Phonesoap UV Phone Sanitizer & Charger
DEAL
EPISODE SUMMARY
🕓 Air Date: January 30, 2015
Asking For:
$300,000 for 7.5%
Investor:
Lori Greiner
Deal:
$300,000 for 10
PRODUCT SUMMARY
PhoneSoap Charger uses ultraviolet light to sanitize and charge any phone, killing 99.999% of bacteria in five minutes.
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Background Story
Dan Barnes and Wes LaPorte, hailing from Provo, Utah, are the visionary founders behind PhoneSoap, a product born out of a simple yet profound question: What’s dirtier – a cellphone or a public toilet? This query sparked their entrepreneurial journey, leading to the creation of a revolutionary solution to tackle the startling bacterial contamination found on personal phones. The genesis of PhoneSoap can be traced back to their college days, where Dan, engaged in cancer research, stumbled upon an eye-opening article revealing that phones harbor 18 times more harmful bacteria than surfaces in public restrooms.
Armed with this alarming information, Dan and Wes, who is also Dan’s cousin, recognized the need for a practical and effective hygiene solution for phones. Drawing from Dan’s experience in cancer research and the knowledge of ultraviolet light’s sanitizing properties, they conceived the idea of PhoneSoap Charger. The technology, commonly used in labs for surface sanitation, was ingeniously combined with a phone charger. The result was a device that could kill 99.999% of bacteria on a phone’s surface in just five minutes.
Their venture gained traction when they secured $800,000 from a local investor, demonstrating the market’s response to their innovative solution. The decision to give up 60% of their company reflected their commitment to turning their idea into a reality. Located in Provo, Utah, PhoneSoap emerged as a pioneering company with a mission to initiate a “clean-phone revolution.” The founders’ background in science and their dedication to solving a prevalent problem laid the foundation for PhoneSoap’s success.
The Product
PhoneSoap Charger is a cutting-edge device designed to address the often overlooked issue of bacterial contamination on personal cellphones. The product stands out with its dual functionality as both a phone sanitizer and a charger, providing users with a convenient and efficient hygiene solution.
The working mechanism of PhoneSoap Charger revolves around ultraviolet (UV) light technology. When a phone is placed inside the device, the built-in UV-C lights spring into action, effectively eliminating 99.999% of bacteria on the phone’s surface within a brief five-minute cycle. This not only ensures a clean and sanitized phone but also helps in maintaining the overall hygiene of frequently touched devices.
Universal in its design, PhoneSoap Charger caters to all phone models and sizes, accommodating even larger phones. Its versatility extends to charging capabilities, supporting any phone charging requirement during the sanitization process. Available for purchase both online and at major retail locations, including 400 Staples stores.
This reasonable cost positions the product as an accessible solution for individuals who prioritize hygiene in their daily lives. The founders have intentionally avoided chemical cleaners, recognizing the potential damage to phone coatings and warranties. PhoneSoap Charger’s features, including ease of use, compatibility, and effectiveness, make it a compelling and valuable addition to the tech hygiene landscape.
How It Went
The company’s position before Shark Tank
PhoneSoap has demonstrated robust performance in the market, showcasing strong sales figures and strategic partnerships. Over the last 5.5 months, the company has achieved an impressive $537,000 in sales, primarily driven by focused online marketing efforts. The product has successfully penetrated the retail market, securing placement in 400 Staples stores, a significant milestone that highlights its acceptance among mainstream consumers. Strategically, PhoneSoap has aligned itself with major partners, with Staples being a notable retail partner. This partnership expands the company’s reach and enhances its visibility in the consumer electronics space.
While the founders have emphasized online sales through targeted marketing, the inclusion of Staples as a major retailer indicates a multi-channel approach to distribution. The customer base for PhoneSoap is diverse, reflecting the universal appeal of the product. With a focus on personal hygiene, the product caters to health-conscious consumers who recognize the importance of keeping their phones bacteria-free. The decision to target hospitals and schools further broadens the customer demographic, appealing to institutions where cleanliness is paramount. In terms of funding, PhoneSoap has successfully raised $800,000, with a notable portion coming from a local investor.
The founders’ decision to give up 60% of the company at an early stage reflects their commitment to realizing their vision. As for the financial health, PhoneSoap has managed to maintain profitability with $537,000 in sales against a $20 manufacturing cost per unit. The company’s structure appears to be dynamic, with an emphasis on online sales and strategic partnerships. The recent deal with Lori Greiner not only injects capital but also brings valuable expertise and connections to navigate the challenges of entering the commercial market. PhoneSoap’s success in Staples and its targeted marketing approach reflect a company that is agile, responsive to market demands, and poised for continued success in the tech hygiene industry.
The Negotiations:
The negotiation process for PhoneSoap on Shark Tank unfolded dynamically, culminating in a deal with Lori Greiner. The founders, Dan Barnes and Wes LaPorte, initially sought $300,000 for a 7.5% equity stake. Mark Cuban made an initial offer of $300,000 for a 20% equity stake, implementing a venture-debt strategy tied to decreasing unit costs based on recouping the investment. Lori Greiner swiftly entered the negotiations, presenting an alternative offer of $300,000 for a more favorable 15% equity stake.
Leveraging her expertise in retail and QVC, Greiner envisioned significant sales success for PhoneSoap. However, the negotiation took an unexpected turn when Mark Cuban adjusted his offer to a 10% equity stake, urging the founders to accept on the spot. Despite this enticing proposition, the founders opted for Lori Greiner’s deal, recognizing the value she brought to the table with her extensive retail experience and QVC connections.
In a surprising twist, Lori Greiner adjusted her offer, realizing that the founders were inclined towards Mark Cuban’s revised deal. Ultimately, PhoneSoap sealed the deal with Lori, accepting $300,000 for a 10% equity stake. This negotiation highlighted the founders’ strategic decision-making, aligning their vision for commercial market penetration with Cuban’s expertise. The outcome solidified PhoneSoap’s position for growth and success under the guidance of Lori Greiner.
