I spoke to Byron Young, the bean bag chair/bed maker, to get a CordaRoys update on the deal he made with Lori Greiner on Shark Tank episode 417. Byron took a $200K investment from Lori for 58% of CordaRoys, a company he started back in 1998. He filled me in on the company history, his Shark Tank experiences, working with Lori, and the future of CordaRoys.
CordaRoys History
Byron made his first bean bag chair by hand. The fact that it changes into a bed was a happy accident. “I first set out to make foam filled bean bags, so I started cutting circles of fabric. It started to hurt to cut circles, so I made the inside liner a square and stuffed it into the beanbag. It worked great and I was thrilled because I didn’t have to cut more circles! One night, I had some house guests that needed a bed. I gave them the inside of the bean bag and they loved it. I decided to get it patented.”
Byron started selling his CordaRoys bean bags out of his garage in 1998. “From there,” he continues, “I spent the next few years making them in my garage, selling them here and there. In 2001, I got an investor and it grew quickly. Unfortunately, I learned what it meant to grow too quickly. At first, we were going like crazy. The economy was good, we opened mall kiosks all over the place (23 in total) and we couldn’t manufacture bean bags fast enough.”
We were still opening kiosks when 911 hit. Unfortunately, we had some bad owners, we extended them credit and they didn’t pay. We were beginning to realize the kiosk thing was bad idea and it drained us. We should have pulled out sooner than we did. By 2009, we pulled out of 22 of the 23 kiosk locations; the only one left is at The Mall of America. We still sell wholesale and direct online.”
“After closing everything down, it was a rough six months. CordaRoys didn’t have enough money. Luckily, my suppliers stuck with me and gave me time to get the business back on track. After that six month period, the business started to go back up.”
How CordaRoys Got on Shark Tank
“I know our product is solid, we know we can sell millions of them. We’re geared up to do higher sales than we’re doing, but it takes years to figure out all the logistics. I tried everything. I wanted to hit the masses, but I knew we needed exposure. I’d been watching show and thought I should try out sometimes, to help move my business further along. I was ready to do something different.”
“I went to a casting call in Orlando and I got there late. I had to be last one there. When they went to lunch, I just left the bean bag there. I was last in line and I was going leave. Then a lady came up and asked me about the beanbag. People gathered around, and it turns out one of them was a producer. She started asking questions, about sales, years in business, patents and so on. I had no pitch planned, I just sold her the product like she was a customer. She pulled me in the back and we shot a video right there. I went from having bad attitude about it to getting an audition.”
“Once I got out to LA to tape in September, I was skeptical. I thought I’d quit the process. I told them I don’t need it; I didn’t know what was going on, didn’t trust they were serious, and didn’t want to risk doing something stupid. When I told them I was going to quit, the producers and I had a heart to heart. I decided to keep moving. I was wrong about what was happening; everyone was just nice, hardworking people.”
CordaRoys In the Shark Tank
Byron said he was in with the Sharks for about an hour. “They left out my wife, I actually introduced her to the Sharks. They also left out all of the company history. The whole confusion with the numbers – that’s just me. Most of the businesses that appear on Shark Tank have ledgers that are the equivalent of a small brochure. I have a ledger that’s like several large, bound, volumes. I don’t memorize my numbers on a daily basis, I have a CPA to deal with that. I’m a creative guy, not a numbers guy. All in all, when you think about it, taking an hour and cutting it to 8-10 minutes is an art; they did a great job.”
“Before I taped, I walked around for three months talking to myself about my pitch. You can prepare, but you never know what’s going to happen. I never thought Daymond would go out, I thought they’d all be fighting over a deal. I wasn’t prepared for a 60% offer; it brought out real emotion, but I knew I wasn’t leaving that room without someone’s phone number!”
Post Show CordaRoys Update
“Knowing what I know now, I am thrilled with the outcome. I had Lori’s number, I saw it on a daily basis. She didn’t call right away, then, one day, she did. I still had a hard time believing she wanted deal, but I can tell you she is building a brand, she cares. I’m shocked at how much she cares. I was introduced to Aaron (Scrub Daddy) and Rick (ReadeRest). They were influential in me signing a final deal with Lori. They both spoke highly of her – that’s when I finalized the deal.”
“I met Lori and her husband, Dan, in Chicago. Dan reminds me of a friend of mine. He looks like a programmer or accountant I know. As I was getting to know them, it was important to me to know Dan and Lori are good people, and they are. They’re both nice, down to earth people.”
“Since the show aired, I have contact with Lori on regular basis. CordaRoys is going on QVC in August and we have a larger event planned for the fourth quarter. We also have a few other things in development. If everything goes like it’s going now, the CordaRoys update segment will be one of the biggest Shark Tank success stories ever!”
The CordaRoys website crashed on show night and was down for about 24 hours. “The web traffic was HUGE,” says Byron, “We went from 23 people on the site to 25K in minutes then it crashed. I can tell stories about a crappy web host, but I didn’t hire a web guy; I wish I hired the people I have now. It was a simple mistake. We had a dedicated server with cloud backup. Unfortunately, my dedicated server was like a Pinto with three wheels.”
“I spent the next 24 hours on the phone with the hosting company. It was a very depressing 24 hours, I didn’t get to enjoy the moment. Lori was as comforting as my aunt. She wasn’t pointing fingers, she just said not to worry. We got the site back up Saturday and the floodgates opened; it was a good test run and we’re all caught up now. There was a drastic uptick in sales, I couldn’t tell you exactly how much, but it was a s___load!”
I asked Byron if he had any advice for other entrepreneurs. “We offer a 100% guarantee and we have impeccable customer service. Some people think a guarantee like that costs too much money, but it doesn’t cost much if you make a good product. We’re like Craftsman tools – if it breaks, we’ll take care of it. That’s the thing that makes us successful. In any business, no matter what you make, you have to do the right thing when the right thing is difficult to do.”
I had one more question for Byron. He answers it over at The Hot Dog Truck.
