first into the tank is a customized
version of a bedtime essential
[Music]
hi sharks i'm susanna i'm kevin and
we're seeking 400 000 for a 5 equity
stick in our company pluto pillow
now i know what you're all thinking
another pillow company well yes but
thankfully here at pluto we do things
differently see finding the perfect
pillow can be so amazing but finding the
right pillow for you can also be super
hard here's how it usually goes while
shopping online you're faced with an
overwhelming number of options that can
be hard to compare with one another and
with tens of thousands of search results
how do you know which would work best
for you
in stores is it better to squeeze
pillows with your hands or should you
awkwardly place your head on the dirty
display pillows the answer is both suck
well with pluto there's a better way
pluto is a custom pillow company that
custom builds pulls to you based on your
body stats how you sleep and what you
like
here's how it works
simply visit our website fill out a
quick questionnaire tell us about your
current pillow what you like what you
didn't like about it then answer a few
questions about your personal
preferences then all of your data runs
through our algorithm helping us create
the perfect pillow for you our modular
design allows us to create over 35
possible variations through our
innovative process
the best part while there are a ton of
pillows out there nobody else does this
even better our customers love us so
sharks before you hit snooze which one
of you will join us in helping everyone
get a good night's sleep
[Music]
all right sharks um right in front of
you in those really cool boxes are your
very own custom pluto pillows
now we had to do some research to figure
out what we should craft for you we
think these make great starting out
points so mark word around the league is
that you prefer fill pillows over foam
pillows and you like your pillows to be
really soft so we made sure to cross
that squishy squishy squishy i like my
pillow squishy daniel we heard how
important it is for your sleep products
to be hypoallergenic the good news is
all of our pillows are we crafted a
pillow for you that's both light and
soft
mr wonderful we heard that you prefer
fill pillows over foam pillows so we
made one for you that's just that but
one that never flattens
lori you tend to heat up at night and
you like more of a medium firmness level
and lastly robert lucky you you're
exactly the same as mr wonderful both of
you love thick plushy filled pillows
yours is a quilted cover while kevin's
is a smooth so sharks enjoy your out of
this world pluto pillow susanna i have a
question i always assumed that there was
actually
a better pillar for everyone are you
saying that that's not the case that
really truly there is no scientific best
for everybody there isn't so we take
your body stats sleep positions and
preferences so we know that like let's
say if you're a side sleeper you need
that like neck support for the neck to
shoulder tip ratio whereas like a
stomach sleeper it's better if you sleep
on a flat pillow but besides that we
also have empirical evidence we have
over 1.5 million data points that we
take into account of like what makes a
great pillow for you what do you mean by
those 1.5 million data points so we have
an algorithm on our site that every time
anyone goes on our website orders a
pillow we store this information and
then we look at other people who answer
similarly to that person
and then we see like exactly what kind
of pillow would be best for them with
this data point and this has actually
led to a very low return rate compared
to the industry average the industry
average is 12.95
while ours is sub 8 and we did this in
two years break down the numbers for me
2018 197k when we first started 2019
473k and this year so far is 490k there
you go wow what's the average sales
price we saw our standard sizes for 95.
