We’ve had three entrepreneur founders and supporters from our eLuminate Network get their shot to pitch on ABC’s Shark Tank. So, what’s the secret to getting one of the sharks on Shark Tank to bite?
The keys to success always seems to narrow down to two key fundamentals, a great pitch and great numbers. PrideBites was one of those startups that pitched their way to a successful investment by two of the Shark Tank investors.
Lori Greiner and Robert Herjavec paired up to offer PrideBites $200,000 for 20% percent equity in the company. PrideBites co-founders, Steven Blustein (CEO), and Sean Knecht (CMO), appeared on the show seeking $200,000 in exchange for 10% percent equity in their customizable dog product business.
What drove their success on the show?
Prior to Shark Tank, PrideBites had seen impressive momentum, landing its products in over 2,500 stores in the first year, doubling growth year-over-year and being honored with the “Dog Toy of the Year” award by Pet Business Magazine.
The founders were seeking capital to expand their manufacturing capabilities, and though they had to give away twice the equity they had planned they were able to leverage the traction from their business into a successful pitch.
With the new capital, the company plans to continue enhancing its efficient back-end personalization and fulfillment platform, grow its sales and marketing efforts, and expand into additional pet verticals. The company also has plans to roll out several new products over the next 90 days.
What’s the value of being on an episode?
Building a relationship with any of the Shark Tank investors is a major plus, but the exposure that a startup receives once their episode airs can net even more business opportunities.
PrideBites has also closed an initial seed funding round of $500,0000 with ATX Seed Ventures, BlueStel Ventures and Tucker Max, among other previous investors.
“We’re always excited to invest in companies with highly engaged user bases and there is perhaps no user base more passionate than pet parents looking to pamper their pets,” said Chris Shonk, General Partner, ATX Seed Ventures. “PrideBites has utilized a personalized approach to gain early traction with dog owners and an innovative on-demand platform to efficiently manufacture and ship custom products to them. With this massive new exposure to pet parents across the country, I believe it is poised to be a new leader in pet commerce.”
With pet-related spending hitting more than $60B in 2015, the purchase of pet products online is seeing double digit growth year over year. Although there are thousands of companies in dog ecommerce targeting the 54 million households owning a dog, PrideBites has dug out its own niche by becoming the ‘Nike ID of pet products,’ while building a uniquely flexible and efficient manufacturer and supplier network.
“The two major reasons I cut back on seed investing was lack of good people to invest in and the amount of time it took to assist companies,” said Tucker Max. “PrideBites continues to be an exception. While I’ve certainly invested a lot of hours assisting the company, they’ve always maximized the return on that time and I knew from day one that it was the right team to address this multibillion dollar market.”
Does your startup development team use BoMs to track product data spreadsheets across networks of engineers?
Bills-of-Materials (BoMs) are a fundamental part of every engineering and manufacturing process. “
The changing technological landscape has only exacerbated traditional challenges involved with BoM management such as, controlling product costs, Requests for Quotes (RFQs) processes, coordinating between engineers and other product stakeholders, and managing change orders with contract manufacturers (CMs) in distributed environments.
Manufacturing is changing and with it comes a need to change the way BoMs are managed. The change is brought about by several trends in the market, including:
- Globalization of manufacturing and supply chain
- Growing number of new hardware developers
- Surge in the maker movement
- Increased reliance on contract manufacturing
- New manufacturing practices including adoption of internet and mobile tools and technologies
“Technology is dramatically changing the way manufacturing works,” said Oleg Shilovitsky, CEO and co-founder of Newman Cloud, Inc., developers of openBoM, a cloud data management tool
“Manufacturing companies that used to be under one roof are now building businesses around distributed global manufacturing networks. These new distributed manufacturing environments have created a demand for new types of cloud applications that help companies manage and support distributed working environments.”
About Newman Cloud, Inc. and openBoM.
Newman Cloud, Inc. was co-founded by Oleg Shilovitsky and Vic Sanchez, both experienced software industry veterans. openBoM, a wholly owned and branded product of Newman Cloud, Inc. is a cloud data management tool that removes the traditional pain of managing BoMs across organizational and geographic boundaries. Newman Cloud, Inc. is headquartered in the Boston, MA area.
Will this product management strategy work?
How one startup is encouraging developers to build on their open API software to expand the application
If you have an open API platform, you recognize the importance of attracting developers who want to work on applications to extend the functionality of your product.
For example, the BRAIN One open API, by startup, Brainsomeness allows users to develop their own application for any action sport. The startup team is currently looking for developers and data scientists to build on the device’s existing platform and extend the experience to new action sports.
What do you have to give to attract developers?
However, the question becomes — How do you attract developers to participate in your open API? Well, Brainsomeness believes that they can build a core group of development evangelist by giving them a few perks for a price tag of $1128 (€999).
The price is not cheap for developers to participate. For the investment, developers receive three benefits:
BRAIN One 3D printed prototype
A free online training held by the CTO and development team.
Exclusive access to the team’s software development kit (SDK) before anyone else
Does the cost outweigh the benefits?
While we don’t see this offering to provide any real value-adds that are unique to companies seeking to court the developer community. If you are running a startup, you may want to test a few different offers that can attract developers. Free training and access to the SDK are fairly typical offerings that may not generate the interest you are expecting for an unproven product with a one-thousand dollar price tag.
We would be interested in including your feedback on future stories on attracting developers and product management geared toward expanding open API software. Share your comments or contact us here.
Pitching the developer community
The team at Brainsomeness has integrated open API software for programmers. The startups founder, Simone Grillo, noted; “while BRAIN One was initially created for motorsports, our team wanted to ensure that BRAIN One could be used for virtually any action sport athlete.” – “That’s why we’re looking for individuals to build upon and learn about BRAIN One’s unique embedded systems and data processing.”
During the development process, these particular backers will work closely with the Brainsomeness team to collect any advice or feedback from the resources and experts provided. In addition, one developer will be chosen to develop the first BRAIN POWERED application.
Evidence-Based Entrepreneurship means for the first-time ever using lean principles get early evidence of how a startup is progressing before obtaining users and revenue.
Startups are not smaller versions of large companies. Startups search for a business model and need to be out in the public testing their hypotheses with real people. The only way to know whether the idea has potential is to setup experiments to test the hypothesis and gather data. This is the foundation of the lean startup.
Check Out This Top Lean Startup Resource:
Steve Blank, shares how investor readiness can be tracked and measured through nine levels, from hypothesis-to-key metrics. If you are seeking capital, potential investors may use the concept of investment readiness as an indicator of your progress.
Check Out These Top Steve Blank Resources:
Top 10 Startup Mistakes An Early Startup Must Avoid
The importance of avoiding “premature deal adulation”; why entrepreneurs shouldn’t put a barrier between themselves and an investor by giving them anti-dilution; and how a startup can avoid losing focus on execution.
Common startup mistakes founders make is using “China Syndrome Analysis” when describing the market potential of their business. There are very few startup companies that will successfully capture even 1% of a one billion consumer market, so it is foolish to use that as the basis for your projections.
Entrepreneurs need to focus on addressable market segmentation and how they can meet their financial projections. How they will grow their businesses is what’s crucial. Founders should focus on how they will succeed through execution and addressable market segmentation to avoid these common startup mistakes.
Source: docstocTV | John Greathouse, General Partner, Rincon Venture Partners
eLuminate Entrepreneur Mastermind Session hosted by eLuminate founder and CEO, Sharon Brown. Entrepreneurs discuss founder compensation and the decisions they made about the timetable to pay themselves.