Before Shark Tank – ReadeREST and Rick Hopper
While Rick Hopper didn’t get a pre-show segment on Shark Tank, he filled in the gaps in an August 2015 interview with Startup Dallas. Like many other entrepreneurs, he had humble beginnings. Rick tells stories of annual trips to replace the previous year’s worn out pair of sneakers, working with his hands, and never getting a college degree. However, his creative spirit was greater than his hardship. From a young age, he constructed monoliths with Lincoln Logs and ERECTOR sets. Carrying this into adulthood, he began working in window paneling and spent his time-off building furniture for his young family. After a window business’ rocky end in the late 2000s, ReadeREST was Rick’s second attempt to take his creativity to market.
Blessed with perfect vision for most of his life, as he got older, Rick didn’t like dealing with the hassle of reading glasses. His solution was the first iteration of ReadeREST, a glasses holder combining a bent paper clip and a few magnets. The product worked perfectly for what it was: he never lost or dropped his glasses again. They even stayed secure when he took a fall on an electric skateboard and broke his shoulder. His little invention slowly became a real product and business. Friends began asking where they could buy the ReadeREST, and Rick took this as his opportunity. He traveled across the west coast and attended trade shows to find his market. The paper clip became stainless steel. The piece of scrap metal used as a back piece became a powerful neodymium magnet. Rick was still making them by hand when his friends begged him to look into Shark Tank. It took nine months of pleading before he decided to take the plunge.
During Shark Tank
Rick stumbled into the Shark Tank – literally. He took a fall on the edge of the carpet. What Kevin O’Leary called “bad theatre,” Rick called showmanship. Not to be defeated, he hopped onto his feet and launched his pitch. Rick was seeking one hundred fifty thousand dollars in exchange for fifteen percent of his company, a one million dollar valuation. According to Rick, ReadeREST solves problems for the everyday consumer, like dropping glasses in the toilet, stretching out collars, and ugly “granny chains.” He didn’t intend to sell it until some friends expressed interest, after which he sold sixty-five thousand dollars of product in test markets. Unfortunately, he ran out of inventory and needed an investment from the sharks to take ReadeREST into mass production.
Saving arguments about the valuation for later, the sharks asked if he had a patent, followed by some brief confusion. Although Rick did develop the ReadeREST around 2007, his patent search turned up an independent invention of a similar product in 2002. Luckily, it had never taken off, and the original patent holder was willing to sell it for five thousand dollars. With this patent and the trademark on ReadeREST, the sharks seemed content on intellectual property concerns. Along with sales, having a proprietary and differentiated product is one of the keys to success in the tank.
As he is known to do, Daymond put Rick on the spot. Instead of focusing on his high potential sales that were prevented by the production bottleneck, he compared Rick’s valuation of ReadeREST to the cost of the patent itself. One million against five thousand. “Do you see anything wrong with that?” Rick countered with the idea that high volume of distribution on store shelves would mean six million dollars a year in profits, a real money maker for any shark willing to bite. In short, he wanted a strategic partner. To Daymond, this was too much risk. He balked at the combination of an optimistic valuation, the work involved, and the networking headaches. “So now you want us to give you the money, work, and then pass off our connections.” Rick was left stammering, and Daymond was out.
Lori took things in another direction. She’s been around the block as a businesswoman with her own show on the home shopping network QVC, and she didn’t see Rick as a natural salesman. “I create things. I’ve been designing little things since I was thirteen years-old,” he agrees. “So you really need someone who will come in and take over and make this work for you.” She made Rick an offer, although not the one he was hoping for. In exchange for her one hundred fifty thousand, she needed sixty-five percent of his company. To keep Daymond on board, Rick had offered greater equity, so he was willing to budge, but giving up a controlling interest in the company was hard for him to stomach. Still, what if she was just the partner he was looking for? They both agreed that TV was a better place for the product than store shelves.
Without offers on the table from Mark, Kevin, or Robert, Lori was his only lead, but he attempted to counter at forty-nine percent equity. She immediately declined. Since no other sharks had expressed interest, he lacked negotiating power. “I’m a little gun-shy in giving up total controlling interest in the company without a complete buyout option, with royalties…” he offered. The sharks were dumbfounded at his sudden development of business skills and jokingly speculated that they were being hustled. Now that an offer was on the table, Robert spoke up. “At best, I saw this as a knick-knack that was sold as gas stations.” Unable to see the value that Lori did, he bowed out. Kevin also made a swift exit, calling a million dollar valuation for “a little piece of metal” insanity. Mark claimed that he was “processing” the deal, but Lori wouldn’t give him a chance, threatening to take her deal off the table if Rick waited for another offer. Tensions rose as Mark tried to jump in, claiming his own TV networks made him an asset.
