FuzziBunz founder Tereson Dupuy’s appearance on ABC television’s “Shark Tank” netted some painful but valuable advice. Artist Kyle Rainey taught his children an important life lesson about trying and failing … and took them to Disneyland. Lisa Lloyd landed an investment partner for Treasure Chest Pets, but the business ultimately failed. Still, she learned more from that disappointment than from all her other business successes. Colin Grussing, who had a shark costume made for his appearance, still relies on those quirky instincts but discovered that being an entrepreneur sometimes means following the rules.
While only one of these south Louisiana “Shark Tank” contestants won investment capital, each found the experience valuable in other ways. That sort of experience is typical of pitching to investors, according to local economic development officials.
Startups in pitch competitions like “Shark Tank,” or even those on a much smaller scale, shouldn’t expect to cash in, said Ansley Zehnder, senior vice president of marketing with the Baton Rouge Area Chamber. The competitions help businesspeople refine their pitches, validate proof of concept, gain valuable exposure and potentially gain access to capital.
“Just the basic opportunity to share one’s business concept could provide introductions to critical business partners, like suppliers, manufacturers and others who are important in the supply chain,” Zehnder said. “Just by participating in any pitch competition, entrepreneurs can forge connections to mentors who can also further propel or accelerate their growth.”
Exposure to potential investors is one of the biggest benefits of pitching, said Stephen Loy, executive director of the Louisiana Technology Park, one of the hosts of the 2014 Baton Rouge Entrepreneur Week Pitch Night.
“You’re talking to these people plus X, and you never know how big that X is going to be,” Loy said. “Maybe no one in the audience is interested in (your idea), but they talk to their uncle or a friend or something. That can really help out and add some value to these events.”
The experiences and lessons of the “Shark Tank” competitors follow.
Bunz of steal
Three years ago, Tereson Dupuy, founder and CEO of Lafayette-based FuzziBunz, was struggling. Her adjustable cloth diaper company, the “baby” she had dedicated countless hours to over a dozen years, was smothering beneath an avalanche of cheaper knockoffs. Her design patent provided about as much protection as the paper it was written on. She was exhausted, physically, creatively and entrepreneurially.
Still, when the producers of “Shark Tank” called, Dupuy’s initial response was, “I really don’t think so.” Her company wasn’t a startup. It didn’t really fit the profile.
“But when they said there were 5.5 million viewers on a Friday night, that grabbed my attention,” Dupuy said. “Maybe it could be really good for the brand. Maybe it could grab the attention of somebody else, and we could sell lots and lots of diapers.”
Dupuy went all in. It took four months of nonstop work to go through the process, prepare an audition video, answer all the producers’ questions and then answer some more. Dupuy made sure she knew all her firm’s numbers, backward and forward.
FuzziBunz had already sold a lot of diapers, roughly $20 million worth, with an estimated $3.9 million in sales projected for 2012. But the profits were more like the stuff you had to wash out of the diapers. In 2012, the company might have earned $20,000.
The sharks wouldn’t bite on an unenforceable patent — by then Dupuy’s product had spawned dozens of competitors — or a 0.5 percent profit margin.
Dupuy returned home. She felt good about the experience. The sharks were respectful and recognized her tenacity. She had met lots of other entrepreneurs and made valuable contacts.
And she left with two pieces of invaluable advice. Judge Mark Cuban told her to concentrate on outcompeting her rivals. Judge Robert Herjavec told her the real problem with FuzziBunz was her.
It took a while before Dupuy could accept the latter.
“I was part of the problem. I was burned out. … I was tired of running a company. I was looking for an out,” she said.
Eventually, Dupuy found one. She licensed her brand, ceding control of the business to investors who had money and manufacturing connections. Eventually, that strategy also failed.
“The brand pretty much flat-lined. It wasn’t in stores any more,” Dupuy said. “It almost ceased to exist.”
Dupuy was hurt, but there was little she could do about it. She moved on and started Pitch Perfect Consulting, teaching entrepreneurs how to pitch and helping them connect with investors.
Then in 2014, Lafayette businessman Benton Knobloch called. He wanted to partner with Dupuy in a product licensing company, and the first brand would be FuzziBunz. The partners formed Infant C Trading Co. LLC in late December.
Their new plan followed Cuban’s advice, in a roundabout fashion. Dupuy said she applied 15 years of success and failure to start from scratch. She and Knobloch restructured the company, outsourcing manufacturing and distribution and basically eliminating overhead.
The company has no corporate headquarters and no warehouse. It doesn’t really have an address or employees. Instead of the 30 workers FuzziBunz employed at its peak, Infant C has an eight-member team, mainly contractors, in far-flung locations, including California, Maine, Morocco and New Orleans. Business meetings take place on Skype.
“FuzziBunz headquarters is pretty much in my head or wherever I am or wherever my laptop is,” said Dupuy, who now lives in New Orleans. “It gives everybody a lot of freedom and also eliminates needless expense.”
Lightz, camera, patience
Kyle Rainey landed a “Shark Tank” gig on a whim and without a product. The Baton Rougean has dreamed up more than 80 inventions, but it had been years since he tried to bring one to market. He wasn’t expecting much when he emailed “Shark Tank” the idea for “Tail Lightz,” lighted magnetic stickers that kids could attach to their clothes.
But a little while later, Rainey got a call telling him he would be on the show in 30 days. He didn’t have to audition. All he had to do was design the products; get someone to turn out some prototypes; put together provisional patent applications; produce an audition video, props and displays for his products; research the competition and market; learn his manufacturing options; and complete daily homework assignments from the producers.
