14x09 - Episode 9

[bunniefuu]

Tonight, "Shark
t*nk" brings the holiday cheer.

Well, the fabric,
it's 6% spandex.

The whole thing looks
dated and not that attractive.

What did you think was going
to happen in "Shark t*nk"?

Not so festive.

Ho! Ho! Ho!

It's really hard to learn!

This isn't ready yet. We
don't know what we're doing.

This is a toy that's going to
be in every house in America.

Mr. Wonderful, you
have such a huge heart.

- Aww.
- So true.

Oh, my Lord.

First in the
t*nk is a convenient way

to get festive for the holidays.

Hi, Sharks. I'm Liz.

And I'm Kristina.

We're from San
Francisco, California,

and we're seeking $250,000

for a 10% equity stake
in our company... Wow.

ReadyFestive.

Sharks, we all love the
feeling of a festive home

for the many holidays and
seasons throughout the year.

We love the magic, the memories,

the traditions made
with family and friends.

But shopping for decorations?

Not so festive.

Finding holiday
and seasonal decorations

for your home and your style

can be a frustrating and
overwhelming process.

Many of us lack the
time or the creativity

to pull it all together.

And as soon as
one holiday's over,

the next one is
around the corner.

We need some help!

Introducing ReadyFestive.

ReadyFestive is a customizable
and convenient service

delivering on-trend home decor

for the holidays and
seasons you celebrate

throughout the year.

Here's how it works...

Go to our website and
choose your favorite

holidays and seasons.

Select a mini, standard,
or deluxe box size.

Next, customize your decor,

and your ReadyFestive
box will be delivered

right to your doorstep

to help take your home
from everyday to holiday.

No more frenzied shopping trips

or hours of scrolling required.

Simply unbox and
start decorating,

or as we like to say...

Stress less and festive more.

Sharks, who's ready to flip

this $25 billion
industry on its head

and deliver festive

to every doorstep in America...

With us?

Wow. What do we
have in front of us?

So, each of you has
a ReadyFestive box

in front of you to enjoy.

Mark, we've curated a Hanukkah
box for you today. Thank you.

Barbara, we know that you
love to host Thanksgiving,

so we have chosen that
box for you. I do. I do.

Mr. Wonderful,
America's sweetheart,

we've chosen a
Valentine's Day box for you

since you have
such a huge heart.

- Aww.
- So true.

Oh, my Lord.
You got confused.

What does Lori have?

Lori, we've curated

a glam Halloween
box just for you.

I love Halloween.
Thank you. Wow.

These are bunnies!

We know you have two
cute bunnies at home

that love to
decorate for Easter,

so you have an Easter box today.

Oh, thank you.

So, the products in front of you

are really representative
of the breadth of products

that we provide
in all of our boxes.

What's this?

It's a table runner.
It's a runner.

Oh.

What's a table runner?

It's a table runner.

So, you lay it across
your dining room table,

and then you can put
decorations or candles...

Oh. Why do they
call it a runner?

'Cause it runs down
the middle of the table.

And why would you even do that?

Why don't you just
put it on the table?

To make it more festive.

Do you get to choose
what you want in your box,

and do you price it
per box or per item?

So, we allow our customers

to customize in
four different ways...

Choosing their
holidays and seasons.

So, we have 14 options.

Wow. 4 seasons and 10 holidays.

And we just require
that you sign up

for a minimum of three.

We have two payment options.

You actually can pay up front

and save 10% or pay as you go,

which means you
pay as your box ships.

You're trying to entice me
into a subscription service?

It is,
isn't it? Yes. Yes.

To our customer, we're
a subscription service,

but, really, we see ourselves

as the new wave of subscription

because our service is
completely customizable

for our customer.

We're not a monthly
or a quarterly box

because that's not
how you celebrate

the holidays and seasons.

How do you keep track, then,
and have so much inventory?

Because if I'm getting
to pick from everything,

you have to pick
and pack each thing.

Yeah. Right?

The beauty of our business

is that it is customizable,

and so our customers
are pre-ordering

and we have a lot of data

that they feel comfortable
trusting us with. Yeah.

And so with that data and
constantly talking to them

and serving them,
and the pre-orders,

we're able to
forecast very closely.

And we've actually scoured
the trade shows every season

and we find the biggest trends,

the biggest ideas, and we curate

usually three to
four collections

each holiday or season.

And, Kristina, are you trying
to hit a certain price point

in that collection
each and every time?

We are, Barbara.

So, our mini box is $69,

our standard is $99,

and our deluxe is
$159 plus shipping.

And, really, what we
promise our customer

is that the total retail value

of the items in your box

will be equal to,
if not greater than,

if you were to go out and
shop for them yourself.

And then, of course,
we've saved you the time

and the hassle of doing that.

Kristina, this seems like a
very complicated business.

Potentially inventory,
potentially moving pieces.

What makes you guys
qualified and experienced

to run this business?

So, Kristina and I like to say

that we have very complementary
business backgrounds.

I bring the
customer in the door,

and she gets them out the door.

Great. That's great.

My background is primarily
in marketing and sales.