how are you manufacturing so how this
works is if you guys open up your
pillows inside there's actually a foam
core and it's surrounded by a plush
outer cover so there's these two main
parts and through our questionnaire when
it goes to our algorithm the computer
actually decides like hey this person
needs this foam with that plush cover so
someone's in the facility picking yes
they just
put it together
just two components and variations of
those two components two components make
over 35 variations that feel really
different
one pillow you sell it at 95 dollars and
then what does it cost you including
fulfillment and what is your what do you
have left so 95 18 shipping and it cost
us 25 to 30
to make the pillow so forty three
dollars so you only have half about
fifty percent margin yes so with that
it's 50 or 60 just cost of goods sold so
that's not a big ratio that sounds like
you're normally gross margin structure
is not so good is there a reason why
because no matter how much you grow if
your gross margin out the gate is bad
you're just compounding the problem so
why are your gross margins not healthy
and that's why with like if we could
have a bigger size warehouse to order
more materials we can get that down to
20 to 25 instead of 25 to 30. you're
talking about a few dollars like 18 of
your cost to shipping right tell me a
little bit about the back end operations
how big is the team so before this year
it was actually just us two we boxed
every pillow we answered all the
customers you guys did all the boxing in
the warehouse we were boxing in the
warehouse
and now we have we hire two pillow
builders um we have pillow builders yeah
and we have someone who is full-time on
customer service i want to share with
you a few things my thoughts well you're
picking something smart because pillows
are great and everybody needs pillows
it's also an extremely competitive space
and i just think the combination of that
along with your valuation
just not the right investment for me i'm
sorry i'm out
thank you very much
yes guys you guys are are super
impressive i think lori makes a really
good point about how competitive that
industry is but nobody does what we're
doing in terms of taking body stats
sleep positions and preferences into
account and we have a utility patent
penny we have over one point five years
depending on what on the way we make the
pills combined with the algorithm
and we have over 1.5 million data points
that no other company has in terms of
like evidence on like what makes a good
pillow we did all the hard work already
right we already established the brand
we already created a product guys you
haven't so here i'm guessing you're
using machine learning because it's
linear right 1.5 million data points is
nothing
but you actually have kind of dropped
the ball and i can tell by your answers
because the better approach is to say
based off my data points including my
orders i can build in anticipation of
what will be ordered and will to be
ordered from because you already know
based off your machine learning
algorithms how many orders are going to
take place from this part of the country
that part of the country this part of
the country that part of the country
right i'm saying all this because i
don't think you've gone through that
whole process yet right and i don't
think you're fully aware of all the
things you're going to have to go
through yet to get there so for those
reasons i'm out
i love pillows i'm obsessive about
pillows
but you know this world of algorithm
everybody talks about how they have an
algorithm and i'm not 100 sure that
nobody else can do that
i don't think this is
where i'm going to sleep comfortably so
i'm
[Music]
thank you very much daniel
if this had been
for a lower amount of capital
risk i would have probably done it just
for the talent
but you guys are too small for 8 million
bucks i'm out
thank you kevin
i have to tell you when you came out
here and you started talking about
pillows i was born out of my mind
i couldn't have been less interested but
you sold me
and
i think there's a couple of big problems
to mark's play your algorithm it's not
predictive you've got to know what the
potential orders are going to be before
you get them and i think you'll start
getting that once you get the volume
yeah but come on who up here knew
everything about their business and to
make those mistakes so at the end of the
day it's not about the mistakes you're
making
it's about my confidence and your
ability to overcome them
and you've sold me on that so i like it
all
hate the valuation
hate the valuation don't let that get in
your way robert so i was being quiet
with my own algorithm and saying
what number
would make me feel comfortable
sleeping at night
[Music]
four sharks are out
but robert is interested in kevin and
susannah's custom-built pillow company
pluto
what number
would make me feel comfortable
sleeping at night
so you're looking for four hundred
thousand for five percent
i'm thinking
four hundred thousand
for 20 percent ichi
it's aggressive but your ass was very
aggressive it's a mount i feel
comfortable with but i think it's one of
those things you won't need more money
you're going to need more expertise and
more ways to get out there faster
it's an offer you've got a shark tank
offer
[Music]
go
10. i think that's just a little bit
hype would you be able to go down to
nine percent or four hundred thousand
no i'm not going to come down that much
i mean would i go down to nineteen
nineteen and a half some marginal amount
sure maybe if you could convince me but
i think
it's a lot of money it really is and
it's a lot of my time and i do think
you're one of these investments we're
going to look back on and say
wow
pluto went to the moon
[Music]
i think 19 is just a little bit too much
we've seen triple digit growth year over
