Shark Tank – 8/30/09 – spoilers

[Abandoned]

Gift Card Rescue

$150k/30% Lots of statistics to start. Buys unused gift cards for 70ish% of face and resells online at 90%. Decent margins. People do this all the time on ebay so there’s no reason it shouldn’t work as an organized business model. He was contacted by Amazon but he doesn’t say for exactly what. The rapid outs are surprising me. The valuation is all screwed up but the percentages could be adjusted. Kevin did just that in an offer. Robert irked Kevin over his offer but Kevin will go with it. $200k/50% split between Robert and Kevin. Offer is accepted. I’m glad. I was skeptical at first but this deal has legs.

Soul’s Calling

Set-up all warm and fuzzy. Uh oh. This isn’t going to be pretty. $150/25% Positive energy gift items. I can tell you from Dragon’s Den these types of things don’t go over well with Robert or Kevin. Inspirella Umbrella. Connecton bracelet. Kevin goes straight to the numbers. Doing it for 5 years, $100,000 invested, $18,000 in sales. Good question, Robert. Is it a personal goal or a business? She says business. Kevin goes back to horrible valuation for a company that has never made a dime. She got the ‘pack it up’ speech from Kevin. Robert: “The business is telling you something.” Good quote. Everyone is out.

Coffee Brand Gifts

$300k/40% Coffee novelties. Has patents for toys using common coffee names imprinted on them in one method or another. Kevin gets snarky. No orders yet. Has $400-500k invested. No sales. They’re beating the crap out of him. Granted, it’s deserved. Everyone is out. He’s still arguing. He just can’t stop. Ends with the “I’ll show them.”

The Alibaba.com spot inserted here was probably one of the most appropriate commercial placements for a show I’ve ever run across. B2B sourcing. I don’t know anything about the site/company but that was smart.

Grafitti Removal Services

Set-up: Mobile grafitti removal service. Wants to franchise his existing business. $350/15%. Was a municipal maintenance painter. Proprietary products. Robert questions if the offer is the removal product or the service. It’s the service. The product is available for purchase from the manufacturer. $230k revenue/$75k profit $60k franchise fee. He says that profits will come from franchise fees. There is no proprietary aspect to the business. Anyone can purchase from the product manufacturer/distributor. This is service only. Robert offers $350k/75% and he becomes an employee of the company. Kevin jumps in to split the offer. Offer declines. Now there’s an argument. Robert asks if he wants to rethink. He flat out refused. Kevin told him to get out.

Coverplay

$350k/15%. That was an attractive demonstration. Covers for play equipment. Target is both a private end user and large volume customers. $200k sales so far. Three hotel chains and Carribean cruise line. 2 patents. They didn’t give a very good answer for where $350k will go. Answer was mostly administrative. $100k invested. Here comes the valuation speech. Barbara offer: $350/40% not negotiable to be used ONLY for the product development. Daymond’s offer of $350k/65% for manufacturing only and gets all of his existing logistics support. Out for a conference. Refusing controlling interest. Good point that Barbara’s experience has nothing to do with this product. Robert offers to sweeten to $500k/65%. Offers percents ownership for a higher percentage. The patent was never indicated previously as not part of the package. Offers pulled immediately. Talk about the patent. One partner 60%, the other partner owns a “portion” and the ex-husband owns a “portion.” Oh, that’s good. Drag an ex-husband into this mess and they certainly can’t speak for him. She says it’s available to include in the offer so they’re going with it for negotiations. Kevins offer $350k/51% with Daymond, Robert and Kevin splitting equally. Barbara still at $350k/40% with conditions. They took Barbara’s offer. I will say they will be successful but not to the degree that could have been possible on the other offer.

[BWINKLER92]

I don't get how anyone could get a patent on just a cloth cover for a playpen? Also, why no sharks noticed an old sheet could do the same job at no cost?

They did get it right on the graffiti removal, yes a good idea but anyone can do it and drop his franchise as soon as they know how. He should have slightly modified the mixture and then said it was his secret mix. Did he think about hazards like hanging from bridges and water towers and what all the safety equipment belts and the training and insurance for that would cost? Bet not.

