'Shark Tank' Update: The Sharks' Sour Reaction to a Vinegar Company Now Tastes Sweet This Detroit entrepreneur saw her sales soar, even without a shark's investment. Take that, 'Mr. Wonderful.'

By Brian O'Connor

Opinions expressed by Entrepreneur contributors are their own.

Shark Tank
Jess Sanchez-McClary, CEO of Detroit’s McClary Bros.

Just because an entrepreneur walks away without a deal from the billionaire moguls on Shark Tank doesn't mean the pitch was a failure. In many cases, the effort to get Mark Cuban, Lori Grenier or even Kevin "Mr. Wonderful" O'Leary to invest can itself turn out to be a huge success.

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That's what happened to Jess Sanchez-McClary. The CEO of Detroit's McClary Bros. originally pitched her drinking-vinegars business on the season premiere of the ABC-TV reality show in late September, seeking $100,000 for 15 percent of the company.

Her product was drinking vinegars, a modern version of a colonial-era cocktail and soda mixer made with natural and organic ingredients. She came up with it while studying preservative techniques at culinary school, and told the sharks that her mixes are aimed at the growing craft cocktail movement.

The Sharks weren't initially impressed. Not only did she not get an investment, she got an aggressive dismissal from O'Leary, whose criticism went over the line in the opinion of guest shark Ashton Kutcher. The reason: O'Leary's comment to Sanchez-McClary that, "Let's be honest -- it's four guys and dog that drink this stuff. Why are you doing this to yourself?"

Kutcher actually called him out: "You're belittling people and that's not OK," he told O'Leary. "She gave you an answer, and if the answer's not suitable, that's fine, but you don't have to belittle people."

That may have buoyed Sanchez-McClary's spirits. But what happened immediately after the Friday episode aired probably did even more: McClary's website took in 1,000 new orders the very next day. By Monday, Sanchez-McClary was able to say, "We have done now, on the website, as much in sales as we did on the website the whole of last year."

In the three months since, things have gotten even better. Sanchez-McClary now says she's doubled her full-time staff from three to six people, reopened a tasting room to draw in retail customers, connected with several distributors and grown the business so much that she's opening a second production facility next month.

And her bottom line? She estimates today that sales prompted by her Shark Tank appearance have brought in $200,000 – more than she was seeking from the sharks in the first place. "Before the holidays started, we had already done more than twice in revenue than the amount we had requested from the sharks," Sanchez-McClary says. "I really don't need an investor anymore."

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That comes as no surprise to TJ Hale, host of the online Shark Tank Podcast and author of The Ultimate Guide to Getting on Shark Tank. Hale coaches entrepreneurs on how to handle the wave of publicity and business that can follow even an unsuccessful appearance on Shark Tank. For any business, just getting on to the show is an accomplishment, considering that 50,000 entrepreneurs audition and that many episodes that get taped never air.

"There's a whole layer of everyone from investors to distributors to Nigerian scammers who will call after someone goes on Shark Tank, " Hale says. "Airing is the apex. If you air, it's all worth it."

The surge in interest in a business right after a Shark Tank appearance is so predominate that there's even a name for it -- "the Shark Tank effect." As Hale says on his podcast, "We call it the 'Shark Tank tsunami.' It's big. It's a lottery ticket. It's the reason you do it, because it's a big payoff."

Sanchez-McClary says she tried to prepare for what would happen after the show, but couldn't predict exactly how things would go, though she hoped for the best. An initial wave of new retail orders came in the first month, followed by a string of orders from distributors.

"A month later, it was all these companies that wanted whole pallets of vinegars," she says.

She credits a big part of the response to the fact that, while the sharks didn't care to invest, they did like her product when she passed around samples, a stroke of good fortune which essentially turned her pitch into a nationally broadcast taste test for more than 7 million viewers.

"It really influences how people view the product," Sanchez-McClary says now of her experience. "A lot of people took the sharks' word for it that this is good. It made every sales from that point forward easier."

Another side effect of her TV appearance is that she's become more of a local celebrity. At a recent tasting event at Detroit's Eastern Market, an entire family recognized Sanchez-McClary, including an 11-year-old girl who was inspired to start dreaming up her own business.

"She was in awe," Sanchez-McClary says. "The whole thing has been huge. It's been crazy."

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Wavy Line
Brian O’Connor is the award-winning, nationally syndicated  "Funny Money" personal finance columnist for the Detroit News, and author of The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese, from Portfolio-Penguin. In addition to positive reviews, The $1,000 Challenge was named Best Money Management Book of the Year by The Institute for Financial Literacy. A 2001 Knight-Bagehot Fellow in Economics and Business at Columbia University, O'Connor also was the founding managing editor of Bankrate.com.

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