[eerie music playing]
[eerie music continues]
- Wow! What an entry! - Whoa!
[chuckling]
Sharks, you must be wondering what I was just wearing.
This is a new-age technology product
that relieves you from your endless salon woes!
Wow!
By the way, Himanshu, do you know
with whom every Indian woman shares a love-hate relationship?
With her boyfriend?
No, with the lady at the parlour!
[laughter]
"You have lots of blackheads."
"You need a facial."
"Ma'am, you have a lot of hair growth this time!"
Hey! We don't wish to listen to your taunts!
Neither do we have time to spare
nor do we have the budget to get salon services done regularly.
To get rid of all these problems, we present you with Winston.
[upbeat music playing]
Sharks, Winston manufactures beauty appliances
that can be used at home
and that give you salon-like results.
We use the 3S strategy to achieve this.
For instance, the face trimmer, eyebrow trimmer,
blackhead remover and LED face mask.
[euphoric music playing]
This is a one-time investment that will last you for years.
We come to you to fulfil this vision
with the ask of Rs. 1 crore in exchange for 4% equity.
Immediately within a span of a year,
I started my own business
of selling international products on Instagram
which are not available in India.
My dad was into another business.
My Instagram business had seen a lot of expansion.
I convinced my dad
that this is the only business he should be doing.
It took some convincing and this is our family business now.
We run a skincare brand.
Does he run Winston too?
The business I started before marriage
- was a skincare brand by the name Milagro Beauty. - Okay.
With Himanshu's electronic expertise and my D2C expertise,
we are running Winston.
[intense music playing]
- My family has a background in electronics. - Okay.
My dad is a distributor for LG, Philips and other brands.
I worked with him.
He shared years of learnings with me.
Okay.
We conceived our baby Winston within a month of getting married.
[laughter]
Did you shut down your original business
- and start a fresh one? - Dad runs it.
You're out of that.
- You'll do this. - That was her intention.
- She's the troublemaker. - Culprit!
- She's a serial entrepreneur. - Yes.
How did you two meet?
- Arranged marriage. - Oh.
Wow!
- That's rare these days. - Yes.
Why this particular category?
A new product comes out every day.
As I mentioned earlier, I used to sell international brands.
The lockdown was enforced soon after we got married.
We noticed that the most demanding product
that featured on our page was the face trimmer.
That's when we had the idea
of building our brand with this product.
Do you manufacture and design these products yourself
or do you import them and print your brand name on them?
Sir, in layman's terms, we import the products...
They're made in China!
- Yes. - They're made in China.
We tried...
I was about to compliment you on the designs.
They are very suggestive
and very well-designed products.
- Can we please... - Sure.
[pleasant music playing]
- What is this? - This is the LED therapy mask.
Nice. This is what I want to try.
Sir, I'd like you to try this. This is the pedicure at home.
This is a face trimmer and this is the eyebrow trimmer.
[euphoric music playing]
- Wow! - [chuckling]
Tell us about this product.
- Did you feel anything? - No.
What is the price?
We have two face cleansers, ma'am.
One costs Rs. 2090 and the other one is for Rs. 2990.
The market is filled with trimmers costing Rs. 500.
[intense music playing]
Our products do not work on cells.
This has an in-built battery.
It's travel friendly...
USB charging.
- It comes with USB charging. - Yes.
Wow, nice.
- We offer one-year replacement warranty. - Hmm.
- At your doorstep. - Doorstep service.
- No service centre... - How many times?
The biggest problem with these products is
- that they stop working within 3 months. - Quality.
Our complaint rate is lower than 0.5%.
[intense music playing]
How many factories are you associated with in China?
We have two vendors.
[tense music playing]
Does that not scare you?
- What... - What's to fear? We're building a brand, sir.
Nice.
- Perfect. - Wow! Well done.
Do you relate to me in terms of our businesses?
- Yes. - It's the same story.
I feel like I'm standing there and pitching to investors.
I have done the same thing!
My dad owned a distribution business too.
- Oh! - Then people... There are too many similarities!
How far can you fight off competition and until when?
What will your strategy be to go against all odds?
A product alone is not enough to build a brand.