Souls calling should have thought to partner with a church, not sharks. Also maybe even a TV network promoting say new comedies or maybe weight loss or anti drug use programs, but more than just have a nice day printed on an umbrella.

[omnibus]

The key to the graffitti removal system is the chemical that actually does the work "probably "ZAP" It's going to take an iron clad franchising agreement to keep franchisee's loyal.

[Abandoned]

I don't get how anyone could get a patent on just a cloth cover for a playpen? Also, why no sharks noticed an old sheet could do the same job at no cost?


That surprises me as well but then again someone got the patent for putting a piece of static cling plastic in front of an LCD display or touch screen and called it an anti-scratch device. A rectangle of an existing product, go figure.

I'm more amazed that the guy got trademarks for cappuccino, espresso, etc. I didn't think you could trademark a common use word but I looked and there's all kinds of patents for many different lines on those.

[Abandoned]

The key to the graffitti removal system is the chemical that actually does the work "probably "ZAP" It's going to take an iron clad franchising agreement to keep franchisee's loyal.

He didn't exactly tell the truth on the obtaining the removal products. He claimed they could only be purchased from the manufacturer. Since he specifically said citrus ZAP came to mind for me too. I just Googled it and anyone can buy it. This place has wipes through 5 gallon buckets.

http://www.bonstone.com/store/cart.php?m=product_detail&p=93

[Neenahboy]

Now I know why that Soul's Calling woman is so happy all the time...she smokes the crack that led her to come up with that insane valuation. Yeesh.

[MrGreg]

I think the Graffiti guy made the right choice turning them down. I don't think he'd be happy working as someone else's employee. He can still try to sell franchises going forward, but he's got a profitable small business where he's his own boss.

[BWINKLER92]

Yes, many business ideas work if small and a smart person runs them. Go to a franchise and someone will fall off a bridge or water tower removing grafitti and they will be sued for not training properly or having the right safety gear. It is much more expensive to do than he thought, but you'd think sharks would think of that.

[marrone]

Once I was able to get through to the soul's calling website (had image loading problems, probably due to it getting tons of hits), I'd say her problems are twofold:
1) lack of marketing (though Shark Tank took care of that just by airing it)
2) pricing. Heck, one of those umbrellas (the size of which I could get free at a trade show) wound up being ~$40.00 shipped via UPS ground. If I'm paying $40 for an umbrella, it had better be a darn big umbrella that won't turn inside out in a gusty wind.

The sharks were right...this was more of an emotional thing for her, not a business. She can probably make a few bucks off of it, but turning that into something major...I don't know.

I liked the Coverplay chicks, though. They seemed pretty much on the ball. Except for what they wanted the $350K for. I don't see the problem with using it for product development, though...they could probably just funnel that existing money to something else, depending how the contract is written up. I would think they would have wanted to use it for advertising, though. But considering they got Marriott, as well as cruise lines on board, I'd say they're doing pretty well as it is.
I can definitely see their hesitation of Daymond's offer, though. They already have a successful business, it's making money, they have high profile clients. Yet he still wanted pretty much the whole shebang. (granted, his offer was essentially higher than the others, back office support, distribution network, etc). I don't blame them for taking Barbara's offer...they still have their control, and an extra $350K in which to expand. They just have a stakeholder who can have a big mouth, but not necessarily do much. Barbara, in return, gets a big investment in an already successful company. Win-win.

Coffee guy...ugh!
Graffiti guy: I got confused half-way through all that.
Gift card rescue: I thought there were already places out there that do that. Maybe it was GCR that I saw, I dunno. Can't see a lot of profit potential, but should do alright.

I think this was the first time in Shark Tank that the sharks actually asked for LESS than 50%. Nice to see that.
(I love how Barbara scolded the men for always wanting control...that was funny! Not sure where the ex partner & secretary bit came from, though. That was out of left field there.).

