Tie Try Before Shark Tank
Tie Try founders David Powers and Scott Tindle were friends and attorneys who had the smart idea a launching Tie Try, a Netflix style service, but for neck-ties rather than movies. Customers would be able to sign up with a monthly subscription, select a tie based on their own preferences in terms of style, pattern and width and then receive their requested item in the post just a few days later.
The entrepreneurs launched the Tie Try business in 2011, and slowly began picking up monthly subscribers. Without spending anything on marketing, or paying to advertise their new business, the duo eventually managed to build up over one hundred regular monthly subscribers, but in order to expand the Tie Try business model they required a healthy injection of funds in order to increase their available inventory. Seeking further investment David and Scott applied for Shark Tank and were given the chance to pitch to the Sharks in November 2012.
Tie Try On Shark Tank
When David and Scott entered the tank they were immaculately dressed, just as you would expect them to be, but would the Sharks find Tie Try to be an equally smart investment? David announced that they were hoping to attain a $100,000 investment and a new shark partner in exchange for a 25% equity stake in the Tie Try business.
David began the pitch by describing Tie Try as ‘Netflix for Ties’, which drew a wry smile from Mark Cuban. David explained that due to their profession, he and Scott wore a lot of ties, but they usually ended up just wearing the same few ties over and over again. Scott took over and told the Sharks that many other work colleagues had exactly the same habits when it came to ties, they wanted to be more versatile and have a greater selection of ties to choose from, but simply buying a new tie every day was never really an option. With high quality ties costing up to $100 each the cost of such a habit would soon become prohibitive, and that had given the pair the idea to launch the Tie Try business.
David revealed that customers could choose from an unlimited amount of ties, and get them delivered directly to their home a few days later. For just one monthly fee customers could repeat this process as many times as they liked, to ensure they were always wearing something different. For the price of just a couple of cups of coffee customers could wear hundreds of dollars worth of quality neck ties every month.
With that the pitch was over, there was only so much to say about the Tie Try business, it was a simple enough concept to understand, but Kevin O’Leary was looking concerned. He remarked that he had never heard of Tie Try before and asked how much it was costing the business to acquire new customers. David told him that so far nothing had been spent on advertising at all, new customers had been gained through free media promotion, but primarily through word of mouth advertising.
Robert Herjavec seemed surprised at how basic that strategy was, he asked how many subscribers the Tie Try business had currently. Scott told him that at the present time the business had 110 customers signed up, but he explained that the company had only been formed six months previously, and before he and his business partner invested a large amount of their own funds into the business they had used the first half year of business as a proof of concept in order to be sure that the business model really worked, now that they believed they had achieved a successful business model, they were ready to take on more investment and grow the Tie Try business.
David and Scott had performed well in the tank so far, but the Sharks were looking cautious. The low number of subscribers to the Tie Try business was one area of concern for them, but Kevin O’Leary still couldn’t grasp the concept entirely. He told the entrepreneurs that he spent ‘thousands’ on ties every year, and he wore a different one every day. At this point Barbara pointed out that Kevin’s ties all appeared to be black, and the sharks broke into a quick round of laughter.
It’s true that Kevin O’Leary is rarely seen without a tie, but it is also true that at least 50% of the time he appears to be wearing a black one, but despite that evident truth and Barbara’s comment Kevin insisted that he always looked ‘Spectacular’, and he asked the Tie Try business where the value in such a service was for someone like him.
It was perhaps an unfair question to be posing, few of Tie Try’s target demographic were likely to be millionaire businessmen like Kevin O’Leary, but David dealt with the inquiry smoothly. He explained that for a monthly subscription of just $15.99 a customer would be able to wear up to ten different ties a month, if they were quick to send them back after wearing them for one day. As most of the ties retailed for between $80 and $90, then a customer would be able to wear ties worth over $700 dollars for that $15.99 monthly subscription.
Barbar Corcoran believed that her fellow sharks would commonly spend over $300 on their ties, suggesting that perhaps the ties available from the Tie Try service may not be high enough quality to satisfy many potential customers. Robert Herjavec agreed, ‘$300 or more’ he remarked, but Mark Cuban, who is rarely seen wearing a tie laughed ‘Not me’. David attempted a joke, remarking that Tie Try had a ‘Mark Cuban’ plan, where customers would only receive one tie a year for when they were invited to the White House. Mark Cuban didn’t laugh.
Robert Herjavec wanted to know the strategy for growing the Tie Try business, he asked how the company would gain more subscribers. Scott explained that they envisaged a referral program, where existing customers would receive a reward for referring new customers to the business. David and Scott clearly saw this as a fail safe way to grow revenue but Robert Herjavec seemed surprised that there was no other element to the strategy, it seemed a small-scale solution and the other sharks looked equally as doubtful.
