In light of our College Startups Class of 2016, I felt I should share a story close to me. Corey Egan was a student of mine at the Institute for Innovation and Entrepreneurship at the University of Texas, Dallas in 2010. He was a semester away from earning his MBA. There was no doubt in my mind (even then, not just now...) that he was going places. He never did only what it took to complete an assignment--he always went above and beyond.
And in November of 2010, Corey and his partner, Swapnil Bora, launched iLumi and competed in a University business plan competition. They won $5,000. Since then they competed in additional business plan competitions and increased their winnings to $50,000.
Their idea? a multi-color LED light-bulb that forms an ad-hoc Bluetooth wireless network with all other light bulbs in your home, and with your mobile phone, allowing you to control the intensity and color of your lighting, and even respond to the music you play. The funny thing is that they were both business students. Not engineering...
They then turned to crowdfunding. Their first project was in January 2013 on indigogo, where their goal was $100,000, but they only got $34,000 backed. A month later, they lowered the goal to $1,000, and this time got it over-backed with $25,000. In September that year, they launched a Kickstarter project, and two months later raised $145,000 through it. In July 2015 they launched a second Kickstarter project, this time raising almost $366,000!
I connected them with the North Texas Angel (investor) Network, and they pursued additional networks themselves, but angels simply didn't bite.
Their real break came when they applied to the Dallas Shark Tank auditions in April 2013. Corey described his experience auditioning for Shark Tank on WFAA, and offered the following advice on auditioning:
- You need to have a compelling story. The sharks care about the story almost as much as they care about the product. Let's face it, the sharks have plenty of investment opportunities. They can't care about all of them.
- Don't show up in flip-flop and shorts, unless you sell flip-flop or shorts.
- First impressions are powerful and quick.
The short of it: they were accepted, and the show was recorded on September 2013. After they convinced Mark Cuban to part with $350,000 for a 35% stake in the company, it was still a long road. They entered a due-diligence process and the program was aired only on April 2014.
Since then, they approached additional investors and raised a total of $3.5 million. The product is currently available online and in stores at Best Buy, Home Depot, Amazon, Fry's, and Brookstone, "with more to come," Corey promises me.
Over coffee, I asked Corey to share advice with entrepreneurs who have Shark Tank dreams. Here is what he told me:
- Don't expect the process to be fast. It is long. You audition to Shark Tank, then if you get accepted, it still takes a long time until they air the program, conduct their due-diligence, and finally they get the money. It took a year for iLumi. You cannot wait until the money comes. You have to continue. They pursued two Kickstarter projects, and two indigogo projects. They didn't sit idle, waiting for Shark Tank funding to come through.
- If you are pragmatic, and if you believe in your product, you have to take the leap. You cannot do this part-time. Corey and his wife moved out of their house and lived with her parents so he can spend 150% of the time developing the company. You cannot do it part time, while holding a full-time job. Corey tried it initially. It didn't work. He never got anywhere until he jumped full time. You have to make the sacrifice.
- This has to be about more than an idea. You cannot go around selling ideas and Powerpoint slides. You have to be predisposed and biased towards action. I remember times, when I was nowhere near the level of confidence Corey had in his success, but he could visualize success, and worked towards it relentlessly.
- There is no magic around Shark Tank. You have to have a plan and a strategy to win. You have to understand what makes the sharks decide to invest, and offer that to them. Your product has to offer a compelling value proposition (take my course to learn how to develop and present a compelling value proposition to investors). Don't just plan to present to them. Plan (and strategize) to get them to invest.
- Surround yourself with other people who are also biased towards action. while you want everyone on your team to be critical and pragmatic, you don't need full-time devil's advocates. You want people who will be part of the solution, and not part of the problem. There are going to be many ups and downs, and you want people who move on towards solution.
Are you ready for Shark Tank?