Katamco Before Shark Tank
The bathroom break is an essential part of life. However, people often take too long and waste so much time procrastinating in the bathroom. 5-minute affairs can become 20-minute affairs thanks to devices such as mobile phones being scrolled during that time. The practice of carrying a newspaper as you go to the toilet has also become more acceptable. The toilet is no longer viewed as a place to answer a call of nature but also to relax and unwind.
However, with this comfort does come the problem of people taking too long which is a problem especially when other people are waiting for the washroom. Katy Stephy had experienced this problem more than enough times when her husband, Adam Stephy was taking too long in the bathroom and she wanted a solution.
Katy and Adam developed the Katamco toilet timer which was a timer that could be used in the bathroom. The timer worked with a sand system like an hourglass and just by placing it the right way up it started its countdown. The Katamco timer business was off to a great start and was a great success. In fact, on some occasions, the business would run out of inventory.
Adam and Stephy needed more funding to expand operations and so reached out to the Shark Tank to see if they could get an investor who could help them grow. The sharks saw potential in the business and invited them to the show to tell them more about the business. Adam and Katy were on the 7th episode of the 12th season.
Katamco on Shark Tank
When Adam Stephy and his wife Katy Stephy went to the Shark Tank, they sought $200,000 for 10% of their company. This gave Katamco a valuation of $2,000,000. Katy Stephy came to the presentation by herself and started it by herself. She was joined by Adam soon enough. His delay showed the sharks the problems people experience waiting for too long for someone who was in the bathroom. Katy then showed the sharks the solutions that Katamco presented.
After the explanation, the sharks were each given a sample to review. Mark Cuban said that It was common for legs to fall asleep as someone was doing it. He also said that for many men that was the only time that they got some privacy. Adam said that it could be a product that men don’t want. Adam said that it would be a product that a man would not want but a woman would look at it and conclude that he needs the product.
Mark Cuban then asked if it was supposed to be a gag gift. Adam said that it was primarily a gag gift but there was a practical side to the device. Kevin then asked them what the practical side of the device was. Adam said that being on the toilet for too long can be bad for a person’s butt and gut health.
Adam then showed the sharks a video of Dr. Bradley Rieders, a gastroenterologist. Dr. Bradley said that he tells his patients to stay in the toilet for more than 3-5 minutes. He said that this will prevent fissures, hemorrhoids, and bleeding. He concluded by saying that lingering in the loo was bad for somebody’s health.
Kevin then said that he was pragmatic and he was a bit skeptical about the idea since they didn’t know much about it and it looked overvalued. Mark Cuban thought that since they didn’t even know what the product sold for so it was too early to dismiss them. Adam then told them that they would provide them with some numbers. Barbara then asked for the numbers.
Adam said that they made $250,000 in sales in the Christmas of 2019. Kevin then asked them what the cost of making the product was and he was told that it was about $3 landed. He was asked how much it cost to sell them and he said that it was sold for $14.99. Barbara didn’t believe the figures and Adam agreed that they were unbelievable.
Kevin then asked them where the product was sold and Adam said that they were primarily sold on Amazon. Adam then said that the product lends itself to incensing very easily. Each shark had been given a covered item and they were asked to uncover them. They uncovered the items and saw that each of them had been given a Katamco timer with their own sticker.
Kevin said that he used to laugh at such novelty items until he got into the potato parsing business and he no longer laughed at them because of the amount of revenue that they could generate. Kevin then asked them how much they expected the custom edition to generate. Adam said that he expected to sell around $250,000 in that year.
Mark Cuban then asked them how they marketed the product and if people were just looking for it on Amazon. Adam said that over the past 2 Christmases, Amazon’s algorithm had picked up that people liked the product. This led to them not having to spend anything on advertising the next year. Daymond then asked Adam what revenue he was expecting that year. Adam said that if he did not get a deal from the sharks he expected to record $1,000,000 in sales that year and that was because that was all the product he expected to buy that year.
Barbara asked Adam why he expected his sales to go from $250,000 to $1,000,000 in that year without any publicity. Adam said that they had already made $318,000 in that year, in the non-customized skew. and $250,000 of that sale was on the Father’s day holiday that had just passed. Kevin said that he could not believe where the sales that he had were coming from.
Adam then said that they could do $3,000,000 in that year. Barbara then asked him if he had said $1,000,000 just a few moments before. Adam said that he had but that was by himself. He then said that his bank was not scaling with him. He then said that he could do $3,000,000 if he could get help with inventory. He then said that once past trends were analyzed, he could see that they should have expected major sales in that year and he wanted to be ready for it.
Adam was asked if he needed $200,000 for inventory and he said that he needed $200,000 for some other stuff and then some more money for inventory. Lori then asked him what other stuff he needed money for. Adam said that he had a production facility in China and he wanted to turn it into a higher-volume production facility.
Barbara thought that he had great margins and she asked him why reinvestment would be a priority for him. Lori then said that she didn’t think that there was anything that they should supply a manufacturer with unless they owned the company themselves. Instead, companies should ramp up their systems to accommodate their demands.
Lori then left and she said that although she thought that it was a great business run by a great group of people however she did not have anything of major benefit to the business. Kevin then left because he thought that they had asked for too much money and he wasn’t willing to make a lower offer. Barbara then told them that they didn’t have a business they had a gimmick and she didn’t think that the business would last for a long time but it would make some money in the short term. For that reason, she left.
Daymond asked Adam how much he had started the company with and Adam said that he had started it with $300. Daymond was impressed with how he had taken the business to earn $1,000,000 annually. However, it did not resonate with him so he was still not going to invest.
Mark Cuban was the only shark left and he offered $200,000 and he asked for 25%. Adam accepted Mark’s offer. Adam was happy to accept the offer and he said that he thought that they would do great business with the product.
Katamco Now in 2023 – The After Shark Tank Update
The Katamco timer got a deal from Mark Cuban and went on to do business as usual. The Katamco toilet timer was sold on Amazon where it got a rating of 4.5 out of 5 from 16,000 reviews. However, the business seems to have run out of steam. When we checked their website we found that it was no longer functional. It also was not available on Amazon.
On Instagram, Katamco had 350 followers and on Facebook, it has over 8,000 followers. However, the last posts were in September of 2022. Has the business run out of steam? Everything seems to indicate that it has. Why would this happen? Well, the first and biggest problem for Katamco was that it was supposed to be a seasonal gift.
The Katamco Toilet Timer had great sales during the Christmas season and on holidays such as Father’s day. However, it did not have as much sales in the months after and this could have led to a long-term decline in performance. Katamco has not listed its profits but the founders had made much more than they had invested before it closed down making it a success even though it is no longer in operation.