Noene – Shock Absorbing Shoe Insoles
DEAL
EPISODE SUMMARY
🕓 Air Date: April 24, 2015
Asking For:
$100,000 for 10%
Investor:
Mark Cuban, Daymond John (50/50)
Deal:
$200,000 for 30%
PRODUCT SUMMARY
Noene USA offers high-tech insoles that absorb and disperse both low- and high-frequency shocks during physical activities, minimizing the rebound effect that causes chronic pain and injury.
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Background Story
Noene USA, founded by former NFL player Bryan Scott, has its roots in Atlanta, Georgia. Bryan, with an illustrious 10-year career in the NFL playing for the Atlanta Falcons, New Orleans Saints, and Buffalo Bills, experienced firsthand the physical toll that high-impact sports take on the body. Faced with the challenge of mitigating the impact shocks that athletes endure during activities such as running and jumping, Bryan sought a solution that went beyond the conventional methods available in the market.
The inspiration for Noene USA came when Bryan encountered Noene, a successful European company specializing in shock-absorbing insoles. Recognizing the potential of Noene’s technology to address the chronic pain and injuries caused by the rebound effect, Bryan, along with three partners, secured an exclusive distribution agreement for the U.S. and Canada. Motivated by a personal commitment to making a positive impact, Bryan and his team have dedicated significant resources, committing $1 million to the project.
The company’s strategic focus involves initially introducing the high-tech insoles to the market, with plans to expand into various sport applications, such as baseball-bat grips, boxing gloves, tennis rackets, and more. The background story reflects a synergy of athletic experience and a keen entrepreneurial spirit, as the founders aim to revolutionize shock absorption in sports through the innovative technology brought by Noene. This venture represents not only a business opportunity but also a personal mission for Bryan to make a difference in athletes’ lives by addressing a prevalent issue in the world of sports.
The Product
Noene USA’s flagship product is a revolutionary high-tech insole designed to absorb and disperse both low- and high-frequency shocks experienced during physical activities such as running, jumping, and walking. Composed of viscoelastic, vulcanized rubber, these insoles effectively minimize the rebound effect, a common cause of chronic pain and injuries associated with strenuous activities.
The insoles boast a unique ability to absorb and internally disperse shocks, leaving minimal to no rebound effect. This is demonstrated through various tests, including dropping a weighted boccie ball onto the insole placed on a glass sheet, showcasing its protective capabilities.
The product comes in different variants, including the “under insoles” designed for sneakers and an upcoming women’s heel version. Notably, the insoles are remarkably thin and light, ensuring that they seamlessly integrate into various types of footwear without altering the fit. Priced at $49.99, Noene insoles offer consumers an affordable solution for enhanced comfort and protection during physical activities.
Customers can purchase these innovative insoles directly, and the company is poised to enter the market with a strategic focus on sports applications beyond insoles. With a retail price that reflects the product’s quality and effectiveness, Noene USA positions itself as a game-changer in the realm of shock absorption for athletes and individuals seeking comfort and protection in their everyday activities.
How It Went
The company’s position before Shark Tank
Noene USA is positioned in the early stages of its business journey, yet to make sales as the product has not been taken to the market at that point. The company has strategically aligned itself with Noene, a well-established European entity, through an exclusive distribution agreement. This partnership grants Noene USA the rights for distribution in the U.S. and Canada, tapping into the success of the European market where Noene brings in an average annual revenue of approximately $1.2 million from insole sales.
The funding structure of Noene USA involves a commitment of $1 million from the founders, with each of the four partners contributing $250,000 to support the project. The founders’ dedication to investing in the company demonstrates a significant commitment to its success. The company’s strategic focus includes expanding into various sport applications beyond insoles. The partnership with prominent Sharks, Mark Cuban and Daymond John, adds substantial value to the company, providing not just capital but also expertise and networks.
Additionally, Daymond John’s mention of Etonic Brand, a company he owns, hints at potential collaborations and synergies that could further enhance Noene USA’s market presence. The financial health, profits, and losses, as well as the available capital, are not disclosed in the episode, given the early stage of the company. As the company progresses and enters the market, these aspects would likely become more apparent.
The Negotiations:
In the Shark Tank episode featuring Noene USA, the negotiations were a rollercoaster of interest, skepticism, and ultimately, a successful deal. Bryan Scott, the former NFL player and founder, entered the Tank seeking $100,000 for a 10% equity stake in his company that specializes in high-tech insoles for shock absorption. Initially, the Sharks were intrigued by the product, with Lori Greiner expressing interest and Kevin O’Leary raising concerns about the $1 million valuation given the absence of sales. Mark Cuban and Daymond John, recognizing the potential of the technology, ultimately made an offer of $100,000 for a 20% stake in the company.
However, their offer came with a significant contingency – they wanted Bryan to convince Robert Herjavec, who owns Etonic Brand, to join them as a partner. As negotiations unfolded, the Sharks revealed their respective strengths and reservations. Kevin O’Leary suggested pursuing a licensing deal with the European company, emphasizing the challenges of building a distribution system from scratch. Lori Greiner, although intrigued, opted to stay out due to uncertainties. Mark Cuban and Daymond John, determined to make the deal happen, extended their offer to $200,000 for a combined 40% equity, with Daymond owning 20% and Mark owning the other 20%.
Sensing Bryan’s hesitation to give up 40% of his company, Daymond John proposed a counteroffer of $100,000 for 25%. Bryan, aiming for a middle ground, countered with $100,000 for 30%, which was eventually accepted. The negotiations showcased the Sharks’ concerns about the valuation, the product’s unproven market performance, and the potential challenges in entering the industry. Despite these hurdles, Mark Cuban and Daymond John’s strategic partnership, combined with Bryan’s determination, led to a successful deal that promised not only capital but also valuable expertise and networks to propel Noene USA forward.
