Origaudio – Turn Anything Into a Speaker
DEAL
EPISODE SUMMARY
🕓 Air Date: May 6, 2011
Asking For:
$150,000 for 15%
Investor:
Robert Herjavec
Deal:
$150,000 for 15%
PRODUCT SUMMARY
OrigAudio offers innovative portable audio products designed for travelers, combining cutting-edge technology with convenience.
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Background Story
OrigAudio, founded by Jason Lucash and Michael Szymczak, has its roots in the fusion of their passion for travel and music. The duo, who have been friends since college, found themselves frustrated by the impracticality of lugging around bulky speakers while on the go. Determined to find a solution, they embarked on a journey to revolutionize the portable audio industry. Operating out of Jason’s residence in California, OrigAudio emerged from the intersection of their entrepreneurial spirit and shared interests.
Despite limited resources and tight finances, Jason and Michael leveraged their backgrounds in business and design to bring their vision to life. Jason Lucash, armed with experience in sales and marketing, complemented Michael Szymczak’s expertise in graphic design and product development. Their friendship and complementary skill sets formed the foundation of OrigAudio’s innovative approach to portable audio solutions. Inspired by their own travel experiences and a desire to make music more accessible on the go, Jason and Michael set out to create products that offered convenience without sacrificing quality.
Their journey led them to develop “The Rock-It,” a groundbreaking device that utilizes vibration technology to turn any surface into a speaker. Additionally, they introduced folding speakers made from recycled materials, aligning with their commitment to sustainability. OrigAudio’s founders, driven by a shared vision and entrepreneurial spirit, continue to lead the company with a focus on innovation and customer satisfaction, propelled by their determination to redefine the way people experience music while traveling.
The Product
OrigAudio’s flagship product, “The Rock-It,” is a game-changing device that harnesses vibration technology to transform any surface into a speaker. Compact and versatile, The Rock-It attaches to various objects, such as cups, tables, or even windows, and converts them into amplifiers for audio playback.
Users simply attach The Rock-It to a surface using its adhesive backing, connect it to their audio device via a standard audio jack, and enjoy amplified sound wherever they go. Its portability and ease of use make it perfect for travelers, outdoor enthusiasts, or anyone seeking convenient audio solutions on the move.
In addition to The Rock-It, OrigAudio offers folding speakers crafted from recycled materials. These speakers feature a compact, foldable design, making them ideal for travel or compact living spaces. Powered by devices like iPods, they offer eco-friendly audio solutions without the need for batteries.
OrigAudio’s products are available for purchase through their website, select retail stores, and television shopping channels like QVC. The Rock-It and folding speakers are competitively priced, with The Rock-It typically retailing for $49.99. With their innovative designs and commitment to sustainability, OrigAudio’s products offer consumers an affordable and eco-friendly way to enjoy high-quality audio wherever they go.
How It Went
The company’s position before Shark Tank
OrigAudio has demonstrated impressive performance and growth since its inception. With $750,000 in sales within its first year of operation, OrigAudio has established itself as a player in the portable audio market. The company’s success can be attributed to its innovative products, strategic partnerships, and commitment to sustainability. OrigAudio has secured partnerships with environmentally-conscious retailers and wholesalers, expanding its market reach and distribution channels. With over 500 retail stores nationwide carrying its products, OrigAudio has access to a diverse customer base spanning various demographics and geographic regions.
Additionally, the company has capitalized on online sales channels and television shopping networks like QVC to further increase its market visibility and sales potential. In terms of funding, OrigAudio has primarily relied on revenue from sales to fuel its growth and operations. While the founders initially invested $40,000 into the business, including a contribution from Jason’s mother, the company’s profits have been reinvested to support expansion efforts. With a net profit of $150,000, OrigAudio has demonstrated financial viability and sustainability, despite not yet distributing salaries to its founders.
OrigAudio’s current structure includes a lean and agile team, with Jason and Michael leading the company’s operations and strategic direction. The company’s success and growth trajectory position it favorably for future opportunities, with potential for additional investment to further accelerate expansion and innovation initiatives. Overall, OrigAudio’s performance underscores its potential as a key player in the portable audio industry, driven by its commitment to innovation, sustainability, and customer satisfaction.
The Negotiations:
During the negotiation process on Shark Tank, OrigAudio founders Jason Lucash and Michael Szymczak faced a flurry of offers and strategic maneuvers from the Sharks. The initial ask was $150,000 for 15% equity, and the Sharks wasted no time in making their offers. Robert Herjavec matched the founders’ initial ask, offering $150,000 for 15% equity, which they ultimately accepted. His offer provided the funding needed while allowing them to maintain a reasonable equity stake in their company.
Meanwhile, Barbara Corcoran made a higher equity offer of $150,000 for 25%, emphasizing the potential value she could bring as a partner. However, the founders opted for Robert’s offer due to its alignment with their original terms. Daymond John presented an unconventional offer, proposing to acquire 100% of OrigAudio for $300,000. While his offer provided significant funding, it would have resulted in the founders relinquishing control of their company entirely, leading them to decline.
Mark Cuban attempted to dictate the negotiation by urging the founders to return to him with a counteroffer and avoid engaging with other Sharks. His approach, perceived as aggressive by some, ultimately did not sway the founders, who opted to consider all offers on the table. Ultimately, the negotiation process highlighted the importance of strategic decision-making and maintaining control over the company’s direction. By accepting Robert Herjavec’s offer, OrigAudio secured the investment needed to fuel growth while retaining a significant stake in their company’s future.
