Define Bottle and iReTron: A Tale of Two Pitches

By: Pete Troshak
Twitter: @Shak74
Website: www.Shak74.com

kid entrepreneurs on shark tank
Last week's Shark Tank featured entrepreneurs ranging in age from six to sixteen who have invented items to make the world a better place. Two of the pitches featured inventors of roughly the same age who displayed business savvy combined with an impressive level of social and environmental consciousness beyond their years. Only one walked out of the Tank with a deal, and we are here to analyze why.


First up was Carter Kostler. Carter is 15 years old and has brought his invention, the Define Bottle, to the tank. The Define Bottle is a stylish, reusable, two compartment, portable water bottle. The top compartment holds most of the water, while the bottom part screws off so you can fill it with fresh fruit. Once the two parts are combined and filled, the water gets infused with fruit flavor after just 15 minutes. This type of bottle encourages healthy living by offering a safe alternative to soda or other sugary drinks, and prevents the waste that comes with buying case after case of bottled water. Carter has been selling the bottles for four months and has $65,000 dollars in sales to show for it. The bottles sell for $30 retail and cost him $10 to produce. He is now working with a new manufacturer that will bring his costs down to $5 a bottle, which will almost double his profit.

define bottle shark tank
Carter has come to the Shark Tank to look for $100,000 for 20% of his company. He has gotten some sales via his website and also has his product in some Whole Foods and David’s Tea locations. But despite the product selling out at David’s Teas, Carter did not pursue an immediate reorder and he received some criticism from the Sharks for that. He also was unable to explain his conversion rates and some key analytics from his website which disappointed the Sharks. To further muddy the waters in the Tank, Carter revealed that he has spent $300,000 dollars inventing the  Define Bottle. And even worse, his parents took a mortgage out on their home to do it. Still, Robert Herjavec believed in Carter and the product enough to offer $100,000 for a 40% stake. Mark Cuban seemed vaguely interested but didn't actually make an offer. The rest of the Sharks simply didn't bite, and after consulting with his family and unsuccessfully countering Robert’s offer for $100,000 for a 30% stake, Carter left with no deal.

Next up was Jason Li, whose company, iReTron, buys old cell phones and other electronic devices from people, and refurbishes and resells them to new owners. He claims he offers the best buy-back prices of anyone in his type of business and that he has zero inventory, as he apparently resells every item that he buys. Jason formed his company partly as a business and partly as a way to get better technology into the hands of people with less money and help the environment by preventing more electronic items from rotting in landfills. Jason is 16 years old and he immigrated to America at the young age of six. His sales in 12 months of business was $40,000, and he was asking the Sharks for $100,000 in exchange for 20% of his company. Jason told of how he was a Judo Champion who was supposed to compete in the U.S Open before breaking his back. While he was recuperating, he tried to find direction for himself and was inspired by the book How To Change The World.

iReTron shark tankRobert and Kevin dropped out right away despite Jason’s impressive story and well-meaning service. Mark Cuban dropped out because he was concerned with how Jason would manage the money and if he would lose his “hustle.” Barbara though saw great potential in Jason, and offered him the $100,000 for 20% of the company as long as she was able to be involved in decisions on how he used the money. Barbara then added into the deal that she would own 20% of whatever else he invented in the next five years. Jason lobbied for Mark to partner with Barbara, and Mark accepted. Jason left with two Sharks as partners and an influx of cash to his business.

The question which has been bugging many Shark Tank fans, was why did the Shark’s invest in Jason’s company and not Carter’s? Both are intelligent and creative beyond their years, and they both displayed a desire to keep their companies “green” and help people with their service/product. On paper, Carter’s company has been more profitable, and seems to be trending upwards. Carter’s Define Bottle is a tangible, somewhat innovative, and a stylish physical product, whereas Jason offers a service. A service that, as Kevin O'Leary observed, could be easily offered by any entrepreneur with some money to start up the business.

I believe that the Sharks' willingness to work with Jason over Carter came down to two factors:

1) Fiscal responsibility – Carter admitted that he spent $300,000 on development. The Sharks as a whole seemed appalled at that figure for the creation of what is a relatively simple product. Even worse, his family finances are tied into the success of the product. That $300,000 represents a large hole that the company has to dig itself out of before it can be profitable. The Sharks appreciated Carter’s product and his good intentions, but obviously felt that it would be a struggle to get the company into the black and make money from it. The company’s debt and lack of financial controls was a huge red flag for the Sharks, and ultimately made the investment not worth their risk.

2) They invested in the person – every time you invest in a product or company you are investing in the people too. Carter is smart and creative and will probably be a success at something else if the Define Bottle doesn't take off. But his uncertainty when answering some of the Sharks questions and the company’s debt doomed his pitch. Jason on the other hand, had a certain “it” quality to him. He had a great story and came across as very driven and focused. He radiated a certain calm confidence and unshakable belief in himself while giving his pitch. More than likely, his current business will fail or never be profitable enough for hungry Sharks to feed off of, but he got an investment from Barbara and Mark anyway. They might lose the money they invested in iReTron, but they recognized something in him (possibly reminding them of the qualities that have made them successful) which motivated them to take a risk on a 16 year-old with big dreams.