Becoming a food storage pioneer is the last thing medical student Michael Tseng had in mind when he entered Princeton University, but there he was, pitching his revolutionary Plate Topper on Shark Tank in episode 410 in what has become, for many, a lesson on how not to negotiate. Michael was portrayed as clueless, crass, and ill-informed about the value of his food storage business. While what aired in episode 410 may be an “accurate portrayal” for many viewers, there was a lot of creative editing and calculated character assassination on the part of the Shark Tank editors and even one of The Sharks. I recently spoke to Michael to get his side of the story.
Food Storage Visionary Michael Tseng's Background
Food Storage Visionary, Michael Tseng has a PHD and only needs to complete his residency to become a full-fledged medical Doctor. He's also an engineer. As a parent of a budding medical student myself, I was curious as to Michael's parents' reaction to putting off medical residency to develop his entrepreneurial food storage venture. “Initially, they weren't gung-ho about the idea, they were skeptical. There was definitely some push back at first, but when they saw my level of dedication, they eventually came around. I really enjoy the engineering process and they saw that. They also saw the potential.” Sadly, Michael's parents have passed away and will never see the Plate Topper reach its full potential as a food storage icon.
“I've been working on Plate Topper Food Storage product since 2005,” Michael continued, “but it was a hobby initially. I submitted my initial design to the top 30 players in the food storage space like Rubbermaid, etc. My prototypes at the time were crude and they didn't like it. I continued to engineer it and in 2009, I took it to the International Home and Housewares Show. It won an award and Billy Mays presented it to me!”
Michael was also a finalist and winner in Walmart's Get on the Shelf contest last year. “Winning the Walmart contest is what got the producers' attention,” he said. The Plate Topper Food Storage product is available on Walmart's website and on QVC. I asked if Michael had any other inventions up his sleeve. “I won't be doing anything clinical and I won't be doing any more food storage products. I am going back to helping with medical start-ups related to medical IT Technology. I enjoy the technical side of things more than the biological. It comes from my love of engineering. That's probably why I won't practice medicine, I enjoy the engineering process and creation. That's more suited to projects than patients.”
Food Storage Pitch On Show
Michael is an extremely well-educated, well spoken, and intelligent young man with a product that could be as ubiquitous in the food storage world as the Tupperware container. He's an engineer and a Doctor and he has already sold millions of dollars worth of Plate Toppers. I wanted to know what the heck did he need the Shark Tank for? “I've been a fan of the show since season 1 and I had a certain amount of motivation to make it as far as I did. I wanted more exposure for the product, and despite how it was portrayed on TV, I think I achieved that. While it seemed like a train wreck, I don't think I could have done anything to avoid that. What most people don't realize, and what doesn't get discussed, is there's a huge gap between what actually happens and what is shown on TV and what happens with the deals in negotiations after the show is over. What people will remember is the drama involved.”
Despite the drama, Michael had thousands of orders for his food storage product on the night his episode aired. “Walmart sold out completely, but QVC still had it in stock. Overall, I'd say we still sell more Plate Toppers in an 8 minute QVC segment than we did on show night. I DON'T appear in those segments! A woman named Lisa Brady does our demos on QVC.”
“As for the segment itself, when I was done, one of the producers told me I was in the studio longer than any other entrepreneur. A lot of questions that get asked don't make it onto the show and because I was on so long, the specifics get vague. The biggest thing that was cut out was the discussion about Walmart in relation to the valuation. I gave them an example that, with a PO from Walmart, if I sold 3 Plate Toppers per week in each of their 3,000 plus stores, some simple back of the napkin math would show it amounts to almost $1 million in sales in a year. They edited that exchange to make it seem like I was pulling numbers off the top of my head.”
“I was also exhausted.” At one point in the broadcast, there was a shot of Michael taking a deep breath with his hands on his knees. “It was a gesture of fatigue. You have to stand in that one spot the whole time you're out there and The Sharks are all talking at once, firing questions at you. It's intense. I have been through medical school interviews and extensive questioning while on rounds in hospitals with Doctors. I thought that was intense, but nothing can prepare you for what goes down in the Shark Tank.”
“I was really on my heels when Daymond John called me slimy. Even though I have seen him say similar things to other contestants in the past, I was confused by his assertions about my character. I don't think I did anything to deserve that.” Daymond went out after offering a million dollars for 25% of the business, but the discussion that followed was cut. “We talked about PO Factoring. If I have a million dollar order with Walmart that I need cash to fill, I can find Purchase Order financing to fill it. What that amounts to is a short-term, relatively high interest loan – say 19% – that a finance company will float so I can fill the order. I pay it off when Walmart pays me, and I still retain my equity. Which is the better deal for me?”
What about AFTER the Show?
The Sharks were live tweeting during Michael's episode. After all the negotiations, Michael finally made a deal with Lori Greiner at $90K for 8% of the business. Despite the intense and seemingly convoluted negotiations, Lori still liked the food storage product and wanted a piece of it. “I fully intended to complete the deal with Lori, it would have been good for the business,” said Michael.
Lori made some tweets on show night that indicated the deal didn't go through:
She then tweeted:
Michael clarified the scenario: “Like I said, it's impossible to separate the negotiations that occur during and after the show before you actually appear on the show, but that was not fair. Lori wanted a one year exclusive on all decision-making powers for the company before entering into the agreement we reached on TV. I showed it to my lawyers and I spoke with other business people who have gone the Venture Capital route and no VC would attempt to control a company prior to making an investment. I tried to negotiate a shorter time frame with her, but she wouldn't budge. I think it was condescending to say my ‘antics continued after the show.' There was no way I was going to sign that.”
What would Michael do Differently?
“I don't know if I could prepare any better than I did. I think having a second person with you in the Tank could help because one of you could think while the other talks. As far as preparation goes, get five or six people to fire questions at you simultaneously, but really nothing can prepare you for being in the Shark Tank than being in the Shark Tank. I would NOT recommend soliciting offers the way I did. I had offers on the table and I should have negotiated with each Shark on each individual offer. Despite the edits, that approach didn't work.”
“As for advice to other entrepreneurs, I'd say you need to find a project or idea you enjoy without regard to the potential for profit. You need to enjoy it before it becomes lucrative because you need to love the journey regardless of the outcome.”
Despite the drama, the selective editing, the character assassination, and the less than perfect negotiations, Michael Tseng will emerge as a winner. The Plate Topper is the best, new food storage product to emerge in the market for a long time. He has millions of dollars in orders, a deal with QVC and Walmart, and nothing but upside. The Plate Topper will make him a very wealthy man.