and made with goats milk. She began to make chocolate many years ago and the name came from a family nickname. she has been selling mostly locally and has 2 Whole Foods stores she is working with at the moment but has yet to break into their nationwide reach. They recorded $60k in sales over the past 12 months. Kevin offered her $250k for 1000% stake, she is confused then he says he is out. The rest of the Sharks do the same. Donna leaves without a deal.

Feedback: Energy, passion, enthusiasm would be some very accurate adjectives for Donna McCue. She undoubtable has a good product that tastes good and touches on the Gluten, Lactose-Free segments which are growing. The problem once again is her valuation of her company. Valuation can only be accurate when it references either sales history or pending / accounts receivable. Having said that, unless she has an enormous amount of non-cash assets such as equipment her valuation of $5 million dollars is just silly.

Inventor: Scott Martin (a.k.a., Scotty Clause)

Pitch: The Living Christmas (www.livingchristmas.com)

Requesting: $150k for 30% stake

The Living Christmas Company

The Tank was full of Christmas trees as a jolly Entrepreneur approached with a long Santa cap and a handlebar mustache. Scott talks about the issue of the annual tradition of cutting down a tree then only weeks later after the holidays have passed it is thrown out. He created a sustainable solution to the problem of deforestation by delivering a living tree with a pot that is only temporarily brought into the home. After the holidays, his company picks up the tree and returns it to the farm where it is fed throughout the remainder of the year until the following Christmas whereby the process repeats. The average cost of the tree rental is $100-200. He had $150k in sales last year with a profit of $33k (no salary taken). He is in need of money for further infrastructure growth to take on more business. Kevin doesn’t like the business because it is seasonal. He is out. Daymond owns a tree farm (yes apparently he does) but thinks the business model has too many unknowns. Robert and Barbara are also out. Mark then asks about how many jobs could be created with the money and offers the $150k for 40%. Scott takes the deal.

Feedback: I really like this concept but, i think he needs to diversify into other non-seasonal products / services. Since I don’t know the first thing about the costs to operate a standard tree farm I would be out of place to provide too much insight here but, I see from the website that Scott has garnered the support of various corporate sponsors and partners which is a good sign. The other thing that concerned me with the finances was the amount of profit (~20% without his salary taken). I think with Mark Cubans support they will be able to find a lean solution to the cash problems. Updates on this one will be greatly appreciated since it is that time of year…

Inventors: Julian Jaccard and Connor Pastoor

Product: Partie Poche (http://96.0.165.69/partiepoche/)

Requesting: $100k for 20% stake

Party Poche

Julian and Connor (two MBA students) are pitching a fashionable, discrete holder for a woman’s cellphone, money, etc,.. The Partie Poche is worn on the leg of the user and virtually out of sight to others. They sold 200 units with prices ranging from $17-36/unit (pricing was incrementally increasing towards the end of the 200 units). A Provisional Patent is in-place. Every time the Sharks began to talk to them about valuation and finances they became very argumentative and arrogant. Julian said she had a meeting with a Nordstrom VP but, didn’t receive a PO because she didn’t have any product. They said the initial product inventory was sold and designed by a freelancer and they didn’t have any more product to sell. A late investment of $50k from some college colleagues which was enough to retain 40% stake of the company (leaving Julian and Connor with a 60% net stake). Kevin was furious and said he was out and forbid the other Sharks to do business with the two. Daymond told them that they were hard headed and he was out. Robert said the two were arrogant and stubborn and he was out. Barbara doesn’t think it will sell and bows out. Mark was left and asked the two to stop talking as he requested them to explain the infrastructure and after the same type of responses as before he says he is out.

Feedback: So many things rub me the wrong way about these two. The first is the attitude of they know it all because they are studying for their MBAs (this was evident when Julian started throwing out financial buzz words). While I am a strong believer in higher education, street knowledge and learning from your failures is far more valuable. The other issue here is that this project does not appear to be a full time venture and the lack of focus on getting additional product manufactured with the $50k investment is perplexing. If I had $50k from an Investor I would find the fastest way to pay them back and that would be through product inventory and sales generation which they appear to have none. This pitch should be an example to other aspiring Inventors to listen to those with knowledge and experience in the business world and don’t talk over them. The final thing, with the airing of the show in the works for some time now, their website is still in Beta mode. Ridiculous! Even bad publicity is publicity and if they couldn’t turn the Shark Tank publicity into money they shouldn’t be on the show.

