⚖️ Issue #69: Scaling Fast & Timely Pivots
Founder and CEO of BeatBox Beverages Justin Fenchel shares with Forbes how they scaled, pivoted, and secured one of the largest investments in Shark Tank's history
💬 Welcome to issue #69 of Between the Lines
Good morning & happy Thursday. Welcome to November! Let the voting polls and Turkey countdown begin. 🦃
This week, Claremont alumnus Justin Fenchel shared with Forbes the origin story of F&B upstart BeatBox Beverages from business school, how his passion for music manifested itself in their go-to-market strategy, and what’s next for the fast-growing consumer startup as they look to establish themselves as a top five ready-to-drink brand.
~ Josh & Miles
📢 👥 Community Voices: Justin Fenchel & BeatBox
Authors: Dave Knox & Justin Fenchel
Claremont alumnus Justin Fenchel is the co-founder and CEO of the beverage business BeatBox Beverages. In 2014, BeatBox secured a $1M check from Mark Cuban, one of the largest raises in the history of Shark Tank. But in the explosive growth that followed, the brand learned the hard lesson of scaling too fast without having the fundamentals figured out. Justin sat down with Forbes and talked about these lessons and how some timely pivots in their product and distribution strategy led the brand to reach new heights of growth a second time around.
While the business started around 2012, the turning point was when you guys appeared on Shark Tank. What led you to that moment?
We started BeatBox in the business school at University of Texas McCombs. We had no experience in alcohol so once we figured out how to make it, we then self-distributed the products. After that, we got picked up by a distributor and we had exhausted all of the money that we had put in. We self-funded initially with $55,000 from the five original co-founders and we were able to get about $150, 000 from our friends and our families. All that money was going into making the product so we started to fundraise. Nearly every person we talked to said “Oh, you should go on Shark Tank” and then said it as if you could just pop down to Sony Picture Studios and go on the show. But we heard it enough that we ended up applying to Shark Tank and we hit it from every angle we could. We tweeted at The Sharks, we emailed, and we sent them messages on LinkedIn. We just did whatever we could to get their attention.
We ended up making it through the process and eventually on the show. We were very lucky. I think of the 80,000 companies that applied for season six of Shark Tank, we were one of 108 to make it on air. They said you had a better chance of randomly applying to Harvard and getting in than getting on Shark Tank, but we did it.
And what was the result of being on Shark Tank?
Coming into the show, we had done about $230,000 in revenue in the 14 months that we had been in existence, and we had a distributor that could take us nationally. We had an outsource manufacturer, so we were trying to check every box as to why this would be de-risked for an investor. We had a product that was selling in the market, we had a distributor, we had a co-packer and we went in asking for 200,000 for 10% of the company. So we were valuing the company at a 2 million post money valuation, which was pretty substantial at 10x our current revenue.
And of course Mr. Wonderful bashed the valuation and said it was too high. But he made an offer and then Barbara made an offer. We didn't realize they were all going to make offers. And eventually the guy that we wanted to do a deal with, Mark, made an offer and he offered $600,000 for a third of the business. That put us at a valuation of $1.8 million post money. We were in the moment so we figured with Mark, he's a billionaire, what's a few hundred thousand dollars, and we countered his offer with a million-dollar investment for a third of the company, which would be a $3 million post money value, and he took it right away. He was excited that we didn't go into the room and debate.
We knew we wanted him and it was really, really cool and a powerful TV moment and an entrepreneur's dream to get a million dollar investment from Mark on the show. I think it's still one of the top 5 dollar deals in the show's history. 👇
📣 Pardon the Announcement: Kyle Schuster & Autobound
Kyle Schuster is a Claremont alumnus and was previously a Sales Manager for Yelp. His experience with the B2B sales process inefficiencies prompted him to start Autobound — a sales intelligence platform that analyzes buyer and seller data across the web to generate instant ready-to-send individualized sales emails. Their platform's sales engagement recommendations are personalized to each user and their target buyers, helping sales teams convert better and automate time-consuming tasks. The waitlist for their new Autobound Chrome extension is live:
I’ve been working on this next iteration of Autobound for the past 5 months and am PUMPED it's finally in beta. We stripped most of the complexities from our old product, and launched a chrome extension that fits so seamlessly into a seller's existing workflow, they barely know it’s there (aside from the massive value it provides). Our waitlist is live!
