'Shark Tank' contestant fails to get a deal despite his product being approved by Justin Bieber himself
Pitches on "Shark Tank" may be entertaining, innovative, and impressive, even if they require sharks to do bizarre things at times. But that does not mean that the founders will get the kind of money they come looking for, unless they can outdo investors at the negotiation table. The founders of All33, who make ergonomic chairs, realized that no amount of marketing can make up for actual sales figures. While the company's signature product had celebrity endorsement from none other than Justin Bieber, its founder, Bing Howenstein, failed to close a deal on the show after he failed to justify his $20 million valuation.
Bing entered the Tank seeking $500,000 for a measly 2.5% share of his company, All33. With the claim that “chairs may be killing you," Howenstein elaborated on the health hazards of prolonged sitting. He explained that the traditional chairs cause a series of problems, starting from neck pain to lumbar issues. He claimed that even the high-end chairs that the Sharks were seated in weren’t any different. "They've had the same basic design for almost 3,000 years. Whatever you're sitting in, even the fancy expensive chairs you guys are sitting in right now, you can find yourself locked, stuck immobile, and a lot of times in pain," he claimed.
He then explained that All33 wasn’t just another ergonomic chair, but its unique selling proposition was the patented sitting motion technology that mimics the body’s natural movement. He explained that the center of the chair had a movable design that followed the movements of the user to help them stay mobile. To demonstrate the efficacy, he invoked the pop icon, Bieber, who drew parallels between sitting and his fluid dance moves. "If you gotta sit, this is it," the star said in a video message for the firm.
Kevin O’Leary decided to give it a try, and he became instantly aware of the rocking motion and felt an intuitive nudge to sit upright. Bing credited the breakthrough design to Dr. Dennis Cornell, a seasoned expert with 45 years of practice under his belt. He shared that together, they had propelled the idea into a scalable business that generated more than $800,000 from sales.
He shared that the chair was a premium offering, but at a competitive rate of $799. He boasted a healthy margin as well as the product cost only $260 to make. While the Sharks were impressed by the product and its proposition, they had a hard time swallowing the $20 million valuation. "I don't care about Bieber, I'm going to kick his ass when my album comes out. I don't like your evaluation," O'Leary said.
Howenstein defended his stance by reasoning that his competitors with similar revenue multipliers had the same valuation, but the Sharks remained skeptical. Despite Howenstein stressing the value of “Shark money,” the investors started to drop out one by one. "I always feel the smart thing to do is to be a lot smarter about your valuation because if you get somebody in and alongside you, you could take a one-off item like this and blow it up. So if you had something that was just more realistic, because what you ask is so out of whack for me, it just turns me off. For that reason, unfortunately, I'm out," Lori Greiner said.
Sharks like Mark Cuban and Daymond John dropped out citing different reasons as well. Cuban simply didn't want to be in the chair business, so he dropped out. Meanwhile, John cited a conflict of interest and dropped out. Like others, Barbara Corcoran also had problems with the valuation, so she dropped out as well.
"I started choking on the valuation, and I'm still choking on it. I tried the chair and it has merit, but 500k for two and a half percent, I don't get out of bed for two and a half percenters," O'Leary commented before dropping out.
According to "Shark Tank Recap," the company seems to have gone out of business as its products are nowhere to be found on the internet.
