Made for Kids, By a Kid: Le-Glue

Authored by: Ian Gyan

Children usually seek out the guidance of a trusted adult to solve their problems. But sometimes they don’t, sometimes the adults don’t even notice the problem. So when they’ve broken their toys and made a mess, what is a child to do?

Tripp Phillips has the answer. He showed The Sharks why you should never send a man to do a boy’s job. On episode 1 of Season 10, the enthusiastic 12-year old entrepreneur, along with his sister, Ally, and father, Lee, walked into the Shark Tank looking for an investment for his product, Le-Glue.

Le-Glue is a non-permanent, non-toxic adhesive used to secure Lego and other children’s building blocks together. It dissolves in water, so kids can use it repeatedly on their toys. During his witty presentation, Tripp revealed his frustration over never being able to play with the toys he built before they fell apart. This was the reason he and his father created Le-Glue, and luckily, it solved two issues. Children could build and play with their Lego, and adults wouldn’t have to worry about accidentally stepping on their children’s toys.

The young entrepreneur confidently requested $80,000 in exchange for 15% of the company, an ask so favorable that The Sharks didn’t bother commenting on the company’s valuation. The product’s value was clear, and Tripp had the numbers, accolades and vision to back it up. Over its lifetime, Le-Glue had sold over $125,000 worth of product and was already secured by a utility patent, making Tripp one of the youngest patent holders in U.S. History! His clever goal was to partner with various toy brick manufacturers, negotiate a license agreement, and get Le-Glue included in all of their toy kits. But what truly made The Sharks perk up was the impressive margin between the 43 cents it cost to make Le-Glue and the $8.99 (now $5.99) price it was being sold for on his website.

Hearing these numbers, it’s no surprise that some of The Sharks decided to jump into the frey. Kevin wasted no time, offering to provide an $80k investment in exchange for 50% of licensing royalties until he recouped his initial investment, after which, a partnership in perpetuity would be established where Kevin had a 20% stake. Kevin further sweetened the deal by basing his shares on the condition that he could successfully negotiate a licensing agreement. Knowing a great deal when he saw one, Jamie Siminoff, the former contestant turned Shark, commended Kevin on his “wonderful” offer before backing out.

Daymond, however, stepped forward to outbid Kevin with a simpler offer of $80k in exchange for 25% of the company. At this point, Lori could see that either deal would lead Tripp and his family to success, so she decided to not get her fins wet this round and also backed out. Mark soon followed suit and backed out as well, saying that he couldn’t provide an offer better than the two that were already laid out.

Le-Glue was nicely positioned to jump to the next level, but instead of immediately giving in to either offer, Tripp made Daymond a savvy counteroffer. He set his new ask at $80k in exchange for 20%, but Daymond wasn’t impressed and stuck to his original offer, as he was already asking well below his usual 33% stake. With three Sharks out and two great offers floating in front of him, Tripp was left to make a choice. After a nervous moment of silence and quick word in his father’s ear, he announced to Mr. O’Leary that he’d like to do business.

Kevin O'Leary - Shark Tank Secrets

What better way is there to kick off Season 7 of Shark Tank than with this Forbes interview with Kevin O'Leary. In the interview, Kevin shares some of his Shark Tank secrets - specifically, what type of entrepreneur makes him interested in investing his hard-earned money.

You can watch the interview and read the original article written by Steve Schaefer of Forbes here.

They may call him Mr. Wonderful, but in the Shark Tank boardroom Kevin O’Leary is often anything but friendly to the entrepreneurs pitching their ideas for hot-selling consumer products. O’Leary’s barbs, zingers and critiques have made him a reality TV star alongside colleagues Mark Cuban, Barbara Corcoran, Lori Greiner, Robert Herjavec and Daymond John.

It takes a lot to cut a deal with O’Leary, a tenacious negotiator and harsh critic of gimmicky contraptions, but in a recent interview with Forbes he shared the secrets to success and why viewers can expect him to bet on a lot of women founders in the news season premiering Friday night.

There are three keys to getting one of the sharks to buy in, O’Leary says, evident in virtually every case where a deal is reached with the inventors and entrepreneurs pitching their idea.

