The Bouqs Company Before Shark Tank
Entrepreneur John Tabis, the brains behind The Bouqs Company, started the business in 2013, after he spotted a surprising problem with other large online flower suppliers.
Most other companies would purchase flowers through a middle-man, and the added extra step in the sales process resulted in longer delivery times, less fresh flowers and more wastage for the business. John had the idea of partnering flower farms in Ecuador himself, and using them to send bouquets of flowers directly to the recipients, without the time consuming intervention of a third party.
There were other added benefits to the strategy, flowers could be cut early to ensure they arrived in the peak of freshness, and bouquets could be completely customized to the customers wishes. Added to that, the business could charge a flat rate for orders, regardless of which flowers were ordered.
Initially business went well, and John managed to find a profitable niche amongst the big names in the field, and was helped along by Valentines Day, Mothers Day, and his on average four day delivery time, compared to his competitors delivery schedule of 10-14 days.
By May of 2014, within a year of opening the business, John was reporting sales in excess of half a million dollars. But in order for the company to expand its services and sales, and enlarge all of the businesses operations, it required an injection of capital to fund the growth. To that end John applied for, and was accepted, onto Shark Tank.
The Bouqs Company on Shark Tank
When John came to the Shark Tank, in May 2014, he was looking for an investment of $258,000 in exchange for just 3% equity in his business. When he announced his intended deal, Robert Herjavec laughed at the valuation, his fellow sharks were also unlikely to be too impressed with such a huge company valuation, but they were silent for now, somewhat ominously.
John was prepared to win over two of the sharks there and then, and presented Lori Greiner and Barbara Corcoran with bouquets as he explained the unique benefits of his business.
Barbara commented ‘Well you know how to win me over’, but Kevin O’Leary, perhaps unhappy at not receiving flowers of his own, asked her if the flowers were real.
John explained about the partnership with the flower farms, and told the sharks about the farm in Ecuador, located on the side of a volcano, it was sustainable and ecologically friendly. He also detailed his pricing service, and the flat $40 fee for a bouquet that made the complicated pricing for other flower outlets seem confusing in comparison. Lastly, he explained about The Bouqs Company concierge service, that could arrange a years worth of deliveries in advance, all at a discount to customers.
Barbara asked if the bouquet she had received was a standard $40 bouquet, and John revealed that in fact it was a $50 bouquet. The entrepreneur had mentioned a flat $40 fee for all the bouquets during his pitch and Barbara queried the higher price. John explained that the $40 bouquet could be doubled in size for only an additional $10, it could also be tripled for just an extra $20.
‘That’s the best angle, and you didn’t even mention it’ observed Mark Cuban, and the other sharks agreed.
Mark asked how the business operated. John explained that all sales operations were run online, the business had been in operation for only eleven months at the time of filming, yet sales had been an impressive $700,000, and that was with almost no marketing budget. Mark wanted to know exactly how big the marketing budget had been and John admitted the business had so far spent about $70,000 on promotion. Mark Cuban seemed impressed, as did the other sharks, but the huge company valuation was still damping the chances of a deal being struck.
Lori inquired about profit margins, John revealed that profits were at approximately 50% across all products. Barbara wanted to know what delivery time the business offered, and finally the sharks found something besides the valuation not to like.
John admitted that the delivery times for bouquets, although only 4 days in the early days of the company, had increased to 6 days as the business had grown. That news was greeted with a chorus of disapproving noises from the sharks. Robert Herjavec pointed out that many men would only remember about their wives birthdays the night before, a six day wait for delivery was no use to them.
John had an answer for that, in three weeks time the company was due to go into partnership with some California based farms, and would be able to offer overnight shipping, at least in California, for an extra charge.
Barbara inquired what the extra charge would be, John told her it was $10. Barbara remarked that John was ‘changing his business model’ but the entrepreneur disagreed. He revealed some more details about the advantages of his flowers, they would be cut on order, treated with a special solution to maximize their lifespan, and because of those factors, would always be fresher than flowers that had been stocked in a storage facility for a few days, before being sold.
