Somnifix is a product by a company from McClaine, VA, that wants to solve the problem of snoring. To do this, they have created a new type of nose strip that goes over the nose holes that features little filters. Then, to force the sleeper into breathing through their nose, they also include a piece of tape that should seal the mouth shut. Don't think about waking up for a glass of water in the middle of the night! That said, the entrepreneurs claim that the lip tape can be breathed through in case of emergency but that the wearers mouth can't be wide open. Also, they can't wear lip balm at night.
The adhesive on the lip tape is said to be gentle though, it is not like tearing off a bandage. Supposedly, the tape will relent as soon as someone works to open their jaw.
The entrepreneur states that Somnifix has done clinical studies with the Harvard Medical School and that it reduces snoring, on average, by 72%. He then goes on to say that snoring can lead to other issues such as sleep apnea.
A box of 28 strips (and lip tapes, one assumes) costs $5.60 to produce and is landed for $8.60. This box then retails for $15.49. As the entrepreneur states, this is just under a 50% margin. So far, the Somnifix has been on sale for nine months and has seen $350,000 since then and year to date.
The biggest competitor to Somnifix is the Breathe Right strip, says the entrepreneur. But the difference between the two products is that the Breathe Right opens the nose and doesn't keep the lips closed.
Making A Deal
Daymond drops out of the deal first, stating that he thinks he'd probably use the product a couple of times but then never again. Barbara, like Daymond, has problems with the product. In her case, she says that she was moved to a different room because of her snoring and is now worried that, if this actually works her husband might want to have her back. Because of this, she's out.
Lori drops out because she seems unsure of how it would be marketed, stating that she's unsure of what the general reception to the product would be.
Mr. Wonderful questions the value placed on the company by the amount being asked. The entrepreneur states that Somnifix has regulatory clearance in the United States, Canada, the European Union and Australia. Additionally, with the clinical trials the company has invested in, he feels as though he's taken the risk out of the deal. But, in the end, this doesn't persuade Kevin and he goes out stating that he doesn't see how it would fit into his portfolio and that he can't see how he would bring any value to it.
Mark's big question is whether the company has a "sports" version of their product. The entrepreneur states that they're working on an adhesive that will withstand liquid better. Mark then says that the company's marketing "sucks" but that if the founder is willing to make changes, he's willing to offer the asked for $500,000 in exchange for 20% equity. The entrepreneur says that he wants a $3,000,000 valuation and that Mark's will leave him with just $2,500,000 but Mark doesn't seem too concerned. In the end, the entrepreneur comes around and agrees to Mark's terms and a value solidly bitten in half.
- While having actual clinical studies done is impressive, stating that snoring leads to sleep apnea is misleading. Snoring is often caused by sleep apnea but, in total, snoring and sleep apnea is more of a correlation-not-causation kind of problem. It would have been nice for one of the more science oriented sharks to catch this...
- When someone says "IP protection" this almost always means filing lawsuits against competitors and knock-offs.