Basic Outfitters Before Shark Tank
Lauren and Michael Dweck decided that they wanted to start their own business after having a relatable experience. When they began their new married life together, Laura decided that her new husband’s old, ratty undies and socks needed to go. He was having trouble finding new basics without breaking the bank. The two decided to combine her fashion experience and his business acumen to form Basic Outfitters. They ended up making some regrettable decisions along the way. Would the Sharks still decide to invest? Let’s take a look.
Basic Outfitters on Shark Tank
Michael and Laura Dweck walked out onto the stage holding hands. They faced the Sharks and introduced themselves. Both of them were wearing Basic Outfitters T-shirts. Michael announced that they were from New York City and that they had founded their business together. He asked the Sharks for an investment of $125,000 in exchange for 10% of their company. Laura asked the Sharks if they knew that men kept their underwear for an average of 7 years. She told him to let that “stink” in for a second. Robert looked outraged. Michael admitted that he was a victim of the statistic.
Laura said that she was the true victim of that statistic. She told the sharks that when they 1st got married, she decided to put her foot down and not put up with that anymore. Her new husband’s underwear, socks, and undershirts were faded and were filled with many holes. She said that she did what needs to be done and demonstrated by taking all the offending clothing out of a dresser on stage with tongs and throwing it into a hazardous-waste bucket. This got a few mixed laughs from the Sharks.
Michael said that his primary issue with her actions was that he couldn’t find new clothing items without spending an entire paycheck to refill his dresser drawers. They decide to create the solution together. Michael said that Basic Outfitters was the online solution for men to find high-quality basic garments at affordable prices. He’s said that you could choose up to 10 pairs of socks, 3 pairs of underwear, 3 pairs of undershirts, and a pair of jogger sweatpants offer $60. Laura said that that was usually the point where people jaws dropped to the floor. Men were now able to get up to 17 basics for $60. They finish their presentation by asking the Sharks who want to invest in their business and get rid of that disgusting statistic.
Laura said that they had some amazing drawers to hand out to the sharks. Apparently, they would customize each one. Michael told Mark that his garments were in Maverick colors. Robert said that he was a little bit blown away by the price point. Michael confirmed that it was up to 17 items for $60, which indicated that you might have to choose quality over quantity. Robert wants to know if he had to buy an annual subscription, but Jason said that it was not a subscription model.
Lori attempted to outline what she thought the business model was. She said that you would go online, and see which pack fits you. She said that the sock that she was holding was the softest most amazing is she’s ever felt her entire life. Daymond agreed, stating that his stuff was also very good quality. Lori stated that it felt like cashmere. Daymond wants to know how they could afford to sell it at that price. Laura told the Sharks that they did market research to figure out what the sweet spot price would be to lend customers. They were relentless in finding the $60 price point and they worked with a buying agency which found Basic Outfitters the factories.
Daymond admitted that he was one of the men who had not shopped for underwear since Elvis did the comeback concert in Hawaii. He did say that he was in stores all the time that had underwear for sale, so he didn’t understand why if he didn’t buy it then he would then go home to purchase it online. Michael said that was a good question, and said that the idea had come from when he and Laura 1st got married. She challenged him to get rid of anything he had not worn in 3 months. He wanted a quick and easy way to refill his drawers but wasn’t finding what he needed in department stores. The department stores were also too expensive for his tastes.
Kevin said that he was currently wearing a pair of underwear from Switzerland that cost $99. He claimed that it was handstitched by Italian virgins. Everyone laughed and looked uncomfortable. Robert said that he learned that the selling point was great, but he still didn’t know their cost. Laura said that cost him on average $25.90 to make a drawer. Kevin asked him what they were projecting that their sales would be for the year, and Jason said that they were looking at about $500,000.
Mark Cuban asked them what they had done in the last 12 months versus the year to date. Michael let him know that they launch the company 10 months ago, and they’ve done $351,000 in sales. Robert seemed impressed. Kevin wants to know how much inventory they would end with after this year’s projection. He wanted the number in dollar amounts. Laura told them that they still had $397,000 in inventory. They went big for their initial buy. Michael explained that they invested $250,000 of their own savings into their business. Mark asked how much they raised in addition to that.
