This episode featured the most exciting Shark Tank presentation since Season 5’s Breathometer and Season 6’s Spikeball presentations (both won the Sharky Award for the Best Presentation of their respective seasons). XCraft was the clear winner of tonite’s Sharky Award for entrepreneurial excellence.
J.D. and Charles from XCraft entered the tank accompanied by their drone. Their X Plus One can transition from hover mode (like a helicopter) to forward flight at speeds up to 60 MPH!
But what got the Sharks hyper-ventilating was XCraft’s “Phone Drone” which allows a smart phone to fly and act like a drone! It leverages the GPS, gyroscope, camera, and other technologies that are utilized by today’s smart phones.
This excitement led to an all-out bidding war that resulted in XCraft getting $1.5 million (three times as much as they had originally asked for). They got an offer from all five Sharks together at a $6 million valuation……each taking 5% equity. This is an example of where the usual financial metrics go out the window. Despite the fact that XCraft had sales of less than $173K, the Sharks saw explosive growth on the horizon. I do too.
XCraft will use the money to continue development of the “Drone Phone” and ramp up production of the X Plus One. Their current cost is $400 per unit and they sell for $1,800. With the Sharks expertise and investment, they will be a formidable player in the newly emerging drone space.
Best of the Rest……..Jordan and Daniel from Three Jerks Jerky gave an excellent presentation. They make a premium jerky made of filet mignon. Finally, a beef jerky that isn’t like chewing on rawhide and tastes good! The Sharks loved their product and loved their pitch. Four of the five Sharks were interested. A spirited bidding war ensued.
Jordan and Daniel asked a question of Daymond that had never been asked before. They wanted to know if a relatively small investment would incentivize him to work hard on their behalf. They ended up structuring a deal that got them $100K now for 15% equity and gave Daymond an option to buy another 15% at $100K in the future. This provides the incentive the entrepreneurs were looking for.
Melinda from Skinny Mirror gave some conflicting messages in her presentation. As the name implies, Melinda’s mirrors make people look skinny. If she just took her logo off the mirror, she could sell tons of them to retail clothing businesses and hotels. In fact, she had already turned down an order for $700K from a large hotel chain that were prepared to buy if she removed the logo from the mirror. Turning down an order of this magnitude when starting a new business is not a good idea. The Sharks didn’t feel comfortable with the whole idea of making people look lighter than they really are. No offers were made.
Rob and Lara from Switch Witch have a Halloween product that allows kids to give up all or some of their candy in return for a plush doll. Although their product provides a healthier option for kids, the whole concept was not sweet enough for the Sharks. Almost seemed un-American to me.
At the very end of their pitch, Rob and Lara committed the cardinal sin of presenting (according to Mark Cuban). He always warns entrepreneurs never to say, “This is a huge market of X Billions of dollars and if we can get just 1%, our revenues will be huge”.
Update: Congrats to Bantam Bagels and Shark Lori Greiner. Since their appearance in Season 6, they are now selling their small, stuffed bagels in Starbucks and on Delta Airlines. Paraphrasing D. Trump…..now that’s HUGE!