Lockstraps
Lockstraps is a company and product from Temecula, CA, that is designed to help hold and secure items better than ever before. Lockstraps is both a securing system to hold things down (think in the bed of a truck or locked against a gate) and and locked tight with a combination lock.
The straps that are part of the system are stainless steel cables running through a braided cloth-like material with two combination lock carabiners on either side to secure whatever is the strap pins down or holds. To demonstrate the security of the straps, the entrepreneur invited returning guest shark Alex Rodriguez to cut through, first, a braided steel cable and, then, a steel chain. Both were cut with the bolt cutters the entrepreneur provided. The Lockstrap, however, was unable to be cut and Arod described it as giving too much to be able to make a cut.
The entrepreneur claims that this experience of being unable to cut through the Lockstraps is because they are stainless steel surrounded by fabric though the science wasn't fully explained. The entrepreneur claims to have a design patent on some part of it and a trademark.
In the first year of selling Lockstraps, the business had $135,000 in gross sales. In the second year, the business improved and made $175,000 in sales.
Following these sales, Home Depot expressed interest in the product but the founder could not afford to fund the $1,500,000 in inventory required to fill the order so partnered with a company that could. According to the entrepreneur, they changed the design in such a way that the Lockstraps being sold through Home Depot no longer held items with tension. This forced a recall of the product that left the partner $1,900,000 in debt. The entrepreneur claims that he had no numbers on how many units were sold before the recall.
Since that experience, the entrepreneur has introduced a new product, the carabiner with a locking mechanism but admits that it hasn't sold well.
The entrepreneur made clear that the partnership and recall were part of a licensing deal made with the partner company and admitted that he had no part in it at all, that he "waited and cashed his checks."
The sharks were unimpressed with his handling of the recall and how he was not more proactive when it came to fixing the issue. They were even less impressed when he offered to do a deal where the sharks could essentially take over the company and found himself leaving the tank without a deal.
This deal aired on Episode 10.06.
Analysis
While the entrepreneur could certainly have done something other than sit back and cash royalty checks while his product was failing, the criticism by the sharks is more than a little inconsistent and perhaps even unfair. Both Daymond and Mr. Wonderful have touted the benefits of licensing to entrepreneurs specifically with language describing being able to sit back and watch royalty checks roll in. That is actually their selling point to entrepreneurs who are leery about giving up control of their product.
Assuming the best of intentions, the sharks no doubt meant that the entrepreneurs could watch checks roll in so long as everything was going well, it did feel a little hypocritical of the sharks to take issue with this deal when the entrepreneur had done what they themselves had described.