The Sharks Can't Get Any Answers From Lockstraps Owner | Shark Tank US | Shark Tank Global

Shark Tank Global

19 Aug 202408:43

Summary

TLDRIn a pitch for his company, Lock Straps, Jeff Cranny seeks $200,000 for 20% equity, showcasing his theft-resistant straps designed for various sports equipment. Despite initial success, a partnership with Home Depot leads to a massive order that results in defective products due to rushed production. The product recall and financial loss leave Jeff without data on sales or a clear path forward, leading to a unanimous rejection from the sharks who question his commitment and the product's market viability.

Takeaways

🔒 Jeff Cranny introduced 'Lock Straps', a security product designed to protect valuables from theft.
💰 He sought $200,000 for a 20% equity stake in his company, showcasing the product's resilience against cutting tools.
⛓ The product features a stainless steel cable and combination locking carabiners, making it difficult to cut.
🏗️ The initial sales were promising, reaching $135,000 in the first year and $175,000 in the second year before a major retail deal.
📉 A partnership with a company to fulfill a large Home Depot order led to quality control issues and a product recall.
📉 The factory in China altered the product design, causing the straps to slip, which resulted in a massive return and financial loss.
📊 Jeff does not have exact sales figures post-recall, indicating a lack of data tracking and control over the product's performance.
🤝 Despite the setback, Jeff continued to receive royalty checks, suggesting ongoing sales of the non-defective version of the product.
🚫 The sharks expressed concerns about Jeff's lack of involvement in the product's manufacturing process and his presentation.
❌ The sharks declined investment, citing concerns about the product's market performance, Jeff's hands-off approach, and the need for a clear path forward.

Q & A

What is the product that Jeff Cranny is seeking investment for?
-Jeff Cranny is seeking investment for 'Lock Straps,' a product designed to secure valuables and prevent theft.
What is unique about the Lock Straps according to the pitch?
-The Lock Straps have a stainless steel cable embedded inside the strap and come with two durable combination locking carabiners on both ends, making them difficult to cut.
What is the significance of the saying 'Lock straps are kind of like jock straps' mentioned in the pitch?
-The saying implies that just as jock straps protect sensitive areas, Lock Straps are designed to protect valuables from theft.
What happened when the product was tested with bolt cutters on the show?
-The bolt cutters were unable to cut through the Lock Straps, demonstrating their strength and durability compared to traditional chain locks.
What is the patent status of the Lock Straps as mentioned in the pitch?
-Jeff Cranny has a design patent and a trademark for the Lock Straps, but no utility patent is mentioned.
What was the issue with the product when it was sold at Home Depot?
-The issue was that the straps were made too fast by the factory in China, causing them to slip when used to secure items like motorcycles.
What was the financial outcome of the Home Depot deal for Jeff Cranny?
-The Home Depot deal resulted in a financial loss of 1.9 million dollars due to the product recall caused by the slipping issue.
Why did the sharks express concern about Jeff Cranny's involvement in the product after the Home Depot incident?
-The sharks were concerned because Jeff Cranny had previously allowed another company to manage the product, which led to quality control issues and a failed partnership.
What is the current status of the Lock Straps in the market according to the pitch?
-The current product in the market is a single Carabiner by itself, which is not defective and is still being sold at Home Depot.
What was the general consensus among the sharks about investing in Lock Straps?
-The sharks were not convinced to invest due to concerns about the product's past performance, lack of data on current sales, and Jeff Cranny's previous lack of involvement in the product's quality control.

Outlines

00:00

🔐 Pitch for Lock Straps Security Product

Jeff Cranny introduces Lock Straps, a security product designed to protect valuables from theft. He seeks $200,000 for a 20% equity in his company. The product features a stainless steel cable with combination locks at both ends, making it resistant to cutting. Jeff demonstrates the strength of Lock Straps by challenging the sharks to cut through them using bolt cutters, which they fail to do. He discusses the product's design patent and trademark. Sales initially were promising, reaching $135,000 in the first year and $175,000 in the second. However, a partnership to fulfill a large Home Depot order led to quality control issues, resulting in product recalls and financial losses. Despite the setbacks, Jeff continues to sell the single Carabiner version of the product.