If you want to build a brand, you need a product,
you need a team and marketing in place.
What kind of relations are you building with customers?
Absolutely.
What are your after sales services?
How are you retaining customers?
All these things put together make a brand.
[intense music playing]
What are your current numbers?
Our total sales for last year was Rs. 1.20 crores
- Okay. - Yes.
We have done Rs. 1.50 crores till July 2022.
So, total 46%.
Or any other product that is more than 10%?
- Callus remover. That is 20%. - Callus remover.
How many other SKUs are there?
- Total 8 SKUs. - 8.
Will you go from 8 to 50?
One or two products. Like I told you,
we're coming up with a product that combines eyebrow and face...
You might go up to 10.
- You'll limit it to 10 in India, right? - 8 to...
We wish to take the existing brand to a bigger level.
What do you plan on achieving with 8 to 10 SKUs?
Let me tell you about traded Chinese products
Alright.
Second, I wore your LED face mask and found it to be gimmicky!
That one light promises detox,
anti-ageing and collagen benefits.
So, I found it gimmicky.
It is not a joke to make Rs. 6 crores
- out of a trading business. - Right.
But I didn't find this business and the journey exciting.
For that reason, I am out.
[intense music playing]
Let me remind you that Rs. 6 crores is your projection.
Yes.
- You've hit Rs. 1.5 crores now. - Correct.
Yes.
What were your sales in August 2022?
Our target for the current month is Rs. 46 to 47 lakhs.
[intense music playing]
Is it sales or net revenue?
This is MRP sales.
- MRP sales. Okay. - Right.
- I can give you the unit economics if you wish. - Yes.
Please tell me briefly.
Then add another 30% for discounts.
Okay.
- Our marketing spend was 15%. - Okay.
The total comes to 75%.
After that, add another 5% for salary and expenses.
That comes up to 80%.
From the remaining 20%,
we deduct GST from the overall profit we make.
[intense music playing]
- No. GST is given on the top line, not on profit. - Not profit...
- Actually... - Do you show cash sales?
No. We pay GST on the net revenue
from the sales we make or on the bill amount.
- Yes. - Right?
So, we deduct GST from this as per the calculation.
[tense music playing]
Sir!
Himanshu told you the product cost
- after adding GST. - I added the GST.
Let me be very clear.
I've lost complete interest because you can't explain it right.
I was very excited about the category.
You're not deducting GST from the net profit!
I've never understood...
What kind of concept is that, my friend?
Basically, the percentage-wise cost we told you is inclusive of GST.
Just give me a simple calculation.
The GST is calculated on the top line, not the bottom line.
[intense music playing]
Don't mess around.
How much money were you left with at home in July 2022?
As this is a tough category,
you need a partner who will help you with margin expansion.
So, I am out.
- Thank you. - Thank you.
[tense music playing]
I know we got into the business.
But something has been bothering me.
How did you end up in an arranged marriage?
- I'm curious. - We're a Punjabi family.
We have a mediator who has arranged many marriages.
- Okay. - I wasn't aware that he was finding a girl for me.
I received her picture.
I obviously liked it and agreed to meet up, but...
- I just wanted... - [laughter]
Love your honesty!
- I was the first match for her. - Yes.
- For me, he was the first guy. - What about you?
She was the seventh or eighth match for me.
You liked her picture!
- I had not even seen his photo. - Okay.
- That mediator had come home. - [laughter]
He was so persuasive. He insisted I meet the guy once.
My parents said, "Go have a taste."
- "See what arranged marriage is like." - "Go have a taste!"
- As in what questions should be asked. - I love it.
- I love it. - I was clueless about what to ask in an arranged marriage.
- She came for the experience. - Yes.
- Experience... - [hysterical laughter]
- Taste! - I love your choice of words.
- Amazing! - Taste! Experience!
- She came for the experience... - Yes.
But that eventually ended up with me wanting to marry her.
I went to the mediator first thing after the meeting
because he was my friend.
I had her profile blocked with the note
"not interested in marriage".
- So that no other boy marries her. - [laughter]
This actually happened. I'm not making it up.
That mediator helped you find a business partner
- as well as a life partner. - Yes.
Fantastic.