Michael told the Sharks that they raised $750,000 in capital. They had outside investors who love the idea of Basic Outfitters. He continued, stating that they were able to get a million-dollar valuation based on the concept alone. Lori asked how much equity they had, while Robert wondered where all the cash went. Laura said that they had 25% equity in their own business. Mark asked if they already gave away 75% of their business already, and Laura confirmed that they did. Mark groaned and lay back in his seat. None of the Sharks looked impressed at this point.
Robert asked incredulously if they had already sold 75% of their business in order to just get started. Laura explained that when they started Basic Outfitters, there is a huge potential based on the market research that they did. She claimed that she knew that there is a pocket of opportunity that they could capitalize on. They want to build something big. At this point, all of the Sharks had their hands over their mouths, or their heads lowered. Mark claimed that market research was never right. Jason said that it was spot on with what their hypothesis was, but Mark wanted to know why they spend that much on inventory and give away all of their company if they knew it was right. They could have just taken their time to get to where they wanted to be.
Michael said that they wanted to build the company and be sitting with the inventory. Mark asked why they wanted to be sitting on all that inventory, and Michael said that they want to be prepared for the demand. Laura cut in, stating that they knew that they made a mistake by purchasing too much inventory. Kevin told them that they had been screwed by their own venture capitalists. Mark said that it wasn’t that they got screwed so much as they screwed themselves. He said that the vision and the product were good, but the execution was ridiculous. Laura said that they were looking to get into the long haul. They were in the Shark Tank because they wanted to build Basic Outfitters to be the next big empire. Mark told them it was too late because they already blew it. He went out, stating that they were the worst they’d ever seen on Shark Tank at capital management.
Mark said he wasn’t mad at them, he was just feeling bad for them because they created this great opportunity and let it go to waste. Michael stated that he was there to make them a bunch of money, but Mark asserted that they were unable to with how much they gave away. Michael kept trying to argue the point, but the Sharks were having none of it. Robert said that it was a great business and a great idea, but they had made a mistake that was going to kill the business. He said that when you give away 75% of the company, you’re already dead. Robert said that they no longer owned the business at 25%. The Sharks weren’t talking to the owner, they were talking to the hired help. Robert also went out.
Daymond told them that he loved the product, and thought it was amazing. He said that when he 1st saw it, he thought he could integrate it with a company that he already bought. Daymond said that they didn’t have enough equity in the company. He told them that it actually hurt him because he wasn’t going to be able to invest in it. He went out.
Kevin was up next, and he stated that he looked at the problem in a different way. He said that it didn’t make sense to take any of their equity. Kevin made them an offer for the hundred and $25,000, but he wanted all of the equity to come from them. He was asking for 25%. Robert attempted to say that they didn’t have the authority to make that deal, but Michael let them know that he and Laura were here on the investor’s behalf. Lori said that she was excited because she loved to copy Mr. wonderful. She made them the exact same deal. Laura asked if either of them would come down to 15%. She said that they were here to negotiate for them, and they value them as investors. Kevin interrupted her and said that he realized that he was negotiating with someone who wasn’t in the room. He stated that they simply didn’t own enough, and he was out.
Lori said that she would be willing to come down to 20% equity. She urged the 2 entrepreneurs to really think about whether or not the investors would even consider it. Michael said that they could do that deal, but it Lori asked if they had to check with their investors first. Michael said that he was 100% positive that they would agree with it, but Laura wasn’t so sure. She asked Lori to bring down the equity a little bit more. Lori apologized and said the whole thing seemed really tenuous. She said that she had to go out. Laura told her that they really want to make a deal with her, and Kevin told Laura that she needed 51% in order to make that deal. They walked out of the Shark Tank looking disappointed. In their interview after being in the tank, Michael stated that they had 25% of the company that was going to be huge. Let’s see if he was right.
Basic Outfitters in 2018 – The After Shark Tank Update
Despite not getting an investment from the Sharks, Basic Outfitters looks to still be going strong. They still are only offering men’s basics, but they did tell heavy.com that they were looking at offering a drawer for women as well. Recently they have expanded their shipping area to include Canada. They made it into People magazine, and Lauren and Michael were featured on the Forbes 30 under 30. Visit their website by clicking here.