“Shark Tank” judges harsh to printing app entrepreneurs, Flag

Photo printing apps have has a mixed result on ABC’s “Shark Tank”, the show where entrepreneurs pitch well-known venture capitalists known as “sharks”. Over eight seasons, the “sharks” have seen dozens of pitches and made selective investments.

In 2014, the app GrooveBook not only secured a $150,000 investment from Kevin O’Leary and Mark Cuban, the business was soon acquired for $14.5 million by Shutterfly. At the time, the acquisition was seen as a victory for the show, because few “Shark Tank” alums get acquired.

In April, execs from another photo printing app, Flag, approached the sharks with the intent of raising $375,000, in exchange for a 5-percent investment. According to Crunchbase, the company raised $160,000 on Kickstarter  in 2014, then a $1 million seed round in October, 2015.

A Kickstarter video that tries to hard

For an idea of the Flag service offering, check out this cringeworthy pitch video here.

Yes, it’s a “free” printing service, paid for by advertising on the back of prints. This has been tried a few times in the past, but Flag does put a nice spin on it with laser-cut borders, extra-thick premium paper and a non-standard print size-and-shape option. That doesn’t mean the company isn’t without its challenges, as described well at this article on DIY Photography.

So, did the sharks salute the Flag concept? Not at all. What was interesting was not only did the sharks decline to invest, they tore into company representatives Savannah Cowley, CMO, and Samuel Agboola, CEO. Granted, part of the appeal of the program is to watch entrepreneurs squirm under the intense scrutiny by the sharks. It’s a TV show created for maximum drama, not a real VC pitch.

In their criticism, however, the sharks did bring up some good points worth highlighting here:

• O’Leary pointed out the lack of proprietary technology leaves the company vulnerable to competitors. He also blasted them for the lack of metrics: I feel like I have to come over and spank you with a ruler because you are on the cusp of the darkness, the abyss, the evil of going to freaking zero with a bullet.”
• Cuban expressed frustration the Flag execs were not more forthcoming with their financials, including the fact they had already raised $1.6 million, with a planned raise up to $3 million (of which the $375,000 was going to be a part). “You didn’t think you should tell us that?” he barked.
• After Agboola admitted Flag was going to pursue a freemium model to shore up flagging advertising revenues, billionaire guest shark Chris Sacca lost his patience: “I don’t usually invest in businesses that are doing old school ads with a really weak business model in crowded markets with a five-alarm cash burn … And this time is no different. I am out.”

The key takeaway is founders looking for investment need to be candid and upfront with potential investors, especially savvy entrepeneurs who will see holes in a  prospectus from miles away.