Thanks everyone for reading this weeks post. Stay tuned for weekly reviews of Shark Tank.

Sean Yakeley

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

Shark Tank Weekly Review – Episode 302 (re-air) November 30th

So this week was another re-air before the December 4th new holiday themed episode but, as in the previous review we are actually able to provide better feedback since time has passed since the original airing.

This weeks Sharks are: Kevin (Mr. Wonderful), Robert Herjavec, Daymond John, Lori Greiner and Mark Cuban.

Lets get started….

Inventor: Jared Joyce

Product:  Five-Minute Furniture (www.jaredjoyce.com)

Requesting: $250k for 25% stake

Jared Joyce and the Five-Minute Furniture

Jared approached the display table in front of the Sharks and began to ask how long it normally takes to put together a standard piece of furniture with the cumbersome instructions and parts. He then said his solution was a jointed furniture system that can be assembled in under 5 minutes. He follows by demonstrating the concept by assembling a cubic box of 4 sides with a back panel and locking ring. From the Sharks expressions they appear to be somewhat impressed. When asked about sales history for the product he said “none” but that it just launched and that he has around 80 other products in the product pipeline. When asked if he will be including other products into the investment Jared said no. This was a turn off to Daymond and he bows out. Mark also follows out as he feels that too many investors have been left high and dry with Jared. Robert bows out as he states that he doesn’t trust Jared to pay him back and that paying back an investor should be top priority always. Lori then offers an interesting option she and Kevin (assuming he agrees) would split the $250k for 100% transfer of ownership and Jared is no longer involved. Basically, they want nothing to do with Jared and only want the patent to do what they wish. Jared continues to beg for royalty or less stake but the Sharks don’t budge. The result is Jared leaves without any Sharks funding.

Feedback: This one was really hard to watch to be honest because you feel for Jared because you know he is a typical innovator which I like and this product is something that could take off if partnered with a large furniture builder (Ikea, Ethan Allen, etc,..) but, the fact he had too much going on behind the scenes with the other products was a turn off. Reality is that Jared looks like more of a idea person and not a business person and he should have taken the deal and put the $250k directly behind the next new big product in the pipeline. Instead he leaves empty-handed and has to explain to his other investors what happened.

Inventor: Raven Thomas

Product: The Painted Pretzel (www.thepaintedpretzel.com)

Requesting: $100k for 25% stake

The Painted Pretzel

The show does a background piece on Raven and shows her with her sister and mother making various chocolate covered pretzels and snack. She begins her pitch by telling the Sharks that she came up with the idea to create chocolate-covered pretzels and started to make them with all sorts of toppings which is pretty unique to what is on the market currently. She already has a good list of accounts including Neiman Marcus and sales last year totaled $75k, $64k in pending orders but, she had unfilled orders totaling $140k. She then passed out samples to the Sharks and they all agree that they are delicious. Kevin starts out the discussion by being a bit hard on her and asking what is so unique about the product and why he couldn’t just go and pay a company the same amount of money to duplicate the Painted Pretzel. Lori asks Raven what would make someone invest in her and her company. The response is one that is heart felt but not convincing enough. Kevin is out. She tries again and says that she walked away from a $2 million dollar order from Sams Club because she didn’t have enough capital to fill the order. Now that is a good answer! Mark being aggressive jumps right in and says he owns the Maverick and Landmark Theatres and could have the Painted Pretzel sold everywhere. He offers the full asking amount if she says yes then and there. She accepts.

Feedback: Raven is a great person and passionate about her product. This once again is an example of a valid business / product not having anything proprietary but having a strong leader. I normally will side with the patented or patent-pending (at least) as a strong basis for investment but, you can see with a solid sales history and demand out pacing capacity, anyone will be drooling at the potential. I spent some time browsing the website to try and gauge the progress since the show but could not find any major details. If anyone has more information please share (Mark Cuban or Raven would be great).

Inventor: Ryan Naylor

Product: Esso Watches (www.essowatches.com: not active any longer)

Requesting: $35k for 20%

ESSO Watches (a.k.a. TAGI Watches)

Ryan is pitching a silicon negative ion laden wrist watch that will help offset the amount of positive ions our bodies are encountered everyday from electronic equipment. This concept will help restore balance and vitality…. He demonstrates the watches powers by first having Lori try to balance on one leg without the watch and then after putting the watch on she does the same but now she appears to be more stable. Now for the financials he has turned a $20k investment into $120k with a pretty strong $70k in profit. Mark jumps in and says is out after stating that the whole concept is a scam and has been disproven time and time again. Lori asks if he has any independent laboratory testing data to support the claims. He doesn’t. She is out. Daymond says he owns a watch brand that has the same designs and follows out. Robert and Kevin also decline.

