Background study of the scrub daddy company

Aaron Krause founded The Scrub Daddy Company in 2012 while still a Syracuse University undergraduate student whose job was to clean cars (Ray, 2016). One of the top producers of sponges, it had a distinctive "smiley-faced" shape to its goods. According to a brief history, Dedication to Detail Inc., which was the Aarons' initial business, was eventually purchased by 3M, a Fortune 50 international conglomerate, in 2008. Aaron left the company after discovering the sponge's true use since the corporation never removed its sponge items. One of his client's cars was once wrecked while he was cleaning. It made him have an idea about making polymer sponge products that would help clean the vehicles with ease and without any damages.

After the invention of his unique sponge named as Scrub Daddy, he was able to venture into other sectors that used sponge for cleaning. The sponge product was ideal for dishwashing and helped in household cleaning. They could change their texture depending on whether the water was hot or cold. It became hard in cold water and soft in warm water. It gave the unique characteristics of the Scrub Daddy sponge products. Aaron then created a patent for the product and applied a new design, which started with the reincarnation of a smiling yellow scrubber.

Moreover, in October 2012, Aaron got an opportunity with the famous multi-Emmy Award-winning reality show Shark Tank. After his company products were shown on ABC’s show Shark Tank, the revenues went high making his company one of the greatest in the show. Lori Greiner, one of the “Sharks” provided Aaron with a great offer of $200.000 stakes for 20% of the company’s equity. She promised to make Aaron a millionaire in a year’s time. Since the show, the Scrub Daddy Company was able to come up with other products in the same line of business known as Scrub Mommy-half Scrub Daddy, Scrub Daddy Heavy Duty, lemon-scented and half foam sponges. The company had an in-house manufacturing industry with around 50 employees in Folcroft, PA. Particularly, it was a multi-million dollar company with Lori Greiner, a great “shark” as the primary partner.

Sharks Reaction to the Scrub Daddy Company

During the ABC’s show Shark Tank that Lori Greiner was seen to strike a deal with Aaron, since it was a case where each shark was not ready to let go of the deal. They would raise their offers over the other as if they were in a competition. It all begun with Kevin O’Leary who offered $100K stake, for 50% of the equity of the company. However, the offer never impressed Aaron. Daymond, on the other hand, laid his offer of $50.000 stake for 15% of the Aaron’s company equity. The worst thing was that the Daymond’s offer had a condition that would see Lori and Aaron agreeing on the $50K stake that Aaron had already suggested. Lori carried the day since she is well conversant with Aaron products and business type. She offered $100K in exchange for 30% of the company and better still; she would sell the product in the stores national wide in a few weeks. Kevin O’Leary on hearing this raised his offer to $100K for no claim. However, every item Aaron would sell Kevin suggested getting 50 cents until the $100K loan was repaid and 10% per unit with no fixed maturity date.

When the competition got hotter, Daymond felt that he needed to increase his offer to the £150K stake for 25% of the equity in the business. Subsequently, Lori could not allow such a great opportunity pass by and she increased her offer to $100K stake for only of 25% the company’s equity. It led to a heated talk between Lori, Daymond and Kevin O’Leary, with each trying to outdo the other and explaining why each was a better partner to strike a deal with Aaron. Aaron, on the other hand, was quite confused over the great offers he had already possessed. Lori would not stop then; she raised her offer to the 150K stake for 25% of the equity and promised to make Aaron a millionaire in a short period (Ray, 2016). Having heard the Lori’s suggestion, Daymond raised his offer to the 175K stake for 25% of the company’s equity. Lori cherished great hopes and was still willing to give up on the deal. She further raised her offer to $200K stake for 25% of the equity.

The competition between the giants heated up with Kevin O’Leary considering his offer again. He suggested that Aaron had the chance to repay $100K loan at a reduced rate of 25 cents per unit with no fixed maturity date until the loan was fully repaid. At the stage, Aaron had a massive task to judge which deal worked best for him. He started his bargain with Lori on whether she would consider dropping her share of the equity to only 20% of the company. It led to a moment of silence, and after Lori had thought over, she agreed to Aaron’s suggestion, which brought excitement and relief to Aaron (Ray, 2016). His happiness was evident, and they stroke a deal with Lori Greiner as agreed. Particularly, this deal materialized and worked great which made the case one of a kind the ABC show, Shark Tank ever had.

Conclusion

To sum up, the Scrub Daddy sponge products have so far been the most fortunate thing that has ever happened to the Shark Tank. The company has grown positively making it famous, after such a heated session between the sharks. Currently, Aaron and Lori Greiner are great business partners and continuously work to make the products grow national wide. They have achieved such a remarkable sale of over $50 million with over 10 million units’ sold, since those times they have started collaborating. Lately, Scrub Daddy has been highly ranked on Amazon with great reviews from different people in different areas with more than 2000 reviews and a 4.5/5 stars rating. With this analysis, it shows that the Scrub Daddy is living to its hype. Aaron and Lori Greiner are working irresistibly to ensure that the company will venture into international markets alongside cleaning giants such as Brillo and Lysol. Scrub Daddy is also working tirelessly to expand many varieties of their products to the market making it an overall comprehensive company. In my opinion, the company has a bright future making it one of the preferred companies due to its continuous positive progress. I believe that the business’s value is correct due to the figures provided and it has offered employment opportunities to various people. The company deserves a 5-star rating, despite numerous challenges that might affect its line of business like competition and fear of new market entrants.

Reference

Ray S. (2016). Meet the “Daddy” of Scrub Daddy, who runs a million dollar business on selling smiley-faced sponges. Yourstory.com. Retrieved on June 11, 2016 from https://yourstory.com/2016/06/scrub-daddy-founder/