Golfkicks – DIY Golf Spikes Kit
DEAL
EPISODE SUMMARY
🕓 Air Date: October 27, 2019
Asking For:
$300,000 for 8%
Investor:
Mark Cuban
Deal:
$300,000 for 13%
PRODUCT SUMMARY
Golfkicks transforms ordinary sneakers into golf shoes by providing a traction kit with cleats that can be easily attached to the sole.
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Background Story
Founded by Tyler Stuart and John Krosky, Golfkicks addresses the dissatisfaction with traditional golf shoes, which are often considered ugly, uncomfortable, and expensive. The founders recognized the desire for golfers to express their style on the course while maintaining functionality. Thus, Golfkicks was born as a solution to turn ordinary sneakers into stylish and practical golf shoes.
Tyler Stuart and John Krosky presented their product on Shark Tank, emphasizing the need for a more fashionable and comfortable alternative to traditional golf footwear. They expressed a passion for providing golfers with the freedom to choose their favorite sneakers for the game, highlighting the cool factor as a driving force behind their innovative product.
The Product
Golfkicks offers a traction kit that enables golfers to convert their regular sneakers into golf shoes. The kit includes cleats that can be easily screwed into the sole of the sneakers, enhancing traction on the golf course.
In the pitch, the founders demonstrated the process of mapping out the traction on the bottom of a pair of sneakers, taking the Golfkicks traction kit, and screwing in the cleats to create customized golf shoes.
The product is versatile, allowing users to enhance various types of footwear, including high-end sneakers, flip-flops, and even cowboy boots. Golfkicks is designed to appeal to golfers who want a more stylish and personalized option for their golf footwear.
The founders showcased a version that eliminates the need for a pilot hole, making it even more accessible for users to apply the cleats to their shoes. Priced at $29, the Golfkicks kit provides an affordable and convenient alternative to purchasing specialized golf shoes.
With a manufacturing cost of $5 per kit, the product boasts a healthy profit margin. The founders also mentioned plans to transition to a metal screw in the manufacturing process, requiring additional setup costs.
How It Went
The company’s position before Shark Tank
Golfkicks, a relatively new entrant in the market, reported impressive early sales figures during the Shark Tank pitch. In just three months, they achieved $120,000 in sales and claimed to have sold out of their initial version. The founders projected a million dollars in sales for the first year of product availability, based on the momentum they had already generated.
The company’s distribution strategy involves selling directly through their website, with future plans to expand to Amazon and explore partnerships with big-box golf retailers. The founders acknowledged the challenges of entering the golf market, especially dealing with pro shops and traditional distribution channels. However, they expressed confidence in their ability to scale the business, leveraging online platforms and strategic retail partnerships.
Golfkicks has demonstrated a commitment to innovation, emphasizing the development of a future version that can extend beyond golf to sports like soccer. The founders have secured a patent for their product, filed in 2018, with ongoing efforts to protect their unique approach to anchoring cleats into shoes. While the founders did not disclose specific details about partners, wholesalers, or funding sources during the pitch, they highlighted their successful start and positive trajectory in the golf accessory market.
The Negotiations:
Golfkicks entered the Shark Tank seeking $300,000 for 8% equity, valuing the company at $3.7 million. The negotiation started with Mark expressing concern about the high valuation given Golfkicks’ early stage and the risk associated with investing in a product rather than an established company. Lori Greiner and Matt Higgins both opted out early, citing their lack of interest or knowledge in golf. Daymond John followed suit, stating that he couldn’t relate to the business and had no personal interest in golf.
Kevin O’Leary expressed reservations about the distribution challenges in the golf market and the high valuation. Mark Cuban was the Shark who ultimately made a deal with the entrepreneurs. Mark Cuban, despite not being an avid golfer, saw potential in Golfkicks and made an offer of $300,000 for 15% equity, with no royalties. This offer was later negotiated down to 13%, and the founders accepted Mark Cuban’s deal.
The negotiation included discussions about the risks associated with the business, the need for mentorship, and the strategic approach to distribution, especially focusing on online platforms like Instagram. In the end, Golfkicks secured a deal with Mark Cuban, gaining not just financial support but also the expertise and mentorship needed to navigate the challenges of scaling their business. The founders expressed excitement about the partnership and looked forward to the future growth of Golfkicks beyond golf into other sports.