Kevin O’Leary had heard enough talking about flowers, he wanted to get down to what really mattered, the valuation. He clarified that John was valuing the business at $8.6 million and was likely to achieve sales of $800,000 that year. John agreed the valuation was correct but claimed that year end sales would total $1.2 million. Kevin speculated that the business would make approximately $250,000 in profits before tax, and John agreed. Kevin still couldn’t see how the business was worth such a huge valuation, he asked how the figure had been calculated.
John detailed the huge growth of the business in the months since it had been operating. He revealed that the $700,000 in sales had been made with only $13,000 in initial investment. Mark Cuban asked if any other investment had been sought by the company, and John admitted that the business had attracted $1.1 million in seed funding investment earlier that year.
For Mark Cuban, that was all he needed to hear, he told John that the presence of other investors was a huge problem for him, the Texan billionaire didn’t like to be ‘one of many’ or ‘dumb money’, and with that he dropped out of the negotiations.
Kevin O’Leary, somewhat unsurprisingly for regular followers of the Shark Tank, was unable to get over his objections to the size of the valuation. Mark Cuban remarked to Kevin ‘The business is growing’, but Mr Wonderful was unimpressed by its growth, ‘It’s a flower company’ he replied, in a manner that suggested his interest was wilting fast.
Lori Greiner didn’t see the unique strategy of the business being unique for long, if it was profitable. She believed that any of the big flower companies could copy the strategy if they chose to. Lori believed that The Bouqs Company had lost any edge it once had, and she was out too.
Robert was unimpressed with the high valuation, and thought the 3% equity offered was virtually irrelevant, particularly with other investors involved, and he quickly joined Lori in dropping out.
Barbara had a different problem, she hated the company name, it was ‘hard to spell and hard to remember’, and with little further explanation, she was out too.
With only Kevin O’Leary left, John must have known by now he would be leaving the tank without a deal, and Kevin didn’t leave him waiting much longer. He complimented John’s marketing abilities but told him that ‘You died in the tank today’. He finished off by asserting that he would have sent flowers to John’s grave, but if he had done so, they wouldn’t have arrived in time.
The Bouqs Company Now in 2018 – The After Shark Tank Update
Immediately after his appearance John had a comeback for Kevin, he pointed out that The Bouqs company had an overnight shipping service available in California, so the flowers would show up to his grave on time, but of course, by then it was far too late, he was already long dead to the Sharks.
Despite the lack of a shark partner, business for The Bouqs Company seems to be blooming rather nicely, and John and his team have undoubtably put a lot of effort into ensuring that growth continues. For a business that has operated entirely online during its lifespan, it’s no surprise that the business keeps its social media pages and website fully up to date and easy to use, and the amount of content they create to promote the business is quite impressive.
Over a two day period, I’ve yet to see more than four hours between Twitter or Facebook posts. I requested more information on sales from the company and received a response within five minutes. Although initially there were a few unhappy customers, either disappointed at a delay in receiving their bouquet, or unhappy at the freshness of the flowers themselves, it appears that the Bouqs Company has streamlined their delivery process, and along with it, their customer service procedure.
There are still a few complaints about late deliveries, or less than perfectly fresh deliveries, as will inevitably happen with a limited life product that is shipped from a foreign country, but the business is clearly turning those problems into a display of the excellent customer service they provide. Several customers have been so impressed by the response they have received from the company, that they have taken to social media to praise the commitment to good service.
The company website itself was over hauled not long after the Shark Tank appearance, and the buying process was streamlined to make it easier for customers to order online. John found the added interest in his brand was enough for him to be able to attract another group of investors later in 2014, and he has plans to expand further into floral farms in the United States in the future
There may be another form of recognition awaiting the company, one that could make the free publicity gained on Shark Tank seem like a drop in the ocean. The Bouqs Company have recently signed a development agreement with Trium Entertainment, the media company behind unscripted TV programming such as Masterchef and The Biggest Loser. Trium hope to be able to make the story of the business into a reality TV show, following the progress of the flower farms in Ecuador, and the travels of John and his business partners, as they search the World for the best products available.
Whether of not we finally get to see John and The Bouqs Company in their own show remains to be seen, but even without that form of recognition, John Tabis can rest assured that, just like the bouquets he provides to satisfied customers, his business is blooming, and now in 2018, is about as fresh as it will ever be.