Shark Tank Shows Us How To Bag A Deal
Some times it isn't just about striking the right deal. In this episode, we learn that it's just as important to deal with the right Shark.
One might get the impression that one or all of the Sharks needed to catch a bus after taping this episode of Shark Tank, with entrepreneurs hustling in and out only to be dealt with in the most perfunctory of ways. That's probably unfair on my part: No Shark would ever be caught dead on a bus. So maybe someone's private jet was double-parked down at the airstrip or something and that's why they wanted to move things along.
Because I will be frank here: this was a by-the-numbers episode. None of the products stood out in any particular way, heated bidding wars were kept to a minimum, and our only moment of lunacy was a woman bursting into tears when a Shark made a fairly generous offer for her entire business. Even the theme -- "America's Heroes!" -- felt like it was hastily assembled in a pitch meeting. "What type of entrepreneur should we have on this week's episode, gang?" "Hominids!" "Left-handers!" "People with vaguely important day jobs!"
So yeah, the mind wanders on an episode like this as we search for larger meaning in an otherwise unfeeling world. And in this episode, I found myself thinking about whether each would-be business success landed themselves a deal with the right Shark. Let's count it down, shall we, starting with the ones that did dealings with the wrong Shark for them.
4. Doc Spartan
Dale King did some tours in Iraq as an army intelligence officer, only to return to find that his hometown was a dilapidated wasteland. If you're playing the home version of "Florida Or Ohio?", please collect your winnings for successfully guessing that Dale's hometown is in the Buckeye State. So Dale did what any of us would do if we returned to the place where we grew up and found it awash in foreclosure signs and opioid addiction: We'd burn it to the ground and start anew someplace else.
Or we'd start a gym. That's something else we might do.
Before you think that Dale is here to sell the Sharks on gym memberships -- though really, we could all stand a few minutes on the elliptical, isn't that right, Sharks? -- the gym is where Dale met Renee Wallace, who's whipped up a skin treatment cream made up of essential oils that claims to heal anything life throws at it. Regular viewers will recognize this as the point where Mark Cuban's eyes roll backward into the upper reaches of his skull, and there they go, right on cue. Mark's wary of any health business that doesn't have test results to back up its efficacy claims, and he doesn't think Dale and Renee have done the research, so he's out. All the other Sharks drop out too, except for Robert Herjavec, who likes the product's unclear branding, loves that it's a new category, and wants to give Dale and Renee the $75,000 they want. Of course, Robert wants 25 percent, not the 15 percent Dale and Renee were planning on giving up. They attempt to cut his percentage down to 20 percent, but Robert's all, "Nah," and Dale and Renee wind up taking the deal when, really, no Shark would have been a perfectly fine option.
Oh, and the less said about Dale's American flag short-shorts -- just a fraction of an inch away from being a desecration -- the better.
As a pediatric nurse, Melissa Gersin has learned a lot about what it is that makes babies cry, though she's got a long way to go in learning how to treat a would-be investor, at least from Kevin O'Leary's perspective. Melissa has invented the Tranquilo, which is essentially a vibrating mat that can calm a squalling child. And she's got $65,000 in sales over the last 7.5 months to prove that she knows what she's talking about. More evidence? I was set to totally sneer at this product when I looked over at my wife, who was very much in the "I WOULD HAVE PAID ANY PRICE" camp. Any price, in this case, is around $85, so I can imagine how this might have fit the bill.
Daymond John wants in. He'll pay Melissa the $100,000 she wants, though for double the equity she was offering at 20 percent. That's also contingent on Daymond's ability to sign a licensing deal. Kevin will do Melissa one better: He'll give her even more cash and even at the same $1 million valuation she asked for. In this case that's $250,000 for a 25 percent stake; Kevin would also like Melissa to stop being a nurse, so that she can dedicate herself to this Tranquilo business fulltime.
It should be a apparent that's a very fair offer from Kevin. ("Here is exactly what you asked for, only more so.") It should also be apparent that Melissa wants nothing to do with Kevin, given how she hems and haws and all but asks the remaining Sharks, "Anyone? Anyone at all?" Daymond is so put off by this, he pulls his offer, and Lori Greiner's very much in the "Take Kevin's offer, lady" camp.
Ah, but we had forgotten about Robert, who was listening when Melissa half-heartedly suggests to Kevin that maybe he should give her $200,000 for a 15-percent stake, a deal that would boost her valuation. Robert concludes, "Sounds good to me, who cares about math?" and he has himself a deal. But Melissa can't resist one last twist of the knife, waving a Tranquilo at Kevin and telling him, "Hopefully you can use this to calm yourself." Yeah, take that, Guy Willing To Give Me More Cash Than I Asked For. "First do no harm" indeed, Melissa.
2. Peaceful Fruit
Evan Delahanty was in the Peace Corps. Don't worry if you missed this detail when it first came up, Evan will be more than happy to mention it again. Anyhow, while he was donning the local garb in Suriname, he was also hit with a brainstorm: Make natural fruit snacks based around acai berries. "We can make fruit snacks great again," Evan vows, not realizing when this was taped that a lot of us would have had our fill of the "Make X Great Again" theme at this point, thanks very much.
What bothers the Sharks more is that Evan doesn't seem to have a plan to establish his product in the highly competitive world of fruit snacks. (It is so competitive, in fact, that Robert drops out because he's invested in a competing product.) Mark seems like the most natural fit, as he's enthusiastic about the social enterprise aspect of Evan's business, but he's less keen on the risk/reward aspect. He drops out and the other Sharks find reasons to follow. So...why did we have this segment again? Was this just a stealth marketing blitz on behalf of the Acai Berry Marketing Board?
1. Firefighter Turnout Bags
Niki Rasor is here to drop some knowledge on you about firefighter turnout gear, those heavy duty jackets that firefighters wear. You get two sets of turnout gear that you use over the course of a decade, before you turn it in for new gear. So what happens to the old stuff? Well, if it lands in Niki's hands, she's going to make a bag out of it. And boy, do people like their firefighter-gear-based accessoires, to the tune of $194,000 in gross sales. That's inspired Niki to ask the Sharks for $250,000 in exchange for a third of her business.
Niki has some red flags, though, not the least of which is her ability to snap back at any Shark -- mostly Kevin -- who presses her for financial details. More worrying is that she's taken on some high interest loans: one $20,000 loan required her to pay back $30,000 in seven months, which is a 50 percent interest rate by the Sharks' math. Also, Niki is talking about using different material to produce a lower-cost version of her bags in an effort to combat knockoffs, but really, doesn't that undercut the entire raison d'être of her product? "The appeal is a that a fireman wore this," Robert says, holding up a bag.
No wonder, then, that while the Sharks are suitably impressed by Niki's design chops, they think someone else should be calling the strategic shots. Robert puts it quite bluntly: He'll give Niki $500,000 for all of the company, and she can stick around in an advisory capacity if she likes. Niki responds to that offer by having a little bit of a cry.
Sensing that Niki may not be all that thrilled with Robert's proposal, Lori offers one of her own. Niki wants to add a lower-priced version of the bags to the offerings? Hey, that's fine by Lori. Niki wants to still retain some of the business? No worries, lady. Niki wants cash? Cash is what Lori's prepared to offer, specifically $250,000 for half of the business. Niki can be the design muscle, but Lori wants her own team to be the brains of the operation. And you know what? That's the best possible fit you could imagine, so Niki winds up taking the offer.