I spent most of my
corporate career

working for one of
the world's largest

media and
entertainment companies.

And so, I really
handle everything

that's customer-facing,

all of our marketing
and social media.

And my background
is in merchandising

and product development.

And I worked for over 15 years

at one of the world's
largest retailers.

Okay, who?

Gap Inc.

So, guys, now would
be the appropriate time

to talk about sales.

Sales! Yes.

- Exactly.
- Yay!

We were waiting for you to ask.

Well, I just did.

So, we launched ReadyFestive
at the very end of 2019,

so we're going on our
third year in business,

and we've done over
$1.5 million in sales

lifetime to date.

- Good for you.
- Wow. Good job.

Can you walk us through...
Now tell us each year.

Year one, year two, year three?

So, year one, we
did $250,000 in sales.

Year two, we doubled that
and did $500,000 in sales.

And then this year, we're
tripling that, obviously,

with $1.6 million
in sales for 2022.

And are you making money?
And what's your year to date?

This is the first year

that we're going
to turn a profit.

Good for you. How much
are you going to make?

We're going to make
$300,000 this year.

Oh, congratulations. And
that's after paying yourselves?

We don't pay ourselves, no.

And what's your
sales year to date?

Our sales year
to date, $800,000.

That's good.

What does it cost
you to make it,

and what do you sell it for?

Our average box sells for $127

and costs us $75 to make.

So it's a 40% margin
landed to the customer.

So you must know your
customer acquisition cost.

Our customer
acquisition cost is $40.

Oof. So, the average
customer comes to us and gets

six-and-a-half boxes
during their tenure.

They spend about $750 with us.

Our monthly churn is about 5%.

So that would lead
to... Oh, that's good.

Our average customer stays
with us for about two years.

So, another way to look at that

is how much is your
prepaid revenue right now?

So what we have committed
is $800,000 in the door.

And then we already
know, for 2023,

that we have close
to $1.5 million.

But you haven't
collected the cash.

Some we have.

85% pay as your box ships.

- Oh, I see.
- Okay, so only 15%.

'Cause that's an amazing float.

If you could get to
a float of $800,000

or $1 million up front,
that would be incredible.

Boy, you guys really know your
numbers. Guys, let me get the ball started.

Thank you. You guys have
built a great business, right?

Thank you. And it's
super cash friendly.

And I can see you growing to
be, you know, $10 million in sales.

But that's just not a
business that gets me excited.

This is not my thing. So
for those reasons, I'm out.

Thank you, Mark. But congrats.

You've built an amazing
business. Thank you.

Thank you. Listen, ladies.

The part of the business
that I'm uncomfortable with

is how many holidays you have

and how many SKUs
you have to keep stocked.

And how you're
cash-buying all that product

has to be anticipated well.

It's too many SKUs, so I'm out.

Thank you, Barbara.
Thank you, Barbara.

Ladies, I'm not
sure it's worth $2.5 million.

And I was thinking, "Do I
b*at them to a pulp on valuation

even though I've got a little
love sign in front of me?"

Aww.

You know, it's
one of those deals

where it's too small right now.

It's not for me. I'm out.

So, I don't really think
that you need a Shark.

I don't always say that.

When I feel it, though,
I say it honestly.

Love what you're doing,
but, unfortunately, I'm out.

Thank you, Lori. Herjavec:
Well, I don't agree with that.

Because you've made
me an amazing decorator.

Look, you've created a different
push model to your customers,

which is really fabulous.

I love the holiday model.

And what I've
learned... Tipsy Elves.

We started out with
inappropriate, ugly

Christmas sweaters.
Now we do every season.

The key to it is
great operators.

There's inventory challenges,

there's stocking challenges,
there's design challenges.

You need fantastic
operators who live and breathe

the business all day long.

You guys are great operators.

Thanks, Robert. Thanks, Robert.

Like, you make me believe

you're going to make
this business happen.

Thank you.

I'm going to make you an offer.

Four Sharks are out.

Robert is Kristina and
Liz's last chance for a deal

for their holiday decoration
business, ReadyFestive.

You guys are great operators.

Thanks, Robert. Thanks, Robert.

Like, you make me believe

you're going to make
this business happen.

Thank you.

I'm going to make you an offer.

I love the holiday season,

and I think it's a
bet on you guys.

I will give you the
$250,000 for 20%.

20%? Yeah.

Thank you, Robert.

Thank you for that offer.

At 20%, that's going to value us

below what we'll do
in sales for this year.

So, we'd like to... Good
for you. Good for you.

Counter you. Okay.

Would you do the
$250,000 for 12%?

12% just isn't
enough for me, Liz.

I mean, yeah, it may value
you below the revenue,

but I think it's more of what
we can do with the money today

and where we're going.

I built a $500 million
business with a line of credit,

so I'm very good at making sure
the money is being used wisely.

But I love you so much,
I'll come down a little bit.

Okay.

You went up 2%. I'll go to 18%.

Let's go and decorate Christmas.

Ladies, remember the love.

Let's bring joy to the world.

Remember the love.

Remember the love.

Thank you, Robert.

