Tag Archives: Rolodoc

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 and Josh Brooks

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

Lynnae's Gourmet Pickles

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%

Rolodoc

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

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