I found tonite’s show intriguing even though only one entrepreneur received an investment from the Sharks. Many lessons can be learned from tonite’s entrepreneurs. Two Sharky Awards and two Shark Chum Awards are being given to tonite’s contestants.
Platinum Sharky……Moshe Weiss from Soundbender
Moshe made a great attachment for the iPad which helped “re-direct the sound” in the direction of the user. In essence, it served to amplify the sound from the speaker. The margins were over 80% and he had sold over 7K units online. Moshe turned down a license deal from Mr. Wonderful and rejected Barbara’s offer to pay her a royalty because it would take cash out of the business when it was needed to support additional growth.
He recognized that he needed help with Marketing and ended up taking an offer from Daymond whom he believed could provide the expertise he lacked. This was a good outcome for Moshe. Tonite he got the cash infusion he was looking for AND the Marketing knowledge he was missing.
Gold Sharky Award…….Steven and Lena from XeroShoes
This husband and wife team did not get an investment because their valuation was way too high. With forecasted Sales of $1.2 million for the year, an appropriate valuation would have been about $2.4 million (2X revenue) rather than the $5 million (4X) they were talking about. They felt their valuation was fair because one of their competitors had just gotten a large investment at an insanely high multiple.
That said, I think these two have a nice company and will succeed. Barefoot running is a growing trend and their “running sandals” might be a big hit within this niche. I think the Sharks may have missed one here. I like their prospects.
Shark Chum…… Susie and Steve from Bibbitec had developed an expensive cleanable bib that required lots of consumer education in order to sell. Any product or service that needs customer education requires huge margins and these guys didn’t have it. They also aired some dirty laundry (pun intended) by talking about their family finance issues. Their emotion and frustration showed….never a good thing to do in front of the Sharks and 6 million other people.
Mike from Cuddletunes had developed a plush bear that could sing songs that were recorded on the internet. He said it could be used to connect with your kids when you’re on the road. Why not use Skype and just talk (or sing) to them instead of paying $60 for a teddy bear? The Sharks disliked him and the whole concept.