Mark Cuban’s Shark Tank career has given him a pretty good idea of which personality traits can be beneficial to CEOs and which can drive a company into crisis.
On Friday’s episode of ABC’s “Shark Tank,” the billionaire investor highlighted a startup founder as an example of the latter category.
“One of the great qualities of any good entrepreneur is resilience, and you’ve certainly demonstrated that,” Cuban told Amy Leinbach, founder of children’s tool company Big Bee, Little Bee. “But you also have ‘inventor-itis,’ which is one of the worst traits an entrepreneur can have.”
The Huntington Beach, Calif.-based company is known for ScrubBee, a handheld silicone scrubber that brought in 80% of Big Bee, Little Bee’s sales last year. But on the show, Leinbach — who appeared alongside her then seven-year-old daughter Marlo — focused more on introducing the “Marker Parker,” a marker cap organization and storage tool developed by Marlo.
Creating the marker sent by Parker Leinbach’s company finds itself in debt: at the time of filming Big Bee, Little Bee, the film had lost $77,000 year-to-date despite grossing $110,000.
This wasn’t a new problem. Last year, the company had sales of $230,000 but only made a profit of $2,200, Leinbach said.
Leinbach demanded $100,000 from the Sharks in exchange for a 20 percent stake in Big Bee, Little Bee. But all five Sharks expressed concern when they learned that the company was already selling at least three different products and had more in the works, without enough sales to support that growth.
Her answer: The debt was worth it to support her daughter’s vision. At the time of recording, Leinbach had spent $20,000 on the Parker marker and $100,000 of her own money on Big Bee, Little Bee, she tells CNBC Make It.
Kevin O’Leary was the first to back out of the deal, saying he was impressed by Leinbach’s support of her daughter’s entrepreneurship but saw no chance of a return on the investment.
Then the duo introduced another product: a silicone food container that expanded to “fit a whole apple,” Marlo said.
That’s when Cuban stepped in and said that while Big Bee and Little Bee showed signs of being a successful company, they had too many products and were losing too much money for him to invest. “Because you lost $77,000, you have to solve the problems in front of you first,” he said.
Lori Greiner and Shark guest Emma Grede both said they admired the mother-daughter duo’s efforts, but the business was too unfocused to invest in. Robert Herjavec was the latest Shark to walk away from the deal, noting that he had planned to invest in the company – until the pair started showing off so many products.
Leinbach left in tears but said she was ultimately grateful for the experience.
“In the end, it wouldn’t have mattered if the better business decision had been to focus on the ScrubBee instead of the Marker Parker,” she tells CNBC Make It. “Marker Parker was Marlo’s invention, and I would have done it all on my own Game set to support anything from her.”
Or as Marlo said on the show, “I’m glad Mom got what she wanted. She always wanted to be on ‘Shark Tank,’ and now she’s on ‘Shark Tank.’
This story has been updated to reflect comments from Leinbach.
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
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