Paddle Boards are a huge new entrant into the water sports marketplace and Tower Paddle Boards owner Stephan Aarstol recognized the trend early. I recently spoke with Stephan, who made a deal with Mark Cuban on The Shark Tank. Cuban took 30% of Tower Paddle Boards for a $150,000 investment and asked for right of first refusal for any new businesses Mr. Aarstol sought to raise money for. This was the first deal of its kind on The Shark Tank, though Stephan clarified that Cuban “has right of first refusal for anything I raise money for.” If he writes a check to fund a business himself, that clause doesn't come into play.
Stephan plans to wait a while before approaching Cuban with another business. “I want to prove the business model and build trust with Cuban before approaching him with another idea.” The show taped last July, but the deal wasn't signed until November. Stephan was vacationing in Cambodia when the documents arrived for signature. “Here I was in Cambodia with all these documents, and this hotel worker who probably makes $70 a month is witnessing my signature on a deal with a multi-billionaire.”
Aarstol has nothing but praise for Mark Cuban who is “amazingly accessible for a billionaire, we exchange email two or three times a week. His instincts are really good – he's a great mentor and it's nice to have this CEO thinker over my head. He brings a lot of value – it's been a successful partnership.”
We all know editing is a big part of the Shark Tank. Stephan claims the editing was “kind” to him. His pitch for his direct to consumer stand up paddle boards was arguably one of the more uncomfortable presentations seen in the Shark Tank to date. See for yourself in this clip.
Stephan went into the details surrounding his pitch. “They have you in a hallway before you go on and literally 30 seconds before going out, I was handed a clicker for my slide show,” he said. The clicker didn't work and, coupled with a natural aversion to memorized presentations, Stephan got flustered. “The sharks were very helpful, Robert Herjavec calmed me down. Even Kevin OLeary's wisecrack about not screwing up the most important moment of my life was spoken in a supportive way, although it wasn't portrayed that way on the broadcast. Once we got into the more ‘free form' Q & A, I had calmed down and was fine. The end result was good for the show, they even used it in the teaser, so I wonder if they were setting me up. I think it worked in my favor, it gave my pitch a ‘Rocky' effect.”
Whether Stephan was treated fairly or not, he was successful, so I guess he can't complain! One of my favorite segments was the discussion with Kevin O'Leary about customer acquisition costs. O'Leary didn't believe it cost nothing to acquire a customer. Stephan said there was a 15 minute discussion about SEO (Search Engine Optimization) and SEM (Search Engine Marketing) and how injecting that type of internet marketing methodology into any existing business adds value. Barbara Corcoran got a bit “flustered” with the conversation, and that's when she went off on Stephan.
Stephan reads this site, but he also has some suggestions for ABC's website. “I think they should show the entire process for each segment online. There is so much that goes on that isn't shown on TV. I think fans would watch, I think Business School students would watch. It's a Master's Level Business course in negotiating.” Stephan watches the show regularly with his seven year old son to introduce him to the art of negotiating. (On a side note: as a parent of five, enhancing the negotiating skills of a pre-adolescent is a dicey proposition). Stephan wanted to bring his son into the Shark Tank to demonstrate the paddle boards, but decided against it on the producer's advice.
As for the Sharks themselves, he feels what you see is what you get. “The Sharks are playing a part, but it's a part they were all born to play.” He said he wouldn't have done a deal with any other Shark than Mark Cuban. “He has the acumen and he knows how to leverage his personality.” Aarstol is a man after my own heart, he'd like to see more of Lori Greiner on the show. “She's a good negotiator and she brings that QVC trump card to the table,” he said.
His favorite past entrepreneurs were Travis from Chord Buddy, Donny from Invis-a-Rack , and Rick from ReadeRest. “I met Travis the night before taping and he said he was going to go out there and free wheel it; he had a great personality.” He liked Donny McCall's message and ultimately thinks “sticking to his guns was good PR.” As for Rick, Stephan understands why he wiped out when walking into The Shark Tank, “it demonstrates his product, but I wonder if he realized he'd make the highlights for that episode?”
While Stephan hasn't purchased any other Shark Tank products, he wants to get some Painted Pretzels. Mark Cuban funded them too, so he should be able to get his hands on them. He also wants to get a Cat Drawing of a “taunting cat.”
Stephan also answered “The Question.”
We here at the Shark Tank Blog wish Stephan and Tower Paddle Boards much success!