This episode proves that inventing or developing a cool product doesn’t necessarily mean you will become a successful entrepreneur. Three of tonite’s entrepreneurs had developed potentially useful products, but had terrible Go-To-Market (GTM) strategies.
For example, Martin from SmartPlate had developed a plate that measures calories of any type of food. He planned to sell his product for $199 (Mr. Wonderful responded with his signature put-down, “Martin, poopsy baby!”). All the Sharks agreed the price was way too high. Martin also was planning on delaying his launch so that a third party engineering firm could redesign the camera locations on the plate, rather than having people use their own smart phones to take pictures of their food. This would have at least allowed Martin to get immediate customer feedback. No deal here.
Kristi from Float Baby showed a video of little babies with flotation devices around their necks bobbing in a pool. It was not supposed to be funny, but it had the Sharks in hysterics (Mr. W. laughed so hard he actually cried). Kristi tried to convince the Sharks that babies exposed to the water are healthier and smarter than their land lubber counterparts. She came up short.
Kristi’s Go-To-Market (GTM) strategy was to sell “baby float time” in her studio. Clearly the big opportunity would be selling the flotation devices and tubs. Kristi also lacked Sales skills and the hustle required to launch a new product. No deal here.
The biggest Go-To-Market blunder of the night was made by Miles from MTAILOR. Miles is a smart Computer Science major from Stanford who was in the process of building a large totally integrated company. MTAILER includes an app. that measures 14 different dimensions of a man’s body in under 30 seconds so that a custom made shirt can be made that fits perfectly. Miles had run into Supply Chain issues in China and his Sales had actually decreased as a result.
Miles had valued his company at $25 million based on the fact that he had previously sold some shares at a $10 million dollar valuation. His rationale was he had “made a lot of progress” since then, so he thought $25 million was reasonable. If sales were growing rapidly, this may have been a good valuation, but the fact that his sales were going in the opposite direction made this problematic.
Once again the GTM strategy was flawed. By including manufacturing of the shirts (an area where Miles had zero expertise or experience), Miles missed the big opportunity which was licensing his technology to numerous large retail and clothing companies. In fact, he had received an offer of $2.5 million for 17.5% equity from Daymond if he agreed to the licensing strategy. He did not. This would have been a great deal and would have eliminated the need to try to manage international manufacturing and supply chain issues.
The one deal that got done was Bee Free Honey. They make something that tastes like honey but is made from apples. Apparently vegans won’t eat honey and this is a great tasting alternative. It will also reduce the dependence on bees (the bee population is decreasing). Katie and Melissa got three Sharks to invest $210K for a total of 30% equity. They had gotten a deal with Whole Foods, and just nailed their GTM strategy.