Okay, one more counter-offer.

Okay. How about 15%?

18.

How about 15? 18.

Based on our
forward-looking run rate... 18.

We're gonna do $2.5
million in the next 12 months.

That feels very fair.

It is, but this is
the Shark t*nk.

And you're not going... Can
you do $300,000 for 18%?

I'll do $250,000 for 18%.

Look, a year from now,

you're not going to look
back and remember the 3%.

Alright, Robert.

You've got a deal!
You've got a deal!

Whoo!

Thank you, Robert.
We're glad to have you.

So excited!

You're even in Easter pastels.

I stepped on you.
No, that's okay.

Wow! This is awesome.

Thank you so much!
Yay! Thank you, everyone.

Congratulations, guys.

Whoo!

Yeah!

We gave away more equity

than we were looking for,

but Robert is going
to be a great partner.

He has Tipsy Elves.

He gets the
holidays, he gets us,

and we know that we are
going to do great things with him.

In Season 11,
we saw Daniel Zakowski,

Dr. Katie Marks-Cogan,

and Dr. Andy Leitner make
a deal with Mark Cuban

for their food allergy
introduction kit for babies,

Ready, Set, Food!

Feeding allergenic
foods to babies

can help prevent food allergies.

Let's see
what they're up to now.

When we pitched to the Sharks,

we had no retail
distribution at all,

and about half a million dollars

of lifetime sales.

In the last two-and-a-half
years since "Shark t*nk,"

everything has changed.

We've launched
in large retailers

like Target and Walmart,

and we've sold over $6
million worth of product.

Today we're doing a photoshoot

for the exciting,
new holiday flavor

of baby oatmeal,
pumpkin cinnamon.

It's delicious. Babies love it.

It's just an exciting way
to celebrate the holiday,

announce the launch,
and also to build awareness

for early allergen introduction.

We've seen growth
in all areas of the company,

starting from 8
employees to now 27,

including retail sales, science,

research and development.

Our biggest
issue before "Shark t*nk"

was the ability to
spread awareness

to the public and the
medical community

about food allergies
and prevention.

And now, because
of Mark's backing,

we're able to get in front of
major health care systems

so we can reach hundreds
of thousands of families

every year.

You know, it's frustrating

when you hear about
children that have food allergies

when you know it's preventable.

And our biggest challenge
is getting the word out.

And our goal is to reach
more than a million kids

each and every year.

You know, it's an
educational process,

but we're going
to hit that million.

And being able to protect
more than a million kids a year?

That's insane.

Tell us what your
experience has been like

as a parent with a child
of extreme food allergies.

You know, as a
parent of a daughter

with multiple peanut
allergies, it's terrifying.

You know, one
pistachio, one cashew

that someone puts in a
recipe, and it can be fatal.

And what's more terrifying
than that to a parent?

And so this really
hits home for me,

and I'm proud to be
part of Ready, Set, Food!

And I'm really excited
that, in the future,

no other parent will go through

what we are going through

and no other child
will go through

what my daughter
is going through

because of what Ready,
Set, Food! is doing.

Next up is
what the entrepreneurs

believe will be
the next big hit toy.

Whoa.

Whoa.

Hello, Sharks.

I'm Austin Hillam.

And I am Stephen Fazio.

Throughout the decades,

we have been
introduced to objects

that have entertained
and engaged millions.

Early on, it was the yo-yo.

In the '60s, we had
the Etch A Sketch.

In the '80s, there
was the Rubik's Cube.

Now introducing...

The toy of the future.

ZipString!

Anything the user
does, ZipString follows.

The string flies around
35 miles per hour,

and yet is safe to the touch.

Alright, Sharks,
watch this trick.

It's called "the swirl."

This one's "the corkscrew."

This one's "the step-through."

And "the pop."

Presenting... "the portal."

Whoo! Whoo!

ZipString glides
around smooth objects.

Ooh.

All smooth objects.

ZipString has taken
the world by storm.

Oh, my God. It's so cool.

Wow!

We are here for a
$100,000 investment

for 10% of our business.

Wow! Sharks...

Who's ready to Zip?

Let's show
you guys how it works.

And some of you have
already figured it out.

So what you want to
do is you want to hold it

upright like this with the
logo facing downwards.

And get it into the channel.

- Oh, yeah!
- You got it? You got it?

Yeah, there you go! Whoo! Whoo!

See how that emulates
your movements?

Guys, come on.

I love it!

We love it, too.

Did you invent
it? - Yes, we sure did.

Tell us the story, how
you came up with it.

I'm super
passionate about electronics.

Couple of years ago, I
watched a physics teacher

demonstrate a
benchtop string launcher.

He had this device

that would launch
a string in a loop.

And I took that
benchtop version,

I compacted it,
made it handheld,

and I made this prototype.

Everybody loved it.

But I knew I couldn't make
a scalable business out of it.

Until I had Austin over.

We were just
nerding out about this device.

My father had some great
input, and we turned it into a toy.

I put that toy on
my social media,

and by the end of the day,
I had over 20 million views.

No way. Wow. What?!

