The third entrepreneurs into the Shark Tank this week were Richard Rhett and is wife Juli. They were presenting their business Sierra Madre Research and were seeking $175k in exchange for 15% of the business. Their business is focused on developing high-quality hammock based camping equipment, while also giving a portion of their sales to drill clean water wells in Central America.
What they have been able to build so far with this brand is definitely impressive. Through simply word-of-mouth marketing they have been able to grow to $208k in sales last year and a projected $430k - $500k this year. This is all in spite of their product being more expensive than many competitors, starting at around $350 for their cheapest package.
I would suggest that this success has to do with two important aspects of this business. First of all, the product seems to be high-quality. I have not held it in my hands and tried it for myself, but after looking at their competition in the same price range they seem to be making a better product. Second of all, they are giving a portion to charity. This fact cannot be ignored. People get excited about purchasing things for charity.
There are so many products on the market right now that have a humanitarian mission behind them. Some of these products are utter crap, but bank off of people’s desire to buy stuff for charity. People will even buy crap that they would never buy in a million years (like a cheap tacky silicone bracelet) as long as they think it’s for a good cause. How much more likely do you think people would be to gravitate toward a brand that is putting out a quality product that they are actually interested in and gives a portion to charity?
Richard and Juli did end up getting a deal from Richard Branson for exactly what they came in asking for. Branson also gave the stipulation that 100% of his profits from the products goes into the charitable efforts of the company. I was pretty surprised by this gesture. He really did not have to do that, but you know there are going to be cynics who say, “Well, Branson is super rich so that probably wouldn’t effect him at all.” They may be right, but I still applaud his generosity. Good luck to Sierra Madre Research! I hope they sell a million more hammocks and drill just as many new wells!