🚨Claremonster Call-Out: Samet Yildirim & Orbillion Bio
Samet Yildirim is a Claremont graduate and Advisory Board Member for KGI’s Amgen Bioprocessing Center. After spending seven years with biopharmaceutical company Boehringer Ingelheim in multiple positions, Samet joined Orbillion Bio as co-founder and COO. Orbillion is a cultivated meat YC startup working on heritage meats such as bison, elk, lamb, and wagyu beef. The company is democratizing access to cell-cultured food internationally, with its new partnership opening 35 European markets to introduce the next generation of meat. FoodBytes, Rabobank's global food and ag innovation discovery hub, recently announced Orbillion Bio as a Standout Startup for 2022 for their Cell & Fermentation Technology.
💼 Who’s Hiring?:
Endurance Companies is a holding company whose primary work is building new ventures to solve meaningful problems. The company was created in 2009 as a platform for three classmates to collaborate in starting new entrepreneurial ventures. The partners were able to build five successful businesses, and over time, the company evolved into a multi-family office (MFO) with a core business of a Venture Lab. Claremont alumnus Ed Leathers manages Investments for Endurance, and he’s looking for an experienced finance professional to join their leadership team as the Chief Financial Officer. If this sounds interesting or you know someone who would be excited about working across a broad spectrum of responsibilities, here’s more info on the position:
Co-founded by Claremont grad Alex Groth, Tab for a Cause makes it extremely simple for anyone to do good every day. It replaces your browser's default new tab page with a beautiful background image, info on your social impact, and advertisements. Tab for a Cause uses the revenue from those ads to raise money for nonprofits like Conservation International, Partners In Health, Save the Children, Water.org, and many more. They are looking to hire a Founding Engineer who will take Tab for a Cause from $1.5M raised for nonprofits to $10M and beyond. This job is an opportunity to be an early, foundational leader for a social-good consumer product with real revenue and substantial impact. Learn more about the opening:
Tixologi, co-founded by Claremont graduate and CEO Asher Weiss, is a blockchain-based ticketing software that puts event producers, venues, and teams in control of their ticketing. Tixologi allows event producers to capture new revenue sources from secondary and collectible sales, understand all their ticket holders and buyers, eliminate fraudulent tickets, and engage their fans on a deeper level. They closed a pre-seed round early this year and are looking for a Senior Full Stack Engineer to help build the future of ticketing. Interested applicants can reach out to Asher directly:
Check out the other ~5,000 open jobs at 400+ Claremont-affiliated companies here on our Storyboard. Plus, create a profile and enter your preferences to get alerted to new job postings relevant to you, be they the 1,000+ remote jobs, 100+ internships, or 40+ part-time positions available. We’ve published research that shows that Claremont-founded companies that disproportionately hire Claremont talent outperform — so pay attention, Claremonsters!
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🗣️ Conversations on the Interwebz:
This week’s Claremont financing 💸
Brian Ramirez is a Claremont graduate and co-founder of Retirable – a fintech startup that offers products and services across the retirement investing, planning, and spending spectrum. Read more about their recent additional $6M venture-backed seed funding on TechCrunch.
This week’s top listen 🎧
Claremont alumnus and founder Andres Glusman joined the Crafted podcast for an interesting chat about how his company, DoWhatWorks, came to be and what he’s learned about testing and human behavior. DoWhatWorks is a product that tracks and gives you access to thousands of split-test experiments run by the world’s top companies.
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🍽️ BTL Snacks:
🔐 Raising A Round For Enterprise Security….. With authorization increasingly becoming a concern for management at every level, SGNL.ai recently announced its $12M seed raise to expand its access management platform. SGNL is an enterprise authorization company offering integrated access services for organizations, protecting access to sensitive data and guarding against potential security compromises. Costanoa Ventures led the round, and Yvonne Wassenaar, a Claremont Board of Trustee member and the former CEO of infrastructure automation company Puppet, is one of SGNL’s advisors.
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