It hit the front page of Reddit.

Wow! Oh, my gosh!

It went just absolutely nuts.

When was that?

We had everybody
reaching out to us.

When was that?

It was just over a year ago.

So how many of
you sold from all that?

We sold over 10,000.

That's it? And how much
do you charge for them?

They start at $25.

What? Why, with 20 million
views, you only sold that little?

What's it cost to make
them? It costs $6.35.

So, here's what happened.

So, we did a Kickstarter,
ran that successfully.

An all American comedy group

known as Dude
Perfect reached out.

Yeah. They loved it.

They took it on a
nationwide stage tour,

showed it around the world.

Today, ZipString is
in over 50 countries.

We've had so much exposure.

Over 200 million views in total.

Austin, after the
Kickstarter... Yeah?

20 million views,
national tour, all of that...

Yeah... what
were the total sales

in dollars? Yeah.

$277,000.

Why so little? Disappointed.

- With all due respect...
- Absolutely.

If we didn't have
the 20 million views

and all the other
stuff... Sure, sure, sure.

I'd say, "Hey, great start."

Why this and only this?

Supply chain.

We were struggling
to figure that out.

The demand was there.
Preorders were coming.

We couldn't make them fast
enough. We weren't ready.

Have you solved your
supply chain problems?

Supply chain is all set up.

Can you do an order
for 100,000 units?

We can. As long as
we have the cash flow.

How does that reduce the price?

Because right now you're
paying $6.35 to make them.

I know we can get
it down to $5.87.

- $25 is too expensive.
- I think so.

What is the expense
in this? The battery?

That's the largest expense.
That's correct. Yeah.

Why? You think $25
for this is expensive?

- I do.
- Too much.

- Yeah, I do, too.
- For little kids, yeah.

For parents to
buy for their little kids.

$19.95, it's five times the
sales. Are you kidding me?

Have you guys not bought
a stuffed animal lately?

Well, if
you could be $9.95,

you would sell
them like billions.

And here's what's happened.

They've talked and
have a verbal commitment

with Walmart Canada
to start shipping

and selling these.

There, it'll be $14.97.

I'll make you an offer. I'll
take no equity whatsoever.

If I've ever seen a
royalty deal, it's this one.

I want a buck a unit, and
I'll give you the $100,000.

And watch what I can
do in blowing this thing up.

There's only one Mr. Wonderful.

Kevin, is that in perpetuity?

Kevin, they don't
have that big a margin.

What's perpetuity,
Robert? Here's...

- Forever.
- Oh, yes, it is.

Here's what you're investing in.

You're investing in a
new category of toys.

Really, Austin, I've
heard this my whole life...

New categories of everything.

This is a new category.
We are the category kings.

What do you think of my offer?

If there's no other offer,

all of a sudden I'm feeling
even more wonderful.

Let me jump in. I mean,
I love the innovation.

Love you guys.

I think it's early, so I
am taking myself out.

I wish you good luck.

It's nothing I could
help with, honestly.

It's not for me. I'm out.

Alright, guys.

Couldn't love it
more. Let's hear it.

Couldn't love it
more, seriously.

The key for me is you
gotta keep going, right?

You've got to be the
cool... - Exactly.

Stringy, floaty,
scientist-y, geeky product.

That's the investment
I want to make.

That's the ride I want
to go on with you.

Is there an offer involved?

Yeah. I will give you
$100,000 for 20%.

I'll do $100,000 for 15%.

I'll do $100,000 for 10%.

Exactly what you offered
if you take the deal.

I'll give you extra.
I'll do it for 9%.

Can we take a second
to talk real quick?

Wait, wait, wait, wait, wait.

Guys, let me... let me step in.

What you guys have
done is great, right?

It's creative. You got a
chance to make some money.

But as an investment, I think
it peters out at some point.

I don't really see it
as being investable.

So for those reasons, I'm out.

-Oh! -Sure. Thank you, Mark.

Robert, just thinking here.

You and me together for 20%.

For $100,000, right?

I like
it! You know why?

I like it, Kevin.
Because you double

your social media
following, you get two Sharks,

and we're a little sharky.

Together, instead of us
k*lling each other, we help you.

- Double trouble.
- Double trouble.

So, basically, we give
you $100,000 for 20%,

you get two Sharks.

Oh, I love that, Kevin.

Guys, it's your chance
$100,000 for 20%?

$100,000, 20%, two of us.

Would you... your previous
offers, are those still available?

Oh, he wants to hear
what you said before.

Are those still on the table?

There is no rearview
mirror in my life.

You gotta let it go.

This is the deal in
front of you right now.

What do you want to do?

Alright, we're going to counter.

The counter is,
would you be willing

to go for 15% together?

No! You know why?

I want to get up in the morning

and feel I own a piece of it.

Come on, we each own 10%. Yeah.

This is a toy that's going to be

in every house in America.

We agree, which is why
we made you the offer.

You guys realize

that you had an
offer before at 9%,

but you didn't grab it.

So now you're
sitting here at 20%.

That happens in the
Shark t*nk sometimes.

Yes, it does, Lori.

