Every Friday a free tool for entrepreneurs comes on ABC. While nothing can really prepare you for starting a business watching shows for entertainment can be a form of research. Shark Tank has been instrumental in my ‘self’ taught path to business ownership. Last week a new show launched called Beyond The Tank. It is a follow up show that looks at how the Sharks are working with the companies they’ve invested in. I’ve decided to start documenting both Shark Tank and Beyond by commenting on the action then transcribing the notes directly into a weekly post. Let me know what you think and if it helps.
5-8-2015 Shark Tank 1st Pitch
Zoom Interiors online service for interior design.
Three young entrepreneurs enter the tank. All twenty something, good looking white women. I always feel the need to mention race, becomes sometimes discussions on Shark Tank revolve around race and how it factors into investments. My first thoughts as the women pitch are:
1. Too many steps in acquiring a customer on this website.
2. How do you compete with IKEA when your initial buy is 1000.00 bucks?
3. Interior design through a website can’t scale because there are too many steps
4. 186000 net 3000? It can’t scale. No funding.
Mark rolls his eyes! Dude is constantly rolling his eyes. That’s why the Mavs suck, except Monta, Monta is great.
5. Zoom Interiors would work better as a store/retail store.
6. WTF? Barbara wants a third? They got this deal because they were cute. I mean honestly. No ability to scale, no proven sales method. A net of 3K on 200K?
1st transition before commercial:
Squatty Potty insert. Sold a million in two days. Ended up with 12 million. I have to get me a damn Squatty! My feet are always numb after dropping a stinky load aka number two… then again my feet are numb because I’m usually on my Kindle playing chess. Great product.
Sunscreen Mist 400k for 15%. Its a very good idea! The mist, no need to apply it. Kevin asks why not buy sunscreen? Machine cost is very high. MGM grand bought a booth… Kevin brought up a royalty idea. The business plans are confusing. No deal. Poorly pitched product and avoided answers. I wasn’t as into this by the time the Sharks asked questions and the guys looked like they were just lying. A straightforward question, “What message boards are you using to promote?” These dudes start talking about Google Search and SEO. Rule number 1: Answer the muthfreakin question!
More humane medical testing, I’m already sold. It just has to be a good idea. Syndaver Labs 3 million for 10%. Human tissue replacement for medical situations replacing cadavers. 20 years developing. 40000 cost for a cadaver made from salt and other materials. Creepy damn cadaver!!!!! but the guy has done 10 million in 3 years and has 10 issued patents. It seems like a damn good product, but the guy pitching has NO passion and then says he doesn’t care about money… This is the first time I actually believe someone who says they don’t care about money.
My wife says the guy looks like he might be Hannibal and probably has bodies in his lab, lol. Which is not funny, but the guy has zero emotion and only gets joy when he scares the Sharks with the creepy ass eyes opening. Robert wants 35% and a board spot. Risk/reward. Robert goes to 25 and deal done.
100000 for 10% Youkickass transforms you into an action hero. Incredibly cool concept. 3d modeling. The team has serious web development and marketing background. They are invest-able because of this. They’ve done a crowdfunding campaign? What for? I need to look it up.
1. Cost 15 and sell for 60, not bad at all. 3d printing.
2. Personalized is the way to go. They invested 120000 of their own. This is a good sign of a person who will garner an investment.
Robert is intrigued. 100 for 25%. Kevin makes his standard perpetuity offer.
Mark makes an offer for software. Yes or no. They took it. I think the fact that this group has a tech and marketing background and ponied up the money for their 3D printers (used at 20K a pop for two) shows the initiative it takes to gain an investor.
Show ends and transitions to Beyond The Tank
Beyond the Tank: great decision for a show! I miss writing about last weeks episode which was th premier because the DVR went all wonky (yep I’m British for the day).
Red Dress Boutique online shop for women…. Love the comment what better time than now to launch a business at 22 when they started. I actually say something very similar about taking advantage of your youth as opposed to waiting to start a business. I talk about this in my book The 30 Day Project… shameless self promo, sorry.
They launched in 2005 and made 8 million!!!!! They talk about growing their business through Facebook. In 2010 it was a great time to get in early and build an audience. Facebook is no longer a strong point for building your following without getting a big endorser.
Okay I get what they are doing… they are a one stop shop and fulfillment center. This is an online store that minimizes overhead by warehousing clothes. They are buying all of their inventory and running their site. It’s basic e-commerce. I know that sites like Nasty Gal and others have garnered investments, but being in online is all about capital and an investor can see a return on investment, but that investor better take their investment on a monthly basis instead of at the end. Acquiring customers is tough as shit. People tend to go to Amazon or Ebay and with places like TJ Maxx and other companies beginning to create their own sites, I honestly think it is going to become difficult to keep building and gaining audience share.
They want a new website design 250,000. Mark doesn’t because the “free” work he’s provided has helped them go 14 million up with profit over 100%. They made the call to go with the site. Mark made an initial 600k investment and in my opinion is right. If it’s not broken to shit, why change it? If you are doing those numbers even with a website that is hobbling, implementing an untested change at 250K is not very smart. I get that you want it faster and better, but the job is to keep people while you have them. A bird in the hand… segment ends.
Barbara’s investment in Rys Ruffery all natural dog treats 25k for 25%. 800.00 bucks was their two year total. My first thought: How in the entire fuck did they get an investment after making 800 bucks in two years?
Their original name was taken: Ryan’s Bakery. They had to consult with copyright and trademark lawyers and changed the name to Rys Ruffery. They automatically become bigger because they get into Target on the Shark Tank shelf… She got physically sick while running the company. I think this is a case of getting big too fast. Mom had a stroke and mom looks bad. You can see the business is breaking her down. My second thought: They should either hire some people or shut this shit down. She doesn’t look good at all.
Due to Shark Tank, they are about to hit 400 stores overnight. Barbara’s worried. Shit, I am too. Oh, her sickness was prior to the show… I don’t buy that. I think she is on a fast track to a nervous breakdown. Smart damn move Barbara! She suggests hiring someone. Main point taken: Rapid growth requires employees.
Kevin’s group is Plated delivered healthy meals. The deal initially was with Mark but they didn’t close and then they got Kevin. Only in the Shark Tank world does a couple of fuck ups get a shot at another investor. I mean, you get on the show, see a bump and then try to renegotiate the terms of the deal you made on the show? Mark was right to pull out.
I’m already jaded because of this info, but here go my notes.
1. 23 real estate moves and multiple warehouses. These dudes are seriously growing to damn fast. That’s not good.
2. Opened a warehouse in Chicago. My first thought was in regard to this article I wrote recently about Nike. What I was talking about here was why the price of reselling shoes was dropping and how it’s a good time for buyers. In that article I talk about the theft of shoes happening in Memphis from the Nike warehouses. As soon as I heard these dudes had to open a warehouse, I said “They are too fucking big. Stuff is going to get stolen.”
3. Stuff was stolen. Their Chicago warehouse launch was a failure because their trucks were stolen. Damn I’m Negrodamus! If Nike can’t keep a cap on their billion dollar business, how are these guys going to manage all of these fulfillment centers?
I love the premise a chef designed meal by order. 95% of the country covered. Kevin is asking about logistics for share growth. I’m thinking it’s Amazon for food… I’m amazed it works. 12 to 24 months to be profitable. Wifey thinks the Plated section of the show is fake and being used to relaunch the businesses. I agree that it is possibly being used to help the businesses that are forgotten and not gaining ground for the investors. Her suggestion is if we don’t see a company that is doing very well, the show is contrived.
Boom! A hell of a way to end the night!