The co-founders of Boona, a showerhead startup, recently made a critical error on ABC’s “Shark Tank,” which led to them losing a potentially lucrative deal.
What Happened: Despite achieving social media virality, gaining thousands of customers, and projecting $5 million in annual revenue, Brett Skaloud and Jeff Feiereisen were unable to secure a deal on the latest episode of “Shark Tank.” The reason behind this was a mistake that billionaire investor Mark Cuban believes is the most common among startups, reported CNBC.
Skaloud and Feiereisen are the co-founders of Boona, a Seattle-based company that produces a $249 showerhead named the “Tandem.” This showerhead can be easily attached to most standard existing showers, transforming them into couple showers by introducing an additional stream of water on the opposite wall.
The duo, who had left their engineering jobs at Amazon three years ago to establish Boona, sought $400,000 for a 10% stake in their company. Their plan was to expand Boona beyond their flagship product, the “Tandem” showerhead, into additional product lines and revenue streams.
This strategy raised concerns among the investor judges, including Kevin O’Leary and Cuban, who emphasized the importance of focusing on a single application and maximizing its potential. Cuban also pointed out that the mistake of trying to grow a brand too quickly often hinders a startup’s success.
Despite projecting $1.7 million in annual revenue by the end of the year and $5 million the following year, the co-founders failed to secure a deal with three of the investors, Barbara Corcoran, Robert Herjavec, and Lori Greiner. Cuban and O’Leary also retracted their offers after the duo spent too much time answering questions posed by Cuban.
"I can't relate to the product at all for two reasons. I'm a bather and I love high [water pressure], and I'm concerned about you cutting the pressure in half," said Corcoran.
"Guys, I think [the Tandem] is just going to be a cash-generating machine, and the biggest mistake you could make would be to try to grow too fast," Cuban reiterated.
Why It Matters: This incident highlights the significance of strategic planning and the potential consequences of trying to expand too quickly. In contrast, other entrepreneurs have managed to secure deals on “Shark Tank” by using shrewd negotiation tactics and demonstrating a clear understanding of their business’s potential, as seen in the case of Aabesh De‘s Flora and Justin Huang‘s Cup-a-Bug.
Meanwhile, Cuban-backed Sorfeo Inc., a Northern Virginia-based startup, has filed for Chapter 7 bankruptcy in January. The company, which buys and launches brands to sell on Amazon.com Inc.’s e-commerce platform, listed up to 49 creditors in its filing on Jan. 19.
Image Via Shutterstock
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