Guardian Bikes – World’s Safest Bicycles
DEAL
EPISODE SUMMARY
🕓 Air Date: April 14, 2017
Asking For:
$500,000 for 10%
Investor:
Mark Cuban
Deal:
$500,000 for 15% with contingencies
PRODUCT SUMMARY
Guardian Bikes introduces the world's safest children's bikes with patented SureStop technology, aiming to set a new safety standard in the biking industry.
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Background Story
Guardian Bikes, headquartered in Irvine, California, was founded by Brian Riley and Kyle Jansen, who share a deep passion for bike safety driven by a personal tragedy. The inspiration for Guardian Bikes struck Brian seven years ago during his college days when his grandfather endured a serious bike accident, breaking several vertebrae in his neck. Although his grandfather eventually recovered, the traumatic incident left a lasting impact on Brian and his family. Motivated by this experience, Brian, alongside his partner Kyle, embarked on a mission to revolutionize bike safety.
With a background in technology and a shared commitment to preventing such accidents, they conceptualized SureStop technology. This innovative braking system, akin to antilock brakes in cars, addresses the common issue of incorrect braking on traditional bikes. Recognizing the potential to make a significant impact on child safety, they aimed to make SureStop the safety standard in the biking industry, just like seat belts and windshield wipers in cars. Both founders invested their time, energy, and personal funds into developing SureStop, with family members, including Brian’s grandfather, contributing over $100,000 to kickstart the business.
The Guardian Bikes journey began as a component supplier, licensing SureStop technology to other bike manufacturers. However, faced with resistance from major players in the industry, Brian and Kyle pivoted to launch their own bike brand, combining safety with striking designs to appeal to kids. The decision to create Guardian Bikes was not only a business venture but a personal commitment to preventing accidents and making a positive impact on families. With a combination of technological expertise, personal dedication, and a desire to create the safest children’s bikes, Brian and Kyle set out on a journey that led them to the Shark Tank seeking a $500,000 investment to propel their mission even further.
The Product
Guardian Bikes stands at the forefront of child bike safety with its flagship product featuring the revolutionary SureStop technology. Engineered with meticulous attention to detail, SureStop is a groundbreaking braking system designed to eliminate the risk of accidents during biking.
Functioning similarly to antilock brakes in cars, SureStop simplifies braking for young riders. The system utilizes a single lever that first activates the rear brake, ensuring a smooth and controlled stop. Unlike traditional bikes, where incorrect braking can lead to accidents, Guardian Bikes’ technology mitigates this risk by intelligently adding the front brake only after the rear brake is engaged. This eliminates the possibility of children going over the handlebars, providing enhanced safety and confidence during riding.
SureStop-equipped bikes not only prioritize safety but also boast visually appealing designs, making them the coolest bikes for kids. Available in various sizes, the 24-inch model, for example, comes at a wholesale price of $240.
Guardian Bikes can be purchased through various channels, including online sales and partnerships with reputable retailers. The company aims to make its safety-focused bikes accessible to families, aligning with its mission to redefine biking standards and ensure that every child’s biking experience is not only joyful but, most importantly, safe.
How It Went
The company’s position before Shark Tank
Guardian Bikes has exhibited a robust performance trajectory, combining innovative technology with strategic business decisions. As a component supplier, the company successfully licensed SureStop technology to major bike manufacturers, resulting in 40,000 bikes equipped with their safety-enhancing braking system. However, the journey faced hurdles as some major manufacturers hesitated to adopt the technology on all bikes, citing concerns about the perceived safety of non-equipped models. In response to this resistance, Guardian Bikes pivoted to launch their own bike brand, entering the market seven months ago.
The initial sales of their Guardian Bikes reached $95,000, and they project an impressive growth to $350,000 in their first year. The company’s performance is indicative of its agile approach to challenges, transitioning from a component supplier to a bike manufacturer to drive sales and promote SureStop technology. Guardian Bikes has strategically partnered with Pacific Cycle, the largest bike manufacturer in the United States by volume, paving the way for their SureStop-equipped models to be pitched to major retailers, including Walmart. This partnership signals the company’s strategic positioning within the market, aligning with its goal to make biking safer on a larger scale. Sales are not only online but also facilitated through 65 bike shops, demonstrating a diverse distribution strategy.
Guardian Bikes primarily targets safety-conscious parents seeking premium and visually appealing bikes for their children. The company’s decision to launch its bike brand has been financially sound, returning revenue faster than the licensing model, although it involves capital-intensive aspects such as marketing and inventory management. Financially stable, Guardian Bikes has garnered significant support from family members, with over $100,000 invested in the business. Their current funding model comprises a combination of sales revenue, strategic partnerships, and personal investments. The company’s profits and losses reflect a positive trajectory, with a healthy profit margin, positioning Guardian Bikes as a promising player in the child bike safety market.
Guardian Bikes’ capital structure is well-organized, with available capital being utilized for marketing, inventory, and the overall expansion of their bike brand. The transition from a licensing model to manufacturing their bikes is a strategic move, positioning Guardian Bikes to educate the market on the safety advantages of SureStop while simultaneously generating revenue through their bike sales. The company’s decision-making reflects adaptability and a keen understanding of market dynamics, as evidenced by their pivot to manufacturing their bikes. As they navigate the challenges and opportunities in the biking industry, Guardian Bikes is well-positioned to continue reshaping the standards of child bike safety and enjoying sustained success in the market.
The Negotiations:
In the Shark Tank negotiation, Guardian Bikes founders, Brian Riley and Kyle Jansen, presented their innovative SureStop technology aimed at revolutionizing child bike safety. The Sharks expressed initial concerns about the founders entering the bike manufacturing business instead of solely focusing on licensing their safety technology. Kevin O’Leary made an intriguing offer, proposing $500,000 for 20% equity with the condition that Guardian Bikes ceases bike manufacturing. However, Mark Cuban, recognizing the potential of the safety technology, made a counteroffer.
He proposed $500,000 for 15% equity but with contingencies. Mark emphasized the need for confirmation of the technology’s uniqueness, meeting sales projections for the next 6 and 12 months, and the hiring of an internal PR person to boost the company’s visibility. Despite initial hesitation, Brian and Kyle accepted Mark Cuban’s offer, recognizing the value of his expertise and the potential for accelerated growth. Mark’s conditions were viewed as reasonable steps to ensure the success of SureStop technology.
The deal marked a strategic partnership between Guardian Bikes and Mark Cuban, aligning with the founders’ vision to make biking safer for children. The negotiation showcased the delicate balance between investor expectations and the founders’ commitment to both the technology and their bike brand, ultimately culminating in a deal that positions Guardian Bikes for continued success in reshaping the child bike safety landscape.