First, the basic elevator pitch. “In 100% of cases an entrepreneur can articulate their idea in 90 seconds or less,” he says.

Second, the team “can articulate why they’re the right people to execute the business plan.” Plenty of inventors might be able to come up with a great idea; far fewer have the wherewithal to see it through production, distribution and profitability.

Above all though, O’Leary says there’s a single most important trait Shark Tank success stories have in common.

“The one that really matters is the entrepreneurs know their numbers inside out,” he says, rattling off examples like break-even points, market share statistics and margin analysis. “In Corporate America, when you want to be a leader…above all, you need to know your numbers.”

That doesn’t mean O’Leary is infallible. While he holds the crown for the largest exit in Shark Tank’s history — the $14.5 million sale of smartphone photo collection app Groovebook to Shutterfly SFLY -5.71% last year — the product that has proven to be the best revenue generator completely stunned him.

Scrub Daddy is a sponge product funded by fellow shark Greiner. The selling point is that under cold water the sponge is hard and can be used to scrape food residue off a plate; under warm water it’s softer and can be used in more delicate applications.

“I thought it was a piece of crap,” says O’Leary. But after landing a deal to hit the shelves in Wal-Mart, Scrub Daddy is up to $50 million in revenue.

While he missed out on Scrub Daddy, O’Leary has more hits than misses with his Shark Tank investments, and after studying all of them through 2014 he found a surprising statistic.

“One hundred percent of my returns the last six years have come from companies run by women,” O’Leary says, across different sectors and geographies. “There’s an old adage that says ‘if you want to get something done give it to a busy mother,’” he adds, but he’s less interested in how it’s happening – he speculates speculating that women are more mindful of risk and better at time management, both crucial for the small companies in the Shark Tank pool — than about the outcome.

“I don’t care why. I care about the actual financial results. So this year on Shark Tank, I’m investing in a lot of women.”

Kevin O'Leary: 10 Secrets to Being The Best Boss You Can Be

Now, I know what you are thinking. Why is Kevin O'Leary giving advice on how to be a good boss?! There's no way he treats his employees with respect! Well, just because he is tough in the Tank doesn't mean he is a bad boss. Check out his latest LinkedIn Influencer article:

Over the years, I've worked for others and I've worked for myself. Through trial and error, I've figured out a few key character traits that helped hone my leadership skills. Directness, transparency, and decisiveness are three essential traits of a good boss. It’s also important to remember the rules outlined below.

1. Employees are not your friends. Even if you like them, even if you hired them because they are your friends, while they are working for you they are not your friends. They are your employees. The problem with socializing with your employees is that it makes it hard to be objective about their performance, and harder still to crack down on them if they’re under performing.

2. Maintain a clear line of command. In most of my endeavors, I've had a partner, and we've helmed our companies side by side. But I weigh in on issues that fall outside the realm of my command only when completely necessary. Employees always knew which problem to take to Michael Perik and which to take to me. Overlap of authority can get confusing, muck up productivity, and cause unnecessary delays, if not out-and-out grief.

3. Be accessible. You’re not building a fiefdom—you’re building a company. Don’t alienate, isolate, or separate yourself from your partners and top earners. Don’t put them on hold, don’t fail to return their calls, and don’t make them feel like they cannot approach you. I've seen this phenomenon firsthand. It’s toxic, and it’s usually the product of fear or the inability to cope during troubled times. If your first instinct is to bury your head, you are not a leader.

4. Delegate, delegate, delegate. You cannot—nor should you—do everything. CEO's who think that they should weight in on every single aspect of their company get too bogged down in the details, much to the detriment of the overall health of the company. If a ship’s captain is overseeing the catering, he’s going to hit an iceberg.

5. Don’t procrastinate. When an employee is problematic, you must act. Now. Do it right. Do it by the book. But do it.

6. Never pass the buck. Blame stops with you. It always stops with you. Even if you think you had nothing to do with the decision that got your company into trouble in the first place, you’re wrong. You likely had something to do with hiring the person who did screw up. Take immediate responsibility, do what you can to fix the problem, and then whack the knucklehead who couldn't keep pace. If your name is on the product, business, or marquee, that’s especially important.

