Does a WWE Champion with an Inspirational Story get a Deal from the Sharks?

By: Pete Troshak
Twitter: @Shak74

The story of Diamond Dallas Page is like the story of many entrepreneurs - the classic underdog story. Dallas became a wrestler at age 35, an age at which many people in that profession are already broken down or retired. He carved out a 14 year career as a star and championship performer in the ring and then retired to life as a public speaker and fitness guru. Granted we know the story-lines aren't real and that much of the action in wrestling is scripted, but there is no denying the physical talent, fearlessness, and dedication required to survive in that Shark-Tank-like business.

Post wrestling, Page has taken the drive that made him successful in the ring and applied it to a new career and successful business in DDP YOGA. The tagline for his business is "It Ain't Your Mama's Yoga." He was introduced to yoga when an injury almost ended his athletic career, and his belief and discipline led him to create his own workout brand. His first products were a few well received books with his teachings and exercises that successfully re-branded yoga as something as beneficial to men as it was to women, who were traditionally the target market for yoga products. He currently sells packages of DVD's and workout routines through his website. Page arrived at the Shark Tank asking for $200,000 for 5% of his company (valuing the company at $4 million.) Page and his business partner Steve Yu made $2.6 million their first year, netting almost a million dollars after taking out salaries for themselves.

It seemed like a slam dunk investment - a proven famous athlete with a natural personality for sales, a very successful company and an inspiring success story with 10 million YouTube views. The Sharks were impressed with his company and didn't even bother with their customary carving up of the valuation, which was surprising as Page's valuation was one of the highest the show has ever seen! But despite their positive reaction to Page and his successful business, the Sharks dropped out with very little internal or external debate. Why? Because of these three factors:

1) Fitness products/services are generally a hard sell in the Tank. The Sharks realize that fitness products are generally fads which are always fighting for market share in a sea of similar services and devices. Frequently, these products and systems include the marketing of a large and expensive-to-manufacture piece of home machinery. In DDT's case, they weren't looking to sell heavy equipment, just a set of DVD's and some instructions. However, what Page is selling doesn't offer anything proprietary or tangible, and there are literally thousands of other yoga DVD programs, books, and classes available both online and offline. Obviously his product has been successful both in terms of sales and in terms of helping change people's lives, but it's still a battle to stand out in such a crowded market despite its apparent quality.

2) Part of Page's pitch was built around the idea of making an app around his yoga training. Mention the term "app" in the Tank and watch the Sharks lose their appetite and swim away rapidly. The Sharks realize that the odds of releasing a successful app are roughly akin to the odds of winning the Powerball Lottery. No one has put their finger on exactly what makes a successful app which leads to investors having cold feet about investing in them. Apps are hard to monetize and success with them seems random. At best, they are capable of Icarus-like rises and falls (witness the tale of Flappy Bird), and at worst (and much more frequently) they are just ignored or downloaded and never used. The Sharks are therefore rightfully unwilling to invest in any apps that don't have a specific innovative use, as they are a crapshoot that usually comes up Snake Eyes. (Of course this wasn't the case with Cycloramic.)

3) The Shark’s investment model is generally based on getting in on the ground floor of a business and helping shepherd it to success. Page was a victim of his own success when it came to dealing with the Sharks - he has already developed the business to a high level and possibly plateaued. Page and Yu did not offer strong ideas on how they would grow their customer base. They talked about infomercials and the app, but it seemed unclear if they could add anything new to their company to make it grow more and standout in a saturated market. Once again, the Sharks know that fitness-related products are a hard sell, and so they did not invest because they couldn't see where else to take the product to make them money and expand its customer base. The Sharks generally want to invest in products that can grow to great heights, and then cash-in when the products take off. They don't like pouring money into a venture that has probably already reached its peak. I guess we will just have to wait and see whether they were right in the case of DDP Yoga.