- You answer with such honesty. - Yes.
- This tells a lot about... - Character.
- The entrepreneur and character. - Beautiful.
This is why I think you'll do very well.
Okay, we'll offer you a deal.
Alright.
Vineeta and I... Interested, yes?
[laughter]
We will offer you the 1 crore
but it won't be at a valuation of Rs. 25 crore.
We will give you a fair valuation...
- Yes. - It's as per today's market and that is Rs. 10 crores.
Alright.
I feel a great relatability with you both.
Finance is not a big deal.
You do get intimidated by the Sharks.
But you know the finance part also.
I cannot invest because I have a brand already
which will be a competing business.
I am out for now.
[intense music playing]
It's because of a conflict of interest.
But it's very rare
that I wish a competitor to do well.
- Thank you. - Thank you.
- All the best. I am out.
- You have just one offer. - May we take two minutes?
Yes. Don't take too long.
- There is... - We'll take a minute.
- Yes... - Okay. Well done.
She said one minute and that's all you get.
[intense music playing]
- You can't do it. This after boAt. - I'm doing Misfit in boAt.
- It's a conflict of interest. - Misfit by boAt.
[intense music playing]
- Sharks, done deal. - Done!
You have to hit Rs. 6 crores this year.
- Yes, definitely. - Definitely.
[peppy song playing]
[bubbling]
- Flatheads! - Yes.
It's a very famous company.
Then their ask will be Rs. 1 crore for 0.5%.
Yes, on the same lines.
Rs. 1 crore for 0.5%.
- What is their... What is their deal - They're an insane company.
Have you heard of Atoms in the US?
- Yes. - This is the Indian version.
[theme music playing]
[theme music fading]
Sharks.
What's the first thing you do when you come back home?
You take off your shoes, right?
It's so hot in India
that when you wear shoes, you feel like your feet are in a microwave!
There is zero ventilation
which causes your shoes to stink!
[intense music playing]
Moreover, they are heavy.
You feel like your shoes have chained you to the ground!
You wear all kinds of clothes.
But what are you most comfortable in?
In your favourite T-shirts, right?
We bring you that T-shirt-like feeling for your feet.
Greetings, Sharks.
We make T-shirts for your feet.
Flatheads are made of completely natural and breathable materials.
For instance banana fibre, linen, bamboo fibre and others.
They let your feet breathe.
[exhales]
[chuckles]
This sole conforms to world standards
which makes them extremely light.
These materials are completely sustainable.
Our products range from slippers that cost Rs. 1000
to the Rs. 5000 flagship banana range.
One more thing.
These shoes are made in India for the world.
Nice.
Our vision is
to make Flatheads a truly international shoe brand.
So, our ask is Rs. 75 lakhs for 3% equity.
[chuckling]
- Ganesh, welcome to Shark Tank. - Yes, thank you.
You come across as a seasoned player.
Your name gives the feeling that you're well-known.
I was very excited.
It looks like you have customers too.
Tell us about your background first.
I am a mechanical engineer from IIT Mumbai.
I worked in the US after that.
I am a refrigeration engineer. I'm a cool guy!
[laughter]
Good one.
How many times have you used that line in your life?
I just tried that out today.
- Hey... - [laughter]
- Always works. - One-millionth time!
[laughter]
I was in the leadership programme.
I got a chance to set up an engineering centre for them
in Bengaluru in 2004.
I came to Bengaluru and did MBA.
After MBA, I worked as a consultant for Bain & Company.
Then I joined Honeywell in Bengaluru
and we incubated a portfolio of 20 million dollars there
- for India for India businesses. - Interesting.
I met my co-founder there who is the designer.
From there began our ten-year-long entrepreneurship journey
in which we led three start-ups.
We first launched Momoe, short for Mobile Money Everywhere.
Then ShopClues acquired us.
Did you make money?
[intense music playing]
It was a cash plus stock deal.
- Okay. - We invested all the cash
- in Flatheads. - You have that.
Did the investors make money?
The investors swapped stocks.
Okay. So, they didn't make money.
Okay, please continue.
We made a profitable P&L there for two years.
After the lock in, we exited ShopClues in 2018
and that's when we came up with Flatheads.
