Shark Tank US | Pluto Pillow Company Get An Offer!

[Music] first into the tank is a customized version of a bedtime essential [Music] hi sharks i'm susannah i'm kevin and we're seeking four hundred thousand dollars for a five percent equity stake in our company pluto pillow now i know what you're all thinking another pillow company well yes but thankfully here at pluto we do things differently see finding the perfect pillow can be so amazing but finding the right pillow for you can also be super hard here's how it usually goes while shopping online you're faced with an overwhelming number of options that can be hard to compare with one another and with tens of thousands of search results how do you know which would work best for you in stores is it better to squeeze pillows with your hands or should you awkwardly place your head on the dirty display pillows the answer is both suck well with pluto there's a better way pluto is a custom pillow company that custom builds pulls to you based on your body stats how you sleep and what you like here's how it works simply visit our website fill out a quick questionnaire tell us about your current pillow what you like what you didn't like about it then answer a few questions about your personal preferences then all of your data runs through our algorithm helping us create the perfect pillow for you our modular design allows us to create over 35 possible variations through our innovative process the best part while there are a ton of pillows out there nobody else does this even better our customers love us so sharks before you hit snooze which one of you will join us in helping everyone get a good night's sleep all right sharks um right in front of you in those really cool boxes are your very own custom pluto pillows now we have to do some research to figure out what we should craft for you we think these make great starting out points so mark word around the league is that you prefer fill pillows over foam pillows and you like your pillows to be really soft so we made sure to craft that squishy squishy squishy i like my pillow squishy daniel we heard how important it is for your sleep products to be hypoallergenic the good news is all of our pillows are we crafted a pillow for you that's both light and soft mr wonderful we heard that you prefer fill pillows over foam pillows so we've made one for you that's just that but one that never flattens laurie you tend to heat up at night and you like more of a medium firmness level and lastly robert lucky you you're exactly the same as mr wonderful folder that you love thick plushy filled pillows yours is a quilted cover while kevin's is a smooth so sharks enjoy your out of this world pluto pillow suzanna i have a question i always assumed that there was actually a better pillar for everyone are you saying that that's not the case that really truly there is no scientific best for everybody there isn't so we take your body stats sleep positions and preferences so we know that like let's say if you're a side sleeper you need that like neck support for the neck to shoulder tip ratio whereas like a stomach sleeper it's better if you sleep on a flat pillow but besides that we also have empirical evidence we have over 1.5 million data points that we take into account of like what makes a great pillow for you what do you mean by those 1.5 million data points so we have an algorithm on our site that every time anyone goes on our website orders a pillow we store this information and then we look at other people who answer similarly to that person and then we see like exactly what kind of pillow would be best for them with this data point and this has actually led to a very low return rate compared to the industry average the industry average is 12.95 while ours is sub 8 and we did this in two years break down the numbers for me 2018 197k when we first started 2019 473k and this year so far is 490k there you go wow what's the average sales price we saw our standard sizes for 95. how are you manufacturing so how this works is if you guys open up your pillows inside there's actually a foam core and it's surrounded by a plush outer cover so there's these two main parts and through our questionnaire when it goes to our algorithm the computer actually decides like hey this person needs this foam with that plush cover so someone's in the facility picking yes they just put it together just two components and variations of those two components two components make over 35 variations that feel really different one pillow you sell it at 95 and then what does it cost you including fulfillment and what is your what do you have left so 95 18 shipping and it cost us 25 to 30 dollars to make the pillow so 43 so you only have about 50 margins yes so with that it's 50 or 60 just cost of goods sold so that's not a big ratio it sounds like you're normally gross margin structure is not so good is there a reason why because no matter how much you grow if your gross margin out the gate is bad you're just compounding the problems why are your gross margins not healthy and that's why with like if we could have a bigger size warehouse to order more materials we could get that down to 20 to 25 instead of 25 to 30. you're talking about a few dollars like 18 of your cost to shipping right tell me a little bit about the back end operations how big is the team so before this year it was actually just us two we boxed every pillow we answered all the customers you guys did all the boxing