Kevin O'Leary Doesn’t Toy Around with Toybox
The winter holidays may be a long way off, but every season is toy-wanting season for kids. Children are constantly on the look for new plastic and fluffy playmates and adults face the pressure in satisfying their children’s demands. With technology expanding every day, many parents might be wondering how they can just give kids the autonomy to procure their own toys in the base of their home. Kids would not complain about a solution to this issue as well as they would be able to play Santa and automatically put themselves on the nice list all year round.
On Episode 15 of Season 10, we see exciting innovation enter the Shark Tank that provides a solution to this problem. Former Microsoft engineers Ben Baltes and Jenn Chin made every kid’s dream come true when their company Toybox Labs presented their main product 3D Printer for Kids. Their 3D printer connects to a mobile app that allows kids to print any toy they want in the catalog. The app also features a creative space where kids can play pretend designers and put their imagination to use in creating their own personalized toys.
The Toybox Labs duo looked to obtain $150k in exchange for a 5% stake putting their company’s evaluation at $3 million. The pair expressed how they have already made $300k through internet sales in only months while using only Facebook advertising.
As noted by Ben and Jenn, the target demographic for their 3D printer is 6-9-year-olds. While making 3D printing kid-friendly sounds exciting enough, the Toybox Labs duo showed more excitement for the software behind the whole operation. The entrepreneurs marveled over the uniqueness of their app and how easy it is for kids to select and design their own toys to be 3D printed from the app. They also use data analytics to check which toys are most popular and adjust the catalog as necessary.
However, It looked that the Grinch might steal Christmas when some of the Sharks went out following discussion. After learning that it takes 4 hours to print each toy, Mark Cuban went out with the idea that kids do not have the attention span necessary for 3D printing. Daymond John followed Mark in going out as he was concerned with the safety concerns of putting a 3D printer in the hands of children. Ben and Jenn mentioned how they advise their product to be used in the supervision of adults, but this was not good enough for Daymond.
But Mr. Wonderful became every kid’s hero when he made an offer to the duo. Kevin O’Leary was excited by the licensing opportunity with large kids’ brands. The vision in mind is that their 3D Printer could print out toys related to brands like Disney and Minecraft. Kevin offered the pair the $150k for a 10% stake which halves the company’s evaluation from $3 million to $1.5 million. Ben and Jenn decided to entertain remaining Sharks, Lori Greiner and Guest Shark Jamie Siminoff, who both go out based on a too young target demographic and not believing in the product is sellable enough. Kevin takes advantage of being the only Shark remaining which results in a series of counter-offers between him and the entrepreneurs. Finally, the entrepreneurs counter with $150k for a stake 13% and 2% in advisory shares to which Mr. Wonderful accepts.
The first talking point is the fact that no one in Shark Tank bothered to mention that 3D printing also requires constantly buying material to 3D print with. It seemed that the sharks were willing to treat the product as if it had unlimited material to print with which was interesting. This may have benefited the Toybox Labs duo in the Shark Tank as they did not have to mention hidden additional costs to their consumers during the discussion of their product.
Another talking point is whether it is worth shifting or expanding the target demographic of Toybox Labs’ 3D Printer for Kids. Lori and Mark both seemed to have a point when they mentioned that the current target demographic of 6-9-year-olds might not have the patience or interest in dealing with 3D printing. However, if they potentially targeted an older demographic (Lori mentions 8-13-year-olds instead), they could have consumers who would be more excited about the 3D printing aspect of the product. Toybox Labs would have to consider adding more toys/models that would be age appropriate for this demographic if they take this approach.
One more interesting talking point is the safety concerns behind putting 3D printing in the hands of children which was the main reason why Daymond went out. Since they are putting 3D printing in the hands of children, Toybox Labs will have to ensure that their product has a safeguard that will prevent kids from being able to put their hands inside the 3D printer during the printing process. Toybox Labs already advises adult supervision but will still face major issues if they do not take enough safety precautions which results in stories of kids misusing the product.
A final talking point is the exciting opportunity that Toybox Labs’s 3D printers have in licensing. While large brands can take advantage of strictly selling their own toys, if Toybox Labs 3D printers really take off and become popular then there is benefit for both Toybox Labs and the brand to 3D print their branded toys. This can also serve as an opportunity for smaller toy brands to spread their own brand among children.
Overall, it will be exciting to see how Toybox Labs takes advantage of Mr. Wonderful’s investment and expertise to say the least.