Pet Paint, Phoenicians, and the Value of a Sea Mollusk

Abe Geary, the founder of Pet Paint, walked into the Tank claiming to have produced what could be the biggest spectacle in history. The only spectacle he delivered was of his super-high $1 million valuation, as he asked the Sharks for $200,000 in exchange of 20% of his dog spray-paint company. His patent- pending, veterinarian-tested spray-paint costs $9.99 a bottle, and has, up until now, only been available in retail stores. As he released his model spray-painted hounds into the Tank, the Sharks got ready to spray him in the face with questions and negative feedback about his business.

Abe clearly entered the Shark Tank thinking that his $70,000 in sales and his contract with PetSmart to test the product in 50 stores would be enough to get the Sharks to invest in the product. Unfortunately for him, his assumption was incorrect and the Sharks chewed up his business and spit it right back out.

There were three critical issues with the Pet Paint business that the Sharks brought up. After hearing that Abe invested $240,000 into his business, the Sharks couldn't help but wonder where this money went. Abe tried comforting them by telling them that $200,000 of it is sitting in inventory, but to Lori, this had the opposite effect. Lori said that it is a mistake for a business like Pet Paint to order tons of inventory before making sales, because you just don't know how long you'll end up sitting on it. It may takes years to sell all of it, and even worse, it may never sell! This mistake caused Lori to drop out.

The second issue was raised by Kevin O'Leary in a rather amusing manner. Kevin decided to teach the entrepreneur a lesson by taking him back in time to the age of the Phoenicians. That's right, it's time for our segment called "Kevin the Historian":

Kevin: "Four-thousand years ago there was a people called the Phoenicians. They found a way to take sea mollusks, crush their shells, and make purple dye. Because it was such a rare color, everybody wanted purple robes for royalty. These guys would dye the sails of their boats purple and sail into every war zone in the Mediterranean. Nobody touched them. You know why? Everybody wanted the purple robes. Everybody else got killed, but never the Phoenicians. No one else knew how to crush the snails to make the purple dye."

Lori: "Did you just make that up?" 

Kevin: "Nope that is a true story.

Barbara: "Of course he made that up".

Lori: "I've never heard that before!"

Robert: "Kevin, what's your point with that?!"

Kevin: "My point is this, Abe: If you had the purple dye that no one else could make, you could sail off and make millions of dollars. But you don’t. Everybody can make a color hair-spray for dogs. And for that reason, I’m out. You’re not a Phoenician, Abe. Sorry."

Although this may have seemed tangential at the time, it was more than just a roundabout way of getting a very true point across. In a more concise form, Mr. Wonderful was saying that the product wasn't at all proprietary and anyone can just copy the formula and compete. Spray-paint for dogs may be an original idea, but it is not something which is unique and difficult to replicate. In other words, no Phoenician would sail into a war zone with sails painted with Pet Paint, no matter what color it came in.

Last but not least was Mark Cuban's very valid point. While the product itself may not be proprietary, the results Pet Paint can create are worth of going viral. For kids especially, what can be more fun than sharing a picture of a spray-painted canine with friends and family? We live in an era which is way beyond the times of the Phoenicians. It's a Social Era in which every moment can be captured and every memory can be shared. For a company like Pet Paint, building and maintaining a solid online presence is all that's needed to be successful. Brick-and-mortar stores don't make ideas and products go viral; the internet does. There are an unlimited amount of opportunities for Pet Paint online: image sharing, contests, pranks, custom colors...the list goes on and on. Any entrepreneur who can't see these opportunities from the get-go doesn't stand a chance in today's business world. And that's what caused Mark to lose interest in investing in the business. 

Each Shark had what to say about this pitch, and although Barbara did make an offer in the end for 60% of the business, Abe wasn't willing to give up that much equity. In this case, he was probably right. Even if he
didn't walk out with a deal, the words of wisdom from the Sharks certainly penetrated his head as his website is up and running. However, although I can understand his decision not to take the offer, I cannot understand why the Shark Tank producers and editors didn't feature this pitch in the Pre-Halloween episode two weeks ago. If this product was aired and viewed by millions of people before Halloween, and the Pet Paint website was ready for orders, that $200,000 in inventory would undoubtedly all be sold out. To me, that was a huge mistake on the producers' part. For Pet Paint, a Pre-Halloween airing would have been as valuable as the purple dye of the sea mollusks 4,000 years ago.

Jeff Hopkins1 Comment