Feedback: I am a huge sceptic of this technology or lack there of. People have been putting ions or magnets into wrist watches, bracelets and necklaces for years and never has anyone had substantiate evidence that it works. I am honestly surprised it made it through the show Executives considering the amount of questions. Also, I tried the website http://www.essowatches.com and it appears to be a dead site. After looking on Twitter it looks like Ryan is now pushing a new brand (or re-brand called TAGI Watches). This may have been after the show aired. Having said all of that, these can probably be made through a Chinese MFG for probably $1.50-2.00/pcs meaning that if he sells them for the right price in the right markets he will still make money. There are enough people out there that think it works. Any one wish to comment please do.

Inventor: Rick Hopper

Product: ReaderREST

Requesting: $150k for 15% stake

ReadeREST by Rick Hopper

Rick entered the tank but, appeared to take a clumsy stumble before reaching the display table. As he gets up he says there has never been a good product out there to address holding glasses. That is until ReadeREST came along. He shows the two-piece super strength magnetic clip that retains his specs close by. The clip can be worn by simply attaching clips to the shirt and then sliding in the glasses. He says the initial concept came from bending paper clips to form a curved clip (he had the original prototype in his pocket). He has $65k sales to date but, the entire assembly has been in his workshop and the tedious procedure of gluing magnets to metal can only go so far. He purchased the original patent from the previous owner for $5k!! He also has the trademark registered as well. Daymond is out. Robert follows. Kevin doesn’t like the companies valuation and is also out. Lori counter offers Rick $150k for 65% of the company but, assures him that she will make him a Millionaire. Mark is out and Rick asks if she would consider 49% but, as expected, she holds steady with her offer. He finally accepts.

Feedback: I love this product for a number of reasons. First, it is one of those that could be marketed everywhere because not only targets prescription glass wearers but, also anyone wearing sunglasses. Second, I love magnets in fact one of my products is surprisingly similar but also uses Neodyium Magnets (super strength magnets). Finally, Rick is a good person and much like Raven he lives his product and passionately assembles each and everyone, I can relate. I do not watch QVC or HSN but would like to hear more about the sales history since the show and whether it has made any strides in mass production.

Thanks everyone for reading this weeks post. Stay tuned for weekly reviews of Shark Tank.

Sean Yakeley

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

Shark Tank Weekly Review – Episode 312 November 24th

Ok so with Thanksgiving week upon us we were forced to watch a re-aired episode from last season. All is not lost since this episode was in fact a good one and I can provide a little bit of an update to each company / Inventor.

The sharks in the tank this week included: Kevin (Mr. Wonderful), Mark Cuban, Robert Herjavec, Barbara Corcoran and Daymond John.

Without further ado, lets get on with the review. Oh and as always, please leave comments if you have any more updates or comments with regards to the products and services on the show.

Inventor: Ryan Custer

Product: Cougar Unlimited (www.drinkcougar.com)

Requesting: $150k for 30% stake

Cougar Unlimited Lifestyle Drink for Women

So considering time has past since the original recording of this episode, there are a number of developments that I will mention at the end. So Ryan entered the tank with a beautiful blond women by his side. He started to pitch the Cougar Unlimited brand by saying that the term Cougar (as it refers to a woman between the ages of 30-55) has become a bit of a pop couture term and that more and more men are seeking the accompaniment of an older women. The product is a energy drink (ok it is actually a lifestyle shot) specifically designed for women with ingredients that benefit women. Ryan also said that the shots can be mixed with alcohol to create mixed drinks. He has recorded $60k in sales over 3 year period. Daymond immediate bows out as he doesn’t want to waste any time. Barbara thinks the drink tastes like chalk and asked what was causing the taste, Ryan responded with “Niacin” she was out. Kevin then talked about how he already trimmed the market too much by excluding men and women above and below the target age group. Kevin is out. Mark follows. Robert is last and after some hard push from Ryan he also bows out leaving Ryan empty handed.

