Season 5 | Episode 506 | EP506
In Season 5, Episode 6 of Shark Tank, Jason & Amanda Adams approached the Sharks seeking an investment of $100,000 in exchange for 20% equity in ‘Elephant Chat’. The company is currently based in McKinney, Texas.
Elephant Chat is a rather simple product. It is a silver cube made of acrylic. Inside of this cube is a small stuffed elephant. The idea is that whenever something has to be discussed the elephant is then pulled out of the cube. A talk can then be initiated. This is quite literally an ‘elephant in the room’.
Just before the pitch was made the duo had put together a KickStarter campaign. The intention of this campaign was to provide funding for the initial injection molds to be made to allow the business to be scaled up. At the time of the pitch they had a $13,120 goal and about a third of this had been achieved.
The major sticking point for the Sharks was the cost of the product. The ‘Elephant Chat’ cube would retail for $59.00. The cost price would be $22. The Sharks believed that Jason and Amanda Adams were being ‘ripped off’ when it came to the initial purchase of the product. Elephant Chat is nothing more than a stuffed toy in a box. They stated that stuffed toys should be rather cheap to manufacture. The Sharks also believed that anybody who purchases the product would likely also feel ‘ripped off’ when they discover that they paid nothing more than $59.00 for what is essentially just a stuffed animal.
Another sticking point for the Sharks was the fact that there was unlikely to be a market out there for the product. As the company had yet to sell any product and had only achieved a limited amount of success on KickStarter it meant that there was no way to demonstrate that the market was there either. The Sharks are only willing to invest in products which have proven themselves. Elephant Chat was unable to do so.
Elephant Chat was unable to secure any offer from the Sharks. This meant that Jason and Amanda Adams had little choice but to leave the Shark Tank empty-handed.
None of the Sharks believed that Elephant Chat was a viable business idea. This meant that nobody was willing to put an offer on the table.