-Mike

[DancnDude]

Gift Card Rescue *sounds* like a good idea, but I think most people just forget about their gift cards or are too lazy to go to the store and use them. The people who forget are not going to sell on this website, and the lazy people are probably also too lazy to sell them. I just don't see it being a huge money maker. They may earn some profits but hardly any to be worth anything.

The Cover Play idea I thought was great. I don't think you could as easily just fit a sheet over the top. It'd have to be secured in such a way that the baby couldn't get smothered. The fitted idea I'm assuming secures down so it can't hurt the baby. It is a small demographic, but people buy tons and tons of baby stuff so I can see this idea actually making some big bucks if they continue as they are.

[Abandoned]

The Cover Play idea I thought was great. I don't think you could as easily just fit a sheet over the top. It'd have to be secured in such a way that the baby couldn't get smothered. The fitted idea I'm assuming secures down so it can't hurt the baby. It is a small demographic, but people buy tons and tons of baby stuff so I can see this idea actually making some big bucks if they continue as they are.

If you want to see their products, here's their listings on the Target website.

http://www.target.com/Coverplay-Play-Yard-Slipcover-Multi/dp/B001F6ZSN2/sr=1-1/qid=1251739793/ref=sr_1_1/175-9774347-8228857?ie=UTF8&search-alias=tgt-index&frombrowse=0&rh=k%3Acoverplay&page=1

http://www.target.com/Coverplay-Play-Fitted-Sheet-Multi/dp/B002H1KEE2/sr=1-2/qid=1251739853/ref=sr_1_2/175-9774347-8228857?ie=UTF8&search-alias=tgt-index&frombrowse=0&rh=k%3Acoverplay&page=1

[Abandoned]

Gift card rescue: I thought there were already places out there that do that. Maybe it was GCR that I saw, I dunno. Can't see a lot of profit potential, but should do alright.


I decided to try a simple search on Google of ... buy gift cards

The first two hits are this type of business:

http://www.plasticjungle.com/

http://www.swapagift.com/

Gift Card Rescue does not show up on the first page of results but he does show up as the first result of the second page. He has that against him.

The top of his page says "Buy Gift Cards at up to 50% off." He said he's buying for 70ish% of face and selling at 90%. The ones listed on the left of the page range from 10-15% off. Most everything in the list is 10-15% off. Godiva Chocolate is 35% off. There are no 50% off cards at all.

Unfortunately, his website screams small-time. The list of available cards is five pages long where the plasticjungle page has a huge list of many different stores.

[mattack]

There are already tons of gift card exchange sites. I simply googled "gift card exchange". I still voted for it in this thread, since it's the least insane one.

If so, it has news coverage back to Nov 2008.

giftcardrescue.com is his..

[uncdrew]

The Cover Play idea I thought was great. I don't think you could as easily just fit a sheet over the top. It'd have to be secured in such a way that the baby couldn't get smothered. The fitted idea I'm assuming secures down so it can't hurt the baby. It is a small demographic, but people buy tons and tons of baby stuff so I can see this idea actually making some big bucks if they continue as they are.

Agreed on all counts.

I was trying to explain to my wife why the baby market is a small demographic. Yes, there are lots of babies... but when you compare the number of parents with babies to the number of adults, the market is a lot smaller.

However, I would have taken the deal that came with the back-end inventory systems, shipping and warehousing.

So the dude has control over the company? Just means he'll be in charge of making you rich. Unless these ladies have some weird aversion to making money, it was just an ego thing. I'd rather have that one shark's expertise in manufacturing, inventory and shipping than the deal Barbara gave them.


But honestly, if these chicks want to make a ton... they should take out a loan. They're in freaking Target already, and name-brand hotel chains. Just finish up and get with Baby's R Us, get some marketing going, get on Amazon and bring this puppy home.

[BWINKLER92]

Wouldn't just a small rubber mat that fits the bottom of the playpen exactly do the job better and wash right off in the sink? I see nothing in the ad that says their cover is waterproof or stain proof, so I have yet a better idea looks like. Also don't people like to see their baby is moving, you could with a mat but her cover blocks all the sides. For that matter why don't playpens come with a rubbery bottom anyway? The complaint was that the bottom gets all dirty looking, well there is an easy fix.

