BEERMKR on Shark Tank - A Retrospective
BEERMKR is a pretty awesome device - it brews, ferments, and serves your own craft beer, and does so on your countertop. It also connects to your phone and the recipes are completely customizable. Setup takes 5 minutes and cleaning is a snap. On May 7th, 2021, ABC aired our September 2020 Shark Tank pitch to Mark Cuban, Kevin O'Leary, Barbra Corcoran, Lori Greiner, and Alex Rodriguez, all of whom loved the beer and were extremely impressed with the BEERMKR device.
Warning: spoilers ahead! If you haven't watched the episode, I encourage you to stop reading now, head over to the Shark Tank website, and pull up Season 12, Episode 23.
For the event, we had a viewing party with all our kids and it was a lot of fun! Our 4, 5, and 6 year olds didn't seem to grasp how cool it was to see Dad on TV, probably because we all have cameras in our pockets so videos of familiar people are onscreen all the time now.
After the episode aired, we were completely overwhelmed by notes from just about everyone in our lives with words of congratulations, encouragement, feedback, and retrospectives on the show. I figured now would be great time to write a bit about how the show turned out and our thinking around some of the things that happened.
We started out the show by walking through a demo of the BEERMKR, how it works, and serving the Sharks a flight of beers. This was the fun part. We got to geek out over the beer and discuss all the sorts of ingredients that go into one style versus another.
We then had a discussion on the business model, the history of the company, and our sales to date for both BEERMKR and with BrewJacket. In the Tank there were lots of questions, often happening at the same time from different Sharks, which turned up the pressure considerably. We filmed for an hour and all the Sharks needed to get all their questions in, so it was a bit chaotic to be in the center of it. Since our aired segment was only 8 minutes long, the show producers had to cut roughly 90% of what we discussed to focus on the stuff that would make for a great TV show: beer and drama!
The valuation we set for the company was a sticking point for most of the Sharks. We filmed this episode in September 2020, and if you are a kickstarter backer, you'll recall that we weren't shipping BEERMKR until a few months later. The Shark Tank investors are notoriously sales focused with their valuations, so we understood going into the show that this would be the focal point of the discussions and source of their pushback.
The offer we did get was from Kevin O'Leary, aka Mr. Wonderful. This was surprising to us as he was the one who took us to task the most on our valuation, but he also LOVED our beer and had lots of great ideas to lever his wine business to push BEERMKR. In classic Mr Wonderful fashion, he offered a unique deal: he'd give us the dollar amount we were asking, but for half our valuation AND we'd have to pay him back at 9% interest. This was an interesting deal, but definitely not one that we were planning for going into the show. If we had taken that deal, the bet would have been that Mr Wonderful's connections and ability to grow our company would outweigh the hefty debt payments and negative equity. Alex Rodriguez encouraged us to take the deal, citing a low $4,000/month payment, but his calculations assumed a 30 year repayment term, not the 3 year repayment period Mr Wonderful originally proposed, which would have been $16,000 per month, not $4,000. Having that sort of debt service sitting on our balance sheet just isn't healthy for a company of our size.
So did we miss an opportunity to partner with a Shark? Absolutely. The problem in my view was one of timing, and the deal we got was a direct result of us being in an awkward pre-shipping / pre-revenue stage when we filmed. There was nothing we could do about the Sony Entertainment / MGM / ABC's production schedule, and there was nothing we could do about covid delaying us by 9+ months. If we had the choice, we would have chosen to pitch AFTER we had shipped product, had sales to prove our model, and had positive reviews from our early brewer base. Unfortunately, you don't get to choose when to pitch on Shark Tank, and if you get the opportunity to pitch, you have to take it, so we went in with the valuation we believed in and stuck to it. We did succeed in introducing BEERMKR to millions of new people, so I consider that a success.
Thanks to everyone for their support and their words of encouragement! We believe in the potential of BEERMKR, and I know if we pitched the Sharks today, it would be a very different conversation.