Why Flatheads?
Why a shoe company?
I've had the issue of reeking shoes
and fitting problems for years now.
I see. Personal experience.
- Can we see or try some shoes? - Yes. Oh, yes. Absolutely.
[piano playing]
- Sorry... - That's the order.
[sentimental music playing]
I love your logo.
- Thank you very much. - F as in Flatheads.
Linen! Linen sneakers.
These are linen.
[pleasant music playing]
Anupam, the best part about these shoes is,
once you lace up, they become so stretchable
that you can slip them on and off.
- Your shoes are comfortable no doubt. - Yes. Comfortable.
[thudding]
If they get dirty, you can clean them in the washing machine.
- You can dry them out like a T-shirt. - Yes.
They're nice. They're very comfortable.
- So, the comfort factor is present. - Yes.
- Sure. - Don't you feel it lacks style?
The sneaker community is mad about style and colour.
So, why is that missing here?
Yes. There are two types of customers, right?
The customers that you pointed out are sneakerheads.
The sneakers they buy
- are limited edition Yeezies or Jordans. - Yes.
Right? These sneakers...
- Correct, I know. - They cost over Rs. 20,000.
They collect them.
Our shoes are exactly the opposite.
- Yes. - You buy our shoes to wear them,
not to collect them.
And there are three categories.
First are the basics
available at affordable price points.
Then comes the innovation range as you can see.
[upbeat music playing]
It is climate specific.
For monsoon, we are doing a water-resistant sneaker as well.
Then there is the collaboration range
where we'll do limited editions.
We've made two to three prototypes in collaboration.
The discussions are also done, we just have to launch it.
That's why I stand before you for the capital.
Where is your co-founder? Why didn't he come?
Actually, my co-founder and I had an agreement
that for up to three and a half years,
we'll do product detailing and innovation.
We'll make a roadmap.
After that, he wanted to make a transition.
So, he's just stepped out and I'm running the company.
How much equity does he hold?
Both of us have 30% each.
- Oh, wow! - Our angel investors hold 33%.
- Will you buy back his 30%? - That's right.
- I have two questions. - Sure.
Firstly, FY 22 sales and margin.
Secondly, you mentioned that you gave 33% to angels.
What was the last valuation and round?
In FY 22, our top line was Rs. 3.40 crores.
Our cost of goods is 40%, Gross margin is 60%.
Net of trade margins, we are at about 48%.
- Namita, this is one of the highest performance... - Yes.
- True. - The shoes are expensive!
You spend Rs. 3000 on making a shoe that costs Rs. 5000.
And for Rs. 3.40 crore sales,
you've asked a valuation of Rs. 25 crores.
What was your last round?
That might help us understand why 25.
- Sure. - Ask about this year's sale also. This was last year's.
The last round we raised was exactly Rs. 5.2 crores.
You're giving the same valuation of Rs. 25 crores again.
[tense music playing]
- We are offering you a valuation which is... - Less.
A little lesser than the previous pre-money.
Let me get to your question, Peyush.
We're facing working capital constraints.
We are not in a position, erm...
Our runway is almost exhausted.
- So... - How much money do you have in the bank?
Actually, we have invested our money in the last two months.
- Ouch! - Approximately Rs. 35 lakh each.
Oh, boy!
What are the current sales?
Last month's sales were Rs. 15 lakh top line.
What was last month's burn?
Rs. 5.5 lakhs burn.
Our plan is to focus on the international market.
We launched it in the international market in October.
We've done thorough research on the US and UAE markets.
We get price support. We have a price advantage there.
I'm also being opportunistic here.
If over there, we get price support, unit economics
and customers willing to buy such products for 70 or 80 dollars,
- then why not? - So, your learning is that
you don't have price support in India.
Indians still don't wish to pay
- a premium for sustainable products. - Exactly.
We have innovations for India specifically
which are at lower price points.
[intense music playing]
We wear dry-fit T-shirts to gyms.
That material is used to make the shoe.
So, we could introduce such innovations here
at lower price points.
We can launch them here for Rs. 2000 to 2500.
- May I see it? - Sure.
[intense music playing]
- Very light. - Yes.
