Sleepingbaby Before Shark Tank
Brett and Stephanie Parker from Fort Worth, Texas, were overjoyed at the birth of their daughter Charlotte, but as often happens, the young baby began to suffer from regular sleepless nights. That meant Mom and Dad began to lose out on vital rest as well.
Out of desperation Stephanie had created her own design of swaddle suit and it soon had little Charlotte sleeping soundly. The very first night they tried it, she slept for twelve hours, and so did her exhausted and relieved parents. They knew that their invention could help many other tired and frustrated new parents so they launched their company, Sleepingbaby, and began to produce their own swaddling baby-suit that they called the Zipadee-Zip.
Things were progressing steadily in their small home-run business and the young couple wanted another child. Stephanie fell pregnant soon afterwards but after suffering pains she sought medical treatment and tragically lost her baby. It shocked her when doctors informed her that if she had stayed quiet about the pains for another twenty four hours she would have died too. Traumatized by her harrowing ordeal, both physically and mentally, she desperately asked her customers for time to recover before she could continue with business as usual.
Stephanie and Brett were surprised and reassured by the amazing flood of responses that arrived in return, from hundreds of women who had suffered the same nightmare. The uplifting result to Stephanie’s appeal for patience had given her the support she needed to heal. Life moved on for the couple and soon afterwards she fell pregnant again. This time there were no complications and they had a son, Maverick.
Family life passed happily in the Parker household and they continued to sell Zipadee-Zips online, but in time, the young couple wanted to expand their business, and not just because of the profits it would make. Their aim was to share the experience of peacefully sleeping babies with the millions of tired parents out there. To further that ambition they ended up on the Shark Tank in September 2014, hoping the sharks would share their vision of how special the Sleepingbaby business was.
Sleepingbaby on Shark Tank
Their opportunity to do so came when they appeared on the first show of season six of Shark Tank. The smiling and friendly Parkers introduced themselves to the sharks and announced that they were seeking $200,000 for a 10% stake in their business.
They began their pitch by describing the problems with sleepless nights they had experienced with Charlotte when she was first born, and explained how Stephanie had researched the problem and designed a swaddle suit for their daughter that enabled her to sleep peacefully through the night. The couple had brought along a film that demonstrated their son Maverick being startled slightly while wearing one of the Zipadee-Zip swaddles, and being lulled right back to sleep by the effect it had.
Kevin O’Leary got right down to the numbers ‘How many of these little straight-jackets have you sold?’ he wanted to know. Brett told him they had sold about 25,000 units so far.
When Robert Herjavec asked what the retail cost was, Stephanie informed him they sold for between $35 to $40.
Lori Greiner asked how long the company had been in business and Brett confirmed that they had been trading for two and a half years, in that time the business had achieved sales of just over a million dollars.
Robert wanted to know where the sales had been made and Brett explained that all of the sales so far had been made through the website.
‘Good for you’ Daymond John remarked, clearly impressed.
Lori wanted to know how they had spread awareness of their product line to customers.
Stephanie explained that they had done no marketing at all, instead they had spread the word about their products through forums and sites where mothers got together to chat and discuss baby related subjects. They had originally been looking to only make a small amount of money per month, just enough for Stephanie to be able to run the business from home while looking after Charlotte.
Brett took over and gave the sharks the impressive story of how they had started with just $700. After spending $500 of their capital on a website and the remaining $200 on fabrics they had gone into business. Within hours they had over $200 of orders and shut the website off, unprepared for any more.
Brett joked that when it had happened Stephanie had asked him what they were going to do, he had replied ‘You’d better learn to start sewing’.
Robert Herjavec asked for more information about the technology behind the Zipadee-Zip and Stephanie explained about the Moro reflex, which is present in young children under five months old. If a child can spread their arms out without resistance they experience the feeling that they are falling, due to the Moro reflex. When it is triggered in a baby, it will always cause them to wake up and cry. Stephanie designed and produced her own style of swaddle that was able to restrict a baby’s arms enough to stop the reflex but still give them enough freedom to move about comfortably and safely.
Kevin asked if he were to supply the $200,000 investment would they be able to quadruple their production, ‘Immediately’ Stephanie responded.
‘Do you know which products you would produce more of?’ he wanted to know.
Stephanie explained that she had a system whereby customers and the community of people she had built around the business could vote on new and upcoming designs. This way she had plenty of information about which designs and products would be the most popular amongst her customer base.
