Myostorm
Well... this is a first. The entrepreneurs behind Myostorm broke the First Rule of Shark Tank in their opening pitch! That's right! Did you know that 100 million Americans feel pain and spend almost $600 billion in an attempt to remedy it? Cray-cray, amiright? Imagine if Myostorm could open up just 1% of the market... sky's the limit!
Seriously though... this company from Provo, UT, founded by two record holders[1] and an engineer have developed a massage roller that they've managed to get FDA approval for. Developed to be used like a foam roller, it can also be used on the shoulders, back, and feet because it's a little foam ball.
During the demonstration, Lori remarks that it's warm and the entrepreneurs respond that it's because warmth is one aspect of healing. So, also, is vibration because it can do that too! Lori wants to know if this is what their edge is, vibration, since she knows of other massage balls that generate heat and the engineering entrepreneur states that they tried to balance the two.
Myostorm launched a kickstarter with a goal of $20,000 and ended up with $70,000 in backing. To support this, they manufactured 1,000 units and sold them at $160 per unit with a landed cost of $40 per unit. The entrepreneurs attempt to assuage shark concerns about costs by assuring them that worse projects often fundraise on high priced products and some competing massage balls sell for as much a $600 per unit. Overall, they sold 900 units as part of their campaign.
The sharks are... unimpressed. They don't see the 900 units as a whole lot and they also think the price is a little too high. Lori says that she thinks the right price is $99 per unit. The entrepreneurs defend their current price as a test of what the market can bear and find a defender in Daymond who says they need a high price point because of the bite wholesale will take from them. The entrepreneur undermine this defense a bit by stating that they intend to stick with the direct to consumer model but that they also intend to get the price down to $20 per unit and can do so with an order of 10,000 units.
Making A Deal
Mark goes in for one of his impatient offers, throwing out $250,000 in exchange for 20% equity but doesn't the entrepreneurs to waste time hearing other shark's offers. The entrepreneurs ask if Mark would be willing to partner with another shark but he quickly says no. And when they ask to listen to another offer, Mark drops out of the deal.
Kevin steps up and offers $150,000 for just 5% equity plus a royalty of $1 per unit until Myostorm earnes him back $500,000.
guest shark Matt Higgins jumps in, stating that he thinks he's well positioned to reach the sports demographic and meets the entrepreneurs exactly at where they came into the tank, giving them their $150,000 for 10% equity.
Once Lori is assured that they can get the product down under $100 per unit, she matches Mr. Wonderful's offer exactly. Like, exactly. (And don't think Kevin didn't notice.) Daymond remarks that he likes Kevin's offer but he never actually makes his own.
In the end, whether it is because they wanted to work with Lori or because they didn't want to work with Kevin, the entrepreneurs pick Lori as their shark. And, based on the way we value deals on Stats For Sharks, they actually saw an increase in value for Myostorm of $1,500,000! So... way to go!
Notes
- ↑ According to the Myostorm About Us page, one founder has a record for the Road 800m. Another is a 2018 World Silver Medalist in the 800m and yet another came in 6th place in the Rio Olympic Marathon.