Shawn Genenbacher pitches Lite-netics in episode 512, the Shark Tank 2013 Holiday Special. Lite-netics is a new solution to a nagging problem: stringing up Christmas lights without hooks, wire, or other unsightly and damaging fasteners. The secret is MAGNETS! Each bulb socket has a high-powered magnet that fastens the light string to anything metallic.
Each magnet holds 26 pounds and the Lite-netics products have been tested in rain, snow, and high winds; they're going to stay put! At about a buck a foot, they're more expensive than “traditional” Christmas light strings, but the convenience and durability, not to mention the added expense of high-powered magnets, warrant the higher price. Most light strings you see in the “Big Box” stores are kind of cheap. You'll also need to buy bulbs for Lite-netics, since the strand doesn't come with them; Lite-netics accepts C9 Bulbs.
This is a product that Genenbacher probably needs a Shark's help getting into the Lowes and Home Depots of the world.
Lite-netics Shark Tank Recap
Shawn entered seeking $125K for 20% of his business. He began by demonstrating how easy Lite-netics are to install. Lori brought up a major objection: what if you don't have metal on your building? Shawn answered it, but Robert went on to ask how he was selling it. Shawn said he sells a lot to “professional lighting installers.” As of taping, he's currently in the development stages of working with Home Depot.
He did $118K in sales last year with around $400K for the last 4 years; Shawn hasn't grown his sales. His issues are he has problems keeping the cost down due to the magnets. The Sharks don't like how much he sells the product for. Mr. Wonderful likes his patent and offers to negotiate a licensing deal with large lighting manufacturers, but he wants to be a 50% partner.
Robert goes out because he thinks he can't scale it. Mark thinks Lite-netics has a time advantage for professional installers, but he can't reach the market, so he's out. Lori doesn't think it will sell at retail. Daymond offers to negotiate licensing similar to Kevin's, but at 40%. Daymond and Kevin tout the merits of their experience and Shawn asks Daymond to go to 30%, he won't, so Shawn doesn't take either deal. Kevin says “you're dead to me,” then Daymond says “you're dead to me too!” Shawn decides to grow the business himself, but Mr. Wonderful doesn't think he can do it.
Lite-netics Shark Tank Update
The Sharks objected to Lite-netics as being too expensive for the retail market. Since the professional lighting market is significantly smaller than the retail Christmas lights market, Lite-netics faced a real challenge in carving a niche for a product with relatively limited applications and a high price tag. The company held on for a while, but the social media went dark in February 2015, and the website is no longer in place. It seems as if it's lights out for Lite-netics.
Posts about Lite-netics on Shark Tank Blog