7. You’re not their parent. Employees will only bring their drama to work if you let them. If you don’t want to be treated like a parent, don’t act like one. If employees are having squabbles, let them figure it out among themselves. I also try to steer clear of giving personal advice. My employees problems are their problems to solve. And it’s up to them not to bring those problems to work. By the way, if one of your employees is suffering from a genuine issue—addiction, depression, that kind of thing—don’t suggest they get help, insist upon it.

8. Life’s not fair. Some people will simply make more money than others in the same job. Some people will work harder. Some will get higher sales. You will trust one over the other to get the job done. You will likely have favorites. That’s life. If someone complains about it, tell him or her to get over it.

9. The boss doesn't always make the most money. Find stars and pay them well. If you want to attract those stars, you’ll have to lure them with dollars. Remember that money’s the great motivator, and if it means you take a hit financially, take it. Talent will always bring in more money for the company, and that has got to be your number one priority always. Which leads me to…

10. The company comes first. This is the most important tenet. Have a singleness of purpose—the health and welfare of the company—keeps things clean and clear. Employees never question your priorities, nor do they have to guess at their goals.

Flashback: Mango Mango Mango

By: Michael Barbera
Strategy Consultant
@mbarberausa

The ladies of Mango Mango Mango entered the tank with a well-rehearsed pitch (full of dancing and synchronized jingles) and more importantly, a tasty product. All five Sharks loved the taste of the mango preserves - a sure bet that once tasted, a consumer will make a purchase. However, the only problem the product seemed to solve was a satisfaction of the taste bud. 

One of the key reasons for any company to be denied private equity funding is the lack of solving a problem in the consumer’s life. Yet although it's not a requirement, Mango’s handicap doesn't improve with their industry, as the food service industry is notorious for offering extremely low profit margins. And as any avid Shark Tank watcher can tell you, the higher the profit margins, the higher chance of getting an investment. But even though there were two serious handicaps at this point, all Sharks were still in and the business had a chance of receiving capital. Why? Because the product was that good!

The final remaining variable that could help secure an angel was the cash flow of the business. Mango’s COGS (cost of goods sold) were quite high, at nearly $3.00 per jar. With a sale price of $6.00, this leaves Mango with a 50% profit margin before operating expenses and distribution. The motivated ladies of Mango were not receptive to third-party manufacturing and distribution, which would eventually lead to less production, less sales, and exhaustion. This naturally caused Kevin O’Leary to utter his infamous words, “you made a hobby”, which is true for all businesses that don't generate profit. make any money.

In the end, Mango Mango Mango didn't receive any offers from the Sharks, which was ultimately for the best. They are better off using their own capital for growth, rather than seeking equity-based capital in the food service industry.

Kevin O'Leary: New Year's Resolutions

With the New Year just around the corner, many of us are already wondering what 2015 has in store for us. While it is certainly important to come up with your own New Year's Resolutions, Mr. Wonderful has been gracious enough to share (on LinkedIn) some of his advice for gaining more financial freedom in the upcoming year. Enjoy!

The New Year is almost here and you know what that means. A brand new set of financial challenges. In this economy, those challenges can seem bewildering. Thankfully, I can help you navigate those perilous waters so that you and your family hold on to as much as possible of that most precious of commodities: Money! Here are three New Year’s resolutions that will move you and your family further along the path to financial freedom.

1. Summarize All Your Spending

You already know how important it is to set aside some of your income - even if you start small - to invest and put to work towards building your wealth. But it's also easy to get tempted to spend more than you should. That's why you need discipline - and a great way to build discipline it is to prepare a monthly summary of all of your spending.

I’m not talking about your monthly bank statement (though you should pay attention to that, too). I want you to track all your spending so that you can better evaluate your decisions about your cash. Plenty of tools can help you, from a pen and paper to spreadsheets or smartphone apps.

Once you start seeing these lists of where your precious money is going, you'll be amazed at how quickly you start thinking twice before spending what you should be investing.

2. Get More Yield from Your Assets

My mother taught me about the importance of limiting risk when it comes to money. One of the ways I do that is by prioritizing reliable, income-producing investments - the kind that pay regular dividends, interest or distributions. (Your financial adviser can tell you more about the pros and cons).

