Millennial Startup Unlocks Secrets Of Hooking A Deal on ‘Shark Tank’
The AquaVault, a portable lockbox, is the type of travel product you would find in the pages of SkyMall magazine next to the heated stadium seat cushion, eyemask attached to a travel pillow or luggage belt with a built-in scale. They’re ingenious yet paradoxically frivolous outside of the first world because of the obvious alternative solutions.
After all how often do you sit in stadium that’s so cold you need to heat your rump? It’s probably about as often as you would need to store your valuables in a plastic box with a resettable-combination lock that attaches to lounge chair. Yet you look at these products and can’t help but think: “WTF! Why didn’t I think of that!”
The trio of friends clever enough to think of the AquaVault were Robert Peck, Avin Samtani and Jonathan Kinas. They launched it in summer 2013 after two years of development. To bootstrap their Aventura, Fla.-based business, they gave up six-figure salaries, cashed out retirement savings and sold their homes.
“We knew that if we did not execute on this idea, we would forever regret it and wonder what could have been,” said Kinas.
They surely have nothing to regret after hooking a deal with a deal on Shark Tank (Season 6, March 2015) with Daymond John. The men’s fashion mogul who gave them $75,000 for 25% of their company. After Shark Tank, sales rocketed more than fivefold from $87,000 to $500,000. Sales are expected to top $2 million this year and a mind-blowing $10 million annually within five years.
Kinas proves to be a treasure trove of business insights. He unlocks the secrets of bootstrapping a business, selling with zero marketing budget and scoring a deal on Shark Tank.
From an Idea on a Napkin to a Bootstrapped Business
Ho: How did you come up with the idea for your business? Ex. What problem were you seeking to solve?
Kinas: It was a Saturday afternoon that we were all staying at one of the finer hotels in south beach. The hotel will remain nameless for obvious reasons, but you should know that they now offer AquaVaults to their guests.
Prior to jumping in the pool, I inconspicuously hid all of my valuables in my shoes and tucked them underneath my lounge chair. Upon returning from a short swim, I quickly realized that everything was gone. After wasting hours with the hotel security and police officers, it was becoming very apparent that this unfortunate situation may have been a common occurrence.
The moment of clarity was when we heard one of the officers say, “Do you have any idea how many times a day we get calls for theft on the beach?” That single response provoked the wheels to spin in overdrive, which gave us the idea for inventing a portable safe that attaches to lounge chairs.
That night we created pages of sketches for what we knew would answer the question, “Where do I hide my valuables when going for a swim?” We knew that virtually everyone either knows of someone or heard of someone being robbed at the beach. It was just remarkable to discover that nobody had come up with an idea to address this massive problem. Aside from coming up with a great idea, when making the commitment to form our partnership, it was critical that we all had complimentary skill sets, a good chemistry and most importantly, we all shared in the same vision.
We acknowledged that every startup is fundamentally uncertain and the only guarantee is the commitment of blood, sweat and tears. We knew right from the beginning that if we were to work together, each one of us had to demonstrate a unique added value in order to justify the immediate dilution of ownership.
Being that none of us had prior experience with inventing anything, the fear of failure and uncertainty were the first obstacles we collectively needed overcome. To quote Reid Hoffman, “An entrepreneur is someone who jumps off a cliff and builds a plane on the way down.”
Going From Riches to Rags
Ho: Tell us about your background. What were you doing before you started your business?
Kinas: The voluntary struggle is how we like to sum up our story. Houses were sold, cars were traded in and retirement accounts were liquidated. Country club memberships were left to expire and annual ski trips were indefinitely postponed. The fine steak houses that we once loved to frequent quickly forgot who we were. These were a few of the sacrifices made in order to pursue our dream. Before inventing the AquaVault, we enjoyed very comfortable lives making six figure incomes as we advanced in our lucrative careers.
I was a financial advisor at Merrill Lynch where my two partners and I managed roughly $400 million dollars. Avin Samtani was a vice president at a private mortgage bank headquartered in Manhattan. Robert Peck owned a high end industrial contracting business where he specialized in a particular process that landed him large corporate and government contracts.
Needless to say, we all worked very hard to get to where we were and to consider throwing it all away was the riskiest thing we had ever done. The most common responses we remember hearing were, “Are you crazy? What do you know about the invention process? How can you throw away your amazing career?”
We will be the first to admit that we knew absolutely nothing about the invention process. However, what we did know was that we had a great idea and a burning desire to see it through. Life is about taking chances and sometimes those decisions are not easy. We knew that if we did not execute on this idea, we would forever regret it and wonder what could have been.
Ho: How did you go about making a prototype, sourcing the materials and finding a manufacturer?
Kinas: Making our first prototype was something we really had a difficult time doing. It boiled down to paralysis by analysis and we simply didn’t trust anyone. We didn’t know if our NDA (non-disclosure agreement) was strong enough and we certainly didn’t know if it made sense to get it made overseas.
Ultimately, our decision to create it locally was driven by our need for comfort rather than our desire to save a few dollars. We needed to make sure that at this stage, trust was the most critical component.
We decided to manufacturer in China for the obvious cost competitive nature. We looked at several different countries, but when it came down to the numbers, China proposed the most aggressive offer. Our initial attempt to remain in the US yielded us margins that would have unfortunately put us out of business.
The Shark Tank Effect
Ho: What were your annual sales and profits before your Shark Tank appearance?
Kinas: Prior to Shark Tank, we did about $90,000 in sales. After the airing, we finished at over $500,000 in sales. We definitely experienced what they call the “Shark Tank Effect.” Looking back, one of the most important things we did was reach out to our web host, who was WordPress at the time, and notify them of our airing.
