Moki Car Door Step
DEAL
EPISODE SUMMARY
🕓 Air Date: January 6, 2019
Asking For:
$150,000 for 5%
Investor:
Daymond John
Deal:
$3,000,000 for 100%
PRODUCT SUMMARY
Moki Doorstep is a vehicle rooftop-assistance device that provides a quick and easy step to the top of cars for activities like loading gear, securing items, or clearing snow.
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Background Story
Zach and Alyssa Brown, the founders of Moki Doorstep, hail from Newington, Connecticut, and their entrepreneurial journey is deeply rooted in a combination of personal need and professional expertise. Standing at a mere five feet tall, Alyssa, an emergency-room nurse, has always faced the challenges of her height, although she humorously points out the perks, like excelling at limbo and effortlessly securing front-row spots in group photos. Her outdoor-loving lifestyle with Zach, a firefighter, often involves loading up a kayak or skis for weekend adventures.
The inception of Moki Doorstep arose from Alyssa’s struggle to easily secure gear on the roof of their car, hindering their spontaneous outdoor pursuits. Recognizing the commonality of this struggle among outdoor enthusiasts, the couple set out to create a solution. Zach’s background as a firefighter became instrumental in the innovation process, drawing inspiration from the robust design of the Jaws of Life, a tool used in emergency situations. Leveraging this knowledge, they conceptualized and developed the Moki Doorstep, a vehicle rooftop-assistance device.
The product’s name, Moki, is derived from the Pueblo Indians, who crafted Moki steps into walls to navigate vertical spaces. This historical reference adds a unique touch to the product’s identity. The Browns’ professional experiences in emergency response and healthcare infused their product with a commitment to safety and reliability. The Moki Doorstep not only reflects their personal journey as an outdoor-loving couple but also showcases their ability to blend practical innovation with their respective professional backgrounds. The product is not just a solution for them but a contribution to a broader community of adventure seekers facing similar challenges.
The Product
Moki Doorstep is a game-changing vehicle rooftop-assistance device designed to provide a quick and secure step to the top of cars, addressing the common challenge of reaching and securing items on the roof. The device, created by Zach and Alyssa Brown of Moki Doorstep from Newington, Connecticut, is ingeniously simple yet highly effective.
The Moki Doorstep attaches swiftly to the vehicle’s striker, a standard feature in most cars, using a one-second hooking mechanism. This sturdy attachment allows users to effortlessly step onto the doorstep, facilitating various activities such as loading bikes, securing large items like Christmas trees, or clearing snow off the roof after a storm. The quick-release feature ensures hassle-free removal without any damage to the vehicle.
Moki Doorstep stands out with its durability and ease of use, making it an essential tool for outdoor enthusiasts, adventurers, and anyone who needs quick access to their vehicle’s roof. Priced between $40 and $50, the device is available for purchase through channels like Kickstarter campaigns and camping shows, where the founders initially garnered substantial interest. With a landed cost of $10.50, Moki Doorstep offers an affordable and versatile solution for individuals seeking a reliable rooftop-access solution for their vehicles.
How It Went
The company’s position before Shark Tank
Moki Doorstep has demonstrated a promising performance and a strategic approach to market expansion. The company’s health and position have been notably buoyant, with a successful Kickstarter campaign conducted in January generating $110,000 in sales. However, it’s important to note that the product is currently back-ordered, indicating a high demand that has temporarily outstripped supply. Moki Doorstep’s strategic partnerships play a crucial role in its growth trajectory. The founders have engaged in discussions with a rack company, suggesting an impending licensing agreement for North America.
This potential collaboration involves a term sheet indicating a 7-year deal with minimums amounting to $3 million. Such partnerships not only contribute to the company’s revenue streams but also open avenues for global market penetration. The Kickstarter campaign and camping show sales have been crucial for Moki Doorstep’s initial funding, indicating a grassroots approach to gaining market traction. Customer demographics for Moki Doorstep align with outdoor enthusiasts, adventurers, and individuals seeking convenient solutions for rooftop access. The product’s versatility makes it appealing to a wide audience engaged in activities like biking, skiing, or outdoor holiday preparations.
In terms of financials, the company’s profits and losses are not explicitly detailed, but the successful Kickstarter campaign and the ongoing discussions with the rack company suggest positive revenue prospects. The founders’ openness to discussions with investors and licensing agreements indicates a strategic approach to securing capital for expansion. The current structure of the company is centered around a team of dedicated individuals, with Zach and Alyssa Brown leading the venture. With the impending licensing agreement and potential global expansion, the company is likely to experience organizational growth, necessitating a scalable structure to accommodate increased demand and market reach.
The Negotiations:
The negotiation process for Moki Doorstep in the Shark Tank was dynamic and ultimately resulted in a surprising and lucrative deal. The founders, Zach and Alyssa Brown, entered the tank seeking $150,000 in exchange for a 5% equity stake in their company. Right from the outset, the sharks were intrigued by the simplicity and utility of the product. Kevin O’Leary expressed skepticism about the product’s valuation, suggesting a lower price point for consumers. Lori Greiner, recognizing the potential, advised the founders to consider a distribution deal. However, Zach and Alyssa, emphasizing a global perspective, sought an investor willing to support their vision for international expansion.
Daymond John made a strategic move by offering $450,000 for a 20% equity stake, valuing the company at $2.2 million. While this offer reflected a lower valuation than what the founders initially proposed, it was a considerable amount of capital for a minority stake. The negotiation took an unexpected turn when Daymond, seemingly sensing the founders’ willingness to consider a full sale, proposed buying the entire company for $3 million, covering the $1-per-step royalty to Zach’s uncle. This surprising offer prompted a brief discussion among the founders about their initial $3 million valuation and their openness to selling outright. In the end, they decided to accept Daymond’s offer for the entire company.
This marked a significant win for both parties, with Daymond securing an innovative product with global potential, and Zach and Alyssa gaining a substantial return on their creation while still being involved in its journey. The negotiation showcased the strategic thinking of both the founders and the sharks. Daymond’s offer not only addressed the founders’ financial goals but also considered the potential licensing agreement and global expansion, making it a mutually beneficial arrangement that concluded the pitch on an exciting and successful note.