Daymond John was perhaps the most suitable shark for Tie Try to partner with. The FUBU boss was always stylishly dressed and frequently wore a tie, he had been silent throughout the pitch but he now asked if David and Scott planned to offer other mens accessories alongside the ties. David revealed that they planned to also offer many other items such as cuff links, watches and even sunglasses, if they were able to make a deal in the tank and fund the additional inventory. Scott added that the beauty of Tie Try was not only that customers could simply send a tie back if they didn’t like it, there was also no commitment to subscribing, customers could simply cancel if they didn’t feel like continuing to use the service.
Mark Cuban believed that the no commitment element of the service presented a big challenge to the business, he brought up the issue of Churn. Churn is the name given to the rate of attrition of a business, or simply put the number of customers who are lost within a certain time period. Mark believed that with only about six months experience of running the Tie Try business, the churn rate could not be accurately calculated. David revealed that so far the company had enjoyed an 85% renewal rate from it’s subscribers, but Mark Cuban was looking at the glass as being half-empty, ‘So that’s a 15% churn rate’ he remarked, and Robert Herjavec pointed out that the business only had 110 subscribers in the first place.
Mark Cuban put forward a hypothesis, he suggested that even if Tie Try could attract 1,000 subscribers, with a 15% churn rate it would only take seven months before they would all be gone, and once again Scott and David would have to replace them. Free press advertisements and word of mouth promotion was not going to be enough to keep the numbers up.
Robert Herjavec had heard enough, he thought the business model behind Tie Try was fundamentally sound, but he also thought that the concept needed more testing, and more time to refine and perfect it. With only 110 subscribers he believed that the pair had come into the tank too early and for that reason he was dropping out of the negotiations.
Things were not looking too positive for Scott and David in the Tank, but Kevin O’Leary surprised everyone by announcing that he liked them and he had an offer to make. Kevin would supply half of the requested $100,000 investment but only on the condition that another shark could be persuaded to join him in the deal.
Scott asked Robert Herjavec if he would consider partnering with Kevin, but Robert confirmed he was definitely out. Barbara Corcoran thought the Tie Try business had potential, and advised the entrepreneurs to concentrate on younger customers, believing that they would be the ideal demographic for the business, but with only 110 subscribers she believed that the concept wasn’t fully tested yet, and she was out too.
Kevin seemed to be enjoying the tension, ‘So close and yet so far’ he remarked. Scott turned to Daymond John next and began talking about market share and the advantage of being first to offer a service, but Daymond John had other concerns. He told Scott and David that he had not heard them speak once about fashion, he believed that the pair lacked the passion that he was looking for and he told them they were clearly not as ‘obsessed’ about their business as the sharks would be, and for that reason he was also dropping out.
Robert Herjavec cheerfully pointed out that there was only one other ‘non-tie wearing’ Shark left to join Kevin in his offer, and the Tie Try pair looked over to Mark Cuban. David made a last ditch effort to salvage a deal by asserting that he and Scott could make the business work, but Mark Cuban brushed the pep-talk aside, he asked what the cost of customer acquisition would be. Scott admitted that due to having only been in business for six months there wasn’t ‘mounds’ of data available, but when pushed he revealed that through the referral program customer acquisition costs would be approximately $12, about the cost of one months subscription, but Mark was unimpressed. He told the Tie Try entrepreneurs that they were guessing those figures and had not thought their customer attainment strategy through fully, and due to that he was out too.
Kevin O’Leary seemed to be enjoying himself, ‘I was the only one who believed in you, but now you’re dead to me’ he intoned, and even though he was dressed in his customary black suit and tie, it was Scott and David who were left to mourn their failure to pick up a deal in the tank.
Tie Try Now in 2023 – The After Shark Tank Update
The sharks saw potential in the business model and were intrigued by the idea of an economical solution for men to vary their tie collections. While the founders received an investment deal, however, the Tie Try business did not sail smoothly post Shark Tank.
Once the hype of their TV appearance subsided, the company faced the harsh realities of retail business. The rental model, although innovative, wasn’t as sustainable or scalable as initially thought. Operational challenges, such as managing inventory, ensuring product quality and cleanliness, and handling shipping logistics, began to take their toll.
Moreover, they had to grapple with growing competition in the fashion rental space. New entrants with deeper pockets and larger inventories threatened to overshadow the niche that Tie Try had carved out. These factors began to strain the young startup’s resources and operations.
Later in 2013, Tie Try was sold to another company called FreshNeck. This move was seen as an attempt to consolidate resources and position themselves more strongly against competitors. As of 2023, FreshNeck is still in business.
The story of Tie Try serves as a lesson to many budding entrepreneurs. While securing investment from high-profile investors like those on Shark Tank can provide an initial boost, it is not a guarantee of long-term success. The business fundamentals must be strong and sustainable, and the operational aspects of running a business should not be underestimated.
So, in conclusion, while the Tie Try journey had its share of ups and downs post Shark Tank, its innovative concept has left an indelible mark on the fashion rental industry. It’s a reminder that even though not all businesses may reach the heights they aspire to, they can certainly pave the way for new ideas and possibilities in entrepreneurship.