Mr. Wonderful Kicks Pavlok Entrepreneur Out Of The Tank | Shark Tank US | Shark Tank Global

Summary

Manish Sethi pitches his wearable device, Pavlok, on Shark Tank, seeking $500,000 for 3.14% of his company. Pavlok uses aversive conditioning, delivering a mild electric shock to help users break bad habits like nail-biting or overeating. While Manish passionately explains its success and scientific backing, the sharks are skeptical of its effectiveness and the high company valuation. Despite receiving an offer from Kevin O'Leary, Manish rejects it, prioritizing his mission to help people change behavior over making a quick deal. Ultimately, all sharks back out, leaving Manish without a deal but committed to his vision.

Takeaways

• 😀 Manish Sethi pitches Pavlok, a wearable device designed to break bad habits using aversive conditioning.
• 😀 The device releases a mild electric shock to help users reduce cravings and unwanted behaviors.
• 😀 Pavlok targets habits like nail biting, hitting the snooze button, and overeating.
• 😀 The product uses a scientific method called aversive conditioning, which has been studied for decades.
• 😀 Manish explains his initial inspiration came from his struggles with ADHD, leading to a viral blog post about using a slap to stay focused.
• 😀 The device is based on aversive conditioning, where an uncomfortable stimulus is paired with an undesired behavior to retrain the brain.
• 😀 The device has been tested through clinical trials, with claims of success such as 81% of users quitting nail biting in 4 days.
• 😀 The sharks are skeptical, especially about the legitimacy of the studies and the exaggerated claims made in the pitch.
• 😀 Kevin O'Leary offers $500,000 as debt with a 3.14% equity stake, but Manish rejects the offer due to a mismatch in values.
• 😀 Manish stresses that Pavlok’s mission is to help people break habits and change behavior, not just to make money.
• 😀 Despite facing rejection from all sharks, Manish remains committed to his vision of transforming how people manage their habits.

Q & A

What is the core functionality of Pavlok?

Pavlok is a wearable device that helps individuals break bad habits by using aversive conditioning. It delivers a mild electric shock when users engage in unwanted behaviors, helping them associate the discomfort with the habit and thereby reducing it over time.

How does the Pavlok device work to break bad habits?

The Pavlok device works by detecting undesirable behaviors, such as nail-biting or hitting the snooze button, and providing a mild electric pulse when the behavior occurs. This pulse is intended to disrupt the habit by creating a negative association with the action, leveraging the psychological principle of aversive conditioning.

What scientific principle does Pavlok rely on?

Pavlok uses a psychological principle known as 'aversive conditioning,' which involves pairing an unpleasant stimulus (the electric pulse) with an unwanted behavior, causing the brain to associate the two. This principle has been used in behavioral science for decades.

What did Manish Sethi’s initial experiment involve?

Manish Sethi’s initial experiment involved hiring someone to slap him every time he went on Facebook. He documented this process in a viral blog post, which eventually inspired the creation of the Pavlok device as a more automated and scalable solution.

Why did the Sharks express skepticism about the product?

The Sharks were skeptical due to the lack of verifiable clinical trials supporting the effectiveness of the Pavlok device. They also questioned the legitimacy of the claims regarding Pavlok's success rate in helping users break habits, as the data was not based on studies conducted by the company itself.

What concerns did the Sharks have about the company’s valuation?

The Sharks found the company’s $50.9 million valuation to be inflated, especially considering that the company was still in its early stages with only pre-orders and prototype sales. They felt that the valuation did not align with the current state of the business.

How did Kevin O’Leary (Mr. Wonderful) propose to structure a deal?

Kevin O'Leary proposed a deal where he would provide $500,000 as debt at 7.5% interest for a 3.14% equity stake in the company. He also suggested a balloon payment due in two years, with the expectation that Pavlok would meet one-third of its projected sales.

Why did Manish reject Kevin O’Leary’s offer?

Manish rejected Kevin's offer because he felt that Kevin would not be a suitable partner for the company. Manish was more focused on building a mission-driven company to change human behavior, rather than just focusing on making money, which he believed would conflict with Kevin's approach.

What was the general reaction of the Sharks to Pavlok’s claims of effectiveness?

The Sharks were highly critical of the claims regarding Pavlok’s effectiveness, particularly the assertion that more than 50% of users break their habits in five days or less. They felt the company lacked concrete evidence to back these claims, and that the studies cited were not directly related to Pavlok’s technology.

What did Manish believe about the long-term goal of his company?

Manish emphasized that the long-term goal of his company was not just about making money but about helping people across the world break bad habits and improve their lives. He wanted to focus on creating a positive change in human behavior, even if it meant not securing investment from the Sharks.