I've had a question on my mind.
- Yes. - 33% of your equity
- is with investors, right? - Yes.
Why aren't your investors coming along?
Why did you come to us?
Our angels are mostly investors.
You know, it's an aggregation of small cheques. Right?
- Such investors can't pitch... - Don't you have a big investor?
We haven't yet been able to get the VC yet.
Look, the investors are not foolish.
- True. - How much money have you raised?
To date, we've raised Rs. 10.2 crores.
No one writes off Rs. 10 crores.
It would be right to say that the investors
have written down this investment.
"You see what to do. We won't invest further."
[intense music playing]
Correct?
According to the investors if the company were to shut down...
The company could shut down.
The consumer is akin to God.
I always say this but people keep forgetting.
- You need nothing else in life. - Yes.
The basics were missing in your business.
Feedback taken, Aman.
I think we need to learn from people like you.
- You set up two companies. Okay? - Yes.
- Yes. - Neither one had a positive outcome
which is by chance.
Where do you think it went wrong?
Peyush, I admit that I am not the best entrepreneur in the world.
I never said that.
No, it is... So, there is also erm...
How do I put it?
It has to be luck meeting opportunity.
Timing is the most important.
Hats off to your perseverance.
- Which is good. - Your honesty is phenomenal.
- Thank you very much. - No nonsense. Honest. Very good.
So, it is not that... Erm...
That I...
Can't run a company.
I am capable of it
and I have set up many companies under other companies.
The thing is when you step into the market
and for four months
nobody is wearing shoes,
because people are not leaving their homes.
Such situations occur once in generations,
and it happened to us.
[sombre music playing]
- Ganesh, I've made my decision. - Yes. Sure.
[intense music playing]
The pedigree is great.
Even the designs you've made,
muted and minimalistic, I loved them.
But as an investor, do you know what my fear is?
It'll take time to revive something that hasn't succeeded in years.
In three to four months, I will run out of money
and the business will shut down too.
And for that reason, I'm out.
What will you do with Rs. 75 lakhs?
We plan on using this Rs. 75 lakhs
to introduce the inventory of our first set of shoes
in the international market.
- Ouch! - Ouch! No.
We plan on growing our business from 10% to 30%.
[intense music playing]
Ganesh, you know this situation of no money in the bank account,
paying salaries out of your pocket...
I've come across it many times.
Given the stage you have reached,
you don't seem to have achieved the product-market fit
because this has quality and finish issues.
You are still at a stage
where you have not achieved product-market fit.
You speak of America, but that isn't even your market!
So, you know... You seem lost.
[intense music playing]
Four Sharks are left now.
We fear that our Rs. 75 lakhs
will also go down the drain just like your Rs. 10 crores.
[intense music playing]
Tell me what is the first and last duty of an entrepreneur.
The fundamental duty of an entrepreneur.
The fundamental duty is to his stakeholders
whether it is his investors, his...
The fundamental duty is survival.
[intense music playing]
- It's survival. Yes. Agreed. Yes. - Sustaining the business.
- Correct? - Yes.
Got it.
There comes a time in one's life when you need to decide
that you don't want to do something
or do something else,
- or move on. - Yes.
Do you ever feel this way at times?
I sure do, sir.
What do you do? How do you react?
Self-doubt is very normal in entrepreneurs.
When a situation arises where you have to wind down the business,
- of course self-doubt manifests. - Correct.
Did you try to find a job?
[intense music playing]
During this time?
No. I am thinking of it,
but I have not actively started looking for a job yet.
I'm contemplating. I've spoken to a couple of friends...
- But it is not bad. - About what I should do.
Let me tell you.
- Doing a job is not bad. - Yes.
It's not negative. It is positive.
- I'll tell you why. - Okay.
I didn't have money left or investors to back me up.
I closed down my company.
I moved on and worked for two to three years.
I saved some money.
I restarted with that investment.
[euphoric music playing]
- Yes. - It's not a negative.
It's a good exit to life.
[euphoric music playing]
It's simple. If I don't get the funding...
I don't have money as it is.
I might start looking for a job.
And when I get the chance, I will start afresh.
Could you tell me about your life stages?
What is your family situation?