One of the great things about this strategy is that you don't need to worry as much about day-to-day stock price movements. But the best part is the feeling of knowing that your investments are regularly generating cash.

3. Make Sure Your Kids Know How to Manage Their Money

There's nothing like family to help motivate people when it comes to being smart with money. It makes sense - you're more driven to save and invest when you know that your savings will help your kids and grandkids – not just yourself. And you'll be more careful about big risks when you know that a bad decision can affect your family.

So, just as my mother taught me about money when I was young, I have done the same for my kids.

If you haven't done the same yet, get started this year. It's easier than you think - start by talking about money in general, so it's not a taboo subject. Have some conversations about the importance of saving over the long term. We all feel a responsibility to our families and there’s no reason that shouldn't include financial literacy.

Get Started

These three New Year’s resolutions are simple, but powerful. If you follow them, you’ll be surprised at how much you save for yourself and your family. They’re also easy to follow, so you have no excuse not to take these steps. You’ll thank me later.

[None of this content should be construed as investment advice, especially as they relate to any financial products I may represent. Investors should speak with their financial advisers for any investment advice and to discuss the risks of investing to any financial product. This represents my personal opinions and should be enjoyed as such.]

@ Kitchen Safe - Controlling Bad Habits

Ryan and David, owners of Kitchen Safe, approached the Sharks requesting $100,000 for a 5% stake in their company. David came across like a used car salesman yelling the words KITCHEN SAFE over and over. One would have expected the Sharks to be annoyed, but interestingly enough they found it humorous. We couldn't be sure if they were laughing at or with David and Ryan but based on the offers made it certainly appears like the Sharks enjoyed the commercial approach to selling this bizarre product.

The Kitchen Safe is a plastic container with a lid that locks on to the container with a timed mechanism that does not allow the lid to be opened until the countdown timer reaches zero. Its intended use is for people to lock away their junk food so that they are not able to yield to their temptation to snack on the junk food at will. Instead, they will be frustrated by not being able to open the container where they themselves stored the junk food and set the timer at a point during the day when their temptations were not as strong.

David tells us that the Kitchen Safe functions as what psychologists term a commitment device. His claim is that this is a scientifically proven method to fight temptation. The idea is that you create a larger obstacle to the temptation in order to increase the cost of yielding to the temptation. As there are no overrides that would allow the device to be opened the only way to bypass the commitment device is to break it. And the cost for doing so is a whopping $49.00 which is the retail price for the container.

But, therein lies the dilemma. On the one hand, all of the sharks agreed that the device (which according to Kevin O’Leary is a piece of crap) is way overpriced at $49.00. Of course it is when you are looking at it as a kitchen container. However, if the price were significantly reduced, then the question would be whether it would still function well as a commitment device.


[TV Note: After calling the item a piece of crap, David is brought to tears and tells of his own prior challenges of trying to resist junk food and being overweight. A chord is struck and David is brought to tears soliciting Kevin to profer: “Don’t start crying, be a man”. David is on a roll and tells Kevin off after which Lori chimes in and tells Kevin to shut up. Great TV!]

So, what about the financials? In the 11 months since the product has been available on line, they have sold 300,000 units. The cost to manufacture these containers is $14.50 and as mentioned the retail cost is $49.00. If those numbers are accurate that would mean that Kitchen Safe has had a gross profit of over $10 million. One has to assume that these entrepreneurs were not on the show to ask for money. They wanted a Shark (or Sharks) to join their team and propel them to the next level.

Several offers were placed on the table, and Mark Cuban was never even able to make his own offer before Daymond John forced everyone's hand and asked for a decision to be made. At that point two offers were available: The first was from Daymond who offered $100,000 for a 20% stake in the company. The second was a joint offer from Lori and Nick Woodman (the Guest-Shark) for the same $1000,000 for a 20% stake. There were two differences though in the offers being made. David and Ryan already had a deal with HSN to sell their products. But Lori and Nick's offer came with the contingency that the deal with HSN needed to be dropped and that a deal with QVC would be put in its place. This did not sit well with David and Ryan as they appear to be men of integrity.

But, business is business, and what the men really wanted was to partner with a Shark. And given the choice of partnering with one Shark (Daymond) vs two Sharks (Lori and Nick), the choice was easy. Goodbye HSN and hello QVC!