But you walk out with a deal,

you get two Sharks.

That's extremely valuable.

Uh-oh.

What's going on?

Robert? Kevin?

You got a deal.

Let's get up here. Alright.

Let's Zip around.

Oh, yeah. Oh, yeah.

You were absolutely fantastic.

We're very excited.
Thank you very much.

This is the next...

Let's build a big business.

Alright, Sharks.

- Congratulations, guys.
- Good luck, guys.

- Good luck.
- Take care, guys.

What do you think, man?
Dude, two Sharks, 20%.

You know, $100,000 and
9% would have been the deal,

and we probably should
have just grabbed it up.

But, you know, I don't think

we lost at all in the end.

With two Sharks joining,

I think this is going
to be an exciting ride.

Good day in the t*nk.

Next into the t*nk

is a better way to learn
how to play a classic game.

Hi, Sharks. I'm Jeff Wigh.

And I'm Adam Roush.

We are two of the founders

of Bryght Labs, the
makers of ChessUp.

We're here seeking a
$300,000 investment

for a 5% equity
share in our company.

Wow.

Sharks, chess is
a brilliant game.

It's great for the mind,

and it connects
millions of people

all around the world,

regardless of age or culture.

But chess has one

king-sized problem.

It's really hard to learn!

And once you do learn,

it's even harder to improve,

making chess an
intimidating game.

Until now.

ChessUp is chess

like you've never
seen it before.

It has a built-in AI.

It teaches you how to play.

New to chess?

The magic is at your fingertips.

Simply touch a piece,

and you're already
learning how to play.

ChessUp features a patented

artificial intelligence
trainer that comes with

six different levels
of assistance.

Now, you really can
learn and improve

while you play.

It even lets you play

with a buddy who's
halfway around the world,

with their moves
instantly lighting up

right on the board
in front of you.

For the first time ever,

two players of any skill level

can have a balanced,

competitive, and fun
match against each other.

ChessUp is soaring to success.

But there's one piece

that our chess set is missing...

A Shark.

So who's ready to make a move

and capture a whole lot of cash?

Okay, Sharks, you
each have a ChessUp

that's set up and ready to play.

Once you touch
a piece for white,

the AI on your
side will show you

all the available moves
ranked by strength.

So green moves are the best

and red moves are the worst.

Then once you
move the white piece,

the black side is
going to show you

where it wants you
to move its piece,

and you can continue
the game from there.

But it doesn't talk to you.

Like, I'm making those moves,

but I don't really understand
the logic behind it.

There's a curated set of lessons

that we have a
professional chess teacher

that actually walks you
through different scenarios

and teaches you
different strategies.

That's what comes with it.

Not pertaining to this
particular game I'm playing?

Not your exact game
you're playing right now, no.

I got it.

So, I'm curious, how
much does this cost,

and what does it
cost you to make it?

Full retail is $399.

We land it here for $120.

Okay, so, I've played
chess since I was 13,

and I don't want to be
told what I've got to do.

I want to play the AI.

We can control the
level of assistance

on either side.

You can adjust
the settings on there

to just see the legal moves

and you would
receive no assistance.

Why is it so slow?

Can I adjust the speed?

Because I'm trying
to play it quickly.

Let us show you a
video, actually, on this.

The board can keep up
with every human movement.

You can play b*llet
games, blitz games,

which are very fast formats.

You're going to
see that it's doing

an a*t*matic clock
where it's keeping track

of your time and
your opponent's time.

Wow. That's fast.

That's cool.

So, wait, there's a ton
of online chess platforms.

Yes. Right?

There's a ton of
software apps. Absolutely.

You know, why
would I spend $399,

when a lot of them are free
or ad driven or whatever?

Online chess is incredible.

We connect with those platforms

and you can play just
like you'd play online,

but you're playing on
a real, physical board.

So the real difference
is that you're playing

on a physical board, so
you get the tactile feel. Yeah.

And the learning element.
It's just a preference.

And what online misses
is that family experience.

So are you doing this full time
or do you have a different job?

We are very much full time.

We met at the innovation lab

of a major consumer
electronics brand.

Between Jeff and myself,

we're listed on
over 20 patents...

Wow... and we're responsible
for a lifetime revenue

- of over $1 billion.
- Whoa.

Can you name a product
that you brought to market

that we would know?

Sure. So I did, most
recently, Garmin Lily,

which is a women's smartwatch.

It's really small and it's...

I wear the Garmin,
and I love it.

Oh, that's fantastic.

So, I took the job at
Garmin in an innovation lab

in order to take a step
through entrepreneurship.

No joke, when I
started that job,

I had never been around
all the business terms,

so I started watching
"Shark t*nk."

I'm up here
because of this show.

Three years ago,
after a few hits,

you know, watching these
hundreds of millions of dollars

for our employer, and we
were just getting paid salaries,

I decided to leave.

I called up Adam first.

We started prototyping
these gadgets,

and the best concept we had

when we were working
was on this chess product.

So we took it to Kickstarter,

and from there we
had enough revenue

from Kickstarter to
start the company.

What
did you raise in your Kickstarter?