Do you have kids? How is it?
- I am married. - Okay.
Um, my wife is working. She is a software engineer.
She works in a German OEM company.
Does that cover the expenses?
- Yes. - Okay.
- She earns and I spend the money! - Okay.
I have a daughter who is ten
but if you want to get back on your feet,
I have an open offer for you for a job.
[sentimental music playing]
When you're ready, I'll be happy to invest in building a D2C brand.
Right? I want you to land back on your feet.
Got it.
That's my offer.
- But you're out of Flatheads. - Thank you.
But I'm out of today's deal.
[sentimental music playing]
I have been saying the same thing from the beginning.
The basics are missing in this company.
I'll bet on you, but not on your company.
Sorry, I'm out.
[sombre music playing]
Let me tell you that I am keen.
to doing whatever is necessary
to get this company to the next stage.
[intense music playing]
Including getting people, offering them equity...
- who can take this to the next stage. - Yes.
- We won't sell shoes in the US. - Yes.
After the funds come in, the marketing must be down to zero.
- You need to restart the company. - Yes.
- This Rs. 75 lakhs is almost like a restart. - Got it.
And this is a non-negotiable offer.
Got it.
Ganesh, you mentioned India's tropical climate.
And that you wish to make shoes for Indians.
That was Sugar's starting point
that they wanted to manufacture lipsticks for the tropical weather.
- Okay. - Having said that
we don't succeed until we are in the right place at the right time.
We must first go to the wrong places at the right time and vice versa.
[ethereal music]
Where exactly you are in your journey is something I can't fathom.
I have no clue how close you're to 'the right place at the right time.'
But the fact is that because you have faced so many failures.
You have the potential for sure.
the first step is,
without burning any money would be product marketing.
[ethereal music]
- Can I give it some thought? - Sure!
You are a Master in this.
- I know... - I mean you're like a God in this...
Peyush, Aman said something really nice.
- If it's not a succeeding close it down. - Close it down!
[suspenseful music]
'It's definitely a decent offer.'
[suspenseful music]
Even in my company, if somebody wants to leave
because they are getting a better offer, I say please go
Because I don't have money for you.
[suspenseful music]
What do you want to do? Do you want to pull back?
- She has already offered. - He will accept.
Yes, he will.
[suspenseful music]
Aman, Anupam, Peyush,
Vineeta, and Namita, thank you very much.
All of you really thought through this
and made pertinent comments.
Um, I think I...
- '- You have enough time. - It's no big deal.'
[ethereal music]
[melancholic music]
Actually, I have been revaluating this for the last few days
But
talking about the business in so much detail
with the people who have been there and done that
and understanding that I'm very far from where I want to be.
And my thinking about the direction this business needs...
[vocalising]
Maybe choosing this is not the best way forward.
And it's something that's clear to me now.
It wasn't clear until today.
I think I got clarity regarding that.
And I want to thank you for this.
And yes, I'll definitely go back and do something
so that I can come back and do D2C again.
[melancholic music]
- '- Yes! - Right?'
[melancholic music]
- You are an amazing guy. '- An amazing guy'
- Totally! - And a true entrepreneur is someone who keeps getting up
despite taking constant hits!
You are down but not out, my friend.
Yes!
[mellow music]
- Just go with an open mind about your next step. - Sure.
- Right? That's all... - We wish you the best.
- Thank you! - And you're a great guy.
- Thank you very much! - Thank you so much!
- We salute you. - Believe in yourself.
- Good job! - Best of luck! Let's...
- Let's meet him at least. - Good job!
Let's go.
- Listen! Believe in yourself. Okay? - Thank you!
- Bye, bro! - Thank you, sir!
I have been in your shoes. [chuckling]
[inspirational music]
You've made all us emotional..
Take care!
[inspirational music]
Let's watch Shark Xperience.
'We will get to know the Sharks in depth in Shark Xperience.'
'Vineeta, Nishit from Kota, Rajasthan, wants to ask a question.'
'When an entrepreneur realises'
'that his company has suffered a loss, '
'what should he do?'
'Should he shut down his company or try harder?'
Hi, Nishit! In every company's journey,
there are near-death experiences.
So one must try.