Shark Tank Season 5 Episode 503 Recap - Oct. 4, 2013
The first contestant to appear in Shark tank Episode 503 last night was Debbie Glickman and her line of Therapy Aroma Sprays. Already in production was the monster spray, happy camper, sweet dreams, tooth fairy and the superhero sprays for kids. In case you were not aware, monsters are repelled by bubble gum and other sweet smelling fragrances which all the Sharks agree to smell really good.
Currently (at the time of this airing) the Fairy Tale Wishes Sprays cost $2.16 each to produce which seems kind of high, but Glickman insists this product remain 100% USA made which is worth a few more pennies. One bottle of Fairy Tale Wishes retails for $9.99 with sales totaling $5500 so far this year. Mark Cuban and Kevin O'Leary didn't seem very impressed, but Lori Greiner could see the bigger picture and had some excellent advice for Debbie. Barbara Corcoran liked my idea with developing one main Fairy Tale Spray covering a host of insecurities.
Glickman is convinced getting Fairy Tale Sprays in all of Disney's 25,000 Hotel Rooms and would like to partner with them, but hasn't made contact to them to see if they are even interested. I have to admit it was a great plug for the Disney Brand and who knows, it might of been enough to get Disney to call Debbie Glickman. In the end, the business was just not developed enough to interest any of the Sharks to invest in The Fairy Tale Wishes Therapy Aroma Sprays.
A little side note: The vultures (competition) already are picking away at Debbie's success from going on the Shark Tank and starting to circle big time. As evidenced on Twitter, Debbie is standing her ground and handling it in a professional manner which speaks volumes IMO.
David Alwin and Echo Valley Meat's was first seen on the Shark Tank last season in episode 426 where he didn't get a deal with any of the Sharks. Knowing the cost of acquisition per new customer is a common question asked by the Sharks, but at that time Alwin was unsure of the correct answer and it ended up costing him getting a deal on the Show. Whatever his cost of acquisition was at the time, it's nowhere near that high now that Dave has become a Shark Tank Star. Dave took the Sharks advice and you can bet he now knows Echo Valley Meat's numbers inside out as this business continues to grow.
After Echo Valley Meat aired on the Shark Tank, Dave says the website had over 1.6 million hits generating over 6700 orders within a short amount of time. Alwin also now has deals in place with Costco, Sam's Club, QVC and Amazon all carrying Echo Valley Meat products. Dave puts projected sales of Echo Valley for 2013 between $5 and $10 million. These numbers now put His product in the List of the Most Successful Products Ever Seen on the Shark Tank Show.
The Freeloader Child Carrier developed by two Firemen Erick Jansen and Nathan Jones out of Austin, Texas, came into the Shark Tank with Nathan's Son River to help demonstrate this unique product. Both Jansen and Jones being parents themselves, came up with a better solution for carrying around your bigger kids when out sightseeing or on long walks. The two Fire fighters were asking for $200k in exchange for 15% equity stake in the Freeloader Carrier Business.
Robert Herjevic also being a Dad with younger kids, wants to try out the Freeloader giving River basically a piggyback ride with the Freeloader. Mark Cuban who has a son by the name of Jake, (that's my younger sons name also) has issues with the safety harness and how easy little kids could figure it out and potentially fall off the Freeloader. I suppose Mark may be right, but if your kid had that much energy you most likely wouldn't be carrying them until they were already tired and wanted a ride.
The Freeloader is such a unique idea that the best form of advertising has been wearing the Freeloader at large Festivals and having potential customers approach them. One example was at a Kite Festival with over 100,000 people in attendance where they spend two hours walking around and handing out business cards to whomever inquired, resulting in $3000 worth of orders within the first 24 hours.
It seems the General Public loves the Freeloader but the Sharks could only see a potential liability problem with the harness. All the Sharks but Robert Herjevic go out leaving him as their last chance. Robert's first impression was he really liked the product and could see how it would fill a need, but because of the other Sharks concerns, he now questions if he wants to invest in the Freeloader after all. Robert decides he does but for $200k he wants to be a third partner in the business.
Robert Herjevic gets a Deal for $200,000.00 and proud 33.1/3% owner of the Freeloader Business.