in the warehouses and now we have we hire two pillow builders um we have pillow builders yeah and we have someone who is full time on customer service i want to share with you a few things my thoughts well you're picking something smart because pillows are great and everybody needs pillows it's also an extremely competitive space and i just think the combination of that along with your valuation just not the right investment for me i'm sorry i'm out thank you very much yes guys you guys are super impressive i think lori makes a really good point about how competitive that industry is but nobody does what we're doing in terms of taking body stats sleep positions and preferences account and we have a utility patent penny we have over one point five years pending on what on the way we make the pills combined with the algorithm and we have over 1.5 million data points that no other company has in terms of like evidence on like what makes a good pillow we did all the hard work already right we already established the brand we already created a product guys you have it so here i'm guessing you're using machine learning because it's linear right 1.5 million data points is nothing but you actually have kind of dropped the ball and i can tell by your answers because the better approach is to say based off my data points including my orders i can build in anticipation of what will be ordered and where they'll be ordered from because you already know based off your machine learning algorithms how many orders are going to take place from this part of the country that part of the country this part of the country that part of the country i'm saying all this because i don't think you've gone through that whole process yet right and i don't think you're fully aware of all the things you're going to have to go through yet to get there so for those reasons i'm out i love pillows i'm obsessive about pillows but you know this world of algorithm everybody talks about how they have an algorithm and i'm not 100 sure that nobody else can do that i don't think this is where i'm going to sleep comfortably so i'm out thank you very much this had been for a lower amount of capital risk i would have probably done it just for the talent but you guys are too small for 8 million bucks i'm out thank you kevin i have to tell you when you came out here and you started talking about pillows i was born out of my mind i couldn't have been less interested but you sold me and i think there's a couple of big problems to mark's play your algorithm it's not predictive you've got to know what the potential orders are going to be before you get them and i think you'll start getting that once you get the volume yeah come on who up here knew everything about their business and to make those mistakes so at the end of the day it's not about the mistakes you're making it's about my confidence and your ability to overcome them and you've sold me on that so i like it all hate the valuation hate the valuation don't let that get in your way robert so i was being quiet with my own algorithm and saying what number would make me feel comfortable sleeping at night [Music] so you're looking for four hundred thousand for five percent i'm thinking 400 thousand for twenty percent it's aggressive but your ass was very aggressive it's a mount i feel comfortable with but i think it's one of those things you won't need more money you're going to need more expertise and more ways to get out there faster it's an offer you got a shark tank offer [Music] i think that just a little bit high would you be able to go down to nine percent or four hundred thousand [Music] no i'm not going to come down that much i mean would i go down to 19 and a half some marginal amount sure maybe if you could convince me but i think it's a lot of money it really is and it's a lot of my time and i do think you're one of these investments we're going to look back on and say wow pluto went to the moon i think 19 is just a little bit too much we've seen triple digit growth year over year since we started and we feel like there's not really much in our way to keep growing we do want some experts take care of your guns guys stick to your guns yeah there's nothing wrong with sticking to it i disagree guys he could help you a lot every year for me is a matter of investment and risk and i think at 20 i'm deeply invested what do you want to do let's shoot for the stars thank you so much for the offer robert but i think 19 20 is just a little bit too much i think we can't really go more than 10 percent for four hundred thousand dollars i i can't get there okay thank you guys good luck congrats guys and good luck thank you thank you very much guys thank you [Music] while we're so flattered by robert's offer we felt we were worth way more than what he was offering and we feel that we could still grow this company ourselves you

Channel: Sony Pictures Television

Views: 2,365,484

Keywords: Sony, Sony Pictures Television, Shark Tank, Shark Tank US, Shark Tank USA, Shark Tank America, Shark Tank Pitches, Shark Tank bad pitches, Shark Tank Best Pitches, Shark Tank Covid, Shark Tank Season 12, lori shark tank, daymond shark tank, mr wonderful, shark tank moments, shark tank deals, shark tank pitch, shark tank best pitch, kevin oleary, mark cuban, lori greiner, Barbara Corcoran, pillow, pluto pillow, shark tank offer, shark tank pillow, shark tank pluto

Id: Id2hTL13PpU

Length: 11min 11sec (671 seconds)

Published: Thu Oct 28 2021