BatBnB: Kevin O’Leary Finds a New Home
Carrying the accusation of Kevin O’Leary being the most “blood sucking” Shark, the other Sharks tell a series of jokes as Harrison Broadhurst and Chris Rannefors step into the tank to pitch their startup, BatBnB. Having created a Bed and Breakfast for bats, the founders of BatBnB are seeking a 100k investment for 16% equity stake for a controversial solution to a widespread concern—pest control.
Entrepreneurs Harrison and Chris come from Lexington, Kentucky where they grew inspired to design their product as a result of the 2016 outbreak of the Zika virus, spread by mosquitoes infecting hundreds of United States citizens. Being terrified to someday become victims of the dangerous disease, Harrison and Chris were discouraged to learn the only mosquito repellents available on the market were an array of harmful and unpleasant pesticides. From this, BatBnB was born.
“So, most people don’t know that a common bat will eat up to 1,000 mosquito sized-insects an hour...making them one of nature’s greatest forms of natural pest control.” Chris states.
BatBnB is a collection of designer bat houses built to be a brown bat’s paradise, while providing a much needed home for the notoriously feared animal. Each BatBnB can house anywhere from 80 to 100 bats! The BatBnB is designed with interior grove chambers and landing pads that allow the bat to easily grip, climb and hang. What more could a bat ask for?
Rest assured, Harrison and Chris’s presentation was yet to be over. In an attempt to get the Sharks to warm up to the supposedly friendly animal, the young entrepreneurs present Radar, a 6 year old rescued bat that resides within the BatBnB. Lori Greiner is appalled at the sight of the bat, while the other Sharks share a variety of colorful reactions and facial expressions. Alongside countless witty comments comparing the bat population to Kevin and his family, the Sharks grow concerned that there has always been a negative disposition of the bat’s image. Therefore, why would a buyer agree to house bats in their own backyard? Kevin agrees with the Sharks’ consensus by citing the negative interpretation made of bats dating all the way back to Greek mythology and ancient storytelling. Individually, Kevin expresses his sorrow for the bat having a bad reputation, stating that he is “one with the bat” and he understands them.
Although the retail market seems to be a challenge for the BatBnB, Harrison and Chis see the future of their product in the public sector; cities, counties, and states adopting the use of BatBnB for larger pest control. With an investor to help properly educate the public of BatBnB’s uses and lead the entrepreneurs to appropriate connections, Harrison and Chris know that a deal is critical to their product’s success.
Financials and Response
Using crowdfunding, Harrison and Chris launched BatBnB 11 months prior to their current appearance on Shark Tank. The entrepreneurs explain their revenues to date: $135,000, projected sales for this year: $145,000, and profit margins of an $88.50 cost to make each unit and $239 to sell one.
Almost immediately following their response, Robert Herjavec states, “I see it as a hobby market. It’s relatively small. It’s not for me. I’m out.” Short and sweet, we move on to the next Shark. Mark Cuban is interested in the company’s 5-year forecast. After explaining they plan to be a 1-million a year business, Mark steps out explaining that he doesn’t feel the product will be big enough to be worth his time and effort. Daymond John is next to step out, explaining that he has a lot of bats on his property yet does not see any decrease in his mosquito issue. Surprisingly, Harrison and Chris have nothing to say in defense of the bats and their abilities. Daymond then ends his commentary by noting that people aren’t likely to understand the value of the product, and it would be a very hard thing to educate. Next, Lori is very blunt in remarking that the product is just not for her. She cannot stop herself from looking over and squirming in disgust, therefore cannot see herself investing in such a product. She apologizes and goes out of the deal.
With one Shark left standing, Harrison and Chris have given no rebuttals or arguments to defend their product. Luckily, O’Leary has a vision for BatBnB. He expresses his passion for bats that arose from their tendency to be misunderstood over the ages. He promises to explain and educate audiences through his bat expertise, with an offer of 100k for 33.3% equity stake. Harrison’s face turns grim almost immediately, and Chris states that the offer is a little too low for them. They give a counteroffer of 100k for 25%, which O’Leary is quick to reject. He stands firmly on his initial offer, promising a tremendous amount of promotion to the product. After a few giggles, Chris asks, “Will you put on a batman suit if we...” Cut off by laughter from the entire room, they seal the deal. Perfectly stated by Lori, “Who more perfect for a bat house?” The episode ends with Kevin telling bat stories and the entrepreneurs leaving with a content, happy reaction.
Failing to impress the other Sharks, Harrison and Chris are lucky to snag an offer with Kevin O’Leary. Agreeing with Mark Cuban and Daymond John, I feel it was clear that BatBnB would struggle in the retail market. Not only would the founders have to worry about proving the product’s effectiveness in pest control, they would also be left to wrestle with the negative and fearful impression of bats that the public has accepted for centuries. Trying to convince the public that bats are now helpful and friendly creature, is a daunting task. Imagine being at the park with your kids and looking up to see a swarm of bats? The question will be whether or not the public starts thinking that a pest problem is being overlapped with another pest problem.
Additionally, a fault I find in the product is that it does not come with bats included themselves. Therefore, how can a buyer be sure that bats will occupy the home? Without the guarantee of bats naturally occupying the home, the product will seem useless.
To date, BatBnB is available on its own website as well as on Amazon for $228 and yields a 5 star rating. Unfortunately, alongside the posting of BatBnB there is a very similar bat shelter being sold for $41 yielding a 4.5 star rating, and from a much larger customer base. As expected, BatBnB is suffering on the basis of cost reduction. However, if the product stands comparatively superior in pest control, it does have a chance of being acquired by county level pest control services. Not to mention Kevin O’Leary will do everything in his power to vouch for the usefulness of his new home.