"The most difficult entrepreneurs to work with are inventors."
Those were the words of Mark Cuban in Friday's repeat airing of Shark Tank, and the four businesspeople pitching their companies for investments couldn't have done any more--or been more exasperating--to prove him right.
The repeat from February 3 involved four great ideas. Three were so original they already had patents. Two got offers, and only one--the only actual business out of the four great ideas--spurred a feeding frenzy of multiple offers.
The least successful pitches came from entrepreneurs who'd gone just far enough to demonstrate--in their words--"proof of concept." But all they did was prove that their products could actually be made and worked. As far as proving a market existed, the question was left hanging. So was marketing strategy, marketing focus, sales approaches, and repeat sales that would have demonstrated those products could become businesses profitable to attract investment.
One was a $499 very cool miniature combination heater and cooler for the bed called BedJet. Inventor Mark Aramli is a former NASA engineer who worked on temperature control in space suits. He has a patent and purchase orders from major mattress makers and is all set to manufacture the BedJet, but he simply can't answer questions about how the brilliant thing is going to be sold, who the target market is, and even what these mattress manufacturers intend to do with the product and how they'll sell it.
The Sharks are also put off by the price, which they find extraordinarily high. "I think the price is nuts," Kevin O'Leary says. "You will never sell this device for $499. The devil himself won't pay that."
Cuban and Lori Greiner are also offended when they can't get their questions answered. Aramli meets every question or objection with saying how great the product is and its huge potential for the market. At one point, Cuban says, flat out, "Don't pitch me."
Two more entrepreneurs who ran into the same trouble were Liz Moskow and Abby Schwalb, pitching their sexy, '70s-inspired all-natural lip balm, Balm Chicky Balm Balm. The idea is that it can be shared, because it has a "friend end"--one end of the oversize tube opens to present an extra pot of balm that can be used by friends, leaving the lipstick-style other end "pristine and clean."
Again, they have a patent on the tube, and also have gotten the product into 60 stores, mostly adult novelty outlets, as "proof of concept." They've put no money toward marketing and don't appear to have any kind of marketing plan. Sales are a meager $17,000, which, O'Leary points out, means "You're selling point zero zero nothing-burger per store."
All the Sharks like the product, except Greiner, but their eyebrows raise when they find it costs $4.50 to make and retails for $9.50, while all other lip balms average a $2.59 retail price. The fact that Balm Chicky Balm Balm might be a "conversation starter," as one of the entrepreneurs notes, doesn't seem to help.
What also doesn't help is that every question or suggestion from the Sharks is met with a "We can do that" answer. Private branding, creating different brands under different names, licensing, Moskow and Schwalb up for all of it and more.
"Every time we give you an objection, you say, 'We can do that, too,'" says Robert Herjavec. "It's great, but I don't see a company, just a fun, hip, cool name."
No Sharks invest, but Moskow and Schwalb leave with some good advice. Barbara Corcoran notes that she has very few businesses in her portfolio that didn't have to be reinvented, and encourages them to keep trying. Cuban thinks they've got a great niche business.
"You've got a profitable niche that you should be exploiting," Cuban says, noting that they could sell $250,000 of the product and make $100,000 without changing anything right now. "Not every business is going to be a $5 million business," he says. "Win the battles you're in, first."
The Sharks do make an offer to the inventor, Naushad Ali, of a patented, no-mess drain cleaner called Drain Strain. Again, it's not a business, but a few Sharks zero in on the only clear way to big success--licensing to a major manufacturer of faucets or sinks. While Ali can't get his phone calls returned, O'Leary says he can.
Ali wants $110,000 for 15 percent of the company. O'Leary offers 20 percent, contingent on a deal with a major manufacturer. Herjavec counters that any Shark can get a call answered, and that a 20 percent cut is a lot for just picking up a phone. He offers the same deal with the same contingency, but at 10 percent equity, a deal Ali takes.
The big hit of the night was Fresh Patch, a company that sends fresh patches of real grass every other week to pet owners to use on apartment or condo patios. Solo-preneur Andrew Feld of Davenport, Florida, has a patent too--but he also has a business. He's booked $1 million in sales to date and has 550 subscribers paying $25 for a new patch of grass every two weeks.
The Sharks are dismayed by the fact that only 25 percent of Fresh Patch's initial customers become subscribers to the service, and a few are out on that. But others see potential. O'Leary wants a 30 percent equity stake, but Corcoran will settle for 20 percent if Feld agrees to go into pet stores, a space where Corcoran has experience.
Greiner also is interested, but the "Queen of QVC" gets sidelined when she insists on hearing if Cuban has an offer. The tech entrepreneur frequently lurks during pitches, jumping in to make a last-minute offer, and Greiner hopes to sidestep his tactic. But Cuban responds by saying he sees the company as a tech play, since all the sales are online, and he can help. He wants in on Corcoran's deal, giving Feld a tech shark and a retail shark--but Feld can't wait to hear Greiner's offer. He has to take the deal now or lose it.
He takes it, and a smoldering Greiner says nothing. But the exchange proves that, when an inventor shows up with both a great product and a real business established behind it, the Sharks will smell money in the water.