Hammer & Nails Before Shark Tank
Life for young Michael Elliot was hard. The former ward of the state was only twenty and had been homeless in Philadelphia for almost two years. He had no formal education, no family and no support. Instead of letting the circumstances that led to his difficult life drag him down, the young man used his considerable determination and intelligence to make his life a success. He tried his hand at rapping and putting on Hip-Hop concerts, without great success in either area, until in 1988 he produced Krush Rap Magazine. Writing and designing the magazine himself, he aimed it at hardcore fans of the Hip-Hop genre, the first issue sold out but after only four issues cash flow problems signalled the demise of the magazine.
Michael’s appetite for Hip-Hop related media productions had not been satisfied by his brief stint as a magazine producer and he next sought out investors to help him launch a TV show based on the same format as the magazine. He managed to turn $250 savings into $6,000. On a budget that would last mere weeks he managed to keep the Krush Rap TV show on Channel 57 for thirteen weeks, paying the channel just to air the show. By the end of that period he had generated enough interest in the format to sign a sponsorship deal with Coca-Cola and a contract with Channel 17, who would be paying him for the show instead of expecting payment just to air it.
Michael’s enthusiasm and knowledge of the Hip-Hop genre impressed those involved in the scene both locally and nationally, It wasn’t long before the show was syndicated to major cities including Los Angeles, Chicago, Atlanta and Washington. Before long he was sought by the ground breaking and influential Hip-Hop magazine ‘Source’ where he became the director of special projects. Ten years later, Michael was burned out on Hip-Hop and wanted to write screenplays for Hollywood. Never one to doubt his own abilities, Michael moved to California, bought a book on screen-writing and started writing scripts. Thirteen months later he sold his first script to 20th Century Fox and in 2002 his work became the award winning film ‘Brown Sugar’. Further scripts were sold and by the time of his appearance on Shark Tank, Michael’s scripts were responsible for films that had generated over $118 million in box offices.
Michael took a completely different road in his next creative enterprise. An uncomfortable experience during a manicure and an idea stemming from it led him to open a nail salon with a difference, it was targeted towards men rather than women. Only months after conceiving of the concept, he opened his first Hammer & Nails salon in Los Angeles in November 2013. After six months operating the business he applied to appear on Shark Tank, primarily to interest one of the sharks in helping him to franchise the business nationally, and was accepted.
Hammer & Nails on Shark Tank
When the enigmatic Michael Elliot first appeared in front of the sharks in September 2014 he was seeking a $200,000 investment in return for 20% equity in his Hammer & Nails business.
Michael began his pitch by explaining that there are millions of men who go for manicures and pedicures, but they go for them reluctantly. It wasn’t the service that was making all the guys so uncomfortable, it was the salons themselves. Because they were designed to appeal to women primarily, men would instinctively feel out of place in them and not enjoy the service they were paying for as much as they should.
For that reason, Michael had created Hammer & Nails, the Nail Shop for Guys. The customers could relax in a more man friendly environment, the oversized leather chairs and low lighting made men feel right at home there. They could also enjoy watching premium programming on their own personal 32 inch screen while their nails were seen to.
He finished off his pitch by describing Hammer & Nails as ‘Man Cave Nirvana’ and shared his dream of opening Hammer & Nail stores across the country, putting the ‘Man’ back into Manicure.
It was a good solid pitch and Michael, who had a persuasive and charismatic manner of speaking, certainly made it sound like a great experience. He invited Robert Herjavec down to sample one of the oversized leather chairs while Mark Cuban complained ‘I wanted to give it a try’. Robert almost jumped out of his seat before Mark could complain further, he commented how comfortable the seat was while a Manicurist gave his nails a quick buff.
Lori Greiner asked Michael how he had originally come up with the idea. He explained that it had been his own appointment at a salon to get a pedicure that had finally given him the idea, he had felt like a fish out of water and began to ask his well-groomed male friends if they ever felt the same. He was surprised at how many of them had never even had a pedicure or manicure before, often because they felt so uncomfortable at the idea of being in a saloon, there was a general consensus amongst his male friends that the whole salon experience was unmanly.
Coming to the realization that there was considerable interest in a nail salon aimed towards men, Michael had opened up the first Hammer & Nails salon seven months previously. During that period he had achieved a turnover of $150,000 and he projected that custom to the end of the financial year would bring the total figure up to a quarter of a million dollars for the first year of business.
Lori Greiner asked Michael what prices he charged for the services at Hammer & Nails, he replied that prices could range anywhere from $23, all the way up to $125.
