Flipoutz – Customizable and Trackable Bracelets
DEAL
EPISODE SUMMARY
🕓 Air Date: April 1, 2011
Asking For:
$100,000 for 20%
Investor:
Kevin O'Leary, Daymond John, Robert Herjavec (3)
Deal:
$100,000 for 33%
PRODUCT SUMMARY
FlipOutz is a silicone bracelet that holds personalized coins allowing kids to wear, trade, and track them online.
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Background Story
The Johnson family, comprised of Emily, Robin, and their children Erin, Lachlan, and Jake. Their entrepreneurial journey began during a lengthy car trip three years ago, where the typical sibling bickering prompted Emily to challenge her kids to devise a solution for peace in the backseat. This challenge sparked the inception of FlipOutz, a product designed by kids, for kids. Each member of the Johnson family played a crucial role in shaping FlipOutz.
Lachlan introduced the concept of a silicone bracelet that could hold personalized coins, while Erin contributed her artistic flair by designing custom artwork and positive messages for each coin. Meanwhile, Jake envisioned a gaming and trading aspect, leading to the development of the FlipOutz website. The Johnson parents, Emily and Robin, provided support and guidance throughout the product development process, investing both financially and emotionally in their children’s venture.
With $250,000 of their own money invested in FlipOutz, they demonstrated their belief in their children’s creativity and entrepreneurial spirit. The genesis of FlipOutz showcases the power of family collaboration and the ingenuity of young minds. From a simple idea born out of sibling rivalry, FlipOutz has evolved into a thriving business venture, offering kids a platform for self-expression, creativity, and social interaction. Through their journey, the Johnson family exemplifies the transformative potential of turning childhood imagination into entrepreneurial success.
The Product
FlipOutz is an innovative product designed to engage and empower kids through self-expression, creativity, and social interaction. At its core, FlipOutz comprises silicone bracelets equipped with slots to hold up to five personalized coins. Each coin features unique artwork or positive messages, allowing kids to express their interests, hobbies, or traits.
The interactive nature of FlipOutz extends beyond mere adornment. Each coin contains a 10-digit code that enables online tracking through the FlipOutz website. This feature facilitates trading among friends and even worldwide, creating a sense of connection and community among users.
The FlipOutz website serves as a virtual hub where kids can create profiles, blog, chat with friends, and give and receive status updates. Here, they can also name, describe, and track their coins online, fostering engagement and interactivity.
FlipOutz offers numerous benefits for kids, including fostering creativity, encouraging social interaction, and promoting positive self-expression. It provides a platform for personalization and customization, allowing each child to showcase their unique identity and interests.
FlipOutz bracelets and coins can be purchased online through the FlipOutz website or through partnered sales representatives. The bracelets retail for $4.99 each, while additional coins can be purchased separately. With a production cost of 69 cents per bracelet and one coin, FlipOutz offers both affordability and value for its users.
How It Went
The company’s position before Shark Tank
FlipOutz has demonstrated promising performance and growth since its inception. Within six months of operation, the company achieved nearly $20,000 in sales revenue, primarily through online channels. Their strategic partnerships include collaborations with souvenir distributing companies, facilitating placement in various locations such as theme parks, aquariums, and zoos. Additionally, FlipOutz has garnered interest from potential buyers, negotiating a significant purchase order for millions of coins and bracelets.
The Johnson family, founders of FlipOutz, have invested $250,000 of their own capital into the business, primarily allocated towards website development and legal fees for patent protection. In terms of structure, FlipOutz operates as a family-owned business, with Emily and Robin Johnson overseeing operations and strategy. Their children, Erin, Lachlan, and Jake, play integral roles in product development, marketing, and innovation.
The company’s target market consists of children and families seeking engaging, interactive toys and accessories. By offering a unique combination of personalization, trading, and online tracking, FlipOutz appeals to kids of all ages. FlipOutz’s revenue generation and interest from potential buyers suggest a promising outlook. With their innovative product and strong family-driven ethos, FlipOutz is positioned for continued growth and success in the competitive toy market.
The Negotiations:
The negotiations for FlipOutz in the Shark Tank were intense and dynamic, showcasing both the Johnson family’s determination and the Sharks’ strategic acumen. Initially seeking $100,000 for a 20% equity stake, the Johnsons received an offer from Daymond John, Robert Herjavec, and Kevin O’Leary for the same investment but in exchange for a 33% stake. This offer reflected the Sharks’ belief in FlipOutz’s potential and their willingness to take a larger share of the company.
However, the negotiations took a turn when the Johnsons countered with a request for $150,000 for 33%. The Sharks, particularly Kevin O’Leary, reacted strongly to this counter, emphasizing the riskiness of the investment and the value they brought to the table. Despite the tension, the Sharks ultimately stood firm with their original offer of $100,000 for 33%. The Johnsons deliberated and eventually accepted the offer, recognizing the expertise and resources that the Sharks could provide.
This decision marked a significant moment for FlipOutz, as it secured a partnership with three experienced investors who could help propel the company to greater heights. Throughout the negotiations, there was a palpable sense of tension and excitement as both parties weighed the risks and rewards of the deal. In the end, the Johnsons’ willingness to compromise and the Sharks’ belief in FlipOutz’s potential led to a mutually beneficial agreement that set the stage for future success.
