5 of the Most Successful Products in Shark Tank History
Lori Greiner once again proves why she is the "Queen of QVC." She takes a humble sponge and transforms it into a $100 million business.
Aaron Krause was an inventor much like Lori Greiner was. He built a company around buffing and polishing pads. This company was eventually bought out by industry giant 3M. However, 3M had no interest in the sponges he invented.
Aaron decided to make the sponges the focal point in his new company - Scrub Daddy. Scrub Daddy was founded in 2012, the very same year it appeared in Shark Tank. Lori saw the product as a "hero" and offered $200,000 for 20%.
While to the uninitiated, this is a ludicrous sum to offer for a sponge, Lori knows what she is doing from nearly two decades of marketing products through television. Lori to date has created over 600 products and holds 120 U.S. and international patents.
Scrub Daddy, however, was not your ordinary sponge. It was made from a special polymer which would change its texture depending on the temperature of water it would be exposed to. It would be hard when exposed to cold water. It would be soft when exposed to hot water.
Scrub Daddy had huge potential which ended up being caught in a bidding war between Lori Greiner, Daymond John and Kevin O'Leary. The other two sharks, Mark Cuban and Robert Herjavec, saw nothing special in the sponge and quickly dropped out. This is not surprising as the two moguls made their money mostly on technology and the Scrub Daddy is not exactly the most technologically advanced thing out there.
Lori used QVC and her retail connections to propel Scrub Daddy to the top. What was once an invention lying around in Krause's garage is now the biggest success story in Shark Tank history. The Scrub Daddy company now employs 50 people in its Folcroft, Pennsylvania facility and has expanded its product line.
Wicked Good Cupcakes
Tracey Noonan and Danielle Vilagie came into the tank with good tasting cupcakes packaged in mason jars.They were initially asking for $75,000 for 20% of their company. What set these cupcakes apart from your average cupcake is that these cupcakes are made the old-fashioned way without the use of mixes, unnecessary fillers and additives and preservatives.
Each jar would come with layered filling, frosting, and a spoon.
Being also from the Boston area, Kevin feels a connection to the two and was not his usual mean self. He in fact lauded the taste and quality of the cake.
The concerns for the business however were low profitability, high production costs and lack of a patent. To further compound the situation, the cupcakes have a limited shelf life due to their lack of preservatives.
Even though there is no question the product is good and the entrepreneurs are passionate at what they do, the sharks do not see it more than a novelty item.
Kevin sees the risks involved but he takes a stab at it. He offers the mother and daughter duo $75,000 for no equity. All he asks is a $1 royalty until he makes his money back and 50 cents in perpetuity.
Kevin O'Leary may be an astute investor but he often behaves more like a banker. Unlike the other sharks who are more equity-hungry, Kevin comes up with royalty and interest schemes that guarantee he recoups his money and then some.
The tandem take a time-out to discuss the offer and come back into the tank. They haggle with Kevin and whittle it down to 45 cents in perpetuity. They accept the offer and their life is changed forever.
From sales of a mere $150,000 in 9 months, they easily sold $230,000 after their appearance on the show. With the "shark tank effect" in full force, Wicked Good Cupcakes was projected to sell $2,000,000.
The company was growing at a pace of 40% per annum and was fast becoming a household name.
Though Kevin had earned back his investment many times over, he was the main catalyst behind the growth of the company. Without his infusion of cash, celebrity status and connections, Wicked Good Cupcakes may have never gotten off the ground.
Today the company's products can be found at Cinnabon, further solidifying their status in the upper echelon of desert brands.
Tipsy Elves was a unique take on the traditional Christmas sweater. The company used high end materials and had original, humorous and fresh designs.
Evan Mendelson - a lawyer and Nick Morton - a dentist, founded the company and were seeking $100,000 for 5% of their fledgling company. This valued Tipsy Elves at a whopping $2,000,000.
Evan used his knowledge of SEO to help dominate online sales. They planned to use the money to get more inventory and expand into retail.
Daymond John was tempted to make an offer but was hesitant because he had a warehouse full of unsold Christmas sweaters. Daymond actually owned the company that supplied Bill Cosby with his iconic ugly sweaters.
The other sharks saw the sweaters as mere novelty items which were not invest-able.
Kevin took a stab at it and offered his usual royalty deals. He offered $100,000 for no equity. He only wanted $2 per sweater until his money is recouped. Once that happens, the royalties go down to $1 in perpetuity.
Robert offered something close to what the duo originally wanted. He offered $100,000 for 10%.
Ever since their partnership with Herjavec, the company has only been on the upward trajectory. They now have millions of dollars in sales and employ more than four dozen people. They have since inked deals with Sony Pictures and Google, further solidifying their brand.
Despite their success, Evan and Nick have paid it forward and have given back. They have donated towards many charitable causes that help the youth of America.
The photo album has been around since the 1800's. The idea is to be able to store, organize and preserve photographs for posterity.
For a long time, nothing much has changed with photo albums until Groovebook.
Groovebook is a digital photo subscription service that for only $2.99 a month lets people have a bound book of high-resolution photos that they took from their digital devices.
They can use Groovebook as a substitute for a traditional album. They can also give away copies of their Groovebook to family and friends. This is useful for occasions like weddings and reunions.
What makes Groovebook unique is the grooves on the album that enables it to be flexible and ensures it gets a lower shipping rate. Despite the innovation however, the margin is quite small at 69 cents per order.
Husband-and-wife team Brian and Julie Whiteman came into the tank to ask $150,000 for 20% of the business. this gave the business a $750,000 valuation. Mark offers the couple the $150,000 they are looking for for the ability to license it to bigger companies. Being a photographer himself, Kevin O' Leary goes all in and offers the $750,000 to buy the company outright. Neither offer moves the needle.
Mark and Kevin decide to team up and offer $150,000 for 80% of the licensing profits. The couple agree and overnight Groovebook explodes.
The services quickly gained 50,000 new subscribers after it was featured in Shark Tank. They sold the company to Shutterfly for $14,500,000 a year later and it was a huge windfall for the couple as well as Mark and Kevin.
Bombas was not your ordinary sock. It was an athletic sock with a good cause behind it. For every pair sold, the company donates a pair to charity.
Bombas came from the Latin word for "bee." The company's mantra is "bee better." This mantra extends from the quality of their product to being better human beings by helping the less fortunate.
What inspired the entrepreneurs with the company's vision is seeing a news release that socks are the most requested clothing item in homeless shelters.
Bombas co-founders David Heath and Randy Goldberg came into the tank seeking $200,000 for 5% equity in their business. While the sharks admired their social responsibility, they doubted Bombas' profitability.Mark Cuban and Kevin O' Leary were especially vocal about this.
While any shark would definitely give Bombas more credibility and an immediate boost, the entrepreneurs were targeting clothing magnate Daymond John of FUBU fame.
It was not an easy task to land Daymond as he already had his own FUBU socks to worry about. The entrepreneurs sweetened the pot and accepted Daymond's offer of 17.5% equity for $200,0000.
Overnight, after appearing on the show, Bombas sold $400,000 and has been growing ever since.With Daymond's guidance and expertise the company grew from a mere $450,000 in sales before the show to $50,000,000 in 2017.
Despite their success, Bombas has never strayed from its charitable mission. Bombas owners and staff continuously actively participate in giving away socks to the less fortunate, help out in homeless shelters and pitch in at soup kitchens.
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© 2018 Jan Michael Ong