Snapshot
- The decision of Sharks to not invest in a company does not guarantee its failure.
- Many products with no investment have gone on to become huge successes in the future.
- Scrub Daddy, Ring, and The Bouqs are prime examples that have been the cause of regret of Sharks.
The show Shark Tank needs no introduction today. Started in 2009, it has carved a niche for itself in the reality television series arena with a dedicated group of global viewers over the years. Its global popularity can be ascertained from the fact that till date there have been around 50 versions of the show worldwide, including that in the USA, Australia, United Kingdom, India, etc.
If we talk primarily about Shark Tank USA, judges (popularly known as Sharks), each of them have become household names in the country. During the show’s long run of 15 successful seasons, they have witnessed over thousands of pitches from a variety of entrepreneurs. But have they invested in all of it? The answer is NO.
Reflecting their business acumen and strong personalities, the judges assess every single angle of the product and pitch that comes in front of them, do their calculations, and then decide whether or not they should invest in it. So does it mean every decision of theirs is full-proof and correct? Have all the products they’ve invested in the past been successful and the others failures? The answer again is NO.
There have been plenty of instances in the past when the rejected deals by Sharks became huge successes later on, which have made the Sharks regret big time, and they’ve even admitted it in public. Below is a list of all the times Sharks regretted not investing:
1. Scrub Daddy
When asked about his biggest regret on not investing in a product on Shark Tank, Daymond John, in his appearance for The Drew Barrymore Show revealed the name to be “Scrub Daddy.” Often described to be the second-most successful product that appeared on Shark Tank and got rejected, Scrub Daddy is a pathbreaking cleansing sponge that is helpful for cleaning the kitchen dirt.
Aaron Krause, founder of Scrub Daddy, came up to the Sharks with this cutely shaped sponge, with an offer of $100K for 10% equity. Elaborating on his pitch, Krause described it to be a kitchen scrubbing tool that completely changes its structure by adjusting to the water temperature. The scrub cleanses using just water, no chemicals, causing no scratches. Except for Lori Greiner and Daymond John, the other Sharks, including Mark Cuban, Robert Herjavec, and Kevin O’Leary were seen smiling and giggling throughout the pitch. Little did they know that this product would make $900 million of sales in coming years.
Nevertheless, Kevin made an offer of $100K for 50% of equity in the company, to which Krause replied “You’re out.” Following this, John proposed an offer of $50K for 15% equity stake. But he had a condition, which involved him getting into a joint partnership with Lori, which she politely declined. Instead she made her solo offer of $200 for 20% equity stake, promised to get him into infomercials right away, and take him to retail stores across the country within weeks. Aaron was really delighted upon hearing this and instantly said yes to the deal.
Daymond admitted in The Drew Barrymore Show that what he thought to be a “stupid-looking little sponge,” has hit it out of the park in the retail space, and that is his biggest investment regret.
2. Doorbot
Jamie Siminoff, founder of Doorbot, now popularly known as Ring Video Doorbell Pro, came up with this product seeking $700K for 10% equity stake. Curious about the product? Well, as the name suggests, promoted as the first-ever product of this type, it’s a video doorbell built for the smartphone. Despite the ingenious idea, the Sharks started backing out one after the other. Some expressed their concerns stating that it’s a consumer device and that technology doesn’t seem promising, whereas others were unsure of its growth projection in coming years.
“But soon after, Amazon bought Doorbot (now Ring) for over a $1 billion worth deal. Today, the company earns around $577 million, which is the highest ever number of any company to have appeared on Shark Tank.”
3. The Bouqs Co.
John Tabis, an aspiring entrepreneur from Pittsburgh, came up with an offer of $258 for a 3% equity stake in his bouquet selling company titled Bouqs. In his pitch, he described how the flowers were sourced directly from the farms and were intended to be given directly to the consumers, removing the involvement of any middlemen.
None of the Sharks showed any interest in the idea/company and started opting out the deal one by one citing the ordinary nature of the business. Barbara Corcoran showed her disinterest to a level where she said she didn’t like the name of the brand and that it’s difficult to spell. Kevin O’Leary mocked the long six-day delivery process system. Eventually, John walked out without getting any investment.
However, three years after his appearance on the show, Robert Herjavec contacted John for advice on flowers as he was looking for the same for his upcoming wedding and ended up investing $24 million in his business. Since then, Bouqs has raised $88 million, thereby showcasing its true potential.
4. Spikeball
Pitching it as the “next Great American Sport,” Chris Ruder introduced Spikeball as a beach volleyball game involving two members in each team. The idea is not completely new, rather it’s bringing an old toy back to life which was removed from toy stores some years ago.
One set of Spikeball includes the ball and trampoline-like net, which is available on Amazon as well as the company website. It can be used for both a simple backyard game or a full-fledged competition with its supremely portable nature. To make a lasting impression on the Sharks, he brought along four players who competed for a game of Spikeball with two members in each team.
None of the sharks seemed much interested except for Kevin and Daymond. Kevin offered $500K at a 9% interest rate for 10% of the company. But it was Daymond John who locked the deal after a serious round of negotiations. His final offer was $500K for 20% equity.
However, the deal never closed owing to creative differences involving a Spiderman-Spikeball set, which Chris was completely against.
The incomplete deal didn’t seem to stop the success of Spikeball, which generated an annual revenue of $19 million by January 2023 and its estimated net worth is $45 million.
In a Nutshell
The judges on Shark Tank bring forth years of experience to the show and make calculative decisions based on what they perceive from the pitch presented to them. However, many times, their instincts take precedence over their business acumen, which in turn leads them to make or opt out of a deal. Whereas, there are instances when they get swayed away with what their fellow Sharks have to say. But this doesn’t guarantee success or failure for any company.
This is why it’s crucial that entrepreneurs accept rejections in stride and view it as a learning opportunity to look into the loopholes, if any. If not, they should have faith and choose an alternative route like Doorbot (which chose Amazon) and just keep going. Sooner or later, success will come your way.
References
Guest Shark Biography, ABC Network
https://abc.com/cast/b002321b-f329-4386-b241-641603cf96ce
John Tabis, Crunchbase
https://www.crunchbase.com/person/john-tabis
Scrub Daddy’s famous sponge was rejected by a Fortune 500 company and forgotten in a box for years. It’s now a $220 million empire, Fortune, Kevin Sanchez Farez
https://fortune.com/2024/02/02/scrub-daddy-founder-interview-shark-tank-success-story/
Entrepreneur, auteur, raconteur. Rob Merlino is a blogger and writer who enjoys the Shark Tank TV show and Hot Dogs. A father of five who freelances in a variety of publications, Rob has a stable of websites including Shark Tank Blog, Hot Dog Stories, Rob Merlino.com and more.
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