Saucemoto
Saucemoto is a classic Shark Tank deal by some entrepreneurs out of Cleveland, OH, that wants to try and solve the problem of eating fast food in a car with the various sauces that are provided and the risk of messes they present.
The "Saucemoto" is a small clip that can attach to an air vent blade. It is designed to hold a standard size packet of sauce that typically comes with french fries and chicken nuggets. The inspiration behind such a device was when one of the entrepreneurs made a mess in the other's new car ten years before.
The entrepreneurs behind this device claim that Stanford University has done a study[1] and found that 20% of meals are eaten by Americans in their cars. (Please see the footnote for more information regarding this "study".)
Amazingly, the entrepreneurs have managed to sell 12,000 Saucemoto units for $77,000 in lifetime sales. Each Saucemoto costs just $0.80 to manufacture but sells for $5.75 online. Barbara even complements the entrepreneurs on their packaging.
In terms of marketing, the entrepreneurs have made a series of videos which 44,000,000 views in total. Additionally, they see the Saucemoto as being something that can carry other brands and be used as a promotional tool (thereby increasing the number of wholesale orders).
Making A Deal
Putting on his marketer's hat, Kevin says that the entrepreneurs should focus less on the nugget market and more on the french fry segment. However, both he and Mark seem to agree that the sauce thing in cars is a legitimate problem.
Kevin makes the first offer of $45,000 for 50% equity in the business, saying that $45,000 is "real money". He says that he could easily get it into fast food restaurants.
Mark, while apparently liking the idea and product, says that he thinks they would need to hustle too hard for large sales and is out. Barbara, likewise, said that she thought it was too small of a product, too low of a price, and was also out.
Robert seemed curious about the videos and asked how much the entrepreneurs invested in them. When the entrepreneurs stated that the videos only cost $4,000 to produce, Robert said that he believed the entrepreneurs were in the wrong business if they got 44,000,000 views on a $4,000 investment. But he still offers them $45,000 in exchange for 40% of the business. He also says that he's uncertain as to whether Saucemoto is the right investment but that he's certain the entrepreneurs are the right people to back.
Mr. Wonderful revised his offer to be 25% of the company to put him on equal footing with the three entrepreneurs and the deal is accepted. While this represents a $120,000 bite from the value of the company, this can likely be made up by any deals Kevin might bring in.
Kevin ended the segment by standing up and shouting, "Let's get out there and make hundreds of dollars!"
Notes
- ↑ While no Stanford study could be found, there is an article on one of Stanford's websites that attributes the 20% of meals eaten in cars statistic to journalist Michael Pollan. And apparently, after exhausting the Internet to figure out where Pollan came up with this number, we have found that it was from his book In Defense of Food where he wrote: "The study, commissioned by industry and unpublished, was conducted by John Nihoff, a professor of gastronomy at the Culinary Institute of America." Searches on John Nihoff and the study return many, many quotes from Nihoff citing his own study but the study itself cannot be located, nor can the methodology be confirmed. So... to recap... the "Stanford" "study" that Saucemoto used to back up its claims is actually a webpage on the Stanford website, citing something Pollan wrote in a book that cites an unpublished study by a professor at a cooking school that cannot be found. The "20% of meals happening in a car" figure should be viewed as more than a little bit suspicious in this light.