StepNPull Door Opener
DEAL
EPISODE SUMMARY
🕓 Air Date: April 2, 2021
Asking For:
$300,000 for 3%
Investor:
Kevin O'Leary
Deal:
$300,000 for 6%
PRODUCT SUMMARY
StepNpull is a small device that mounts on the bottom of a commercial latchless door, allowing users to open doors with their feet to avoid touching germy handles.
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Background Story
StepNpull’s origin traces back to its founders, Mike Sewell and his two partners, based in Springfield, Missouri. Their entrepreneurial journey began as a sideline venture, balancing full-time jobs. However, the first five years showed modest sales of around $35,000, and growth appeared sluggish. The turning point arrived in their 13th year of operation, when StepNpull experienced a remarkable surge in sales.
This surge was nothing short of astonishing, with March alone accounting for over $1.7 million in revenue, surpassing their total sales for the preceding years. Their year-to-date earnings approached an impressive $7 million. This extraordinary upswing can be attributed to the heightened awareness of hygiene during the COVID-19 pandemic.
StepNpull emerged as a timely solution to a pressing problem: germ-ridden door handles. With the world more conscious than ever of the need to minimize touchpoints and prevent the spread of viruses, StepNpull’s device became highly relevant. This surge in demand not only bolstered their sales but also positioned them as a crucial player in the fight against germs in public spaces, making their entrepreneurial journey a remarkable success story.
The Product
StepNpull’s innovative product is a simple yet effective solution to a common problem. This low-cost device is designed to provide a hands-free alternative to opening latchless doors, reducing the need to touch potentially germ-laden door handles. It operates by allowing users to use their foot to pull the door open, minimizing direct contact with the door surface.
Versatility is a key feature of StepNpull. It can be effortlessly installed in a wide range of settings, making it suitable for various environments. Whether it’s an office building, a restaurant’s patio doors, or a critical space like healthcare clean rooms, StepNpull offers a hygienic and convenient way to access such areas.
At a retail price of $29.95, StepNpull is an affordable and practical addition to any door. What makes it even more appealing is its cost-effectiveness in production, with a U.S. manufacturing cost ranging from $8 to $9. This pricing structure ensures accessibility for both businesses and individuals looking to enhance hygiene and reduce the spread of germs, particularly in the context of heightened awareness during the COVID-19 pandemic.
How It Went
The company’s position before Shark Tank
StepNpull’s performance in the market has been nothing short of remarkable. With sales soaring, they have achieved a year-to-date revenue of nearly $7 million, a testament to the growing demand for their innovative product. This surge in sales can be largely attributed to the increased awareness of hygiene and touchpoint avoidance, driven by the global COVID-19 pandemic.
Their distribution strategy is a key factor in their success. A quarter of their sales are facilitated through wholesalers, while the majority, a significant 75%, come from direct sales. Their website has emerged as the dominant sales channel, responsible for approximately 35% of their total sales. This strong online presence has allowed them to reach a wide audience and capitalize on the demand for their hygienic solution.
StepNpull’s ability to adapt and meet the needs of businesses and individuals seeking a safer way to interact with doors has positioned them as a valuable player in the market. Their remarkable sales figures reflect not only the quality and relevance of their product but also their ability to navigate a changing landscape with agility and innovation.
The Negotiations:
Mike Sewell, the founder, initially sought $300,000 for a 3% equity stake, valuing the company at $10 million. Kevin O’Leary was the first to jump in with an offer of $300,000 but for 6% equity, effectively valuing the company at $5 million. Mike quickly accepted this offer, recognizing the value of partnering with Mr. Wonderful and his extensive business experience. Other sharks, Daymond John and Lori Greiner, made offers as well.
Daymond offered $300,000 for an 8% equity stake, while Lori presented an intriguing proposal of $300,000 for 5% equity, plus a royalty of 50 cents per unit until $500,000, after which it would drop to 20 cents per unit. Mark Cuban, known for his tech investments, initially expressed interest but dropped out of the negotiation after offering the same terms as Kevin. Barbara Corcoran, on the other hand, expressed concerns about the consumer appeal of the product and exited the deal.
Ultimately, Mike chose to partner with Kevin O’Leary, accepting his offer of $300,000 for 6% equity. Kevin’s experience and connections were seen as valuable assets that could help StepNpull grow even further. The negotiation showcased the sharks’ interest in the product and the potential they saw in its market success.
