THE FOLLOWING IS A ROUGH TRANSCRIPT OF THE VIDEO ABOVE
The first entrepreneurs into the Shark Tank this week were presenting their business Guard Llama and were seeking $100k in exchange for 5% of the business. They have developed a wireless bluetooth GPS remote that pairs with your phone and their app. When the button on the remote is pressed, your profile and current location is sent off to local dispatch so that the police can come to your aid.
As for their numbers, they have around 2,000 users. They charge a $10 per month subscription fee for the service, or you can pay $100 for the year.
There are a lot of obvious markets for this product. As soon as they started presenting it, my mind went to college campuses, kids playing around their neighborhood, adults who commute by foot in large cities, real estate agents that regularly enter homes with strangers, door-to-door salesmen or missionaries, and the list could go on. The market potential for this product is definitely wide, and that’s usually a major plus for any investor.
However, there is one looming problem with a business like this. Liability. It would be a PR nightmare and potentially a legal nightmare if one of their customers tried to use the product and it fails to work. There a lot of “moving parts” to this product. The bluetooth has to remain successfully paired, and transfer the notification from the remote to the phone. The phone has to have signal in order to sent an alert to their system and then their system has to successfully communicate with local dispatch. They boast a mere 30 second delay between the remote being activated and dispatch being notified, however I would like to know if they have had any cases where the remote failed. I wouldn’t be surprised if they have been batting a thousand so far, because their user base is still fairly small, but the larger it becomes the more potential there is for mistakes.
Anyway, a few of the Sharks echoed these same thoughts. I wouldn’t go as far as to call the product “horrible” like Mark did, but I can understand his concern with such a complex system. Chris was also concerned with their marketing plan, and I would have to agree to certain extent. They mentioned that they were splitting their attention between online and other forms of marketing. I don’t see why they wouldn’t just pour all their efforts into a purely online strategy. This is a tech product that is largely going to find its customer base in those who are savvy enough to be buying peripherals for their smart phones. I’d venture to say that all those people can be reached out to through targeted online marketing.
Despite these concerns, they did end up getting a deal and I’m so glad it was with Barbara. They landed on a $100k loan for 18% equity and a $2 royalty until her money is recouped. I think Barbara will be a great partner for them for reasons that I feel should be pretty obvious. Her influence in the world of real estate will definitely give them a leg up. That’s going to be one of the easiest markets for them to advertise this product to and Barbara’s influence will just pour gasoline on the fire.
So congrats to them on making a deal and I wish them luck in going forward with Barbara as their partner!