As some of you may know, I am a huge Shark Tank fan. Shark Tank is a TV show where entrepreneurs pitch the “sharks” a business venture and ask for a certain amount of venture/growth capital in exchange for equity.
After a very long time without a light product, a new one was pitched last night. The company “Xtorch” pitched a multi-functional light product (lantern, flashlight, table, solar light).
One of the sharks even referred to the “flashlight community” and I thought it was an interesting pitch for us here on BLF.
- What is your opinion on the light itself? Is the BLF lantern better?
Do you believe this product is actually useful or does it already exist elsewhere?
Personally, I didn’t like the physical design of the product, but without having the ability to touch/review the light it was also hard to say.
The company website doesn’t give a lot of details regarding technical details, unfortunately.
I saw this episode last night. Not one Shark took the pitch and all declined. The sales price of the light was roughly $60/each. There was discussion on the sales history, margins, customer base, and lack of patents, etc. One Shark said the price needed to be $29.95 and sold online to be successful.
However, one Shark offered to buy the entire company - 100% of it for $500,000. The couple countered with an even one million.
The Shark held firm on his half million offer based on estimated worth of the company and betting on future sales. I have watched this show on and off (no pun intended) for what seems like the past 10 years and do NOT ever recall a Shark offering to buy the entire company. This was a first.
Note: sales history showed very modest and limited numbers. As an aside, the rule of thumb for rapidly growing companies with bright (no pun intended) futures are valued at 10 times sales. This was not what would be called a rapidly growing company based on sales, and had NO patents on the design. That means that if it turns out to be really a worthwhile product that it would be immediately knocked off and produced out of China in mass quantity by other companies.
The couple finally countered that they would accept a minimum of $750,000 for the entire company. So, the Shark declined and wished them luck.
I think they should have jumped on the half million offer. The couple left smiling and holding hands…. many people use their appearance on Shark Tank to get exposure for their products so that is perhaps the reason they left smiling. I think they were foolish for not taking the half million dollar offer.
There were many light products on Shark Tank before but this, I believe, was the first actual flashlight/lantern/camping light.
- I was completely shocked when Robert Herjavec made the offer to buy the entire company (what for, to go into the flashlight business?). Sharks often times offered to buy 100% equity in a company, but never for one this trivial.
- I don’t think the sharks asked the right questions regarding this product, they could have drilled down with way more detail. But the fundamentals were ticked off and they agreed not to pursue this opportunity.
- I think that a flashlight like this is a commodity, there are way too many people marketing light products and there are almost no unique selling points for this light. To invest in a flashlight company it either requires significant patents for either a unique design or unique features (and even then competitors will find a way around the patents), or it has to be such a good brand that people would simply know about it and buy it over other brands, e.g. Maglite.
- I don’t think the sharks are the ideal angel investors for this type of product. How are they going to help the founders market a flashlight? On QVC? How can a flashlight stand out with so many other similar products to pick from at every gas station and every Home Depot?
The founders: If I met these two people on the street, I’d have never expected them to be founders in a flashlight business. They just don’t seem like they are into flashlights. But that could be the superficial impression, I could be wrong.
I also agree that sales and overall numbers were a joke for this product. You’d have to sell millions to make your investment back.
Mediocre light with mediocre battery life and a nearly useless solar charger. “Water resistant” ABS case. Seems expensive for the questionable feature set it has.
This seems to aim for a niche that doesn’t really exist. Too big with too many useless features to carry every day yet not durable enough for serious survival use. This may catch some random as seen on TV buyers with it’s novelty, but it doesn’t really check any boxes for someone that’s going to actually use it.
Also, they have some feel good marketing about how it was designed for use in the Dominican Republic and other third world countries where the don’t have access to light or power. It may actually be useful for people in those circumstances, but not at $60 a unit.
[EDIT… Giving them the benefit of doubt here, Hopefully for those invested this is not just a scam / cash-grab]
They’re just quoting the latest lead times from their part suppliers. Depending on where in the world they are sourcing parts and services anything is possible. Look whats happening in Delhi right now. All it takes is one supply chain on the BOM and your lead time blows out. I’m sure they are competing with other much higher volume customers too. Some of which may be industry volume drivers for those parts, so those customers get highest priority and first units off the line.
I work for a much-MUCH larger company than these guys, and I have seen my product supply chain fall apart overnight from covid 19 shut downs the past year. All it takes is one government somewhere in the world to issue a lock down / stay home mandate and BAM… no parts are available. This also affects shipping logistics too. So the fabricator may have parts, but no way to deliver them.
It was interesting to see a flashlight/camping light business on the show, but the product wasn’t so great. I would never buy it, but I guess there is a small niche customer base that would need everything in one light.
The solar charging feature was really funny, it takes way too long.
Also, I don’t believe that the flashlight was that unique, I have seen similar products before.
That’s just it, there’ll be one thing on the market, then some yayhoo builds pretty much the same thing but with an am/fm/wx radio “for emergencies” and puts it out as the greatest thing since whatever.
Then the main light breaks and the whole thing’s pretty much useless.
Not a product I’m interested in. As others say, modular approach works better for me. I’ve a solar panel with USB output, about the size of a sheet of paper, a “dumb” 18650 charger (miller ml-102?), and more 18650 lights than I care to count, many with USB charging capabilities.
Longer trip or less sunny conditions = carry more cells
Forget to charge something during the day? = Use USB output from the charger
Charger breaks = resort to using the onboard USB charging on the lights
Car/hotel/hostel based = option to ditch the solar and charge from USB ports
Edit to add:
While I understand the logic of these products for those in greatest need, what really needs to happen is a push for sustainable development in order to lift the poorest in the world out of poverty- solar lanterns etc are all well and good, but they’re just a sticking plaster for much larger issues. What happens when the cells wear out or the solar panel dies? They are back to square one…