Feedback: First, this market is so flooded with competition and I honestly think it will all dissolve as more and more scrutiny comes down from the FDA. Having said that, Ryan has a unique pitch with the female market but, in reality he should also offer a male-only shot to cover the remaining market. We recently saw a pitch by a military gentlemen for www.ruckpack.com for a energy drink without the caffeine designed for the military and civilians. This is to me a much more well-rounded concept.

Inventor: Gary Gagnon

Product: Remyxx 100% Recyclable Shoes (www.rekixx.com)

Requesting: $50k for 10% stake

Rekixx (aka Remyxx) Recyclable Shoes

Gary enters the tank to pitch his company of Remyxx which is a fully recyclable shoe idea that takes into account the materials used to ensure that the shoe can be recycled with zero waste. He has some prototypes that he passed out to the Sharks and they appeared to be pretty fashionable to me. He does not yet have any sales as this is in the start-up phase and has invested about $30k to date. He is asking for the money to purchase the individual molds for each shoe size. Robert, Kevin, Barbara and Mark all bow out but, each seemed to like the idea. Daymond is last to speak and he says “you may not like what I have to offer” then says $50k for 80% stake (ouch!). After some emotional discussion, he takes the deal but, requests that Mark Cuban wear a pair court side at the Mavericks game.

Feedback: The product is not only unique but a trendy topic so I think it will ultimately do very well in the long run. The deal of relinquishing 80% of the company is painful but, he really just got a licensing deal for 20% return with one of the more successful fashion brains in the industry. The $50k was not nearly enough to get the product off the ground and I will elaborate. First individual molds for each  size shoe sole for the injection molding of the rubber would probably cost about $3000 per size (made in China) and if we figure sizes form 6-14 (half sizes included for mens only) that means that it would cost $51,000. This does not account for sample runs, shipping and testing of all samples as well as the cost to cut and assemble the upper portion of the shoe. So lets say for a shoe retailing for $65 as it is on the website the non-domestic cost is probably going to be around $18-20 per pair. If you can imagine a box box retailer such as Foot Locker, they will likely order a sample run of 2 pair per size per store which may be in the neighborhood of 5-10k units. That means Gary needs to be able to handle the order, front the inventory cost since the retailer is not going to pay for probably 90 days. He would need $150k conservatively to take on that order. I can tell you from experience that selling online is easy but, moving to the big retailers is a gigantic step that needs capital. Don’t let that discourage you because I do think Daymond will help it off the ground. By the way it appears that Daymond decided to change the company name to Rekixx from Remyxx (good call).

Inventors: Frank Campitelli and Debrae Barensfeld

Product: Nitroforce Titan 1000 (www.thenitroforce.com)

Requesting: $250k for 10% stake

Nitroforce Titan 1000 All-in-one Gym

Both Inventors enter the shark and approach the Titan 1000 all in one gym. The most unique part of the product is the usage of gas shocks for resistance instead of weights which makes it far lighter and more versatile. Frank mentioned intellectual property in the pitch but it was not clear if they actually own the patents to the concepts or what? Anybody want to clarify? The 1000 in the product name comes from the amount of total resistance that the system can simulate much higher that the competitive products (Bowflex, Bioforce, etc,…). They have 90 machines in their warehouse, sold 26 for $1299 and invested about $200k so far between the two. Unfortunately all of the sharks chose to bow out and they leave empty handed.

Feedback: After looking at the website in great detail, I don’t know if they have any further sales to date since the episode but I would be interested in hearing more if anyone can provide more info. I also noticed another product in their pipeline (golf training system). Also, the product is retailing on the site for $899 plus $399 shipping!! This to me is typical of an eCommerce company, low price with an inflated S&H which ultimately goes into their pockets. I can verify this because actual ground shipping would only be $100 at most. Not a big deal but, consumers are not easily fooled. Best of luck Inventors!

Inventor: Phil Dumas

Product: Unikey Technologies (www.unikeytech.com)

Requesting: $500k for 33% stake

Unikey Wireless Locking Systems

Phil entered the tank to present his company Unikey Technologies which is a wireless, keyless locking system for the home. The technology utilizes a Bluetooth signal from the cellphone or key fob to verify the homeowner is in range to unlock the door. A simple touch to the top of the lock will unlock the mechanism. He already has a provisional agent filed for the invention. The system is fully refit table to the existing door holes 2 bolts out 2 bolts on. The expected retail will be $149-199 each. He is currently in licensing discussions with Black and Decker and seeking a 7.5% royalty. Money will go towards patent protection and bluetooth application package. Kevin starts out by offering $100k for 10% if he can get another shark to fund the rest. Barbara offers $250k for 25% but, needs Mark to finish the deal. Daymond says $500k for 40% and Robert offers a staggering $1 million for 75% stake. Finally Mark Cuban turns down Barbara because the technology is not “in her wheel house”. He finally agrees to deal with Mark and Kevin for $500k and 40% stake with two seats on the board.

