Seven years ago, Tavis Malcolm and his wife went on a family camping trip and couldn’t find a sleeping bag suitable for their newborn son.
Instead, they layered pajamas, a snowsuit and a swaddle blanket to keep baby Morrison warm. It was an ‘aha’ moment for Malcolm, a New Mexico-native and former Eagle Scout who came from a family of business owners, he said on Friday’s episode of ABC’s “Shark Tank.”
In June 2018, Malcolm quit his marketing job. Six months later, he launched Morrison Outdoors, which sells sleeping bags for babies and toddlers, as well as a selection of products for adults. On the show, he asked the panel of investor judges for $300,000 in exchange for 10% equity in his business, which he and his wife launched in his garage.
“I told my wife, ‘Listen, I think that this could be something serious. I want to quit my job, I want to take our savings — which at the time was like $3,000 — and I want to commit myself to launching this product,’” Malcolm said.
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Between the company’s launch and the episode’s September 2024 filming, Morrison Outdoors generated $4.3 million in sales, said Malcolm. “Year-to-date this year, we’re at $850,000 [in revenue] and we’re looking at about $1.1 million [in projected 2024 revenue],” he added.
The company was barely profitable in 2023 due to Malcolm’s overconfidence with marketing, he explained: “I said, I’m going to blow out marketing on every channel at once. I’m going to go to these trade shows, I’m going to hire these people … I spent away our whole margin.”
His overspending was a valuable learning lesson for any business owner, said Mark Cuban.
“That is the best lesson to everybody watching. When you chase topline growth, you’re going to have to chase your profit margins because they’re leaving too,” Cuban said. “When your bottom line goes up, not only can you control your own destiny, but you can reinvest in your business and it makes you more attractive to investors like us.”
“So far, we’ve spent less than $15,000 on marketing this year to generate that $850,000 in sales,” Malcolm responded, adding that Morrison Outdoors was on track to end 2024 profitable. (The company didn’t immediately respond to CNBC Make It’s request for updated 2024 figures.)
The investors said they liked Malcolm’s dedication to his business, and appreciated Morrison Outdoors’ wide-ranging target audience — with some products meant for kids, and others meant for adults. Kevin O’Leary and Lori Greiner both said they liked the company’s adult sleeping bag, called the Mega Mo, which comes with pockets, sleeves and a bottom zipper to enable walking while wearing it.
“Mega Mo is a bigger market,” Kevin O’Leary said. “This would work.” “That’s so fabulous,” Lori Greiner added.
O’Leary, who “sleeps with a mint on my pillow every night,” said he wasn’t outdoorsy enough to make an offer. Greiner and Robert Herjavec also bowed out, leaving only Cuban and Barbara Corcoran — who partnered up to offer a total of $300,000 for a combined 20% equity stake in Morrison Outdoors. Malcolm quickly accepted their offer.
The deal fell apart after the show’s taping, Malcolm told KOAT Action 7 News on Friday.
“There’s a lot more that goes into an investment than just what you see on TV,” he said. “After the show aired, we worked with the Sharks, we did our due diligence for months and in the end. The deal didn’t go through, which was unfortunate, but we’re still incredibly grateful for this opportunity.”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
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