Simple Habit
Simple Habit is a company from San Francisco, CA, that has created an app that tries to get people to meditate.
The service curates and offers a variety of 5-minute meditations through a free to download app. User can access unlimited content through two subscription plans, $11.99 a month or $99.99 a year. The founder claims to have over 500,000 users and 5,000 paying subscribers.
The founder of Simple Habit claims that the key differentiating factor between her service and those that already exist on the app store is that hers offers multiple teachers whereas most apps focus on a single teacher. Simple Habit connects multiple teachers to users.
The entrepreneur predicts $750,000 annual recurring revenue within the first year. The previous quarter booked $75,000 in revenue and the next quarter is predicted to end at $90,000. She predicts the next year will net $5,000,000 and the company will be profitable. 20% of revenue is paid to the teachers on the app.
Simple Habit is different from most companies that appear on the tank in that it has $2,300,000 in the bank and is not appearing for the money but to build partnerships with the sharks in order to help with user acquisition and make connections with influencers.
So far, Simple Habit has raised $2,800,000 with a $12,000,000 valuation with convertible notes.
Neither Daymond or Mark were happy to have Simple Habit in the tank with Mark going so far as to claim that the entrepreneur was a "gold digger" and not interested in making a deal. Daymond, on the other hand, suggested that she "stole" a spot from a more deserving and less cash rich entrepreneur in need of help.
Needless to say, Simple Habit did not make a deal with the sharks.
The deal aired on Episode 9.01.
Stats Shark Analysis
While calling the entrepreneur a "gold digger" seems unjustified, coming into the tank with an ask of $600,000 and a cap of $12,000,000 does seem unserious. At least as far as the purpose of the show where the average equity deal among all sharks as of Season Nine is $197,853.
Having had issued convertible notes also adds a wrinkle as there was a limit to how low she could realistically drop her valuation since convertible notes are a regulated security. Offering them to investors at one price and then offering like shares to another investor for considerably less could lead to winding up in seriously hot water.
In one sense though, Daymond and Mark were both correct. Her goal on Shark Tank wasn't so much to make a deal as the financials weren't there to be able to. The goal was to benefit from the "Shark Tank Bump" phenomena as a marketing campaign.