Feedback: Phil not only brought a very good technology to the table but his back ground is perfect for a start up company as he spent time in the start up business. This product is one that I scratched my head to ask why has nobody done this before? I wonder what the patent looks like and as soon as it publishes I will provide more details. From looking at the website, the product is still not available but is pre-ordering. He also updated the site to say he has partnered with a legal counsel and filed the non-provisional patent. I also did not see anything about Black and Decker which makes me wonder if the deal fizzled. Any updates anybody? I am sure this product will do very well assuming the cost is below $150.

Thanks everyone for reading this weeks post. Stay tuned for weekly reviews of Shark Tank.

Sean Yakeley

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

Shark Tank Weekly Review – Episode 411 November 16th

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

Nearly Newlyweds by Jackie Courtney

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 with CorksAway

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

Tietry by David Powers and Scott Tindel

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

RuckPack by Rob Dyer

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.

Sean Yakeley

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

 

Developing a New Invention on a Budget

When I hear someone with a great idea procrastinate because of the cost, it frustrates me for a number of reasons. First, an idea for a new, novel product is not something that should be taken with such a lack of motivation. Second, when looking at a new product, cost is a necessary part of getting it off the ground but the results can quickly pay dividends. I always tell my clients and potential clients that you must not look at the up front costs as a burden because there are ways to help elevate some of the sticker shock for product development consulting fees. If you are considering using a consultant to help get your product developed, I would look at the following priorities in order of importance.

1) Provisional Patent – estimated costs ranging from $110 (direct USPTO cost) – $500 (service fees added)

“Do this first so that at the very least, you will have 12 months to get the formal patent prepared, lowering your costs. Plus you will be creating a date of filing which can protect you in the event of infringement”

2) 2D and 3D Drawings – estimated costs ranging from $1000 – over 20,000 (depending on the complexity)

“Getting the formal drawings created is the next most critical phase in the development of the idea. You should make sure that you receive electronic and printed versions of all sub-components and assemblies including the Bill of Materials (which will state what each piece is made of that will help the manufacturer)”

3) Prototyping – services fees range from $2000+ with the actual machining costs additional

“Make sure that you have selected a durable material to make your prototype with so that during the market research phase, it will hold up. Also see about getting 2 or more prototypes made so one can be used for marketing and the others used for demos”

4) Market Research – usually $50/hr is a good rule of thumb

“To say you have the next million dollar idea is hard to justify without a good test run. I would typically take a prototype and demo it with a small sample of users (minimum of 100) to gain their feedback, likelihood of use, purchase price, etc,… This phase can often be the the most critical, don’t cut corners here. Feedback on some minor changes may mean the difference between the next fad and the next flop”

5) Refining

“Because this is sometimes included with some drafters, I have not shown additional cost. check to see if iterations are included in the design”

6) Manufacturing

“This is very much specific to the product so I would hate to state a cost estimate. Depending on your desired goals, you can seek a production facility to turnkey the product for you while you handle the marketing and sales. Most people are looking to have someone actually manage the sale of their product and that is where licensing or sale of the patent may be a better option. Partner with an expert in the field of your invention to make sure you get the maximum return”

7) Sales and Marketing

“So if you think about the things you are most inclined to buying, a lot of your decision is based on the marketing and packaging design. I would suggest you work with a cutting edge young firm here to get the most modern packing possible. While the upfront print and tooling costs can cost over $10,000, it truly is necessary if you are looking for retail exposure”

If you just look at the above steps as one big expense it will be enough for anybody to steer clear and opt for the less risky path of procrastination. However, product development can take well over a year from concept to production, this will allow for costs to be spread. I might also suggest to write a business plan and try gaining some investors from you network of friends, family and colleagues. Every little bit can help and providing a little share of the profits is usually enough to get some followers.

Follow my blog as I will be adding to this post in the coming days…

Thanks for reading.

Sean

New Product Development Consulting