Congratulations to Ryan and David on a job well done. There is no doubt that thousands of people in middle America will be purchasing this 'piece of crap', and even Mr. Wonderful would be willing to sell this 'piece of crap' to make money.

Kevin O'Leary: 3 Money Mistakes You Must Fix to Get Rich

In a previous post, I shared a list of my top five Influencers on LinkedIn. It took some time, but LinkedIn finally extended the Influencer title to all of the Sharks, at least to those who have an active presence on LinkedIn. Here is an article written by Kevin O'Leary just a couple of days ago which I thought was worth sharing here on Blog Shark Tank. I think the topic is critical especially for millennials and the younger generation, and is blunt and to the point, just like everything that comes out of Mr. Wonderful's mouth. So here it is:

3 Money Mistakes You Must Fix to Get Rich 

By: Kevin O'Leary


I get a lot of questions about how to get rich, and I always give the same answer.

Don’t spend too much. Mostly save. Always invest.

Seems simple enough, right? Yet so many people do the exact opposite—invest poorly, spend way too much, save almost nothing, and remain willfully ignorant about their finances.


Why? Because they don’t understand their relationship to money.

The first step in changing money habits is taking a cold hard look at your financial input and output. Here’s what you need to do: boil your money matters down to one simple number by adding up all your earnings and subtracting all your expenditures over three months. I call this your 90-day number.

Once you write that 90-day number down you’ll be faced with one of two truths.

Your number is positive. Congratulations, you’re one of the few people taking in more money than you spend!

Your number is in the negatives, and like the majority of men and women, you spend more than you make.

The good news is that no matter what your 90-day number teaches you about your relationship with money, there’s always room to improve. I’m going to help you do exactly that by pointing out 3 money mistakes everybody makes at some point in their lives, and teaching you how to fix them.

Money Mistake #1: You’re drowning in credit debt.

The Fix: READ THE FINE PRINT

Spending too much is a disease, and credit card debt is a cancer. The first time you get a credit card bill and don’t pay off the full balance, you’ve let the first financial cancer cell into your life.

Next time you get a credit card bill in the mail, put your glasses on and take a good, hard look at the fine print.

Credit card companies are required by law to tell you how many years it will take you to pay off your balance if you pay the minimum each month. In most instances, this number is a monstrous thing to behold.

With typical compound interest rates averaging around 16%, this black hole of debt keeps growing, and growing, and growing.

Once you take a look at the fine print, you MUST start dedicating every spare penny you have to paying off your credit. If you want to get rich, you need to eliminate your debt first.

Money Mistake #2: Spending makes you happy

The Fix: GET A HANDLE ON EMOTIONAL SPENDING

Most men and women who spend too much do so because it feels good, temporarily. But as I always say, mixing money with emotions is a toxic combination.

Don’t go shopping to change your mood. It might make you feel better in the short term, but I promise: the long-term fulfillment of saving and growing your money far outweighs the temporary satisfaction of retail therapy.

Recognize when you’re about to spend with your emotions, and go for a walk, cook, or read instead. Do anything; just don’t head for the mall!

Money Mistake #3: Frugality isn’t fun

The Fix: CREATE A “FUN MONEY” FUND

Many people who commit themselves 100% to eliminating debt and saving money find that a certain joylessness creeps in after a while. The same thing happens to dieters who deprive themselves of all their favorite foods for months, and then cave to late-night binges.

That’s not a way to live, and that’s not what I advocate. Austerity, yes; deprivation, no.

The key is to include spending on fun things in your budget. Set aside a manageable percentage every week in a fund that will let you splurge with cash. Go out for lunch, get your hair done, or use your fun money to go on a vacation—do whatever you want, as long as you pay for it outright. This way you can enjoy your splurges without feeling guilty!

You can read the original article here.

Mo's Bows: Money Isn't Everything

Moziah Bridges stole the show in last week's episode of Shark Tank. The 11 year old entrepreneur from Memphis, Tennessee started his bow-tie business at the young age of nine after deciding to pursue his "passion for fashion". He along with his grandmother spend many hours a day sewing a variety of bow-ties to then sell for a high-end $40 or $60 apiece. Mo charmed the Sharks from the moment he started his presentation, and ultimately got an offer from Kevin O'Leary. But although Mo turned this offer down, what he walked out of the Tank with was a lot more valuable.