year since we started and we feel like
there's not really much in our way to
keep growing we do want some
experts yeah there's nothing wrong with
sticking to your face agree guys he
could help you a lot
for me is a matter of investment and
risk and i think at 20
i'm deeply invested
[Music]
what do you want to do let's shoot for
the stars
thank you so much for the offer robert
but i think 19 20 is just a little bit
too much i think we can't really go more
than 10
for 400 000
i can't get there okay thank you robert
guys good luck congrats guys and good
luck thank you thank you very much guys
thank you
while we're so flattered by robert's
offer we felt we were worth way more
than what he was offering and we feel
that we could still
grow this company ourselves
[Applause]
next into the tank is a product designed
to make a dreadful household chore
easier
[Music]
hello sharks i'm lola and i'm from los
angeles california i'm here asking for
one hundred and fifty thousand dollars
for 10 of my business badly
sharks let's face it the duvet cover
struggle is real it's definitely one of
the most frustrating tasks ever first
you may have to crawl your way into your
comfort after that trying to line up all
four corners while somehow getting out
of this maze is beyond me now you're
lost confused disoriented and almost
cannot breathe
and when you finally make it out alive
you're left jumping up and down on your
bed in hopes that your comforter will
magically line up
[Music]
all of this sweat and hassle making your
bed does not have to be challenging
complicated that respectful
there's gotta be a better way
that's why i created the easiest fastest
and most user-friendly duvet cover ever
known introducing
a bentley
our signature innovative duvet cover has
a three-sided opening that makes
inserting or removing your duvet a
breeze like never before
simply unzip the three sides place your
duvet on top
straighten things out
the badly duvet cover is just very easy
to use even a child can handle it
and sharks no need for crawling inside
so now she's gonna zip the duvet cover
off using our signature nylon zipper
zip zip zip
so no more stuff in shopping or you know
duvet gymnastics with bedrooms it's so
easy think about how much time you saved
and what you can do with that precious
time so sharks who's ready to zip up
this deal with me and bring badly to bed
everywhere
i have samples for you
robert thank you very much welcome
sorry thank you
mr wonderful is getting wise he is pure
as the driven oh yeah
and damon
and mark thank you lola thank you
appreciate it
so you sharks may not know the
difference between a blanket and a duvet
let me explain the difference well mark
doesn't i certainly do not the duvet was
first made popular in the french course
in versailles it is a down filled large
pillow and so the duvet cover allowed
them to not have to wash the down every
time they had to wash just the cover and
so duvets became immensely popular with
royalty all around the world what years
were those these are back in the 1400s
how old were you in high school because
i am a duvet expert
lola it looked complicated even when she
did it no that was easy that was very
easy how complicated how would i how
would i know that from looking at yeah
that's going to be my question like if
i'm in the store do you only sell this
online today oh right now just online so
you have a video demonstrating what we
just saw on the website yeah absolutely
yeah because otherwise why would i know
the difference between yeah because it's
a demonstrable yeah like i don't know i
wouldn't have known how to do that so
when you pick that up on the retail
shelf you look at that hopefully you
look at that label and it tells you it
has a three-sided opening
it's hard to know that though lola
looking at it
because it's very small and the
representation you don't have anything
there that says that okay well lola tell
us about you okay so what's your
background so equipped with a degree in
chemistry and physics i'm originally
from nigeria so i i immigrated to the us
i ended up getting a job in uh
investment banking
on the technology side and then while
working full-time
i went to colombia and got my mba i've
always had this entrepreneurial yearning
so i'm brainstorming what ideas can i
you know what can i so then i'm like
every time i have to wash my duvet cover
for a king size bed it's a pain and i'm
not a lazy person but that was the one
thing i did not like doing i'm like no
this has got to stop there's got to be a
solution to this so i looked i didn't
find it so i decided i'm going to make
one everybody has this problem if
they've ever changed their duvet cover
exactly so
what does it cost you to make it and
what the units that you sold what did
you sell them at right now it's made in
the u.s
so our costs are very high and i know i
can get that down drastically so right
now it's 57.50
to make and we sell yes on average and i
know i can get this down and you sell it
for what
one for 130 140 average what are your
sales okay so i'm gonna preface that
with do not judge me by myself
are you sure we promise you we will not
judge you by your sales i am going to
judge you by your sales 150 000
for ten percent it puts a million and a
half dollar valuation because your
investment banker you know that i know
okay so but you know what i wasn't gonna
let
sales that are not gonna be pleasing to
you they're not stop me
from getting here oh yeah don't worry
about it i'll just tell you the sales
so our
revenue from
2018 because that was when we really
started to sell before that was just a
few here and then just for life what
were the 28
we're not impressed
okay lola we don't live in the past
thank you we do not live in the past and
so this is 2019 year-to-date
yeah 19th year to date is about 12 000.