The Kook n Kap Gals Juli Deveau and Ozma Khan came into the Shark Tank with a very well-rehearsed presentation. Going all the way back to when the Kook n Kap was first conceived as a business idea, Juli tells the Sharks about a dinner party where she cooked fish as the main course. After a nice dinner, the party went to a Night Club where someone mentioned that her hair smelled like fish. Ewe, they knew there had be a better solution to this stinky problem, and the Kookn Kap was born.
The very entertaining Deveau and Khan came into the Shark Tank seeking a $50,000.00 investment for 20% of their Cookig Cap solution. They end the presentation with their slogan "Hair smells like crap? Get a Cap". So far the pair has sold exactly 1,729 cooking caps thus far proving they came in to the Tank well prepared knowing their numbers. What they weren't prepared for is when Barbara Corcoran notices the Kookn Kap's label saying "Caution - Flammable".
Oops, someone forgot to proof the label before going into production because selling flammable cooking cap's might not be the best of business decisions. The girls are genuinely shocked and immediately assure the Sharks that their cooking Cap is indeed "Non Flammable" and its a misprint they were not aware of. Lori Greiner the most likely Shark to invest in this product, wants to know why can't you use a regular shower cap that would serve the same purpose? As it turns out shower caps are Flammable and should never be worn when your cooking. In the end there was No Offers from any of the Sharks and No
O.K., Chris Johnson the inventor of the Rapid Ramen Cooker, walked on stage in front of millions of Shark Tank viewers and 5 of the most ruthless Sharks in the Business World, almost as if he was a little shy about all the attention. And then BOOM, Chris wakes right up and makes sure he has every one's attention as his entire attitude completely changes into the Master Salesman that Johnson is.
Johnson claims "The Rapid Ramen is the fastest, easiest and healthiest way to make Top Ramen in the Microwave". This is such a great idea that Chris came into the Shark Tank looking for $300,000.00 in exchange for only 10% putting the initial valuation at $3 million. Considering Top Ramen sells 95 billion packets world wide a year, this is clearly an untapped market in a new way to cook this College Staple.
Total sales for the Rapid Ramen Cooker were $164k within the previous 3 months at the time Chris was in front of the Sharks. In just the last 3 months, the Rapid Ramen has gone from zero retail stores to over 2500 stores across the country including Albertsons, Safeway and Winco to name a few. Chris has been a Serial Entrepreneur starting very young with a few other successful businesses besides the Ramen Cooker. He sees the huge opportunity with this product and is now devoting 100% of his efforts to grow the Rapid Ramen Cooker into a global product with projected sales of $2 million this year alone.
The growth and numbers sound impressive, but Mark Cuban isn't buying it and say's "something is just not adding up with this valuation". Chris says if someone offered $3 million to outright buy The Rapid Ramen and its patent, he wouldn't even consider selling and values it much higher.
Kevin O'Leary makes one of his now famous offers that lets the contestant keep 100% equity in their business, but pay for O'leary's money for the rest of that businesses life. Kevin offers Chris the $300k he needs to invest in more inventory, but wants $1.10 for every Rapid Ramen sold until he gets his money back. O'Leary then wants 50 cents per unit sold into perpetuity for however long the Rapid Ramen bowls continue to sell.
Robert Herjevic who seems to be getting off on a buying spree for Shark Tank Season 5, makes a seemingly high offer to give Johnson the $300k for 40% of the Top Ramen Cooking Business quickly knocking the valuation considerably lower. Chris leaves the Shark Tank to make a call which leaves Kevin and Robert enough time to come up with a new offer combining their strategies.
This has given Mark Cuban more time to realize Chris Johnson is the "real deal" and an investment in the Rapid Raman Cooker would be a solid one. Cuban comes up with a creative solution for Chris to keep more equity, but still get the needed capital to expand the Rapid Ramen business. Marks offer was $150k for 20% equity, and another $150k loan charged at the going rate He charges all his Shark Tank investments.
With such a better offer than the O'Leary/Herjevic offer, Johnson boldly asks Mark if he'll accept a 15% equity stake which appears to almost blow the deal. The determination to make the Rapid Ramen Cooking Bowl into a Huge Success was written all over Chris's face and Mark did indeed accept the revised offer with no more further negotiating. Congratulations Chris, this was definitely one round of negotiations I will not forget anytime soon.