Daymond inquired if there were other complementary services that he offered in addition to nail treatments. Michael confirmed that there were none and he had no plans to offer any in the future. He was trying to keep the business as far away from the beauty end of the market as it was aimed exclusively towards women.
Lori asked what background experience Michael had. He told the sharks his inspirational and surprising rags to riches story, from his troubled childhood, through his involvement in the Hip-Hop scene, and on to his success with scriptwriting before opening the first Hammer & Nails in 2013.
All the sharks enjoyed hearing his story of triumph over adversity and clearly admired the determination and belief that had enabled him to turn his life around. Daymond had heard of Michael from his time at Source magazine and admitted that he considered him a legend.
With his personal history and achievements fully detailed, Michael outlined his future plans for the company. He wanted to franchise Hammer & Nails and he talked about his belief that it could be the ‘Starbucks of nails for guys’.
Kevin O’Leary, as always, wanted to get down to the numbers, he harangued Michael slightly about franchises not working on belief and tried to pin him down to actual figures of profits for Hammer & Nails. Michael answered, somewhat less confidently than his usual tone, that he believed he would break even that financial year
‘Why wouldn’t you just keep the business for yourself?’ Mark Cuban wanted to know.
Michael started to explain that he believed the business would be worth more by selling franchises, but Mark disagreed and interrupted him. He thought that Michael’s strategy to franchise the business was ‘Putting the cart before the horse’ and Michael would end up trying to convince franchisees to purchase the business rather than waiting until it was successful enough that he would have them running to him, and willing to pay whatever he asked for a licence. It was a fairly stinging assessment of Michael’s business plan and left him looking slightly flustered for a moment, Mark wasted no further time and dropped out of the negotiations.
Lori spoke next, she liked the idea and thought it was clever, but she had no idea as to how popular it would be amongst men. Unable to judge if the business would make her money back if she made an investment, she was also dropping out.
Perhaps the five minutes in the oversized leather chair and the quick buff of his nails had softened Robert Herjavec up a little, he started on a more optimistic note. He thought it was a great idea and was wondering why there were not more nail salons for men but Michael’s response to Mark Cuban hadn’t impressed him. He explained to Michael that any question along the lines of ‘Why don’t you just do it on your own?’ only had one answer that made any business sense, and that was ‘because I need the capital’. Robert thanked Michael for the Manicure, but he was out too.
Kevin O’Leary estimated that Michael was at least two and a half years from being able to convince anyone to sign for a franchise license. He complimented Michael on how well he sold his vision but as always with Kevin, it all came down to the numbers. ‘The numbers rule’ he intoned before telling Michael that he didn’t believe in the concept. He dropped out too leaving Daymond as the only remaining shark.
Daymond John is the walking definition of well-groomed, it came as no surprise that he had regularly visited a similar business in New York, the renown John Allen’s, a premier Men’s Grooming Club. He described how that business had other complementary services such as tailoring and a bar. Those additional services would be harder to duplicate in a franchise driven business. For that reason Daymond dropped out too leaving Michael without an offer from the sharks.
Hammer & Nails Now in 2018 – The after Shark Tank Update
Hammer & Nails is still operating, the business has expanded in some ways since the show aired but not in all the ways that Michael would have liked. There are additional services offered to customers, as Daymond John suggested. Haircuts and old fashioned straight razor shaves are available to the clients now. Michael hasn’t installed a bar there yet but he is offering complementary beverages to customers, and he’s also still offering franchises.
Michael’s undoing in the shark tank centered mainly on his answer to Mark Cuban regarding franchises. His poor explanation of his motives for wanting to go down the franchise route with his company put the other sharks off of the idea of investing with him, but he still seems to be keen on pursuing that eventuality.
He recently employed Mike Watorski, who has over twenty years experience in franchise set-ups, as his Director of Franchise Development. He has also appointed John Leonesio as the CEO of Hammer & Nails. Leonesio is the founder of The Q Sports Club and has a proven track record in the health Spa market and the development of franchises in that area. The Hammer & Nails website proudly declares that there are other Hammer & Nails locations around the World in the pipeline, but for now, there is still just the original location in Melrose Avenue, Los Angeles.
Only time will tell if Michael’s proven track record of success will continue in his Hammer & Nails venture or whether the sharks were right to avoid a deal. Whatever the eventual result, Michael Elliot is a man with incredible determination and belief in himself. Those qualities have turned his life around and nailed him success in Hollywood, perhaps nails will prove to be his next big success even if the sharks hammered the idea.