No Mo-Stache Before Shark Tank
Jennifer Paschall and Gita Vasseghi, from Los Angeles, California, came to the Shark Tank to pitch their discreet and easy hair removal product, No Mo-Stache. Both of them were already involved in the hyper-competitive beauty industry, Jennifer is the owner of The Beauty Strip waxing salon located in North Hollywood, while Gita is a fashion executive.
The potential market for beauty products is a huge one, but it’s also one of the most competitive sectors. The beauty industry generates sales in excess of $60 billion annually, with 20% of that figure spent on skin care products. The beauty sector is particularly resilient to the recession, with consumers continuing to buy products during periods of economic downturn. Customers also display a stronger than average brand loyalty to products that they’re familiar and comfortable with, but the competition is intense.
New beauty products have to compete with hundreds of products with exactly the same purpose, and with beauty franchises typically making 15% of their profits from the sales of products that they stock, any new product needs to either be exceptional in what it can achieve, or have an advantage that makes it stand out from the crowd.
Being connected to an influential business mogul would be a great advantage for any new beauty product, and to have a shark partner involved with Mo-Stache would be a huge advantage for Jennifer and Gita. Since launching No Mo-Stache in 2012 they had sold 100,000 No Mo-Stache kits, and wanted not only a shark partner but also an injection of funds to help them develop more hair-removal products for the No-Mo brand.
No Mo-Stache On Shark Tank
Jennifer and Gita entered the tank and announced to the sharks that they were looking for a $100,000 investment in exchange for a 25% stake in their No Mo-Stache business. The pitch began with an assertion that their hair removal strips could revolutionize beauty routines for busy moms, and professional women with not enough time to visit a beauty salon for a few hours. The mess-free cold wax strips revolutionized beauty routines and offered a quick and easy alternative to traditional waxing with no risk of burning.
All the user had to do was rub the packet of wax in their hands for a few moments to heat it up, tear the strip apart and apply it to the face. The entrepreneurs had a model to demonstrate quite how quick and easy the whole process was, and although she didn’t exactly have a mustache to remove in the first place, it was a simple process that took mere seconds.
Jennifer explained what made No Mo-Stache stand out from all those other hair-removal kits out there, it was the only product of that type that came in a small discreet tin, so women could be prepared for unexpected hair at any time. Gita finished up the pitch by telling the sharks that with No Mo-Stache, women would have ‘No Mo Worries’.
No Mo-Stache was obviously a product designed solely for women, and with only Lori Greiner and guest shark Bethenny Frankel in the tank to really appreciate the message, there were bound to be some questions from the male sharks that completely missed the point. Mark Cuban was quick to ask ‘Why don’t you just shave?’, and as Mark has been married since 2002, it’s safe to assume he was joking, but just in case he wasn’t, Skinnygirl CEO Bethenny explained that shaving would only stimulate more growth. Robert Herjavec was more sincere, but still unfamiliar with the whole World of female hair removal’.
‘Excuse my ignorance’, he began, before asking if there were really that many women with mustaches. Jennifer quickly asserted that ‘Everybody’, meaning every woman, had to deal with top lip hair removal at some stage, and Bethenny was equally quick to confirm that this was true. Bethenny may have been the guest shark in the tank, but she was clearly more familiar with this line of product. She asked Jennifer what was the difference between No Mo-Stache and a Sally Hanson strip, which gave Robert the opportunity to further increase his understanding of female waxing products, as he learned that Sally Hanson strips were beauty products that didn’t have the advantage of being small and discreet, unlike the small tin that No Mo-Stache strips came in. ‘Discretion is the concept here’ explained Bethenny.
Kevin O’Leary may have the least amount of hair on his head of all the sharks, but he did have a far more pertinent question. ‘What’s proprietary about this?’ he asked, holding up the packet of wax. ‘It’s the only portable waxing kit on the market’ explained Jennifer. Next Kevin asked if the product was patented, but it wasn’t. Kevin was unimpressed, ‘So what are you bringing here?’ he wanted to know. Jennifer explained that she had 14 years experience running a waxing salon, ‘And that’s worth $100,000?’ asked Kevin, but Mark Cuban by now was getting the idea and interrupted Kevin to ask about the numbers.
Gita revealed that the cost to make each kit was $1.74 landed and that the business had achieved $400,000 in sales over the last two years. That impressed the sharks, and Kevin asked what the sales for the current year would be. Jennifer told him that sales of $300,000 were projected for the next twelve months. Lori inquired what the No Mo-Stache retailed for, and $18 was the answer. It was a healthy profit margin, and the sales were equally strong, But Bethenny still thought the product was a ‘Gimmick’. ‘A $400,000 gimmick’ remarked Robert.
Mark Cuban asked where No Mo-Stache was currently being sold, but the answer revealed problems with the popularity of the product. Gita told the sharks that No Mo-Stache was being sold in the chain of premium personal care shops, Sephora, which has 200 stores in the United States. That was achieved after No Mo-Stache had been featured in the Women’s interest magazine Real Simple, but when Lori asked if No Mo-Stache was in every Sephora store, Jennifer admitted it was only stocked in 60. When asked why it wasn’t in the rest of the Sephora locations, Jennifer admitted it had been, and Lori asked ‘So they removed it because it wasn’t selling well?’.