We needed them to make sure that the proper arrangements were made in order to facilitate the heavy website traffic that we anticipated. We heard of multiple horror stories in which companies would have their websites crash which forced them to kiss all of those potential sales goodbye. You only get one shot to capitalize on that exposure and we had to do everything in our power to maximize on that moment.
Ho: Where and at how many locations were you selling your product before Shark Tank?
Kinas: Before Shark Tank, we had the AquaVault at a majority of the hotels in South Beach. Aside from this rather small stretch of real estate, we really had an insignificant presence elsewhere. After the airing, we received countless inquiries from all around the world. Some of the biggest accounts we landed were Disney World, SeaWorld, Norwegian Cruise Line and Brookstone to name a few.
Aside from our domestic presence, we now have distributors who are selling our product across the globe. Some of our largest relationships are in Dubai, Thailand, South America, the Caribbean and parts of Europe.
We’ve experienced many instances where some of the most notable celebrities, athletes and high profile executives have expressed their interest and appreciation for our product. A common response when first being introduced to the AquaVault has become, “Where has this been all of my life?”
We used to joke that our office phone never rang, but boy did that change once we aired on the tank. AquaVault quickly went from being a local name to a brand that is now recognized in many countries around the world.
Marketing With Zero Budget
Ho: How is the product distributed?
Kinas: Distribution is arguably one of the most critical aspects of any business. Aside from being well capitalized, that is really the lifeblood of the company. Distribution can be the difference between a brilliant product going nowhere and a mediocre product making a fortune.
We knew that the luxury of spending $5,000-$10,000 a month on a PR firm was not in the cards, so we really had to get creative and play the hand we were dealt. We started to scour the internet for every editor and journalist imaginable. On a weekly basis, we would send out hundreds of personalized emails without receiving a single response. We spent many months repeating this process while continuously being met with disappointment.
One afternoon, a news anchor responded to our email and provided her honest feedback on how to change our pitch. With nothing to lose, we quickly made the adjustments and the results were nothing shy of mind-blowing. To summarize her suggestions, she recommended that we made the subject field more intriguing, tremendously reduce the content and structure the focal points in bullet format. We went from having four paragraphs in the content to a brief intro and seven bullet points.
We went from our original subject field saying, “Please read about our interesting invention called the AquaVault” to “ Think you’re safe on vacation? Think again.” We switched our post Shark Tank subject field from, “AquaVault goes on Shark Tank and makes a deal” to “Shark Tank Entrepreneurs did the Unthinkable.” These minor tweaks opened up an entirely new world to us. All of a sudden we started receiving responses from all over the place.
Before we knew it, we had dozens of articles written on us from some of the biggest companies in the business. We went from having zero air time, to being featured on a variety of news stations across the nation. We reached a point in which we were able to determine when an article would come out just by noticing a random spike in sales volume.
This detection method also applied to articles that were written internationally. We cannot emphasize the importance of how critical it is to be creative when designing your pitch. It comes down to people simply not having the time to read your emails. If you don’t capture their attention in the first three seconds, you’ve more than likely lost your window of opportunity.
Another great piece of advice that we learned was to avoid sending emails on Monday mornings and Friday afternoons. On Monday mornings, your email will get lost in the shuffle. On Friday afternoons, people are already in weekend mode.
What’s in Store for the Future
Ho: What are your goals for your business over the next year and five years?
Kinas: Over the next five years, we hope to be at a majority of water parks, theme parks, cruise ships and hotels around the world. We have created a product that is well received in many nations outside of the U.S. We are weeks away from releasing our new retail version of the AquaVault, which is going to be the soft and flexible edition.
Not only is our product being use on lounge chairs, we have come to realize that consumers are buying it to use on strollers, golf carts, bicycles, boat railings, hospital beds, closet rods and more. We realistically believe our annual sales should exceed $10 million within five years.
Ho: What other products do you have in the works? When are they set to launch?
Kinas: The FlexSafe by AquaVault is going to be released in six to eight weeks, which is going to be our way into the retail market. We created this product based on consumer demand and we’re excited to finally provide our clients with what they asked for.
The FlexSafe is going to be a soft, slash-resistant bag that will operate in the same fashion that our current hard version does. The biggest difference is that this will be a very flexible version that is going to be much easier and convenient to transport. So far, if pre-orders are any indication of the product’s success, this product should hopefully be a home run.
Advice for Getting on Shark Tank
Ho: How did you prepare for your appearance? What made it a success?
Kinas: While going through the motions of advancing rounds, there was a great deal of preparation involved. This process essentially forced us to dig deep into the mechanics and minutia of our entire business, far greater than we ever had before. Our numbers, projections, strengths, weaknesses and direction of the company all had to be articulated in a concise and uniform manner.
Aside from knowing the intricacies in and out, we put together panels of individuals whose sole objective was to poke holes in our presentation and only play the devil’s advocate. We had strict instructions which were to thoroughly criticize and prepare us for the unexpected. We understood the importance of being able to exude a great deal of confidence while presenting a flawless demonstration that outlined the vision of our company. This was absolutely not going to be an opportunity to televise an AquaVault Roast.
Ho: What are the secrets of a successful audition and appearance?
Kinas: When preparing for Shark Tank, it is imperative that you can articulate your vision in a reasonable and rational manner. Do not demonstrate delusions of grandeur unless your intention is to be embarrassed and walk off without a deal. As long as you can convey that you are passionate, devoted, willing to learn and capable of success, you will instantly separate yourself from a large portion of your competition.
When asked how we endure the tough times and get through the long grueling hours of being an entrepreneur, we usually respond with, “If you do what you love, you never work a day in your life.” We embrace the challenges of the journey because it’s the tough times that make the achievements that much sweeter.