Squatty Potty Toilet Stool
DEAL
EPISODE SUMMARY
🕓 Air Date: November 14, 2014
Asking For:
$350,000 for 5%
Investor:
Lori Greiner
Deal:
$350,000 for 10%
PRODUCT SUMMARY
Squatty Potty is a simple stool designed to help users achieve a healthier squatting position on a traditional toilet, aiding in better elimination and addressing colon issues.
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Background Story
Squatty Potty, founded by Bobby Edwards and his mother Judy, emerged from a genuine concern for colon health and a unique entrepreneurial vision. The company’s roots trace back to a realization about the adverse effects of the conventional sitting position on toilets. Bobby and Judy hail from an undisclosed location but present themselves as a dedicated mother-and-son team. Bobby Edwards, driven by a passion for creating a positive impact on people’s health, brought his expertise and enthusiasm to the development of Squatty Potty.
The product idea was inspired by the anatomy of the puborectalis muscle, which forms a kink in the colon when sitting on a traditional toilet. Recognizing the importance of a more natural squatting position for improved elimination, the duo conceived the Squatty Potty—a carefully designed stool that allows users to maintain a healthier posture while still enjoying the comfort of a standard Western toilet. The journey began three years ago when Squatty Potty was introduced to the market. The founders have actively promoted their product on renowned platforms such as “Dr. Oz” and Howard Stern, garnering attention and building a cult following.
Their commitment to health and wellness resonates in their efforts to educate the public about the benefits of the Squatty Potty. The success of Squatty Potty is evident in its sales trajectory, with impressive revenue figures and a notable online presence. Bobby and Judy’s entrepreneurial spirit, coupled with their dedication to promoting a healthier lifestyle, has positioned Squatty Potty as a unique and impactful solution in the realm of bathroom health.
The Product
Squatty Potty is a revolutionary stool designed to enhance the natural posture during bowel movements, promoting improved elimination and overall colon health. The product is ingeniously simple yet effective, addressing the anatomical challenges associated with the conventional sitting position on toilets.
The stool works by providing users with a platform to elevate their feet while seated on a standard Western toilet. This elevation helps mimic a squatting position, fully relaxing the puborectalis muscle, which aids in more complete and comfortable waste elimination. The ergonomic design ensures the perfect angle and width, distinguishing Squatty Potty from makeshift alternatives like stacks of books.
The benefits of using Squatty Potty extend beyond just the physical aspect, encompassing improved colon health and addressing issues like constipation. The product can be neatly stored away when not in use, making it a convenient addition to any bathroom.
Squatty Potty is available for purchase online through the company’s website and on Amazon. The standard model is priced at $25, with an additional adjustable version that raises with toilet height. The founders highlight its perfect angle and width, emphasizing that Squatty Potty is specifically designed for the task at hand, ensuring a superior experience compared to makeshift alternatives.
How It Went
The company’s position before Shark Tank
Squatty Potty has demonstrated robust performance and notable growth since its inception three years ago. The company, founded by Bobby Edwards and Judy, has positioned itself as a leader in the niche market of bathroom health, capitalizing on the unique benefits of its innovative product. In terms of financial performance, Squatty Potty has achieved impressive sales figures, with $1 million in the first year, $2.7 million in the second, and a projected $7 million for the current year. The company has successfully leveraged online platforms such as its website and Amazon for direct-to-consumer sales.
They express a desire to enter retail but acknowledge challenges in educating consumers about the product’s benefits. Squatty Potty’s customer base has been growing steadily, and they emphasize having a cult following. The product’s success has been amplified through appearances on popular platforms like “Dr. Oz” and Howard Stern, contributing to its widespread recognition. Funding for Squatty Potty has been primarily sourced from its sales, with the founders stating that they have cash in the bank.
The founders were seeking $350,000 in funding during their pitch on Shark Tank, primarily to achieve FDA compliance and medical-reimbursement coverage, aiming to elevate the product’s status from a direct-response item to a legitimate medical device. The founders’ mention of having cash in the bank suggests a healthy financial position. The company is structured as a family-run business, with Bobby and Judy leading the charge. Their decision to seek a Shark’s investment indicates a strategic move to secure guidance, support, and potentially broader market reach.
The Negotiations:
The negotiations for Squatty Potty on Shark Tank were dynamic, involving multiple sharks expressing interest and concerns about the product’s valuation and equity stake. Bobby Edwards and Judy initially sought $350,000 for a 5% share, emphasizing the product’s health benefits and impressive sales figures. Lori Greiner, recognizing the potential of Squatty Potty, made the first offer, proposing $350,000 for a 10% stake. Kevin O’Leary also expressed interest, making the same offer as Lori. The founders were quick to counter, proposing $500,000 for 10%, highlighting the importance of having a shark on board to assist with scaling the business.
Mark Cuban and Robert Herjavec, however, expressed skepticism about the valuation and the significance of a 5% stake. Robert Herjavec, in particular, decided to opt out, stating that 5% seemed insignificant to him. Mark Cuban voiced concerns about changing consumer habits and the difficulty of convincing people to alter their toilet practices. In a surprising turn, Lori accepted the initial offer of $350,000 for a 10% stake. Despite counter-offers from Bobby, including a $700,000 offer for 10%, the deal was sealed with Lori.
The negotiation highlighted the tension between the founders’ valuation and the sharks’ assessment of equity value. While Lori saw potential in QVC and retail for Squatty Potty, other sharks expressed reservations, leading to a competitive yet successful negotiation with Lori Greiner. The founders were enthusiastic about partnering with Lori, recognizing the value she could bring in terms of market reach and guidance.
