Friday night on ABC's Shark Tank, we were introduced to a product that could, as infomercial godfather Kevin Harrington put it, make "$100 million on TV." It was LipStix ReMix, an ingenious lipstick recycler.
Although the pitch ended in a fantastic six-figure deal, its inventor made a simple negotiating mistake that could end up costing her an untold fortune. Jason Cochran found out what it was in WalletPop's exclusive AfterShark interview. (Make sure you stay tuned for the end of the interview, when Quillin offers an exclusive two-for-one deal exclusively for WalletPop readers.)
The promising lipstick doyenne was Jill Quillin, who wanted $105,000 for a 30% stake of her cosmetics creation. Every woman knows you can't get all the lipstick out of a tube. After a certain point, it won't scroll up any more, and you wind up wasting about a third of every tube you buy.
Her kit promises to salvage that wasted lipstick. Just three spent tubes are enough to make a whole new one using her mold and blank tubes. Pop the lipstick nubs in the microwave for 45 seconds, pour the liquid into the mold (which, cleverly, only she can sell you), put it the freezer for 10 minutes -- and it's ready. When you use up three of those, you can even do it again.
This is a woman who started at the bottom. She set up a table at a Tennessee mall for 10 days at Christmas and sold 254 units for $19.95 each.
The male Sharks had to turn to Barbara Corcoran, the only female Shark, to hear it was a good idea. She conceded it was very clever, not least because "nothing's more exciting than a new lipstick."
Robert Herjavec figured that you can't sell this item without being able to demonstrate it, and since that was Kevin Harrington's racket as a TV commercial guy, he claimed to be useless to her. He went out.
But if you had pegged Quillin for a dabbling housewife, here's where she surprised you. She told him not to be so hasty, because she planned to use that $105,000 investment to produce a single test infomercial in a small market, which should be enough to launch her product into the big time as well as get customers familiar enough with it so that it would sell on retail shelves, without the aid of television. She had a game plan, and visibility was all she needed to put it into play.
In the ads for the episode, Harrington was the one implying this product "could be $100 million on TV," and sure enough, he joined with John and Corcoran in a circuitous, back-stabbing round of bidding.
Although it ended in success, Quillin erred in turning her back on the Sharks for a few minutes to call her husband for advice. His counsel was mostly supportive and useless, but in the time it took to get it, the Sharks, led by Daymond John, had privately banded together to steal more of Quillin's company away from her.
Cornered, she took the deal. She still stands to make a fortune. But her moment of insecurity may have cost her an even larger one. After years of scheming, spending, and slaving, she needed outside confirmation that her dreams were about to come true. I'll bet she never lets that happen again.
Next it was snack time in the Shark Tank again! This time, courtesy of Captain Ice Cream.
That was the corny gimmick of Tim Gavern, who wants to create a franchise of wholesome, moped-riding ice cream men, and to kick off his pitch, he rode his vehicle, bell tinkling, down the long forced-perspective hallway to the Shark Tank and across the oriental rug.
I desperately wanted a peek into the formative years of Gavern's childhood, because the entire time, he was so starry-eyed about the mythos of the ice cream man that he didn't seem to be aware that the Sharks were subtly making fun of him. When he strode in wearing his white shorts and his paper cap, Daymond John saluted.
"How much do you sell in a day, Captain?" snarked Kevin O'Leary.
Gavern confessed it was only about $25 an hour. Strike one.
Herjavec: "Are you making a living?" Gavern: "I'm barely eking out a living." Strike two.
O'Leary admitted that yeah, yeah, yeah, he likes children and sunshine and ice cream and all that stuff, but there wasn't enough money in this idea for him, since any yahoo with a moped could copy the idea. Gavern, protesting that no, his franchisees would be the model ice cream men who no one else could be, got close to whining: "It's a start up. What am I gonna tell ya?"
Strike three. You can guess what the Sharks told him as his dreams melted before our eyes: "Goodbye."
In walks a guy with an idea that seemed innocuous at first, but gradually, revealed itself as so brilliantly diabolical that even the cold-blooded Sharks seemed to get chills.
His idea, essentially, was a patented litmus test that detects the presence of caffeine. Boring, right? But what he wanted to do with it was virtually insidious: He wanted to convince one of the dominant sweetener manufacturers (for TV, he had to call them "the blue guys," "the pink guys," and so on) to put this incredibly inexpensive strip of reactive ink on every sugar packet they make.
The idea was that people will intentionally activate sugar packets by putting wet spoons on them, and use of sweeteners would leap. His entire scheme banked on the hope that one of the sugar manufacturers would put it on their packets to get a leg up on the other guy.
Or, he figured, they'd pay him a huge amount to bury his invention so no one else got it. He wanted to foster a bidding war in a rough market. His idea was wasteful, it was disruptive, and it was savage.
"There's something nasty about you that I really like," O'Leary gushed.
Corcoran didn't think Americans really worry much if their decaf is actually caffeinated, and she also thought the marketing of this new feature would put off the sweetener manufacturers, so she went out. (Personally, I could see people sitting at restaurant tables turning the packets pinks just about of boredom, so I think she was wrong on the first count.)
"I like the idea you're trying to attack the number-one drug in the world," said John, but he agreed with Corcoran, and he went out.
Herjavec and Harrington were willing to put in the $200,000, but with the highly risky contingency that one of the big sweetener makers had to agree to put it on its packets first. While O'Leary dithered about whether he'd offer, too -- he was tempted by the dastardly possibilities -- Harrington lost patience, and, perhaps worried about being smoked out of the deal, gave an ultimatum for a decision.
And the rarest of things happened: Kevin Harrington won. He rose, shook the hand of the evil sugar genius, and returned to his place with the rest of the furniture on the set.
Continuing with the coffee theme, Jeff Hughes and his wife, from Santa Monica, presented Legal Grind, and they wanted $200,000 for a mere 15% of the company.
"Mmm, that must mean there's profit!" crowed John.
Not so much. Also, not much performance. The duo stumbled and halted over their pre-planned patter like an amateur vaudeville team. The concept -- at their cafe, the coffee costs nothing, but you pay $300 to chat with a divorce lawyer (or less for something simpler) while you drink it -- didn't provide the jolt of success the Tank needed. A Starbucks for lawsuits? Has it gotten that bad for us?
At any rate, the Hughes weren't savvy. They made the grave mistake of admitting they had no idea how to franchise even though they had a list of interested applicants, and the Sharks were in no mood to hand their cash over to someone who would squander it the minute the check cleared. They need lawyers of their own.
We also caught up with a former contestant on the show, Lisa Lloyd of Treasure Chest Pets toys, which are storage boxes disguised as stuffed animals. Back when we saw her in the Tank, she was at the end of her rope, but having secured $150,000 from John and Corcoran, now she was in party mood, as her invention was being picked up in stores across the country.
AfterShark caught up with her, too. Here's what Lloyd had to say about her experience in the Shark Tank:
Make sure to catch up with all of our exclusive video interviews from the show on our AfterShark home page: www.dailyfinance.com/after-shark-tank!
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