Chubby Buttons – Bluetooth Remote
NO DEAL
EPISODE SUMMARY
🕓 Air Date: March 17, 2023
Asking For:
$250,000 for 8%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Chubby Buttons is a wearable remote control for smartphones, designed for outdoor enthusiasts and others who want to control their phones while wearing gloves.
WATCH HERE
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Background Story
Chubby Buttons was presented by founders Justin and Mike, who have been best friends since they were 13. The idea for their product was born during a ski trip to Colorado when Mike struggled to control his smartphone while wearing ski gloves. This real-life scenario led them to create Chubby Buttons, a wearable remote control to address this problem.
The founders’ background includes a strong friendship and a shared passion for outdoor activities. Their personal experience inspired the creation of the product, as they recognized the need for a solution to control smartphones in challenging environments. The business partners are enthusiastic about their product, and their background story emphasizes their close relationship and entrepreneurial spirit.
The Product
Chubby Buttons is a wearable remote control designed for active individuals who need to control their smartphones while wearing gloves or in other challenging conditions.
It uses Bluetooth connectivity to pair with the user’s smartphone, enabling them to control essential functions without removing their gloves or exposing their phone to the elements.
Key features and benefits of Chubby Buttons include its Nano-Stick backing, which allows it to securely adhere to most nonporous surfaces, making it versatile for use in various environments.
It can be purchased online, and its retail price is $79.99, with a significant profit margin of 83%. The company is actively exploring ways to expand its customer base and distribution channels.
How It Went
The company’s position before Shark Tank
Chubby Buttons has been actively selling its product for three years, generating $500,000 in top-line revenue in 2021 and increasing it to $600,000 in 2022. The company’s key partners and distribution channels are not mentioned in the transcript. However, Chubby Buttons has demonstrated strong sales figures and healthy profit margins, with a cost of $13.37 to make the product and a retail price of $79.99, resulting in an 83% profit margin.
The company currently spends between $12,000 and $15,000 per month on marketing, with a customer acquisition cost of $26.86 per unit. These figures suggest that the company is actively investing in marketing to expand its customer base. Chubby Buttons has had one investor who provided an initial investment of $250,000. While the founders mentioned their intentions to expand their inventory and customer base with the help of potential investors, they had not yet taken any money out of the business. Their pitch on Shark Tank sought $250,000 for 8% equity, suggesting that they are open to partnerships that can help them grow.
The Negotiations:
The negotiations on Shark Tank did not result in a deal. Mr. Wonderful (Kevin O’Leary) offered to provide the $250,000 investment but asked for 10% equity and a $10 royalty per unit until he received a return on his investment. He expressed concerns about the product’s long-term viability due to evolving technology. The founders countered with an offer of 15% equity in exchange for the $250,000 investment and a lower royalty of $1 per unit until Mr. Wonderful recouped his investment. However, this counteroffer was not accepted by Mr. Wonderful, who remained firm on his terms.
Ultimately, none of the other sharks expressed interest in making an offer. While they appreciated the product and the founders, they cited concerns about the competitive market and the sustainability of Chubby Buttons in the face of evolving technology, such as voice-activated products. The negotiations concluded with the founders declining the initial offer due to the high royalty request, and they left the Shark Tank without a deal but with a belief in the potential of their product and their company’s future.
