@ The Wall Doctor

By: Pete Troshak
Twitter: @shak74
Website: www.shak74.com

Entrepreneur Jim Lewis arrived in the Shark Tank wearing a white doctor’s coat, fitting for a man who is a Forensic Pathologist by day and a self-prescribed “Wall-ologist” by night. Lewis brought with him his invention - Wall RX. Wall RX is an innovative solution to the costly and common problem of how to inexpensively and quickly patch a hole in a drywall. After leaving the Shark Tank, Lewis probably realized the one problem he didn't have seem to have a solution for, which was how to navigate a tank full of hungry Sharks and make the most sensible and profitable deal for his invention.

Lewis’ simple but brilliant product consists of two parts and only a handful of steps: First, apply an aerated clear plastic layer with adhesive on one side over the hole in the wall. Next, apply a packet of spackle-like compound with a plastic frame around it over the hole, wait 24 to 48 hours and then peel off the frame and the wall is patched! Lewis has patents for the item, has developed attractive red/white medical-like packaging for it (with tagline “got holes?”) and has good profit margins. The units come in a variety of sizes
to cover different sized holes and cost him less than $2.50 to produce, with retail prices ranging from $6.99 to $9.99. He has sold 80,000 units in three years for a profit of over $600,000, with projected totals for the next year between half-a-million and a million dollars. Lewis came to the Tank requesting $150,000 for a 10% stake in the company; money he wanted to use to create a streamlined manufacturing process and build inventory. He mentioned that he has received interest from an unnamed large retailer (more than likely Walmart) but that he didn't have the inventory to meet their demands, which is a problem many entrepreneurs have. An infusion of money would allow him to take advantage of offers like this and grow his company and profits.

Lewis’ impressive product, solid sales numbers, and excellent pitch, set off a feeding frenzy in the Tank. After the smoke cleared, Daymond, Kevin, Lori and Robert all had offers on the table. Mark dropped out and offered to answer questions as an advocate to the entrepreneur, an offer that Lewis didn't appear to take advantage of during the part of negotiations that were broadcasted. Daymond ($300,000) and Kevin ($150,000) offered similar deals for 15% of Lewis’ company that were contingent on them being able to license out the product to another company. Lori offered a very different package, $300,000 for 20% stake in the company and immediate exposure on QVC and a separate infomercial. Robert offered $150,000 for all international rights to sell the product and the right to purchase inventory at cost from Lewis.

It was evident watching his reaction that Lewis fell in love with Robert’s offer. Lewis seemed instantly enamored with the thought that he could keep U.S. rights and get an influx of cash to help his company. Meanwhile Lewis’ brain seemed to be telling him that Lori’s offer was better, given her connections and track record with similar products. You could see Lewis’ internal struggle on his face and hear it in his voice. This battle of heart and mind led him to a failed attempt to cajole Robert and Lori into a partnership, which they both declined. Robert knew he had Lewis on a hook and Lori couldn't sell the product through her channels without worldwide distribution rights. Robert then bluffed that he was offended and going to drop out, leading to Lewis practically begging him not to withdraw his offer. At this point, Daymond smelled blood in the water and seemed ready to dive back in, which led to Robert quickly patching things up with Lewis and the entrepreneur accepting Robert as a partner.

It seems that Lewis took the second best deal. Lori’s offer involved instant marketing power, exposure and twice as much cash - giving him the ability to have more inventory at a cheaper cost and in higher quantities. Due to not dealing with Lori, he effectively shut himself out of QVC sales which could have been huge. Even if the sales numbers weren't spectacular on TV, the product would've no doubt received a massive amount of exposure on the network and via infomercial. Lewis got half as much money from Robert and is now required to manufacture items for international sales that he will make no profits on. Lewis got hung up on keeping 100% of the U.S. rights and didn't see the forest for the trees. He beat the odds by inventing an inexpensive product with good profit margins that will undoubtedly sell worldwide, but gave away his international rights and left $150,000 on the table. Given the choice, would you rather have a massive amount of free exposure, $300,000 in cash and 80% of profits of sales worldwide, or 100% of the profits of one country and be manufacturing goods for the rest of the world for an eternity for $150,000? Given hindsight and a chance to do it again without being caught up in the moment, I think Lewis would have chosen Lori’s offer.