Why Cheek'd Failed to get a Deal in the Tank

cheek'd in shark tank
By: Pete Troshak
Twitter: @Shak74
Website: www.Shak74.com

Lori Cheek was an architect who made a lot of money and had a fashionable wardrobe while working for Christian Dior. She sold her posh wardrobe and gave up her swanky apartment to follow her dream of building relationships instead of buildings, by creating a new dating service. She was living on her friend's sofas so she can afford her business and help people connect in a new way. Will her desire to bring love to the world melt the usually icy hearts of the Sharks, or will they decide that Lori Cheek is giving love a bad valuation?

Cheek's service is Cheek'd, personalized business cards that you can give to an attractive stranger to let them know you are interested in them. You buy the decks of cards from her site in packs of 50, and they each feature a random quirky quote and a code number. The quotes range from cute and amusing ("I just put all my drinks on your tab.") to vaguely creepy ("our story begins.") The code number is unique to you and can be used by the person you give the card to find out more info about you and if they are interested to chat with you through the site. The decks of cards cost $20 to $25 for a single pack. The site also requires a $9.99 monthly commitment to keep your code assigned to you, and if you don't keep up your subscription, whatever cards you have left become worthless.

The segment in which the Sharks and Ms. Cheek discussed the valuation of her company was left out of the broadcast. This was possibly because the numbers are kind of ugly. Lori Cheek claims the site has had 4,500 members since it started in 2010. Only 1,125 of those members are paid members, which Cheek attributes to her site having tech problems and being "broken from day one." She has given up her job and her wardrobe and sunk $120,000 into the business which has made back less than half of that ($56,000) in all three years combined.

The Sharks were less than enthusiastic with her company. Mark called her "delusional" (as discussed in the previous article and dropped out first. Kevin compared her business to a rabid dog that needed to be put down. Robert felt her business operated on a flawed premise and that if someone had the guts to approach a hot stranger in public that they would not need a card to introduce themselves. Lori Greiner and Barbara dropped out soon after, with Barbara offering up an anecdote from her own history to explain how she thought the entrepreneur was on the wrong track, which we will come back to discussing in a bit.

But first, why the harsh reaction to the pitch? Mainly because of three issues:

1) Her business wasn't profitable – the Sharks want to invest in something successful. In three years Cheek has lost money and failed to even get her website fixed until recently, making it look like she didn't care if it made money or not. Why would the Sharks invest in her business if she couldn't do the basic things to make sure it was earning every cent of profit it could?

barbara corcoran shark tank2) Her business wasn't innovative enough – Admittedly her idea was kind of different, adding a business card component to a dating app/website. The problem is that there are already a countless amount of popular dating apps and websites – Tinder, Match, OKCupid, eHarmony – it’s a hard business to compete in. And the business card idea, while unique, almost seems like a step backwards in a world where everyone relies on tech interactions rather than paper ones.

3) Don’t rely on an App/website – Because they will break your heart faster than a bad love match. Her success is reliant on a lot of people using her app/website and getting others to use it. It’s unlikely to grab a large part of such a competitive market and even worse, every time the app is successful in creating a love match, she loses two potential customers and revenue!

Barbara’s story is the moral of this pitch: She told Lori Cheek. about her first business, a flower shop. Barb loved the flower shop but it was a failure as a business. Even though it was painful for her to admit that she failed, she knew she had to give up the business and move on to something else. She explained that if she hadn't been willing to admit defeat and move on, she wouldn't be a millionaire today. She used this to illustrate that while she appreciated Cheek's passion and drive, it would be better directed towards another venture that had a better chance of success. If you love something sometimes you have to set it free. It probably won’t come back to you, but if you keep trying and are determined, another better opportunity will come along.