Coco Taps is a company from Long Beach, CA, that ostensibly makes a tool to easily drink the milk straight from a coconut. The tool makes the milk easy to access but the product also comes with a resealable tap that can be added to the coconut so the liquid can last for up to three months in a refrigerator.
The entrepreneur says the product is manufactured in the United States and claims to have patented the toolset. All sales of the tool and tap are sold organically through Amazon.
In addition to selling the tool and tap, Coco Taps also makes and sells a pre-tapped coconut drink direct to hotels like those in Las Vegas. Though it remained unknown exactly how many hotels Coco Taps deals with, the entrepreneur claim that he does daily deliveries to hotels in Las Vegas, dropping off 5-10 cases of product per hotel. Each case sells for $45 to the hotel and costs $27 to produce.
The entrepreneurs claim to have made $250,000 in gross sales in their first year of business (2016) and "almost double" the following year. 20% of all current sales are for the kit and 80% are for the actual beverages that are delivered.
Before the pitch was over, however, the entrepreneur attempted to slip in a third business which was the franchising of the distribution arm.
Because there was too much on offer and not enough demand proven for any of it, the sharks declined to come to any arrangement and the entrepreneur walked away without a deal.
This deal aired on Episode 9.12.
Every once in a while, there's a deal that just feels like deja vu. In this case, the Stats Shark was almost certain he'd heard this pitch before. But, lo, he was actually thinking about Coco Jack from way back in episode 6.20. Unlike Coco Taps, Coco Jack actually got a deal from Mark Cuban. Probably because that deal was for just one thing.
In the case of Coco Taps, the Stats Shark had to watch the deal twice in order to understand what the business was. At first it seemed like they had created an easy to use tool and spout system for drinking coconut milk but then it morphed into a service company providing coconuts to Vegas hotels. Then there was suddenly a third business being pitches as well!
Companies can, obviously, do more than one thing. But startups should not. No food company should come into the tank pitching their amazing frozen raviolis and then pivot to how their distribution models aims to revolutionize the ravioli distribution business. Are they a ravioli maker or a distributor? If an entrepreneur can't clearly describe what their core business is then they shouldn't expect an investor to.
- The USPTO has a registered patent for "Tool to pierce and split a coconut" - Patent No. 7,959,967