This was the final episode of Season 11 and it was one of the best of the season. The episode highlighted the balance between mission-based objectives vs. growth and profitability.
Best Deal of the Episode…..Joe and Rachel from Yellow Leaf Hammocks have achieved a perfect balance between their social mission-based objectives AND running a growing and profitable business. Their social mission is to reduce poverty levels in Southeast Asia. They manufacture their hammocks in a small village in Thailand.
Their sales this year will be $1.3 million and their profit will be $360K after paying themselves. Their landed cost is $44 and they sell the hammocks for $199. They came into the Tank asking for $400K for 7% equity.
They also have introduced a cool looking indoor/outdoor frame for the hammock that they sell for $2200. They just made a deal with Virgin Voyages to have one on every one of their ships and to sell them to interested passengers.
Add to all of this the fact that Joe and Rachel are very smart and likeable, and you could sense a big deal was about to happen. Guest Shark Daniel Lubetzky offered them $1 million for 33 1/3% equity. After briefly entertaining a couple of offers from Shark Lori, they negotiated with Daniel and got him to drop his equity requirement to 25%. They accepted the offer. This will be a great partnership.
Best of the Rest………….Ryan and Lindsey from Rolling Greens are in the red hot plant-based food business. They currently have millet tots and millet wings in their product line with big plans to expand. They perfected their recipes working on a food truck for the past five years..
Their sales were $320K last year and $700K this year. Unfortunately they had losses totaling $500K over that period. Their margins are too thin (35%) to be profitable. In order to break even, they need to be 50%. This means they need to reduce their costs and/or raise their prices.
Fortunately, Shark Robert really liked them, and offered them $500K for 20% equity (which was a very generous offer) and they accepted.
Tara from Dreamland Baby makes weighted sleep sacks for babies. This helps babies fall asleep faster and have longer uninterrupted sleep. She and her husband had gotten laid off and Tara had a newborn with sleeping problems. This provided the motivation to start her own company and invent a sleeping solution for babies.
She’s had $30K in sales Year-to-Date. She sells each sleep sack for $79 and her cost is $13.60……great margins.
A couple of great quotes about Tara came from the Sharks…..”One idea can change your life”-Lori Greiner, and “You turned a crisis into an opportunity”-Daniel Lubetzky
Lori made a deal calling for $100K for 22.5% equity. Her intention is to get a licensing deal with a major manufacturer or retailer.
Mohammed, Mohammed, and Anthony from The Mad Optimist custom make gluten free soap. In seven years, they have sold $800K, their mission is to make the world a better place. They have some unique features on their website, but they clearly don’t have that mission vs. business balance discussed earlier.
Shark Robert told them, “You’re too obsessed with your mission. The market doesn’t reward good intentions…..it rewards results”.
Mark Cuban sat silently. After the other four Sharks voiced their disdain for The Mad Optimist, Mark finally spoke up. He suggested they focus on Muslims by having a website just for them, and then create other websites for other ethnic/religious groups. Mark made an offer of $60K for 20% equity. Of course it was accepted.
I didn’t get it.
OVERALL RATING OF THIS EPISODE………………A