Mo applied to be on Shark Tank for two reasons: To acquire money to be able to move the manufacturing to an actual facility, and to partner with his idol, Daymond John. After being told by three Sharks that he could make it on his own without an investor, Mo was left with two offers, each reflecting on one of his underlying purposes for entering the Tank. Kevin offered to provide the money Mo needed in exchange for a $3 royalty on each bow-tie he sold, while Daymond offered to mentor Mo for no equity in the company at all. With the help of his mom, Mo decided to give up the equity offer and instead walk away with a direct line to the fashion mogul, Daymond John.

@ Buffer Bit: Tastevins, Time Machines, and Shiny Shoes

By: Pete Troshak
Twitter: @Shak74
Website: www.Shak74.com

If you are the kind of person who stores your power tools near your shoes, boy does Mike Quinn have a product for you. Quinn is the inventor of the Buffer Bit, which is a furry drill bit for your cordless power drill that you can use to shine your shoes. The bit is priced at $19.95 (each costing him $9 to produce), and comes with three different wool pads for polishing different surfaces. The bit can also be used to polish your vehicles and other aluminum and chrome products. Similar items that are self-contained and that just polish shoes can range from around $30 to $100, so this is quite a bargain. Quinn entered the Shark Tank asking for $75,000 for 25% of his company, valuing his Buffer-Bit business at $300,000.

@ Alaska Glacial Mud Company

By: Elizabeth Francois, Writer and Designer
Twitter: @elizfrancois
Facebook: Elizabeth's Note Book

Lauren Padawer strolled into the Shark Tank wearing a short sleeve, teal blue wrap round dress and black fur trimmed Wellingtons, (a fashion faux-pas perhaps). She is a commercial fisherman, the owner and founder of Alaska Glacial Mud Company, and was seeking $100,000 for a 20% stake.

As Lauren described how she discovered the buttery soft silky mud on a wilderness rafting trip down the majestic Copper River, visions of luxuriating in the mud danced in my head. I loved this product already. The Sharks however didn't seem to share my vision, eyeing Lauren a little hesitantly during her pitch. Her enthusiastic: “who wants to get their fins dirty and play in the mud with me?” elicited a lukewarm response from the Panel. Barbara put a voice to what everyone else seemed to be thinking: was Lauren the only one in the world to discover this miracle mud? Yes. (..well maybe not after the airing of this episode).

Takeaways: Social Media, Story Time, and a Deck of Cards

By: Matt Turner,
Writer and Entrepreneur

There were certainly a lot of lessons learned in the Shark Tank this week for both the entrepreneurs on the show and the fans watching. Here are some of the Key Takeaways from this week's episode (Season 5, Episode 15):

1. SMO & the Changing Landscape of Social Media

Entrepreneur: Susan Peterson
Company: Freshly Picked
Proposal: $150,000 for 10%

Susan Peterson, who came into the Shark Tank asking for an investment for her baby shoe moccasin company, beautifully portrayed the opportunities available to all entrepreneurs through Social Media Optimization (SMO).

The Sharks' New Groove

By: Matt Turner,
Writer and Entrepreneur

The GrooveBook pitch was one of my favorite pitches to date. There are several elements in it that truly provide entrepreneurs keen insight into both building a business and successfully closing a deal with investors.

One thing that truly impressed me about Julie and Brian Whiteman was their knowledge of their business. They knew all of the numbers that an investor likes to see when assessing any investment opportunity.

With a cost of $2.99 per month for their photo subscription service, their cost of $2.30 left them with $0.70 profit per book. However, even with 18,000 subscribers in 8 months, they were still losing cash. With this business model, it would take 30,000 monthly subscribers to break even on their $21,000 of cost each month, with a profit of $0.70 per subscriber per month there after.

Another thing that impressed me was their commitment to this business. Having invested $400,000 of their own money, their passion for the business was quite apparent. Their ask of $150,000 for 20% of their business wasn't pulled out of a hat; it was well thought through and appropriate.