The prototypes were bulky and inflexible, and the sharks said as much. Rainey returned home without a deal. He described the experience in his blog. In addition to a trip to Los Angeles and Disneyland, Rainey showed his children it’s better to try and fail than not to try at all. The “Shark Tank” adventure inspired Rainey’s son Steffek to launch a website, SteffekRainey.com, where he sells his own artwork and children’s books.
After his episode aired, several companies approached Rainey to talk about investing in his idea. He partnered with Windswept Marketing to make and market the product, now known as Blinkerz. There are six designs. The partners have approved retail packaging and hope Blinkerz will be in retail stores soon.
Rainey also heard from tons of inventors and entrepreneurs seeking help and advice. He now owns a piece of three other inventor-owned companies and is negotiating with a fourth.
“My appearance on Shark Tank taught me that sometimes you have to be patient for the reward associated with the risk you take,” Rainey said. “I believe that if you follow your dreams and are truly passionate about what you are doing, good things will eventually happen, and that has been the case with my ‘Shark Tank’ experience.”
Invention and reinvention
Lisa Lloyd appeared on the first season of the show. Despite finding the partner and capital she wanted, Lloyd’s business ultimately failed.
Her “Shark Tank” adventure began at a trade show in 2009. Lloyd was looking for a partner in her latest venture, Treasure Chest Pets — organizers disguised as stuffed animals. Lloyd had patented and licensed a French Twist barrette to Scunci for millions. But she had sunk much of that money into real estate, and the Great Recession had not been kind to her investments. She also had poured money into her new business, but the company was struggling. Lloyd needed more capital.
A producer spotted her and asked her to audition for a new reality show by Mark Burnett, the creator of “Survivor.”
“I told her, ‘No thank you. I’m not willing to eat bugs for my business,’ ” Lloyd said.
The producer told her the new show was nothing like that, that it would be similar to a BBC series called “Dragons’ Den,” where entrepreneurs got a few minutes to pitch their business ideas to investors. The producer emailed Lloyd some clips on a Monday. Lloyd looked at them on Tuesday and immediately thought, “Oh yeah. I got this.”
Lloyd completed her audition tape on Wednesday and overnighted it to the show on Thursday. The application deadline was Friday.
The producers had been looking for entrepreneurs for a year. Lloyd was literally one of the last people chosen to audition. Her episode taped in October. She partnered with Shark Daymond John, who told her he could make her filthy rich.
Unfortunately, by the time John invested, it was too late, Lloyd said. The cost of goods had increased, margins had fallen and the recession, not to mention imitators, had put a dent in the retail market. In 2012, the partners closed the business. By then, more than 400 stores carried Treasure Chest Pets.
“So I would say we succeeded at failing really well,” Lloyd said.
Lloyd stayed in business with John afterward. She worked with him on an intellectual property portfolio and mentored two of his new companies.
“Shark Tank” changed her life, not so much through Treasure Chest Pets, but in opportunities and learning about the manufacturing and retail processes, Lloyd said. Before the show, she had always licensed her products. She hadn’t made and sold them.
“I learned more from this business (failure) than any of the success I had prior,” Lloyd said.
Treasure Chest Pets and Lloyd were originally based in Arizona. Four years ago, Lloyd moved to New Orleans. She’s still inventing and licensing her ideas. Right now, she’s working on a new business that involves Mardi Gras masks. She has a consulting company, Lloyd Marketing Group Inc., and works with other inventors, helping them go from concept to market.
Rules made to be … followed?
Colin Grussing didn’t land a shark for his idea: RootSuit.com, an online business selling brightly colored bodysuits to attention-starved sports fans. He did make a splash, hiring circus acrobats to model the Root Suits during his pitch. But the episode very nearly didn’t air because Grussing didn’t get the proper clearance for a picture he used on the show.
“I was very cavalier about it and thought that the rules shouldn’t apply,” Grussing said.
For Grussing, being an entrepreneur was about freedom and creativity, not doing things the way everyone else did. It’s good to think that the rules are flexible, but sometimes they have to be followed, he said.
That “Shark Tank” lesson came in handy for one of his newest ventures, an Uber car company. Getting a license for the business required strict adherence to the city of New Orleans’ regulations. “There’s no room for leeway whatsoever,” Grussing said.
Grussing’s approach to the venture is quite a bit more flexible. His Uber fleet — he’s looking to add a second car — isn’t designed to make money. The drivers are entrepreneurs. Grussing is trying to help them make some extra money in their free time while they’re trying to launch their businesses.
“It’s very mission-aligned for us,” he said.
Like the other businesspeople who appeared on “Shark Tank,” Grussing found himself fielding queries for advice from other entrepreneurs.
“It kind of strangely lifted my profile a little bit. People had a little more respect for the experience, I guess,” Grussing said. “It doesn’t really make sense, but it’s not bad. I’ll take it.”
One of those calls came from Venture for America — think of it as Teach for America for startups. Venture for America puts talented young people into startups to teach them to become entrepreneurs.
Grussing had toyed with the idea of launching a business per week for a year before going on “Shark Tank.” But the idea became more plausible afterward. 52Businesses.com launched in March 2014. The first business was itself. In the first week, Grussing and his team established the brand, built a website, publicized the venture, gave Bob the bus a face-lift and set the process for starting the next 51 businesses. Their goal was to demonstrate the accessibility of entrepreneurship.
Grussing started another business as part of 52Businesses.com, making shark suits similar to the one he had prepared for his 2013 “Shark Tank” appearance. The shark suits debuted during Mardi Gras and can be found on Amazon.com.
Grussing describes himself as a serial entrepreneur. He focuses on lifestyle businesses. His other ventures include Nola Sidecars, which makes sidecars for motorcycles and scooters, and a residential rental property business.
“I find something that excites me, and I find some way to make money off of it,” Grussing said.