The Sharks Fight Over an App Made for Cheaters | Shark Tank US | Shark Tank Global

Summary

Entrepreneur Neil Desai pitches his smartphone app, Kate, on a business investment show, seeking $50,000 for a small equity stake. Marketed as a privacy app but commonly called a "cheaters app," Kate intercepts calls and texts from selected contacts, appealing to users looking to avoid relationship conflicts. Neil, who purchased the app from its original developer, highlights its broader potential beyond infidelity, including professional privacy. Despite ethical concerns from investors, his hustler mentality, sales traction, and strategic approach lead to a successful negotiation, securing $50,000 for 35% equity with Kevin and Damon, positioning Kate for future growth and wider applications.

Takeaways

• 😀 Neil Desai pitches 'Kate,' a smartphone app designed to intercept calls and texts from selected contacts, marketed as a privacy tool but functioning as a 'cheaters app.'
• 😀 The app operates on iPhone, Android, and Blackberry, covering approximately 85% of the mobile market.
• 😀 Neil purchased the app from a former police officer for $17,500 and owns 100% of it with his sister.
• 😀 The app has around 10,000 users, with approximately 5,500 paying customers and 4,000 free users.
• 😀 Paid users spend $4.99 for iPhone/Android and $9.99 for Blackberry, generating significant early revenue.
• 😀 Neil initially asks for $50,000 for 5% equity, valuing the company at $1 million, which investors consider overvalued.
• 😀 Sharks debate the ethics of the app, with some seeing it as immoral while others focus on its market potential and privacy applications.
• 😀 Investors propose alternative deals, including repositioning the app as a broader privacy tool rather than solely a cheaters app.
• -
• 😀 Neil strategically negotiates multiple offers, emphasizing his value as a hustler and the app's market potential.
• 😀 The final deal is struck with Kevin and Damon: $50,000 for 35% equity, highlighting negotiation skills and investor alignment.
• 😀 The transcript illustrates key themes: entrepreneurial hustle, market validation, product framing, negotiation dynamics, and ethical considerations in business.

Q & A

What product is Neil Desai pitching on Shark Tank?

Neil Desai is pitching a mobile application called 'Kate,' which intercepts calls and texts from selected contacts and stores them privately, marketed as a 'cheaters app' but also described as a privacy app.

What is the primary function of the Kate app?

The Kate app allows users to select a blacklist of contacts, and any calls or texts from those contacts are intercepted and stored within the app, keeping them hidden from the user's significant other or others.

Which platforms is the Kate app available on?

The app is available on iPhone, Android, and Blackberry, covering approximately 85% of the cell phone market.

How much funding and equity is Neil Desai initially seeking?

Neil is seeking $50,000 for a 5% equity stake in his company.

How did Neil acquire the app, and did he develop it himself?

Neil did not develop the app himself; he purchased it from a former cop for $17,500, who created the app but didn’t have time to pursue it further.

What are the sales metrics of the Kate app mentioned in the pitch?

The app has about 10,000 total users, with roughly 5,500 paid customers and 4,000 free users. The paid app sells for $4.99 on Android/iPhone and $9.99 on Blackberry.

What ethical concerns do the investors raise about the app?

The sharks question whether promoting a 'cheaters app' is morally acceptable. Neil addresses this by reframing it as a privacy app with broader applications.

What was the final deal Neil accepted on Shark Tank?

Neil accepted an offer from Kevin and Damon of $50,000 for 35% equity in his company.

What negotiation strategies did Neil use during the pitch?

Neil initially proposed a low equity offer to all sharks, then leveraged competing offers to negotiate a higher equity retention, while positioning the app as a privacy tool to address ethical concerns.

Did the sharks see potential alternative uses for the app technology?

Yes, the sharks suggested alternative applications, such as protecting sensitive sales data in the mutual fund industry, highlighting that the app could be used beyond relationship contexts.

How does Neil justify the morality of his business?

Neil compares it to selling any profitable product like carrots, emphasizing that pursuing money does not necessarily imply immorality, and frames the app as a tool to prevent fights and maintain privacy.

What prior entrepreneurial experience does Neil have?

Neil has a history of hustling since age 14, selling Pokémon cards on eBay, and engaging in other entrepreneurial activities, demonstrating his ability to identify and capitalize on profitable opportunities.