We did $1.7 million

in 39 days. Whoa!

- Whoa.
- Wow.

What were you looking to raise?

We set the goal at $30,000.

That is crazy.

And you
raised $1.7 million.

But you're asking
for $300,000 for 5%.

$6 million valuation.

What are your sales?

So, we told you about
the Kickstarter sales.

That was $1.7 million.

Since then, we have not
been running ads at all,

but we've just had people
trickling to the website.

We've sold $400,000
this year to date.

Adam and Jeff, I want
to get the ball rolling.

This is a business I
could do nothing for you.

It's not my thing.

I'm still on checkers
and struggling.

I'm out.

- Thank you, Barbara.
- So, guys...

Thank you.

Why am I limited to
the hardware platform?

I love chess. I'm
going to travel.

I'm always taking
my laptop with me.

Now I'm going to take this?

I'm going to take
another bag with me?

There's 50 million
online chess players,

and we're not arguing
that online chess

doesn't have its
place. 50 million?

Yeah, there's 600 million people

who play over a real board.

Over a real board? Yes.

I was gonna say, there's something
about chess pieces and doing it physically.

It is. I mean, to me, playing
chess on a tablet feels terrible.

See, I have no
problem with the tablet, guys.

I like chess. I
don't love it, right?

I'll play it when my
son wants to play it.

To me, it doesn't
matter if it's a board.

And actually, it's
better when it's online

because I can be wherever.

I just don't see it as a
big enough market for me.

So for those reasons, I'm out.

And what will
sales be this year?

So, our sales for this year

are going to be
about $1.4 million.

Are you going to make any
money on the $1.4 million?

Yeah. This year,
we'll actually book

an accounting profit 'cause
all the deferred revenue

from the presales
counts towards this year.

Do you have any
debt on the company?

Yes, we have some
debt that's actually

into a royalty structure.

What is that? What
is that? How much?

So there's $392,000
that gives us...

We give 3.92% of
our sales back to that.

It's 3.92% of sales until
you've cleaned that up, right?

That gets a 1.5 times return.

That sounds like
one of my deals.

Yeah. We're very
familiar with your deals.

So, during COVID and
getting this thing done

in just 15 months,

we went through a middleman
because we can't visit

the factories. We
manufacture in Shenzhen.

And so he's taken a 20, 30% cut.

We can drop that
out almost instantly.

Wow, there's a lot of guys

taking pieces of
the pie in this deal.

But we got out
quick and we're out

and we're ahead of competition.

I'm looking at it, and I'm one
of these on-the-fence deals

because I play the game.

I understand what you've done.

It's a complicated
cap table right now.

It's a complicated structure.

I'm gonna take a pass. I'm out.

Listen, I think
you did an amazing job,

and I think there's something
really important about

touching and playing on a
board when you're playing chess.

But I'm struggling because...

I do wonder, how am I
going to make back my money?

If I said I wanted it
for $300,000 for 10%?

It's a tough one.

It's a tough one. It really is.

Let... Can we...

We would love to work with you,

so let's... let's
think about this.

We can get you capital back.

Join in the royalty.

Another royalty?

Yeah, but what would the royal
be? On the sale. It's very small.

Tell me. Entice me. Excite me.

Yeah, so how about $300,000?

We'll pay you back
3% of every sale

until you're paid back
1.5 times, so $450,000.

We'll give you the
5% of the company.

That's not a bad counter.

It's not bad at all. Uh...

Guys, let me... let me just...

I'll take it.

Oh.

It's done, yes?

Deal. You got a deal.

Whoo!

You guys are so smart.

Thank you so much.

Whoo! so excited about this.
So excited to work with you.

Thank you, thank you.

Yeah. Thank you, everyone,
for the time. This has been great.

Congrats, guys. Well done.

Thanks so much. Good luck.

I'm sorry, Robert.
I had to do it.

Lori is another royalty,

but they're really not
adding up to much.

We're still under
10% of the sale,

and we got the Shark
queen that we wanted.

It's amazing. Lori is our queen.

Next up is an easy
way to show your holiday spirit.

Hi, Sharks. I'm Bill.

And I'm Bill.

And together, we're the...

Bill Websters.

As you've probably guessed,

we're the father-son team

behind Garage Celebrations.

Sharks, today, we're looking
for a $200,000 investment

for 20% of our business.

You know, decorating
for the holidays

can be a real pain.

You have to crawl
up into your attic,

find that dusty
box of decorations,

pull out the ratty wreath

and the plastic candy canes,

and for sure you're
going to find a big wad

of tangled Christmas lights.

There's gotta be an easier way.

Sharks, the outdoor
holiday decorating industry

is multi-billion dollar,

whether it's Christmas lights,

Halloween graveyards
in the front yard,

or flags on the 4th of July.

But most people are missing

the opportunity to decorate

the largest surface
on their home.

Introducing Garage Celebrations.

Our decorative
garage door covers

fit on most residential
garage doors,

both in one car
and two-car sizes.

Better yet, they're
super easy to install

and require no tools,
clips, cords, or tape.