yeah
now we're judging you now we're judging
you
this isn't important there's nobody suck
on the number listen to me
your sales suck it's okay
i've been bootstrapping on this i was
paying like 91 000
all my own money and because my budget
was so limited it wasn't going to stop
me so i i hustled you didn't hustle
enough
why didn't you think you didn't sell
more i haven't been doing a lot of
marketing tell you what i've done right
now we have this um in a macy's pop-up
shop and i've been talking to you're in
macy's qvc and they like it enough to
put it on there yeah with this packaging
pop-up shop yeah at two locations
lola this is a quality product
but for me respectfully it's not a
product for me but i wish you the best
i'm sorry i'm out
lola you deserve a ton of credit right
you you what you've accomplished is
amazing your relentlessness is amazing
for sales not so much yeah right but
it's telling you something honestly i'm
not a marketing expert but i said i'm
not going to stop you know you've got 91
000 of your own money that you've spent
you don't have enough money for
marketing
you know i don't want to keep saying
this but it is what it is i haven't been
able to give this product the brand
awareness that he deserves most of our
customers they find this on google you
know and they don't even market
marketing is really a black hole if you
don't figure it out now
how are you going to figure it out with
the money what do you expect but i've
learned a lot i've seen a lot and then i
can also have i need help
i can get help i think it's a genius
idea you know you're doing something
that's very important you're saving
people time right and that's a lot of
times why people purchase something i
just don't think you've figured it out
yet
so i'm out
oh okay well i um
there's a great saying i forget where i
saw it every time you see somebody with
a small business yeah somebody made a
courageous decision yes so i admire your
courage thank you you are in love with
the romantic idea of starting a business
but my money's got to go somewhere in
order to get back an investment okay and
today you didn't do a good job of
presenting that i'm sorry i'm out
lola you're going through the same thing
a lot of entrepreneurs go through okay
where they have a great product and they
say to themselves well i can't really
sell a lot of them it must be i mean i
don't have enough money for marketing
and if i only had more money for
marketing i can build a brand and if i
build a brand then everybody will come
rushing to me and buy it except that
never works marketing dollars
never build brands product satisfaction
and execution build brands i don't think
you've got to figure out working hard on
this i've been working who doesn't i got
it everybody does it lola everybody
that's amazing i got qvc interested
lola self-awareness is key for every
entrepreneur absolutely we all lie to
ourselves some more than others you're
in the more category right now you got
to get to the less category i'm out
okay thank you good luck thank you
kevin kevin didn't speak and then there
was kevin that's shocking too
no
oh my god never no
i'm out
okay
thank you so much thank you
i think the sharks were hung up on my
sales numbers but i know that all i need
is just one breakthrough and i can push
this into the millions this woman has an
mba she got an mba are you saying that
in a good way or about yeah i'm saying
where is that i'm not a fan of mbas
anymore you know i got to tell you guys
something we've been together 10 years
and it's the first time ever in shark
tank history i was speechless all i
could think of was no
[Laughter]
[Applause]
first in the tank is a product to help
kids sleep more soundly
[Music]
hi
hi
hi sharks i'm katie and this is my mom
lou we're from atlanta georgia and we're
here seeking four hundred thousand
dollars in exchange for twenty percent
of our company slumber pod
[Music]
traveling with your kiddos can be crazy
stressful
whether you're in a hotel room or
crashing at grandma's it can be a
nightmare to share a room with a little
one
many babies need total darkness to sleep
well parents often resort to crazy stuff
like
building dangerous homemade forts what
is that mother doing
for cables or if things really start to
get crazy taping aluminum foil to the
windows
parents don't deserve to be sleep
deprived and miserable on trips so we
decided to kick those sleepless nights
to the curb and create our own easy
solution
slumber pod
yay
it's a portable privacy pod that gives
your baby its own dark and private place
to sleep it's a test once your slumber
pot is assembled simply slide it over
your travel crib and just like that
sweep is moments away
[Applause]
designed with your baby's safety in mind
it's made of breathable fabric
it's not having
[Applause]
slumber pot is made of breathable fabric
it weighs less than six pounds and best
of all
it fits in carry-on luggage
our customers call our product a
lifesaver a game changer and a marriage
saver i don't know
sharks don't sleep on this amazing
opportunity
so who's ready to join us in creating
more 90 nights next time use a fake baby
[Music]
all right oscar
good night oscar
[Applause]
those are real tears dammit real tears
believe it or not oscar actually sleeps
in this every night at home he's just
having a little stage anxiety
thank you
bye oscar
this lumber prison costs how much what
do you sell it for
a prison we sell for 149.99
and the landed cost is 56. lou how did