05:01

📉 Challenges and Future of Lock Straps

The discussion shifts to the challenges faced by Lock Straps, particularly the quality issues that arose from outsourcing production to meet a large Home Depot order. This led to a recall and financial burden on the partnering company, not Jeff's own. The sharks express concerns about the lack of data on sales and the product's performance in the market. They also question Jeff's involvement in the product's development and his decision to partner without retaining control over the quality. The sharks are skeptical about the product's market potential, given the competition and the history of quality issues. Despite the setbacks, Jeff remains committed to his product and is willing to make the same mistakes again, showing his resilience but also a potential lack of learning from past experiences.

Mindmap

Keywords

💡Lock Straps

Lock straps are a type of security device designed to prevent theft of valuables, particularly for outdoor and sports equipment. In the video, they are presented as a product with a stainless steel cable embedded within a strap and equipped with combination locking carabiners, making them difficult to cut. The concept is central to the pitch as the entrepreneur seeks investment for his company that produces these straps.

💡Equity

Equity in the context of the video refers to the ownership stake in a company that the entrepreneur is offering to the investors, known as 'sharks,' in exchange for financial investment. The entrepreneur is seeking $200,000 for a 20% equity stake, indicating that he values his company at $1 million.

💡Bolt Cutters

Bolt cutters are a tool used in the video to demonstrate the strength of the lock straps against traditional security measures. They are shown as ineffective against the lock straps, highlighting the product's security feature as a selling point.

💡Design Patent

A design patent is a form of intellectual property protection that covers the aesthetic design of a product. In the video, the entrepreneur mentions having a design patent for his lock straps, which means he has exclusive rights to the specific design of his product, preventing others from copying it.

💡Trademark

A trademark is a recognizable sign, design, or expression which identifies products or services of a particular source from those of others. The entrepreneur has a trademark for his company's name, which legally protects the brand identity and prevents others from using a similar mark that could cause confusion.

💡Home Depot

Home Depot is a large home improvement retail chain mentioned in the video as a potential sales channel for the lock straps. The entrepreneur discusses a significant order from Home Depot that led to production challenges and ultimately returns due to product defects.

💡Royalty

Royalties in this context refer to the payments the entrepreneur receives from the company he partnered with to fulfill the Home Depot order. Despite the product recall, he continues to receive royalty checks, albeit smaller, indicating ongoing revenue from the partnership.

💡Product Recall

A product recall is a process in which a company removes a product from the market due to defects or safety concerns. In the video, the lock straps had to be recalled because they were found to be defective, specifically, they would slip when used, leading to a significant financial loss for the entrepreneur and his partner.

💡Entrepreneur

An entrepreneur is an individual who organizes and operates a business, taking on financial risks to do so, with the hope of making a profit. The video's protagonist is an entrepreneur who has faced challenges with his product but is seeking investment to revive his business.

💡Investment

Investment in the video refers to the financial backing provided by the sharks to the entrepreneur in exchange for equity. The sharks are considering whether to invest in the lock straps business based on the entrepreneur's pitch and the potential for return on their investment.

💡Market

The market in this context refers to the current state of sales and consumer interest in the lock straps. The entrepreneur discusses the current market presence of his product, which is now limited to a single carabiner version, and the challenges he faces in selling it.

Highlights

Introduction of a security product called 'Lock Straps' designed to secure valuables.

Jeff Cranny seeks $200,000 for a 20% equity in his company.

Lock Straps feature a stainless steel cable and combination locking carabiners for enhanced security.

A humorous comparison of Lock Straps to jock straps, emphasizing their protective function.

Demonstration of the difficulty in cutting Lock Straps with bolt cutters.

Comparison of Lock Straps to traditional chain and cable locks in terms of security.

Explanation of the proprietary design of Lock Straps, combining steel and cloth.

Jeff Cranny mentions obtaining a design patent and trademark for Lock Straps.

Sales figures are discussed, with $135,000 in the first year and $175,000 in the second year.

Challenges faced with a large Home Depot order and the subsequent product recall due to design flaws.

The decision to partner with another company to fulfill the Home Depot purchase order without equity exchange.

The recall of Lock Straps from Home Depot due to quality control issues.

Jeff's lack of involvement in the manufacturing process after partnering, leading to product quality issues.

Sharks' critique of the lack of sales data and the absence of Jeff's oversight on the product.

The current market presence of Lock Straps, focusing on the single Carabiner version.

Sharks' concerns about the product's performance in the market and the lack of a clear path forward.

The final decision of the sharks to decline investment due to concerns over product management and market performance.

Jeff's determination to learn from the experience and continue with his business despite the setback.