And the best part is our
flexible covers stretch

with the opening and
closing of the garage door

so it doesn't impede
the operation of the door.

What's cool is we have covers

for all the major
holidays and events,

everything from Christmas

to Halloween to the 4th of July.

Our covers are reusable,
they're machine washable,

and they fold for easy storage.

So how about it, Sharks?

Who wants to help us

turn America's boring
garage doors into...

Garage Celebrations?!

Ta-da!

Ta-da!

So, Sharks, in front of you,

you each have one of
our more popular covers.

Robert, we gave you
Santa for Christmas.

Well, because I'm jolly.

There you go.

Lori, we gave you
the smiling pumpkins

for Halloween. Love it.

Mr. Wonderful, we
gave you Frankenstein.

Now, Kevin, don't
read into that. Nice.

Don't read into that.

Barbara, we gave
you our dogs for...

Christmas dogs. That's
my dog on there, by the way.

Exactly. I'm suing you.

And, Mark, we gave you

an American flag
for the 4th of July.

Yes, sir. Thank you.

Guys, it's really cool.

Is there other
products out there?

There is, actually. Oh.

There are vinyl covers

that have clips and screws.

And do they rip and tear?

They do.

Have you ever seen a vinyl cover

that isn't creased?

Yeah, they degrade. Mm-hmm.
They're shiny and look bad.

Would you explain to me how
it attaches to the garage door?

Ah! There is the trick. Ah!

So the magic sauce.

This is the Santa Claus...

Ho! Ho! Ho! ...that Robert has.

There he is.

The fabric, it's 6% spandex,

so it's like a big
pair of Lululemon

yoga pants.

The important part
is the connection.

And at each corner of the cover,

there's a cutout.

Now, we call this the collar.

We've gone ahead and mocked up

a corner of a
garage door for you.

You will open your
garage door a little bit

just so you have
access to all four corners.

You'll take the collar, you'll
wrap it around the corner

of the garage door, and
then zip up the collar...

Oh, that's smart.
On all four corners.

Clever, yeah.

- That is clever.
- So easy.

Even I could do it.

There we go.
There we go, got it.

Because the fabric stretches,

it can accommodate a wide range,

so we're able to fit on

almost everyone's garage
door, have it look fantastic.

Plus or minus 4
or 5 inches, actually

Okay, but, Bill Squared,

okay, let me ask you something.

Because over the years,
we've seen many holiday items.

Right. And the big issue

with all of them is seasonality.

How do you know
which style, which colors,

which sizes to order, because
you have to have them there

just before the holidays hit?

Well, we don't yet

because we're just starting now.

Oh, you're pre-revenue!

No. No, we're not.

They sold one to Grandma! Yeah!

We have $175,000 in sales.

Over what period of
time? - That's good.

Just took delivery of the
product last week and delivered...

Oh, my God. Oh, wow.

Oh, so where
did you pre-sell them?

Largest Halloween
retailer in the country.

They ordered sight unseen.

Bill, what do you sell this for?

That one-car garage
door cover sells for $120,

and our landed cost is $35.

So what are you selling
it to that retailer for?

About $43. What?

$43? That's not
enough. - $43?

This deal, we said,

"Well, we can't afford to
really turn down that order."

But you made the mistake of
telling them it was $129 retail,

and they wanted half off, right?

Yeah. Oh, they wanted 70% off.

They wanted a ton off. We wish.

The material's coming in right
now. Alright, so, I'm really curious.

You've just started this.

Right. Yeah.

What made you come up with this?

Is it your full-time job?

I've been a serial entrepreneur,

and a couple
years ago, I retired.

And so I did an
add-on to the house

and I did all my
honey do's for my wife.

I played a little golf.

And I was depressed.

I hated being retired.

I want my phone to
ring with something

other than somebody offering

to renew the warranty on my car.

And so I started looking at it,

saying, "I got to find
something else to do."

And I've always
been playing around

with this idea of these
garage door covers.

And so I turned to my son,

who's the Harvard
architect graduate,

and said, "Hey, can you
help me productize this?"

So, I had enough skill
to look at it and say,

"Okay, how do we take this

beyond just putting
a sign on a garage?"

Right? "How do we protect it?

How do we patent
the attachment?"

And ultimately, "How
do we make it easy?"

You know, it's not always
easy working with your dad.

However, our skills
are fantastic together,

and we've done a heck of a lot.

Okay, guys.

Okay. Come at us, Kevin.

Come back. Why is
this worth $1 million?

You haven't made
a dime on it yet,

including that order

which you gave away
for basically your cost.

So why is it worth $1 million?

Because it's not proprietary.

You told me there's
lots of other guys doing it.

No, it is proprietary. It is.

What's proprietary
about it, the collar?

The utility patent
on the collar itself.

But, Bill, how are you going
to generate more sales?

We're going to do social.
Social, social, social.

Show people how this works.

And who has that specialty?
Who knows how to do it?

Is your dad big on Instagram?

No, not yet.

Not yet, but he's gonna be.

Who did your designs?

Oh. He did.

I want to start with
the design, If I might.

And please don't
be offended, alright?

