Join Shark Tank Australia shark Sabri Suby for a weekly roundup of each week’s king or queen of the tank, the pitches that were eaten alive, and an exclusive behind-the-scenes look at the fishiest tank dynamics.
This week, we had a huge diversity of businesses with some seriously impressive stories to tell. But none of them quite had that special sauce that could persuade me to invest. Here’s the behind-the-scenes scoop on why I was out.
First up, we had Lucas and his business Glossy Boys, a nail polish marketed at boys. Pitching in the Shark Tank at 13 years old? That’s impressive. When I was that age, I was grinding peanut butter for $2.50 an hour and busking in my hometown of Byron Bay in a bid to help my single mum make ends meet.
Lucas understood that our time was worth much more than our money, and he and his mum walked away hooking in Davie and Jane combined $50,000 for 15% and Dr Catriona $25,000 for 5%. A clever negotiation tactic, and one that I was seriously impressed to see a 13-year-old pull off (his mum is a champion).
For me, though, the unit economics just didn’t stack up with the business having such a low average order value, and I couldn’t see the path to help them scale online. The customer acquisition cost would’ve been higher than the average order value, and you would’ve needed huge amounts of cash to fund that business moving forward. Since the play was clearly to go down the retail chain, the three investors that ended up biting were the best sharks for the job.
Next up was The Nostalgia Box, a playable video game museum. Selling memories is always a great way to attract interest, and tapping into nostalgia is a tried and true marketing tactic.
What you didn’t see on the tank was my line of questioning about emulators. A lot of people who have nostalgia towards these old arcade games are just buying these emulators online, which gives the same experience, delivered to your door — giving them a huge competitive advantage.
For those reasons, this wasn’t a business I could scale. It had made just $18,000 profit as a physical brick-and-mortar business, so that proof of concept to franchise and scale just wasn’t there.
Fydoo, a flushable indoor dog toilet, had identified a problem that is very pronounced for his potential customer base with huge mass market appeal. Sebastian, the company’s founder, had already personally invested $350,000, secured patents, and created two versions. But at the time of pitching, he still didn’t have a product ready to sell.
Every single successful entrepreneur I’ve ever met has a lot of scar tissue from failures along the way. It’s the necessary feedback loop needed in order to grow. If someone in business has never failed, then they’re thinking too small. All of the successful entrepreneurs I’ve met deeply remember their failures and how they grew from them.
But I am the marketing guy. I can help you pour gasoline on the fire. But he had no fire for me to pour gasoline on, so for that reason, I was out.
Sebastian eventually went on to secure $250,000 from Davey for 40% equity. With Davey’s background in supply chain, sourcing and manufacturing pet products, this business has a lot of potential.
Rove, the world’s first 3D-printed titanium wheelchair, was a really difficult one for me to back out of. The founders were phenomenal, they had a phenomenal product, a track record, and a great spokesperson in Dylan Alcott.
But the linchpin for me was the red tape around the NDIS. It was impossible to do a direct-to-consumer play where people could customise their chairs and buy them online.
In order to secure a chair through the NDIS, you have to get it approved by an occupational therapist and then processed through the NDIS, and that is not something that you’re able to do online. You have to go in and physically see someone, and go into specialist retail environments. And unfortunately, that’s just not the business for me.
Finally, we had the drinks business Yaala Sparkling. The founders had a unique product that tasted great. So why was I out? The beverage business is an absolutely brutal business, end of story.
Coca-Cola Amatil has completely locked down all of the supply chain for any new beverage businesses in Australia. They give all the cafes and restaurants the fridges for free, and in exchange for that, they are not allowed to stock or sell any other products in those markets.
The only alternative is to go with small, independent boutique cafes that don’t get distributed by Coca-Cola Amatil in Australia, and their margins don’t support a model like Yaala because they’re such a small batch manufacturer.
In order to break through, you have to be doing big volumes and the only places that you can go through are the big supermarkets someone like Woolworths or Coles. With where their businesses stood, I didn’t see the light at the end of the tunnel for them to be able to go out and do that.
A big week in the tank with some great stories to tell. I couldn’t find my match made in heaven in episode two, so I’m still itching to get my hands on a D2C play in need of an online marketing explosion. Tune in to next week’s episode to see if any pitches lit my fuse.
Sabri Suby is the founder and head of growth at the digital marketing agency King Kong, the author of Sell Like Crazy and a shark on the newest season of Shark Tank Australia.
Read more about Shark Tank Australia here.
Sabri is the founder of Australian digital marketing agency King Kong, and author of international bestseller Sell Like Crazy.
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