The Seventy2 Survival System
DEAL
EPISODE SUMMARY
🕓 Air Date: October 1, 2017
Asking For:
$100,000 for 5%
Investor:
Robert Herjavec
Deal:
$200,000 for 10%
PRODUCT SUMMARY
The Seventy2 is a comprehensive emergency survival kit with over 35 high-quality tools and information designed to help people survive and thrive in various emergency situations.
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Background Story
Christian Schauf and Mike Escamilla, co-founders of Uncharted Supply Company, entered the Tank with their emergency survival kit, the Seventy2. Christian, having grown up on a dairy farm in Wisconsin, had a background of preparing for the day and taking care of oneself.
The idea for the product struck him when he moved to Los Angeles and witnessed the city coming to a halt due to rain. This led him to contemplate what would happen in the event of a more serious disaster like an earthquake. Dissatisfied with the existing market offerings for emergency preparedness, Christian embarked on researching and developing a product that would truly protect people during crises.
The Product
The Seventy2 is a comprehensive emergency survival kit containing over 35 high-quality tools and information. It is designed to help individuals survive and thrive in a variety of emergency situations, including earthquakes and natural disasters.
The kit includes essential items such as air filtration, food, and shelter, making it an all-encompassing solution for the crucial first 72 hours of an emergency. One standout feature is a crank radio, flashlight, and power bank that can charge a cellphone.
The kit is designed to work as a cohesive unit, with all components contributing to the overall functionality. A key aspect of the Seventy2 is its user-friendly design, including clear instructions and color-coordinated pockets to assist users in high-stress situations. The emphasis is on providing not just a collection of survival tools but a well-thought-out system that anyone can use effectively.
The founders, Christian Schauf and Mike Escamilla, have iteratively refined the product, ensuring it meets high standards of quality. The kit is priced at $350, reflecting the initial concern for creating the right product rather than focusing solely on cost.
However, the founders have managed to bring down the production cost to $141 per unit within six months, demonstrating their commitment to continuous improvement. The Seventy2 is assembled in the United States, specifically by a company called PRAC that employs handicapped individuals, adding a socially responsible dimension to the product’s production.
How It Went
The company’s position before Shark Tank
Uncharted Supply Company demonstrated a robust performance in the six months leading up to their Shark Tank appearance. With $700,000 in sales to 64 countries, the company had successfully tapped into a global market for emergency preparedness. The initial funding of $400,000 was raised through a crowdfunding campaign, showcasing early enthusiasm and support for the Seventy2.
The founders mentioned that their first batch of units cost $209 each to produce due to their commitment to ensuring the product’s quality. However, within six months, they had managed to reduce the production cost to $141 per unit. This ability to optimize production costs indicates the company’s agility and dedication to refining their operations.
Uncharted Supply Company’s choice of assembling the Seventy2 in the United States, particularly at a company providing employment to handicapped individuals, adds a socially responsible and community-oriented dimension to their business practices. In terms of sales channels, the company started selling through their website after the crowdfunding campaign. The success of the product and its positive reception by customers from around the world demonstrated the potential for growth.
The founders projected a first-year revenue of $250,000 to $300,000, indicating a healthy financial outlook for the company’s initial phase. However, it’s worth noting that Christian Schauf mentioned he hadn’t taken any profits yet, emphasizing his commitment to reinvesting in the business.
The Negotiations:
The negotiations for Uncharted Supply Company took an unexpected turn, with Robert Herjavec making an offer that exceeded the founders’ initial ask. Initially seeking $100,000 at 5%, the founders received a counteroffer from Robert for $200,000 at 10%, doubling the investment while maintaining the valuation. This led to a moment of tension as the founders hesitated to accept or explore other offers.
Mark Cuban and Lori Greiner expressed interest, but Robert urged the founders to consider his offer seriously, presenting it as an “exploding offer” with a deadline. Ultimately, Christian and Mike accepted Robert’s offer of $200,000 for 10%, securing a deal that exceeded their initial expectations.
The negotiation showcased the authenticity of the founders and their ability to attract a favorable deal. While other Sharks were interested, Robert’s offer aligned with their needs and valuation, leading to a successful partnership that would contribute to the company’s growth.
