Autio – Audio Entertainment App
NO DEAL
EPISODE SUMMARY
🕓 Air Date: March 17, 2023
Asking For:
$1,000,000 for 5%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Autio is a mobile audio entertainment app for travel that offers geolocation-triggered stories about places, landmarks, and cities, enhancing the road trip experience.
WATCH HERE
IN A RUSH?
Click these to jump to the section you want to read.
Background Story
Autio founder Woody Sears, a travel enthusiast from Santa Barbara, California, aimed to make road trips more enriching and engaging. He found that during family road trips, they often wondered about the history and stories behind the places they passed.
To address this curiosity, Woody conceived the idea of Autio. With 19 years of experience in the software and mobile industry, Woody had previously started a company called iStoryTime, which created a library of narrated storybooks for the iPhone. This experience equipped him to delve into the creation of Autio. The concept was to provide travelers with a personal tour guide through an app that shares interesting stories about the locations they pass.
The Product
Autio is a mobile app available for download from the App Store. It’s free to download and comes with five complimentary stories. Users can enable location and notification preferences, allowing the app to trigger stories based on their location automatically.
The stories are narrated by professionals, including famous voices like Kevin Costner, Phil Jackson, and John Lithgow. These stories range from historical anecdotes to geographical facts, enriching the travel experience and providing a break from screens.
The app ensures that stories are evenly distributed across different regions, but users can download stories in advance to listen when they’re offline or in remote areas. The stories typically range from three to four minutes, with some going as long as 20 minutes.
Users who have used up their free stories can access unlimited streaming for $36 per year. Autio’s customer acquisition cost has been decreasing, with the average cost being around $38 but dropping to under $10 in recent months. They’ve won the Webby Award for Best Travel App, which has contributed to word-of-mouth growth.
How It Went
The company’s position before Shark Tank
Autio has demonstrated solid performance, with over $700,000 in sales in the current year and $210,000 the previous year, projecting a $2 million annual run rate. The company has raised $3.5 million in funding and boasts AAA, the largest auto club in the nation, as an investor. They’ve also secured the largest retailer of RVs in the country as a partner.
Currently, Autio has 15,000 paid members, 210,000 registered accounts, and over half a million downloads. Subscription renewal rates vary, with the earliest subscribers renewing at 70% and an average renewal rate of about 50%, typical for consumer subscription services.
The Negotiations:
The negotiations (250-400 words): The negotiation process on “Shark Tank” saw Woody Sears seeking $1 million for 5% equity in Autio. While the sharks were impressed with the concept and the company’s performance, they were hesitant about the valuation. Mark Cuban was the first to bow out, citing the competition from established GPS apps like Google Maps, which could potentially add a similar feature. Barbara Corcoran and Robert Herjavec also opted not to invest, finding the valuation unattractive.
Lori Greiner admired the product but was not willing to invest at the proposed terms, while Robert Herjavec saw potential but wasn’t interested at this stage. Ultimately, Kevin O’Leary expressed interest and offered $1 million for 15% equity, a considerably higher equity share than Woody had initially proposed. Woody countered with 10%, but Kevin wouldn’t budge.
When Woody stood firm at 10%, Kevin made a final offer of 12%, which Woody declined. The negotiations ended without a deal, as Woody was unwilling to go above 7% equity. Woody ultimately declined the offers and left the tank without a deal, choosing to stick to his original valuation. While he couldn’t secure a Shark as an investor, the exposure on “Shark Tank” could help him attract more customers and investors in the future.