As usual, Mark concealed his intentions until the end to see how the deal would play out. He said he would help Rick, but when everyone expected an offer, Mark backed out, saying there were better options. Lori was truly his last chance. Rick launched into another round of “Would you consider?” with the only shark remaining, grasping for a few more points of equity, but to no avail. “Take it or leave it.” At his breaking point, Rick did admit that even thirty-five percent of what could be a ten million dollar company is exciting. After some provocation from all of the sharks, with a grimace, Rick finally accepted the deal.
While Rick left the tank, everyone took stock. Mostly, they marveled at the ability of one person to take “a piece of metal with two magnets” and net such a large investment. Rick also seemed happy with the deal, saying “When Lori looked right into my eyes and said ‘I’m going to make you a millionaire,’ I believed her!” Although he wanted to keep more than thirty-five percent of the company, it seemed like a win. Still, it’s striking how the smallest negotiating tactics in the tank can make a difference of millions. Looking primarily for a controlling interest in the company, Lori would have been very likely to accept a counter-offer of sixty, fifty-five, or even fifty-one percent equity in the company, but by trying to low-ball her offer, Rick locked himself out of further negotiations. It’s regrettable, but it’s been established that he’s not a salesman. At least, now he can spend his time doing what he loves, building and inventing.
After Shark Tank: ReadeREST in 2016
Several episodes after ReadeREST’s original feature, the Shark Tank team was able to follow-up with Rick Hopper about his business. The update finds him behind the scenes of Lori’s QVC show, Clever and Unique Creations, where she’s ready to make her first pitch of the product. At the end of Rick’s Shark Tank episode, she had mentioned selling twenty million dollars in reading glasses on TV to date, so by bundling the ReadeREST with glasses, the product should practically sell itself. Her promise to make Rick a rich man looks like reality when he sells out of his first production run of five thousand units almost immediately. Needless to say, Rick is excited to see where things go from here.
In fact, he’s stayed as active as any other entrepreneur who’s taken a deal on Shark Tank. Seven years after the investment, his website is still up and running, with products ranging from ten to fifty dollars. Along with the original designs, he’s come up with pink ReadeREST clips for breast cancer awareness and a design resembling a pair of sunglasses. There’s also been a re-branding effort to focus attention on the ReadeREST trademark. As Rick says in his Startup Dallas interview “All roads lead to ReadeREST.” In early development, Rick referred to the specific product as “SpecSecure,” but over time, he has started to simply call it ReadeREST or the BodyRack. His product was so popular for holding glasses that he decided to begin marketing it as a cord management tool, an earbud holder, and even a pen clip. Searching for the website of any of these products redirects to the main ReadeREST website.
Despite his TV and online sales, as well as Lori’s concerns that his product would die on store shelves, he has had remarkable success with traditional retail distribution. As of August 2015, the product can be found in twenty-five hundred Walmart Vision Centers, as well as Bed, Bath, and Beyond, Staples, Ace Hardware, and a variety of other smaller locations. It looks like Rick’s dream of ReadeREST appearing in five thousand stores worldwide has come true. From his August interview, Rick clearly sees success as stemming from a mixture of business sense and luck. He’s posted blog content to his website that shows his intentions to pass along this success and expressed interest in writing a book about his experiences.
The most impressive thing about Rick is his simultaneous ability to think big and keep himself in check. Countless entrepreneurs have approached the sharks with overambitious ideas like perpetual motion machines and full immersion virtual reality devices. One by one, they’ve been turned down, but Rick Hopper, with a piece of stainless steel and two magnets, has succeeded. ReadeREST has an attractive simplicity, but from the beginning, he recognized its potential and took every chance to grow the business as much as possible. Someday, his plans for a buyout by a large commercial producer of eye wear may materialize, and he’ll move on to his next invention. Until then, between Rick Hopper and Lori Greiner, ReadeREST is in good hands. Here’s to many more years of ReadeREST keeping our glasses out of the toilet.http://gazettereview.com/