All Sharks are in,
and Barbara has a critique

on the design of Bill and Bill's
garage decoration product,

Garage Celebrations.

Please don't be offended,

but my first impression of
this product is it looks dated.

It's the design elements
that don't look fresh.

The letter style
doesn't look right to me.

Just the whole thing looks
dated and not that attractive.

Mm-hmm. I just don't see
this going anywhere, honestly.

So for that reason, I'm out.

Oh.

"Don't be offended
by it." Thanks anyway.

But don't be
offended. We're not.

We won't be. We're
lucky to be here.

I guess I have a
little bit of a different spin on it.

I love this one. Yeah.

Halloween happens to
be, like, my favorite holiday.

This, I think, looks beautiful.

To Barbara's point, some of
the others, you could change,

but that's an easy fix.

I think this is perfectly doable

and a nice business
for you guys.

But for me, I don't think it's
the right kind of investment.

Oh. I'm sorry to hear that.

I'm out.

Thanks. Thanks for the feedback.

What are you gonna
do with the money?

There's a couple things.

One is these are being
made in Vietnam right now.

It's taking like five months
from order to landed.

Right. Your challenge
though, guys...

Look, the real money
is going to come

from customized versions, right?

So how does that work if
you've got a five-month lead time?

Well, it doesn't, actually.

One, personalized covers can
command a little more money.

Yeah. And, secondly...

It's also going to
take a lot more work.

Do you have any
software developed

that lets people upload
their high-res JPEG?

Right. That's where we're going.

So tell me about that, because
that's the real chance for the company.

We can actually
start to do it now.

Our manufacturer in
Vietnam is ready to take...

We basically just e-mail
them the graphic, he makes it.

So, I... I don't agree
with the customization.

I look at the two of
you, I love you guys,

but how do I invest
$200,000 for 20%?

And then, what, we go
out and hire somebody

to be the brains of the
social media rollout?

We would like some
help getting us...

You know, we've got
everything under way.

Alright, guys, look, there's
a person missing here

that's going to do that
for you, because in reality,

what's happened is the
cost of customer acquisition

has gone up, in some cases 80%.

And so strategies now have moved
to more of a community structure

so that you build word of
mouth on platforms like TikTok.

Right. And you have to be
very sophisticated to do it,

because this product would
sell well in 59 seconds on TikTok

if you knew how to do it.

Look, I love it,

but I don't see an opportunity
to make a lot of money here.

So I'm sorry, guys. I'm out.

Bill. Bill.
Thanks, Kevin. Appreciate it.

I love the product.
Love you guys.

But there's something
really big missing in this deal.

And that's a third Bill.

Somebody that
understands e-commerce

and socially driven marketing
and all that kind of stuff. Right.

I'm not saying you
can't learn it... Yeah.

But from where you are
today to get to that path,

it's going to be a long road.

I wish you were farther along,

but because the third
Bill isn't here, I can't be in.

I'm out. I'm sorry.

Appreciate it.

So, guys, that
leads me to a question.

So you order the materials...

Fabric. Fabric.

And then you send it to them

in Vietnam. Mm-hmm. Yep.

And what kind of
machine do they use

to cut it and print it?

They're using a six-foot
dye sublimation printer.

We want to buy our own machine.
That would make it cheap...

And what does the machine cost?
If we bought our own machine.

The machine costs
about $60,000, $80,000.

- That's all?
- That's it?

Yeah. So we could buy a
machine. That'd be an option.

So let me get
this straight, then.

You guys could take
this money... Yeah.

Buy a machine... Yep.

Do it all in your garage.

Oh, absolutely. Yeah.

Then you could build to order.

Yeah. I just like it

'cause I can make
some for the Mavs.

And I just, like, if the
price is low enough...

Why don't you buy them
instead? What's that?

Why don't you buy
the banners instead?

Yeah, but these guys are fun
and they can do most of the work.

Yeah, exactly. That's
what we're here to do.

He's got a lot of
money, this guy.

So, I'll make you an offer.

I'll give you the 200K. I
want 30% of the company.

30%. Phew.

Well... I would just say yes.

What did you think was going
to happen in "Shark t*nk"?

Well, you keep it
entertaining. Sharky offer.

Right?
That's not sharky.

Mark...

You got a deal. Done.

Good job. I just
think it's gonna be fun.

- Thanks, man.
- Appreciate it, man.

I appreciate it.
Good to meet you.

Dad, enjoy. Thanks a lot.

Thanks, Mark. You
got it. Appreciate it.

Thank you all, everyone. Really
appreciate it. Thanks, everybody.

Enjoy your day. Thank you.

Alright! Alright!

We're there. Alright.

That was cool. Yes.

Boom!

So, Mark, you're the third Bill.

Yeah.

You just liked them,
basically, right?

Yeah, I like these guys.
It'll be fun for my kids.

It'll be fun for the community.
It'll be fun for the Mavs.

You know what? Let's not even
call it "Shark t*nk" anymore.

Let's call it the Fun t*nk.

Yeah, well, that's where you can
make a lot of money sometimes,

doing a business
that you have fun with.