LuminAID Founders Light up the Darkness, and Their Sales
Some people turn in their college coursework and never think about it again, content to pull off a passing grade on the themes in Moby Dick, or guess at the economic causes of the Civil War or randomly fill in answers on a multiple-choice biology quiz.
Then there are Anna Stork and Andrea Sreshta, who turned a single architecture assignment into a $2 million-plus business that has turned out to be not only profitable but a crucial assist to victims of disaster during their darkest moments.
Stork and Sreshta are the inventors of LuminAID, a solar-powered inflatable lantern that can light up 10 square feet for 16 hours, recharge on just a few hours of sunlight and fit into a pocket. Hundreds of thousands of the 3-ounce, 8.5-by-12.5-inch lanterns have been deployed in hurricanes, floods and other disasters.
But they’re also popular enough with campers, hunters and homeowners that LuminAID snagged a $200,000 investment from Mark Cuban after pitching their company in February 2015 during season six of Shark Tank.
In fact, LuminAID was such a hit that Stork and Sreshta found themselves in the rare position of fielding offers from each and every shark that night.
“We decided to go with an offer from Mark Cuban, of $200,000 for 15 percent of the company,” Sreshta said this week. “Then he put an additional clause into the deal that if we raised money again he would put in an additional $300,000.”
Since then, sales have gone from $1 million in 2014 to $2 million for the first nine months of 2015, Sreshta said. In addition, LuminAID’s “Give Light, Get Light” initiative, where customers buy one light for themselves and donate another to an aid organization, has distributed more than 13,000 lights, including 3,000 distributed last year through non-governmental organizations, or NGOs, as part of the Nepal earthquake relief efforts.
Between the taping and the time the segment aired, Cuban and his team helped prepare LuminAID for the big bump in sales that normally follows an appearance on Shark Tank.
“When you have a $20-to-$25 product, people just start ordering to your website,” Sreshta said. “We were just coming out of that, and at the end of April, unfortunately, the earthquake happened; so all of our NGO customers were really busy.”
Not all deals initiated by the investors on Shark Tank see success; there’s a period of due diligence when the sharks whose offers have been accepted dig through a company’s background to make sure no problems come to light following the taped segment. Stork and Sreshta had come looking for a deal and were ready to go, allowing LuminAID to start benefiting from Cuban’s involvement right away.
“Mark has a whole team that supports his Shark Tank companies,” Sreshta said, listing business-development experts and operational support, including bookkeeping. “That is a big help. It was just one giant aspect of the business that we don’t have to worry about anymore.”
Stork and Sreshta were in the midst of a three-year master’s program in architecture at Columbia University in 2010 when they got a studio-design assignment to create an idea that solved one of the problems resulting from the earthquake in Haiti.
The two women already had an interest in solar power which, they discovered, offered a sustainable, lightweight solution. Then, to make sure their light was big enough to illuminate a wide area but also compact enough to save space in ongoing aid shipments, they made their product from a lightweight inflatable polyurethane that packs flat.
When inflated, the LuminAID projects a wide, diffused light, and is so waterproof that it also floats.
The women continued to develop a prototype, and were on a school trip to Tokyo when the March 2011 earthquake and tsunami hit. They saw that city suffer through rolling blackouts to conserve energy after nuclear reactors were wiped out on the coast. “That was one more sign to us that lighting in a disaster is a universal need,” Sreshta said.
Before appearing on Shark Tank, LuminAID had promoted its business by supplying aid organizations and some specialty outdoor retailers. But since the show, the company has opened up more retail opportunities through outlets such as Zulily.com, the Container Store and Brookstone.
“Mark’s team has thrown a lot of new opportunities our way,” Sreshta said. "We have a growing emphasis on retail, and [the team is] so experienced, having helped how many other dozens of Shark Tank companies grow their strategy. We always did the camping thing, but a lot of people kept our lights for snowstorms and preparedness, in their cars and for emergencies.”
LuminAID is introducing two new products, including a light that changes colors for consumers to use in backyards and on patios, as well as versions that produce higher-powered light and use the LuminAID’s solar capacity to charge phones. The company also has gone from a two-person operation staffed solely by the partners to a full-time team of four, plus two interns and a raft of subcontractors.
While LuminAID has been expanding its retail offerings, it's been no stranger to Shark Tank. Sreshta said that she enjoyed using the company's January 2016 update appearance on the show to highlight its disaster-relief efforts -- by running footage of the company’s aid effort distributing lanterns in flood-ravaged Malawi.
And that holds a lesson for other would-be entrepreneurs, Sreshta said. “It’s not a coincidence,” she said: “If you’re solving bigger problems, you’re not far from someone just paying for your product.”