Awwww yeah! I am now a bonafide, card-carrying member of the Mile High Club! That’s right folks – I just posted my first blog post while flying in an airplane. Wait – what did you think I meant?
Pitch #1: Cheek’d
Elevator Pitch: “check me out” business cards for online dating
The Entrepreneur(s): Lori Cheek
The Ask: $100k for 10% equity
The Deal: no deal
- Breaking into the online dating market is hard – remember Three Day Rule? Val Brennan’s idea was to leverage referrals and a high monthly subscription rate to keep out the riff-raff – but after that, it was just like any other online dating service. I think Cheek’d falls victim to the same issue – it is really a feature, not a big enough differentiator to justify creating an entirely new online dating service to compete with the big boys like Match.com and eHarmony.
- That said, the “feature” is a good one. I think she should partner with existing sites like Match.com and eHarmony to bring her Cheek’d “check me out online” cards to market. It is an easy upsell to existing online dating customers, or better yet – it is a great way for these big dating sites to attract new customers. Imagine Match.com customers happily handing out Cheek’d cards to other single people, who in turn must create an account on Match.com to view the online profile. Brilliant!
- It was Kevin story time hour again – his preferred way to give advice to entrepreneurs he has already dismissed. I’ll paraphrase – “There once was a boy and his dog, whom he loved. One day, the dog got bitten by a raccoon with rabies. His father made the son go outside and shoot the dog. Lori – your deal is the rabid dog, and as your father I’m ordering you to shoot it.” Mr. Wonderful is such a gentle soul.
Pitch #2: Zipit
Elevator Pitch: hybrid sleeping bag / bed sheets to help kids make their own beds
The Entrepreneur(s): Jennifer MacDonald & Hayley Carr
The Ask: $75k for 20% equity
The Deal: no deal
- On the surface, Jennifer and Hayley looked like they were approaching their business intelligently and methodically. They created 1000 units to perform a market test, validated demand, and sought out a distributor. They were also considering additional ways to reach the market, including a direct-response TV commercial (for which they needed money from the Sharks).
- That’s when things began to unravel. The Sharks had valid concerns and feedback about the right go-to-market strategy, but it quickly became clear that the entrepreneurs weren’t really listening (especially Hayley, who seemed to dominate the conversation).
- It’s easy to judge the entrepreneurs from the comfort of my couch, but it’s another thing to be standing there in their shoes, hearing feedback about the small business you’ve poured your heart and soul into.
- <soapbox>Ultimately, my suggestion to Jennifer and Hayley is to always try to listen first, defend later. There is zero risk to hearing someone out and taking time to consider their ideas – even if you don’t initially agree with them (or end up agreeing with them later). My personal gut reaction is to defend my decisions and train of thought, but I’ve witnessed firsthand – in both my personal and professional lives – the power of listening first (and more often than not, I have altered my thinking as a result).</soapbox>
Pitch #3: Bambooee
Elevator Pitch: eco-friendly alternative to the traditional paper towel
The Entrepreneur(s): Noam Krasniansky & Irene Krasniansky
The Ask: $200k for 10% equity
The Deal: Lori accepts their deal as proposed ($200k for 10% equity)
- I know entrepreneurs have to be overly enthusiastic about their products in order to push through obstacles, but I had to laugh when the pitch started with “We will revolutionize the paper towel industry!” Just once, I’d love someone to say “We’re going to make incremental changes to the industry!” Truthfully, most successful business and product ideas are evolutionary – not revolutionary – and for good reason: it is harder to create demand for a non-existent market than to serve an existing market more efficiently by building a better mousetrap. So don’t be ashamed of the mission statement “We’re going to do the same thing, just slightly better!” Somebody put that on a t-shirt, quick.
- I don’t doubt that Norm & Irene know what they are doing – after all, their company (which has a couple of products) had $1.6M in sales last year with a profit of $900k. However, I’m not so sure about their latest product, Bambooee. Bambooees are “paper” towels rolls made of eco-friendly bamboo sheets vs. traditional paper. The big draws are they absorb much better than traditional paper, and can be washed and reused hundreds of times.
- So what’s my concern? The form factor. It turns out there are a number of competitors out there already selling super-absorbent, reusable bamboo cloths – but none with the convenient form factor of a paper towel roll. So I get the convenience of a paper towel roll, but I don’t buy that those same consumers looking for convenience would be willing to wash and reuse the bamboo sheets (and if I’m right, it is unlikely they will pay ~$13 a roll vs. ~$1.50 for traditional paper towel rolls just to be eco-friendly). Besides – once you rip off all the Bambooee sheets and wash them, you are left with a giant, inconvenient pile of individual sheets.
- My recommendation for Norm and Irene? Try out the baby wipes form factor. That is, create a container of reusable bamboo paper towels that you pull out one sheet at a time. This makes it easier to wash the towels, then quickly stack them and put them back into the convenient dispenser. Bam(booee)!
Pitch #4: Buzzy
Elevator Pitch: medical device that makes injections painless
The Entrepreneur(s): Dr. Amy Baxter
The Ask: $500k for 5% equity
The Deal: no deal (Amy turned down the Sharks!)
- Buzzy uses a combination of vibration and cold to numb your skin prior to receiving an injection.
- This invention is close to my heart – I have had Type 1 diabetes since I was 12 years old, and have given myself thousands of injections over the years. I remember trying out all sorts of gadgets as a kid that claimed to result in pain-free injections. Luckily, I soon discovered the pain was 99% mental (besides – if you look at insulin syringes today, you’d have to squint to be able to see the actual needle!).
- I think the Sharks were a little hard on Amy. It felt like they were harping on her decision to enter the consumer market vs. focusing solely on distribution to hospitals, even though Amy seemed receptive to the feedback (unlike the Zipit entrepreneurs). Besides, I think Amy obviously is doing something right and has proven she has good overall instincts – she sold $1M Buzzies this year, is on track to sell $2.5M next year, and has great margins at 70%. And that was just her and 6 part-time moms with limited sales experience. Imagine what she could do with strategic input from the Sharks and a true sales team?
- In the end, I don’t think the Sharks saw Amy’s true potential. If it is true venture capitalists like to invest in people, not products, I think they missed the boat. Some of the Sharks did make decent offers, but I think they should have been more aggressive about courting Amy. Amy ultimately walked away from the offers, but in my mind, she had earned the right.
Past-Pitch Update: Kisstixx
Elevator Pitch: pairs of lip balm that make new flavors when combined (with a kiss!)
The Entrepreneur(s): Dallas Robinson & Mike Buonomo
The Deal: Mark Cuban offered $200k for 40% equity
- I always love hearing success stories! To-date, they have done $2M in sales and picked up a celebrity country singer as their spokesperson.
- One interesting update was that one of the entrepreneurs – Mike Buonomo – seemed to no longer be involved in the day-to-day operations of Kisstixx. It wasn’t clear what had happened – they made it sound like he got a job opportunity he just couldn’t pass up – but I think it would have to take a lot to walk away from your own successful business funded by Mark Cuban.