[Abandoned]

Wouldn't just a small rubber mat that fits the bottom of the playpen exactly do the job better and wash right off in the sink? I see nothing in the ad that says their cover is waterproof or stain proof, so I have yet a better idea looks like. Also don't people like to see their baby is moving, you could with a mat but her cover blocks all the sides. For that matter why don't playpens come with a rubbery bottom anyway? The complaint was that the bottom gets all dirty looking, well there is an easy fix.

I had no clue originally so I asked the wife about this. On the 'seeing' part, there's a fine mesh window on the upright sides of the cover.

As for the cleaning aspect, she says a "pack and play" gets filthy. While the pad is removable the crud gets everywhere, in every nook and cranny. This product is actually a liner for the entire playpen. So, you're basically popping the entire thing out and washing the entire thing. Yes, it creates a barrier so what's under doesn't get soaked.

[uncdrew]

Wouldn't just a small rubber mat that fits the bottom of the playpen exactly do the job better and wash right off in the sink? I see nothing in the ad that says their cover is waterproof or stain proof, so I have yet a better idea looks like. Also don't people like to see their baby is moving, you could with a mat but her cover blocks all the sides. For that matter why don't playpens come with a rubbery bottom anyway? The complaint was that the bottom gets all dirty looking, well there is an easy fix.

I'm not sure if you have kids or not, but washing something in the sink is a pain. And messy. It wouldn't fit in most sinks so water would be splashing over the sides and then you'd have to let it dry somewhere. My dish drying rack wouldn't hold a 3 foot by 4 foot rectangle.

Throwing something into the laundry is easy. I'd greatly prefer the cloth one.

As far as seeing in, your kid is most likely sleeping so there's nothing to see. Or they're standing up and can see over the side.

[Jayjoans]

It is frustrating to us that there is no follow up. How did these businesses do that they invested in? Are we supposed assume that just because these "sharks" invested in them that they are automatically successful?

I would like to see some sharks lose all of their investment. A few of these things they invest in are flat losers.

[Abandoned]

I mentioned in the first episode thread that the Canadian version of the show started doing follow-up videos after three seasons. One thing though was they showed the successes only of the Dragon deals and success and failures of the non-deals. I usually did searching online to see if the business went anywhere. It's far too early to do any kind of success follow-ups on any of these businesses for this season.

[Jayjoans]

I can't believe that these shows are aired in real time. They must have been shot months ago. It's not as if the investments were made just after the show aired.

[Abandoned]

You're right, the original call for the show was about six months ago. How long do you think it takes to get a business going? These could have turned into months just doing the deal and the average business isn't profitable for the first three years. Are you expecting a success story after six months? That's not going to happen.

[Jayjoans]

It is frustrating to us that there is no follow up.

No, as I wrote originally, I would like some follow up.

As little as "they are still negotiating the deal" or, "since the recording of this show the investor and owner have parted ways", or "look for this product on a home shopping channel in the near future", or "since taping, the venture capital has dried up", or.....

Get it?:rolleyes:

There is not ZERO information.

[Abandoned]

You don't have to be a jerk about it.

Again, it's a pretty short time period. You're being VERY unrealistic. There have only been three episodes and six months since the call went out. That would likely be something that they'd do in the next season for the previous season as inserts. Basically the Sharks have to come in and restructure what the company is/was doing. That's always something that the specifics aren't talked about to the public. It's the making the sausage part. They really don't want you to know. You'll get the sanitized smiling-face PR version. You'll never see the real dirt on the show. Ever. You'll probably never see the failures unless it's that of the ones who didn't take a deal. They've already done that in the other versions.

As for products, after three seasons Dragon's Den began an online store of products featured on the show. I've never seen advertising of deal products otherwise.

[Jayjoans]

You're right, the original call for the show was about six months ago. How long do you think it takes to get a business going? These could have turned into months just doing the deal and the average business isn't profitable for the first three years. Are you expecting a success story after six months? That's not going to happen.

