This post was written by Jon Reidel, University Communications, and first appeared at uvm.edu.
It has been a whirlwind few weeks since Chas Smith G’15 and his cousin Nikita Salmon, co-owners of maple beverage company SAP!, appeared on ABC’s venture capital/entrepreneur pitch program “Shark Tank” on Jan. 28. Smith, a graduate of the Grossman School of Business’ Sustainable Innovation MBA program, took a break at a local café to talk about his Hollywood experience and answer a few key questions, mainly: is the “Shark Tank” effect real, and does he regret turning down $600,000?
Is the so-called “Shark Tank” effect real?
It’s definitely real. Our online sales right now are insane. We hit over $100,000 in new online sales within 10 days of the show. It has generated a lot interest and gotten people to try it who wondered, “What the hell is this?” They only let us know ten days before it was going to air, so we rushed to rebuild our entire website to make it e-commerce friendly. We had tens of thousands of hits during the show and we were really worried the website was going to crash. Fortunately, we came through the spike well and were able to process a huge amount of orders.
Another upside is that we are learning a lot about consumer behavior and how people make purchasing decisions online. The show re-airs in July, so we’re preparing for another spike.
How did you manage to get on the show?
They actually sent us a message. We thought it was a joke at first because they wrote into our website and it looked like spam, but then they called us up and we said, “Wow, this is real.” Typically, there’s a long application process, and they have casting calls all over the country. I think someone on the show liked our product because an assistant called us and said, “We want you in LA in three weeks.”
It was sort of risky, because did we really want to take the chance of being roasted on national TV? We are a small company and know what we need to improve on. Ultimately, as we thought about it more, we said, “how many opportunities do you get to talk to four million people about your brand?” All press is good press as far as we are concerned.
Speaking of being roasted, what did you think of some of the jokes and harsher comments the judges dished out?
It may have looked harsh a times, but they do that to everybody. You are not going to come out of there unscathed, this is reality TV! It is supposed to be sensationalist.
They joked about us looking like stereotypical Vermonters. One of them said, “you guys look like you are straight out of central casting. Are you sure you aren’t from LA?”
The most infuriating moment actually was when Mark Cuban said, “Oh, this tastes like Aunt Jemima.” Our products taste nothing like that; he was trying to create an association with something and he clearly just didn’t grasp what real maple is. For the Vermont maple community, there is nothing more offensive than saying that, right?
But you take the good with the bad, and this has been a hugely positive experience for us and our company.
It seemed like a quick pretty decision to reject the $600,000 offer and 30 percent stake in SAP! from judge Robert Herjavec. Did you have a pre-set number that you weren’t willing to go below?
Well, that negotiation happened over about 20 minutes. The producers just have to cut it down for the episode. We were actually in the “Tank” for about 90 minutes overall. We came in with the mentality that if the deal is not perfect, we were not going to do it. We’re fortunate to be in a position where we didn’t need a deal. Sure, we could have used the money, but we have a core set of investors who are really supportive and there’s a lot of new interest in the business since we’ve been on the market.
Overall, though, it sounds like the positives of being on the show outweighed the negatives?
People have asked if we thought it helped us or hurt us by going on the show. The answer is that this has been resoundingly positive for us when you look at how many people are now interested in our business and how our sales have spiked. I think being from Vermont you are more grounded in reality. We were like, “yup, our marketing does need some work, and we know that, and we’re figuring it out.”
It’s this really unique moment in time where all of these people from across the country are trying our product for the first time, so we’re developing a new e-commerce strategy behind it. A one-time sale is great, but it’s not the basis of a company. We have the opportunity to cultivate a huge amount of new customers and we intend to do just that.
How did you and Nikita come up with the idea for SAP!?
His side of the family has a deep history in the maple syrup industry. We’re both 28, but come from very different parts of Vermont. I’m from Burlington and he grew up on a farm in Enosburg. He started his own businesses right away and is smart in so many ways that I’m not. He has a very practical mindset and can just solve problems and get things done where I have more of an analytical mindset, so I think that’s why we make such a good team. We’ve been making these types of drinks in our family for a long time. We were experimenting with it for a few years and then got more serious when I came back to Vermont for the SIMBA program, which is really where all of the pieces came together.
Did your Sustainable Innovation MBA experience help you with SAP!?
I learned a lot of the necessary skills in the Sustainable Innovation MBA program, but what really attracted me to the program was its focus on how to create a virtuous business model. If our product can ascend and be really successful, it could be a second outlet for maple sap in the State of Vermont, which could help stabilize maple prices and create prosperity throughout the rural Vermont economy. Secondarily, if birch sap takes off it could be a whole new industry in Vermont where you are making birch trees productive instead of cutting them down. The social aspect of providing healthier products for people to consume is important to us. It’s really about how to create business models that create mutual value.
If you could do the show again, would you do anything differently?
If we could rewind, I would just simplify our pitch more. I think we tried to over explain the products a bit and it got confusing for the Sharks. When you are in the Tank, it gets chaotic very quickly with questions flying in from the Sharks non-stop. You have such a short window of time to control the narrative and get your main points across.
But ultimately, the Shark Tank experience has really forced us to be better in a lot of ways. We had to sit down and say, “OK, this really confirmed some things we already thought and this is the direction we really want to take it.” What didn’t get aired in the episode, but was part of the discussion in the Tank, was a lot of the positive reactions on where we want to take the company in the future with new products. We are fortunate to be off to a great start with our company, and are excited to take the next steps with our business in 2018.