The Sharks Try To Be Optimistic With The Mad Optimist | Shark Tank US | Shark Tank Global

Summary

In this Shark Tank episode, three entrepreneurs from Bloomington, Indiana, pitch their unique business, The Mad Optimist, a customizable vegan soap and body care company. They seek $660,000 in exchange for 10% equity, offering a sliding price scale that allows customers to pay what they can afford. Despite their passion and commitment to transparency, the sharks question their business model, with concerns about profitability and long-term growth. Ultimately, they secure a deal with Kevin O'Leary for $660,000 in exchange for 20% equity, with the condition of donating all proceeds on the airing night.

Takeaways

• 😀 The company, Mad Optimist, offers customizable vegan, non-GMO, gluten-free, and cruelty-free body care products, including soap, lip balm, bath soaks, and sprays.
• 😀 The founders, who are Muslims and vegans, created the business because they were unhappy with traditional soaps containing animal fat.
• 😀 Customers can choose their product type, essential oil scents, add-ins, packaging design, and even name their soap through the company's website.
• 😀 The company has a unique pricing model: a sliding scale where customers can choose how much they pay based on their financial situation.
• 😀 Mad Optimist's mission is rooted in transparency, integrity, and kindness, and they aim to make their products accessible to all customers.
• 😀 The company has been operating for seven years, starting by selling products at farmers' markets and local stores in Indiana, and has made $97,000 in sales year-to-date.
• 😀 Despite their passion and mission, the company has faced challenges in scaling, with sales of $21,000 in the first 11 months of their current model.
• 😀 Investors on Shark Tank are skeptical about the business’s long-term viability, citing issues with the lack of growth and profitability.
• 😀 The company has a strong emphasis on customer experience and brand energy but lacks clear financial results, making it hard for investors to see a sustainable business model.
• 😀 After negotiations, Mad Optimist received an offer of $660,000 for 20% equity from one investor, with the condition that 100% of the sales from the Shark Tank airing night would be donated to charity.

Q & A

What is the core idea behind The Mad Optimist's business model?

The Mad Optimist offers customizable vegan, non-GMO, gluten-free, and cruelty-free soap and body care products. Customers can personalize the scent, additives, packaging, and even name their own soap. Additionally, they use a sliding price scale, allowing customers to pay based on what they can afford.

What sets The Mad Optimist apart from other soap companies?

The Mad Optimist differentiates itself with a fully customizable soap-making experience, where customers can choose essential oils, additives like spirulina and coconut milk, and create personalized packaging and soap names. Their sliding price scale is also unique, allowing customers to pay according to their financial situation.

How does the sliding price scale work?

The sliding price scale allows customers to choose how much they want to pay for their products. The typical price range for the soap is between $6 and $16, with the average being around $8.50. Customers who can afford to pay more help subsidize those who need to pay less.

What was the company's total sales in the first 11 months?

In the first 11 months of business, The Mad Optimist earned $21,000 in sales from custom soap, and their total sales year-to-date amounted to $97,000.

How long had the founders been in business before pitching on Shark Tank?

The founders had been running the business for seven years before pitching on Shark Tank. During that time, they sold $800,000 worth of soap, primarily at farmers' markets and other local events in Indiana.

What was the key challenge that investors pointed out during the pitch?

Investors pointed out the challenge of the company's lack of growth despite being in business for seven years. They were also concerned about the hand-made production process, which limited scalability, and the lack of a clear business plan for future growth.

Why did some investors decide to back out of the deal?

Some investors, like Kevin O'Leary (Mr. Wonderful), backed out because they felt the business lacked a clear path to profitability and long-term success. They believed the company's focus on good intentions, rather than results, would hinder growth.

What offer did Mark Cuban make to the founders?

Mark Cuban offered $660,000 for 25% of the business, with a focus on helping them with marketing. He valued the idea of the sliding price scale and the transparency it brought but felt that the business needed a clearer path to growth.

What was the founders' response to the initial offer?

The founders were willing to accept Mark Cuban's offer but wanted to negotiate the equity. They countered with a proposal for 20% equity, with the remaining 2% left for negotiation among the three founders.

What unique plan did the founders propose to do with their profits from the first airing of the episode?

The founders proposed donating 100% of the proceeds from their sales on the first airing of the Shark Tank episode. They wanted to use this as a way to give back during Ashura, a significant religious observance.