Investor:Daymond JohnShark Tank Appearance:October 17, 2014Offer:$300,000 for 20% stake Results:Sales increased from $5.7 million to over $20 million.
Entrepreneurs who close a agreement on Shark Aquarium usually feel elated when they leave the set. That's not the case for David Levich, Eric Liberman and Dan Gershon – three longtime friends who started sunglasses company Sun-Staches together in 2011. Although they have a shark on board as enthusiastic investor, Levich was not excited. “We got our asses kicked,” he says. Returning to their trailer, the old friends were sorry. "We thought we made a really bad deal," admits Levich.
For one thing, they were mostly interested in working with Mark Cuban but ended up with Daymond John instead. They originally offered a 5% stake in their company for $300,000, but John traded a piece of Sun-Staches four times as big for the same investment. "We just gave away 20% of our business for peanuts?" Levich says they wondered.
After a few minutes there was a knock on the door of their trailer. He was one of John's team members, along with a top executive for a large toy company. "You are in very good hands," the executive said. "You should celebrate. »
He was right. Within months, Sun-Staches, which were already being sold online and at major retailers like Toys R Us and Party City, had secured what they had been longing for:licensing deals with Marvel, Nintendo, and Warner Bros. Studios. . “Daymond was really instrumental in getting those deals,” says Levich. “He opened doors for us and he was able to negotiate favorable terms. He knows these people; his people know these people. »
Related: 5 Tips for Entrepreneurial Success Some might see $20 million in sales of goofy sunglasses with mustaches attached. Shark Aquarium s more unlikely successes. John is among those raising an eyebrow. “The world often expects simple, silly things, like Snuggies or Sun-Staches,” he says. "Things that are affordable, that make you feel good, and take your mind off day-to-day problems." ”
For their sales pitch, the Sun-Staches partners had selected samples for each of the Sharks to try:a football helmet for John, a cowboy for Robert Herjavec, a black cat for Lori Greiner, a devil for Kevin O'Leary, and a pixie for Cuban. The moment everyone (except Cuban, who passed on the tatting) donned the Sun-Staches, John knew he wanted to. "It was instantly a party," he said. “There was proof of concept there.”
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Unlike Many Other Shark Aquariums entrepreneurs, Levich, Liberman and Gershon were well prepared for the flood of orders and interest after their episode ended. They had the inventory and the infrastructure in place. What proved more difficult was fending off the imitators. "We didn't anticipate the number of people who would start copying our products in countries around the world," says Levich. To deal with infringements of their intellectual property, the team hired people in-house to monitor the copiers. Levich says they've successfully removed over 1,000 copycats from Amazon and eBay. They have also stopped huge retailers from selling counterfeit products, leading to arrests in Hong Kong.
“We argue constantly, but that's because we make all of our decisions by consensus, not by majority rule. »
"If we don't protect ourselves internationally, we won't have a business," says Levich. They also won't have a business, Levich points out, if they don't continually introduce new products. Five in-house designers are constantly sketching out ideas for new Sun-Staches. Levich says they will make injection molds for about 20 to 30 percent of the designs that are drawn, at a cost of about $10,000 to $20,000 for each mold. Then every other face mask will be put into production. Sun-Staches currently has around 500 models, with Batman the perennial bestseller.
One thing you can't hide is a weak squad, and Levich says they're working diligently to keep theirs strong. "It's the hardest thing we do," he says. "We argue constantly, but that's because we make every decision by consensus, not majority rule. We are currently working on a new range of sunglasses which requires the creation of a whole new distribution network. Eric, Dan and I sat in a sushi bar while I tried, sometimes hard, to convince them that the line was worth what it would cost in money and opportunity. If they had not both come, we would not have advanced. »
The three try to treat all of their stakeholders with equal respect. “We want to support each other to build a successful business while being fair to our customers, suppliers and employees,” says Levich. “Our goal is to be able to sleep at night, not to be billionaires.”
Related: 5 tips for running a successful business
This article originally appeared in the November 2017 issue of SUCCESS magazine.
