Shed Defender
The Shed Defender is a product from a company in Orange County, CA, that attempts to solve the problem with pets shedding fur all over everything. The product resembles long underwear worn by a dog with a zipper down the dog's chest. It even features four leggings. Additionally, well placed holes allow the animal normal bodily functions without having to remove the garment.
As a side benefit to the humans in not having to collect, clean, or pick up fur, the Shed Defender also turns out to comfort animals like a swaddle would a baby and it reduces the need for cones on animals with allergies or surgical scars.
The product comes in nine different sizes or SKUs with the smallest retailing for $39.99 and the largest, "giant", for $62.99. Landed, the product costs between $6.23 and $11.20 per unit with a claimed 80% profit margin. In the eighteen month lifetime of the product thus far, they have made $1,200,000 in gross sales through their own site, Amazon, and the new wholesaling business.
The entrepreneurs project $2,500,000 in sales in the next year.
They also claim that they pursued a utility patent on the product but gave it up in order to focus on sales instead, in which case no patent would be needed as they'd dominate the market.[1]
This deal aired on Episode 10.02.
Making A Deal
Both Mark and Barbara took issue with the number variations and SKUs the product was offered in though Mark and Robert both made offers at 33% equity.
Lori, however, believed that it should be on TV for its demonstration abilities and undercut both Mark and Robert with an offer of $250,000 at 25%. Despite this representing a bite of $1,500,000 on the original value, the entrepreneurs accepted.
Analysis
The Stats Shark doesn't have much to say about the deal except that the animals in the product looked both cute and ridiculous at the same time. However, the fact that a patent[1] that almost exactly matched the product was found issued over four years ago makes him wonder if the reason the entrepreneurs gave up on the patents claims was because the prior art was too strong to overcome and decided instead to rush the product to market to have as much market share and money to fight any infringement lawsuits as possible.
Despite the fact that the Stats Shark thinks too many patents are issued for stupid, non-inventive things, the fact that one already exists for something very much like the product on offer could open up the entrepreneurs to more liability than they think. The very fact that they even looked into a patent of some sort means that some kind of research into prior art must have taken place.
If the entrepreneurs knew about this patent and rushed their product to market despite their knowledge, this opens them up to willful infringement judgements alongside any lost revenues that might be sued for.
Lori will no doubt have her team do the same research that the Stats Shark can do with the little USPTO search engine and... assuming she does, it will be interesting to follow up with this product and see if the deal actually does go through.
Notes
- ↑ 1.0 1.1 A search of the USPTO website brought up no references under "Shed Defender", however "pet shedding" revealed a patent 8,863,699 received in October 2014 that seemed to match exactly what the entrepreneurs described except that the illustration has the fastener over the pet's back rather than under its belly.