The clear winner of this week’s Sharky Award for entrepreneurial excellence is the married couple of Josh and Diana from The Red Dress Boutique. This couple has created an online women’s clothing business that sells $8 million of their products per year. This has been accomplished after just four years of being in business. In fact, next year, they are forecasting $12 to $15 million in sales.
After working for a large corporation for several years, Diana came up with the concept for The Red Dress Boutique. They quit their jobs, sold their house, and slept on an air mattress at their friend’s house while they were getting their business started. Diana’s father passed away, and rather than becoming depressed and overwhelmed, she used that emotion as a positive force to grow the business. And grow the business they did! After sales of $80K in year 1, they did $250K in Year 2, $1.8 million in Year 3, and $8 million in Year 4. They are projecting a net profit of $2 million per year.
They gave a killer presentation and were professional throughout the process. But what made these two so unique was their use of social media to fuel their growth.
For example, Diana would find a dress that she really liked, took a picture of it, and put it in front of their over 1 million Facebook followers who would then give her feedback on the dress. Based on the outcome, they would either include it on their online catalog or not. The Sharks were impressed. Lori and Daymond even said that Josh and Diana could teach them something.
They ended up getting an investment of $1.2 million from Mark and Robert for 20% equity. They can help them improve their website and introduce them to the world of data analytics.
The Best of the Rest……Megan from The Caddy Girls had to overcome the stereotype of a pretty blonde from Myrtle Beach wearing seductive clothing. She succeeded! She gave a nice presentation and even had the confidence to turn down Mr. Wonderful’s absurd offer. Unfortunately, this is not yet an investable business.
Dan, David, and Eric from Sun-Staches landed a deal from Daymond, but did not impress me. They lowered their valuation from $6 million to $1.5 million during the negotiation (this was probably a realistic valuation but the drop ruined their credibility). Their product was a fad product (mustache sunglasses) and appeared kind of schlocky to me. Daymond better work fast on this one.
Jungle Jumparoo’s product was too dangerous, too tough to scale, required too much floor space, and their margins were too small. They just didn’t excite any of the Sharks.