Your reply does not have to be condescending either. I am well aware, as a business owner myself, that it takes time for a business to prosper or die. As I said above, I'm not looking for much, a sentence or two about what has happened since the taping. I am not looking for, nor expecting a review of their tax returns and P&L.

[nataylor]

I wouldn't be surprised if nothing has happened since the shows were taped. I would think ABC would want to keep any deals from being executed until the show aired.

[Frylock]

I'm not surprised there are no updates. It makes more sense for them to not air an update so soon, but hope for a second season and air it as part of that season.

[Alfer]

If you want to see their products, here's their listings on the Target website.

http://www.target.com/Coverplay-Play-Yard-Slipcover-Multi/dp/B001F6ZSN2/sr=1-1/qid=1251739793/ref=sr_1_1/175-9774347-8228857?ie=UTF8&search-alias=tgt-index&frombrowse=0&rh=k%3Acoverplay&page=1

http://www.target.com/Coverplay-Play-Fitted-Sheet-Multi/dp/B002H1KEE2/sr=1-2/qid=1251739853/ref=sr_1_2/175-9774347-8228857?ie=UTF8&search-alias=tgt-index&frombrowse=0&rh=k%3Acoverplay&page=1


I love the 5 star reviews on the Target site...nobody owns one of the items, but due to seeing the show, gave it 5 stars because it's a "neat idea!" etc...

[uncdrew]

I love the 5 star reviews on the Target site...nobody owns one of the items, but due to seeing the show, gave it 5 stars because it's a "neat idea!" etc...

Yeah, I almost busted them for that. Ridiculous.

[Abandoned]

Your reply does not have to be condescending either. I am well aware, as a business owner myself, that it takes time for a business to prosper or die. As I said above, I'm not looking for much, a sentence or two about what has happened since the taping. I am not looking for, nor expecting a review of their tax returns and P&L.

All of the episodes are shot at the same time. It's obvious from the show that they did a pilot and ran it by a focus group. Some elements didn't score well so they came back and redid the set and worked on their rapport with the pitchmen.

Two of the sharks are Canadian and are on the other show. I'm sure this show follows the shooting pattern of the other one. They do 250 pitches in a week. From those they pick the "losers" that they will include in the actual episodes. Everything else is done in post. These episodes have been in the can for some time. They may or may not include updates next season but every 'update' I've ever seen has been contract signings and fluff. You won't get anything out of it.

[Abandoned]

I love the 5 star reviews on the Target site...nobody owns one of the items, but due to seeing the show, gave it 5 stars because it's a "neat idea!" etc...

There was only one there the day of the showing. Interesting. Ah, remember the days when ebay seller ratings didn't actually have to be tied to any sale and people had exchange groups that posted ratings on each other's account? I guess this is a good example of that. :) As seen on TV. It must be good.

[mattack]

I noticed in the credits that they mention that they show footage from Dragon's Den -- I would guess the 'know the sharks' footage in the opening....

Also that it's based upon a Japanese TV idea.

[Abandoned]

Correct. I think to date there are 17 versions of it. If I remember correctly the US one is the only one not called Dragon's Den.

[Zrealm]

Correct. I think to date there are 17 versions of it. If I remember correctly the US one is the only one not called Dragon's Den.

It's actually had different names in other countries (the original Japanese, for example, is Money Tigers)

[Abandoned]

We must be closer to the Israelis. I looked up the Wikipedia article and almost all of them are called Dragon's Den or really close names to that. The Israeli version on the other hand is called The Sharks.

[mattack]

Interesting... From Wikipedia:
Apart from in Japan, where the original show format was maintained, in all other locations the show names, structures, and styles are based upon the UK version.

[Alfer]

On a side note:

I watched "How'd you get so rich" last night and they profiled the bald shark guy...damn he has a nice house etc....:)

[Abandoned]

That was one of the Canadian's, Kevin O'Leary? I wish I'd have known that was on.

[Alfer]

That was one of the Canadian's, Kevin O'Leary? I wish I'd have known that was on.

The show is repeated multiple times this week and next...