Jennifer insisted that No Mo-Stache had been removed because Sephora wanted to make room for new trends. Lori wasn’t convinced by that argument, asserting that Sephora would never have removed No Mo-Stache from any stores if the product had been selling well. Kevin told the entrepreneurs that it was hard to defend losing 140 stores. He saw No Mo-Stache as a new marketing ploy on an old product and asked about distribution in the future. Gita replied that since Sephora had taken the product out from some stores, they had concentrated on attracting new distributors, not putting ‘All their eggs in the Sephora basket’, and in September 2017 they were due to begin supplying five more distributors.
In the meantime Bethenny had been conducting her own test of the product, using one of the wax strips on Mark Cuban’s arm, and the results were impressive. She confirmed the product worked well and left no sticky residue. Even though Kevin had been tough with the entrepreneurs, he surprised them slightly by coming up with an offer at that point, and it was a typical Mr. Wonderful deal.
Kevin offered the $100,000 investment, in exchange for only 10% of the business, but there was a catch in the form of a royalty. Kevin wanted $1 per kit sold until $300,000 had been re-paid. Lori told Gita and Jennifer that it was a great offer, and Mark Cuban agreed.
Bethenny had an offer too, but it was very different. She would supply the $100,000, but in exchange for 40% of the business. However, she offered a future for the business too. She wanted to create a product line with No Mo-Stache as part of her Skinnygirl brand, to include other products in a ‘Girl’s kit’, those busy women could take everywhere with them. She told the entrepreneurs that their gimmick product faced huge competition, it had already lost space in stores, and it would soon be ‘Out of the water’. Jennifer and Gita were nodding their heads and smiling, the girl’s kit concept was clearly exactly the strategy they had in mind for the future of the company, but would giving away 40% of the business, and losing their brand, be too much?
Robert and Mark Cuban both suggested that Jennifer and Gita didn’t want to just have a share of a Skinnygirl product, they wanted their own brand, but once again the male sharks were out of their depth with this product, and Lori spoke up to defend the idea. Lori admitted that No Mo-Stache was in a hyper-competitive sector of the market, and she knew No Mo-Stache would sell well on QVC. Bethenny quickly offered to share a deal with her, and between them, they began discussing wedding trips and strapless dresses at speed. The discussion was getting further away from Kevin’s offer by the second, and his repeated assertions that the 40% offer was a ‘Savage’ deal was falling on deaf ears.
Bethenny was envisaging a whole kit of No Mo items, called ‘No Mo Everything’, and Jennifer and Gita were clearly on board. Kevin was looking frustrated at losing the deal, but Jennifer confirmed that Lori and Bethenny shared the vision. She made a counter-offer, suggesting that the two sharks share a 35% stake between them
Kevin wasn’t giving up, he offered to drop his proposed royalty to 75 cents per unit, and when Jennifer continued to look for a deal with Lori and Bethenny, he dropped it again to just 50 cents, stressing again that he only wanted 10% of the business. Jennifer, however, looked at Lori, waiting for an answer to the counteroffer. She also suggested that a royalty could be included to repay the investment.
Lori offered the $100,000 investment, in exchange for 35%, with a $1 royalty per unit until the loan was repaid. Kevin by now was fuming, ‘My deal is way better’ he insisted, but the No Mo-Stache entrepreneurs showed him no more interest than Lori did. Gita had another counter-offer for Lori and Bethenny, she suggested a 25% stake for the $100,000 investment, with $200,000 to be repaid by a $1 royalty per unit. ‘I’ll take that deal’ piped up Kevin quickly, but to his obvious frustration, Gita and Jennifer had effectively sidelined him by now.
‘No’ Lori piped up, ‘We’ll take that deal’ she said, ‘And no mo negotiating’, and with that the ladies from No Mo-Stache celebrated with their new shark partners, while Kevin sat in silent fury.
No Mo-Stache Now in 2018 – The After Shark Tank Update
Immediately after striking a deal, Jennifer and Gita admitted they wanted a strong woman as a shark partner, and they had just picked up two of them in one deal. Kevin wasn’t congratulating Bethenny on her new partnership, instead, he criticised her lack of creativity when structuring deals. ‘Learn, Grasshopper, Learn’, he intoned bitterly, but Bethenny was more than a match for Mr. Wonderful, ‘I’ll wax your back as a thank you’ she replied.
After the deal had been struck, but before the No Mo-Stache segment aired, Jennifer and Gita went ahead with a new distribution deal with Anthropologie. No Mo-Stache is now also being sold in Harvey Nichols and Virgin Megastore, and helped by the influence of Lori Greiner and Bethenny Frankel, Jennifer and Gita managed to get No Mo products on sale at the beauty store chain Ultra in Spring 2018. They are currently in negotiations to get No Mo-Stache sold with the retail giant CVS nationwide, sometime later this year.
The No Mo kit that Bethany saw as the future of the company has begun to take shape now in mid-2018 too, with a bikini wax kit, ‘No Mo Bush’ being sold on the company website. That retails for $22, and the No Mo-Stache kit has now reduced in price from $16 to $18, presumably on the advice of the sharks in order to keep the product competitively priced. Just recently the company has launched the No Mo-Unibrow eyebrow removing wax strip, which goes to show that the potential products that can be squeezed out of one good idea are numerous.
Gita and Jennifer see the future of the company, and the beauty industry as a whole, as becoming more focused on do-it-yourself products that produce quick and easy results, and although they left Kevin O’Leary out in the cold on the potential riches for No Mo-Stache in the future, at least he got the offer of a free back wax from Bethenny Frankel.