Any entrepreneur who wants to succeed needs more than a healthy dose of self-confidence, but when Mark Cuban tells you, “You’re similar to me but even more arrogant -- if that’s possible,” you probably should tone it down.
That was just one of the memorable moments from a very mixed bag of a new Shark Tank episode Friday that included a baby floatation spa, a "smart" dinner plate (which I guess you serve via the dumb waiter) and a vegan honey substitute.
First in the tank was Martin Dell’Arciprete, asking $1 million for 15 percent of SmartPlate, a connected dinner plate-and-phone app that analyzes meals for diet and nutrition. The company was pre-revenue, which the sharks disliked, and Dell'Arciprete’s price of $199 was an even bigger dose of shark repellant.
There was more not to like: The sharks noted that people frequently dine out, so the plate wouldn’t help them with a diet; there wasn’t a complete working demo, just a prototype; and the technology involved was licensed from third-party vendors, giving the firm no unique technology. In addition, Dell’Arciprete’s pitch was poor and confusing.
At least guest shark Chris Sacca was impressed with one aspect of SmartPlate: “There are so many different ways this business fails right out of the gate,” Sacca said.
Bee Free Honee
The next pitch hit the sharks’ sweet tooth, when Melissa Elms and Katie Sanchez pitched Bee Free Honee, seeking $100,000 for 10 percent of their vegan alternative to honey, which could be used to take pressure off struggling bee colonies by leaving more honey for struggling hives to consume.
Sanchez accidently created Bee Free when she overcooked a batch of apple jelly. The product is now in nine Whole Foods regions, costs $1.60 and sells for $5.99; and Bee Free posted sales of $178,000 last year. The sharks were dubious at first but were impressed by the taste. Barbara Corcoran said the product needed to be entirely repackaged, and Daymond John wanted to see the social benefit aspect of the product promoted more prominently.
Sacca was the first shark to bite. Telling the duo he thought they would need more than $100,000 to expand, he offered $200,000 for 30 percent equity. John followed with an offer to match that or offer $100,000, for 15 percent. Corcoran offered to match any deal, saying, “I’m the shark you want."
Cuban joined the fray, and the choice came down to Cuban, Sacca and Corcoran offering $210,000 for 30 percent (split evenly) or John offering $100,000 for 10 percent of the company and 20 percent of all online sales. Elms and Sanchez took the trio’s offer, getting sharks with experience in tech, packaging and food all in one deal.
The video demonstrating Float Baby had the sharks laughing out loud -- for the wrong reason. Krisi Ison was seeking $150,000 for 20 percent of the company, which offers infant massage and floatation spa. The video showed babies paddling around in deep tubs kept afloat by what looked like hemorrhoid pillows wrapped around their tiny heads.
Float Baby charges $65 an hour and is on track to do $60,000 in business at its one location this year. The sharks didn’t like the absence of anything proprietary to the business. They couldn't see what in particular Ison brought to it; and they cited her failure to expand the concept in multiple locations and grind out enough sales to sell out even the available slots at her one location.
Said Cuban, “I’m going to ask you a very simple question: What’s your grind?” When Ison replied, “What’s that?” Cuban responded, “I’m out.” And so were the rest.
Last up was Miles Penn, seeking $2.5 million for 10 percent of his online custom shirt company, MTailor, which substitutes users' smartphones for a trip to the tailor for measurements.
Penn said the technology allowed him to price a custom shirt that normally would sell for $125, at $69. The company does about $150,000 a month in business and was projected to handle $2 million in orders this year but scaled that back to $1.5 million because of supply-chain issues.
The sharks disliked the manufacturing problems and the 15 percent return rate on shirts. And they really disapproved of the valuation of $25 million for a company having trouble keeping up with orders. Sacca and several sharks felt that Penn’s lack of experience in clothing and overseas manufacturing was a problem, and noted that the company might be better if it focused as a tech play with proprietary technology.
“Technology might be the easiest part of this business,” Sacca said. “So far, it’s not going that great for you."
Another thing the sharks didn’t like was Penn himself. “I don’t really like you, but I like the concept,” John said, and offered $2.5 mill for 17.5 percent on a licensing basis. Kevin O'Leary offered $2.5 million for 2.5 percent of the company, but as a loan at 7 percent, to be repaid over 36 months. Penn said he didn’t want a licensing deal, and only an equity offer, not financing.
“You’re similar to me but even more arrogant, if that’s possible,” Cuban said, as Penn rejected both deals.