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
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
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
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
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.