Lori thought the business was a good investment and made the Parkers an offer. She would supply the requested $200,000 but she wanted 25% of the company. Lori liked the proof of concept but she knew that the business would require a lot of commitment from her in order to help it grow.
Kevin O’Leary asked if the couple had plans to take the product into retail stores or if they preferred to keep sales based around an internet community. Brett admitted that they did not have an answer at that time, the success of their business had been as much of a surprise to them as to anyone, the forward planning of business strategies had not taken place yet.
Daymond had some words on the subject, he told Brett and Stephanie that they needed to have a strategy about where future sales would take place. He personally would always want to take a product to retail but he admitted that it wasn’t necessarily the right thing to do for the business. A million dollars in sales online so far, with ‘no hassle’ and low costs was an admirable achievement in his mind.
Kevin, always a man with a surprising tale, explained that his grandfather had started a business called Kiddies Togs when his family first moved to North America. The family business had produced similar garments for babies and had eventually been wiped out by cheaper production costs in Asia. He knew that retailers could be ‘difficult beasts to manage’ as he phrased it and he didn’t want to see the business ‘die in retail’. He thought the online community that the business had following it was a big achievement and one that could not be over valued. He made an offer too, the requested $200,000 in exchange for 20% of the business.
Mark Cuban and Lori both exchanged some banter with Kevin, expressing surprise that he had offered a deal not involving royalties in perpetuity as was his usual style.
Kevin re-iterated his heartfelt conviction and belief in the business, it was his family business and he believed the Parkers had worked it out in a modern age, he was full of praise for their achievements to date and was putting his money behind his belief in them.
Daymond put a third offer on the table at this point, he matched Kevin’s offer of $200,00 in exchange for 20% of the company. Kevin asked if he would be putting the SleepingBaby product line into retail stores. Daymond confirmed he would be trying it initially to see how things went. If it didn’t work out, the business could continue selling online as it had done previously.
The Parkers were looking a bit more relaxed by now, knowing that several of the sharks shared their optimism for the business, they thanked them and asked if Mark wished to add another offer.
Mark Cuban explained that he was impressed with the product, he was impressed with the personal tragedy that they had overcome and he was impressed with the million dollars in sales they had achieved, all with only a $700 initial investment. He described them as ‘The American dream’ and wished them all the best for the future, but he wasn’t going to make an offer, he was out.
Robert Herjavec was going to let this opportunity slide too, he wasn’t an expert in the area and he acknowledged Kevin’s interest and expertise was greater than his own. Robert wasn’t going to get involved in the face of greater interest from the other sharks and he was out too.
Stephanie and Brett now had three offers to consider. Brett spoke firstly to Daymond, he knew that the shark had the manufacturing facilities that the company needed and admitted that he and Stephanie would like to go into business with him, but the percentage that was being asked for was just too high, would Daymond consider the same $200,000 investment for only 15% of the business?
Daymond thought long and hard, at one point exclaiming ‘Why did you have to ask that’, almost to himself. He explained that he would normally ask for 33% of a business, there would be a lot of work involved for him if he partnered with the Parkers and he was sorry, but he was sticking to 20%.
Brett and Stephanie exchanged a look and came to a mutual decision without speaking, they accepted Daymond’s offer and they all exchanged hugs as the tension drained away. Kevin O’Leary, who had seen his offer rejected, along with his opportunity to re-ignite his interest in the old O’Leary family business, wasn’t quite as happy, but he accepted the result graciously.
Sleepingbaby Now in 2018 – The After Shark Tank Update
Brett and Stephanie admitted after the show that they had wanted to make a deal with Daymond before filming due to his experience in the field, and his ability to launch their product into retail so effectively. They were over-joyed at striking a deal with him even if the equity he would receive for his investment was higher than they had planned.
Although deals are struck on Shark Tank while filming, they have to be agreed in negotiations afterwards, and sometimes the negotiations hit additional problems. In this case the Parkers ended up not taking investment from Daymond and went it alone, although Daymond was gracious after they backed away from a deal with him. He was happy to act as a mentor to them, regularly advising them on business decisions even without an investment in the company.
Sales are still exclusively through their professionally designed and attractive website, that is plastered with countless pictures of happy babies, and in an interview in August 2015 the couple revealed sales of over $4 million so far that year.
They have opened their own warehouse in Fort Worth, Texas and have become involved in charitable causes in recent months. They recently raised money for medical costs for the desperately ill baby of one of their customers, giving back to the community that helped them through their own time of need. The Parkers can sleep easy at night, knowing that they have made a successful business and created a strong supportive environment to help other tired parents of new-born babies.