The Sharks Hate Kudo Banz Valuation | Shark Tank US | Shark Tank Global

Summary

Amanda and Hamza, with their three children, present Kudo Bands, a family business from Connecticut, on Shark Tank. Seeking $150,000 for 10% equity, they introduce Kudo Bands, a wristband-based, interactive parenting tool aimed at motivating kids through positive reinforcement. Unlike traditional sticker charts, Kudo Bands can be used anywhere and reward kids with customizable charms. The kids help explain the product, showcasing its fun and practical aspects. Despite the family's passion and success with $80,000 in sales, the Sharks decline to invest, citing the high valuation and early stage of the business.

Takeaways

• 👨‍👩‍👧‍👦 A family from Shelton, Connecticut, is pitching their business called Kudo Bands, aimed at motivating children through positive reinforcement.
• 🎯 They are seeking $15,000 for a 10% equity stake in their company, which offers a modern twist on traditional sticker charts by making them portable as wristbands.
• 👦 The pitch was taken over by the children, who explained how the Kudo Bands system works, involving a storybook and rewards for good behavior, like listening.
• 📱 The third charm kids earn is a magical one that unlocks rewards on the accompanying Kudo Bands app, making the experience more interactive and engaging.
• 💡 Kudo Bands appeals to both kids and parents, as it offers a fun and convenient parenting tool that can be used anywhere.
• 🎁 Each shark received a customized Kudo Band charm representing different shark traits, highlighting the product's playful and personalized nature.
• 💵 Kudo Bands launched in 2017, and as of the pitch, they had made $80,000 in sales, primarily online through their website and Amazon.
• ⚙️ The starter kit retails for $29.95, and their production cost is $4.98, giving them strong profit margins.
• 📉 Despite the strong presentation, the sharks were concerned about the company's early stage, lack of proof of concept, and high valuation of $1.5 million.
• 👍 Although no deal was made, the family expressed pride in their efforts and confidence in their product, vowing to prove the sharks wrong.

Q & A

What product is Amanda and Hamza presenting to the Sharks?

Amanda and Hamza are presenting Kudo Bands, a parenting tool designed to motivate kids to listen and improve their behavior through rewards, similar to a portable sticker chart for the wrist.

What is the problem with traditional sticker charts that Kudo Bands aims to solve?

Traditional sticker charts are typically confined to home use, while Kudo Bands are wearable, allowing parents to track and reward their children's behavior wherever they are.

How do Kudo Bands work for children?

Kudo Bands start with a storybook that teaches kids the value of listening. As children complete tasks, they earn 'kudos,' represented by charms that they attach to their wristbands. The third charm is a 'magical' charm that activates special rewards through an accompanying app.

How much equity are Amanda and Hamza seeking in exchange for their investment request?

They are seeking $150,000 for a 10% equity stake in their company.

What was the business' total sales at the time of their Shark Tank pitch?

At the time of the pitch, Kudo Bands had made $80,000 in total sales.

What challenges do the Sharks see with Kudo Bands as a business?

The Sharks are concerned about the lack of differentiation from similar reward systems, the early stage of the business with only $80,000 in sales, and the high valuation of $1.5 million.

How do Amanda and Hamza justify their valuation of the company?

They justify the valuation by highlighting the large margins, with the starter kit costing $4.98 to make and selling for $29.95, along with the intellectual property (IP) and patents they hold.

What was Mark Cuban's main feedback to Amanda and Hamza?

Mark Cuban felt that while Amanda and Hamza are a strong team, the business is still too early in its development, and they need to address the challenges before scaling.

What was Kevin O'Leary's reason for not investing?

Kevin O'Leary mentioned that with only $80,000 in sales, the company isn't worth the $1.5 million valuation they presented. He also expressed skepticism about the long-term appeal of the product.

What did Amanda and Hamza say they would do after the pitch?

Despite not receiving an investment, Amanda and Hamza expressed their determination to use the feedback as motivation to prove themselves and make the business successful.