you come up with the idea of a tent for
children so when i was home for the
christmas holidays when my oldest
daughter was a year and a half we had to
stay in the same room with her that room
didn't have great window treatments so
some light was coming through and she
kept waking up in the night seeing us
across the room and not understanding
that she needed to stay in the bed that
it wasn't time to wake up i think we got
two or three hours of sleep a night two
nights in a row to the point where we
went home a day early like sleep
deprivation is a military torture tactic
because it makes you miserable and crazy
yeah that's a good point also
how long will it take you to put it back
in a box breaking it down probably takes
two minutes or less and then putting in
the bag another 30 seconds unless you
have the pack and play otherwise the
child curls out from under it that's a
great question barbara so
it also fits a
toddler cotton side or you could make a
pallet on the floor out of blankets it's
not designed to confine a child it's
designed to create a dark and private
sleep environment it looks really
complicated their instructions sewn
right into the bag as simple as setting
up a camping tent and you know it may
look a little bit um
cumbersome but
what you make up for that is in how
small it gets that's what allows it to
fit and carry on luggage if you started
selling them how much your sales we
launched in august and then this year
we've done 556 000. that's right
what a surprise how did it take off
because moms are obsessed they love to
talk about things that work and they
love to put it on instagram no
advertising we've done very limited
advertising so you guys have got to be
just so profitable and just
generating cash printing money we became
profitable in february
uh we have no debt
what is your background tell us about
you i actually went back to college as a
single mom at 39 years old
i got my
master's degree at 50 um and i've worked
for fortune 500 and small software
companies
um so that's my background how about you
katie and she's also a mom to six kids
and i'm the oldest
kids i'm in the automotive space
currently and i'm a mom to three i have
three old twins
so
i
think about sometimes if i had given
away a percentage of my business would
it have been right for me
or was it better that i had to figure
out everything and do it myself which
made me stronger smarter better and not
a one-person company anymore i don't say
this often but i think you should
continue to do what you're doing because
i truly believe that
i'm going to go out
obviously we have mixed feelings about
that response but thank you
i want to add to lori's story if i may
uh because something happened to me that
was a real lesson in my career i was in
a terrible real estate recession i owed
the whole world so much money and as
luck would have it
merrill lynch came and offered to buy
my business they offered me
250 000
but here's what happened they changed
their mind
and i thought the sky had fallen and you
know it was only five years later i sold
my business to 66 billion dollars to
laurie's valid point
be careful when you sell your stock
but that being said i want to take
advantage of you
[Music]
one shark is out but barbara may be
interested in lou and katie's child
sleeping tent slumber pod
be careful when you sell your stock
but that being said i want to take
advantage of you
yeah
that's the truth she's nothing if not
honest right so i'm going to offer you
400 000 for 25
but i have one contingency i don't want
to wait forever to be paid back every
time
you sell something you name the number i
just want some kind of a payment so that
i know i'm getting paid back first get
that money out but i'll be a terrific
partner okay i'm gonna put some pressure
great and i need you to answer me 25
that's a savage offer and greedy and i
don't like that i just i don't i do not
appreciate that kind of greed
i'm going to loan you 400 000
at nine percent for three years that'll
cover all your inventory costs and i'm
going to take seven percent equity for
that loan
you're getting a bidding war going here
oh there's just greed and reigns
barbara made you a really fair offer i
would have made a more aggressive offer
i'm out
thank you
guys
i'm going to share a story similar to
barbara's when we had started
broadcast.com as audionet and we were
the first streaming company in the
country and microsoft got into that
business and microsoft invited us up and
we started talking about an offer and to
barb's point we thought we were right
there for an offer that was going to be
for 75 million
god
better than my story didn't get that
offer
but two years later we sold for 5.7
billion dollars because we didn't take
that offer i'm out
this is more than money we're looking
for someone to help us scale we're
looking for those relationships
they want to help you of course they
want you to be successful
barbara would you do our original deal
yeah i would
let's do it we'll do it
congratulations come give me a hug i'm
coming in
really well you're squeezing on the
money but you're too nice
thank
congratulations guys congratulations
ladies biggest sale ever done in pajamas
we made a deal with parliament
making a deal with barbara it's a dream
come true she is a female shark which is
what we were hoping for and she just
seems like she'll be an incredible
partner and to be able to grow our
business together with my daughter is a
dream country
you