"Be part of the Kobee's Hive" handmade personal care brand | Shark Tank US | ⁨@SharkTankGlobal⁩

Summary

Kobe Harris, founder of Kobe's Co., pitches his sustainable, all-natural lip balm and personal care products to the Sharks, seeking $300,000 for 6% equity. He highlights his rapid growth, from $30,000 in sales to over $1.5 million this year, primarily driven by social media and direct-to-consumer strategies. Despite the Sharks’ admiration for his entrepreneurial journey, most express skepticism about the scalability of the business and the challenges of entering retail. Kevin O'Leary offers $300,000 for 20% equity, but Kobe rejects the deal, holding firm on his valuation. Ultimately, no deal is made, but Kobe’s resilience and passion leave a lasting impression.

Takeaways

• 😀 Kobe Harris is seeking $300,000 for 6% equity in his company, Kobe's Co., which sells 100% natural, handmade, and sustainable lip balms and other personal care products.
• 😀 Kobe’s Co. products are made with four simple ingredients: beeswax, coconut oil, sunflower seed oil, and mango butter.
• 😀 The company emphasizes transparency in sourcing and sustainability, with claims of using 'happy bees' and 'beauty contest-winning plants' for ingredients (humorously).
• 😀 Kobe started the business during his freshman year of college, initially funded with $200 from his mother and raw materials from Amazon.
• 😀 After a few months of formulating products and marketing at the pool, Kobe saw initial success with a $3,000 sales day, eventually growing the business to $864,000 in sales in its second year.
• 😀 By leveraging social media platforms like Facebook and TikTok, Kobe grew his business to generate $1.5 million in revenue for the current year.
• 😀 The company’s best-selling product is lip balm, which accounts for 75% of sales. The average order value is around $32, with a customer acquisition cost of about $14-$15.
• 😀 Kobe plans to use the requested investment to expand his marketing efforts, particularly through paid social media advertising.
• 😀 The pitch faces scrutiny from investors, with discussions about the challenges of retail distribution and whether marketing investments alone are enough to fuel growth.
• 😀 In the end, no deal is made as investors were hesitant about the business's valuation and gave feedback on how Kobe could improve his business operations and strategy.

Q & A

What is Kobe's Co. and what do they offer?

Kobe's Co. is a company that specializes in 100% natural, handmade, and sustainable lip balms, as well as other personal care products like lotion bars, lip scrubs, and cuticle butter. The products are made from clean ingredients such as beeswax, coconut oil, sunflower seed oil, and mango butter.

Why does Kobe's Co. focus on using natural ingredients?

Kobe's Co. emphasizes natural ingredients because they believe in providing products that are not only effective but also safe and transparent. The company uses ingredients that are so clean that, while not recommended, they could theoretically be eaten.

How did Kobe start the business?

Kobe started the business while he was a freshman in college, working with a sustainability professor on packaging and bees. With an initial $200 from his mom, Kobe bought raw ingredients and spent the summer creating lip balms. He distributed the products to people, eventually making $3,000 in sales on his best day, which led him to drop out of college and focus on his business.

What was Kobe's revenue growth like?

Kobe's Co. saw impressive growth. In the first year, Kobe made $30,000. The following year, sales jumped to $200,000, and in the year before the pitch, sales reached $864,000. This year, they had already made over $1.5 million in revenue by the time of the pitch.

How does Kobe's Co. market its products?

Kobe's Co. leverages social media platforms, especially Facebook and TikTok ads, to promote their products. Kobe, being part of Gen Z, is skilled at using these platforms to engage potential customers and drive sales.

What are the challenges Kobe faces in growing his business?

One of the challenges Kobe faces is getting into retail distribution. Since lip balm is a low-cost product, it's hard to make significant sales online without a large volume. Getting retail space, especially at point-of-sale locations, is a difficult process involving competing against other brands and paying listing fees.

What was the investors' reaction to Kobe's pitch?

The investors were impressed with Kobe's story and the growth of his business, but many of them were hesitant about investing due to the highly competitive nature of the lip balm market. Some investors were out because it wasn't their area of expertise, while others offered deals, but Kobe was reluctant to give up too much equity.

What is the customer acquisition cost (CAC) for Kobe's Co.?

The customer acquisition cost (CAC) for Kobe's Co. is about $14 to $15 per customer.

What is Kobe's Co.'s average order value (AOV)?

The average order value (AOV) for Kobe's Co. is $32, with lip balms making up about 75% of sales. The remaining 25% comes from other personal care products like lotion bars and lip scrubs.

What did the investors offer Kobe during the pitch?

One investor offered Kobe $300,000 for 20% equity in his company, arguing that the money would help fuel the company's marketing efforts. Another investor expressed interest in helping with retail distribution but was hesitant about the competitive nature of the lip balm market. However, Kobe ultimately decided not to accept the deal at 20% equity, as he felt it was too high.