Dr. Amy Baxter pitches Buzzy, a pain blocking device that takes the sting out of getting a shot, in Shark Tank episode 517 on February 28. Dr. Baxter launched the product in 2009 with start-up grants from the May Fund, the National Institute for Health, and Kimberly Clark. The product, which is shaped like a bee, uses cold and vibration to ease the pain of getting shots and vaccinations.
Dr. Baxter has Buzzy in over 1200 hospitals and boasts over 35,000 users. She's listed as one of Inc. Magazine's Top Women in Tech to Watch. This isn't just for kids, either. According to their website, “in addition to injections and IVs, Buzzy can be used for Allergies, Dermatology, Diabetes, and much more.”
Basically, Buzzy vibrates and applies concentrated cold. Reusable ice “wings” get stored in the freezer and clip on to the Buzzy bee. The bee then straps on near the injection site. The combination of the cold and vibration dull the pain of a shot.
Dr. Baxter is likely looking for a Shark partner to help with big box distribution.
Buzzy Shark Tank Recap
Dr. Baxter comes into the Shark Tank seeking an investment of $500,000 in return for 5% of the company. She explains the concept behind Buzzy. The product's been tested in clinical trials. It reduces pain between 50% and 80%. It's already in 1,200 hospitals and clinics. She holds several patents on the product.
The current year's sales are $1 million, and Buzzy is on track to sell $2.5 million in the next year. 30,000 have been sold so far. She has six part time employees, but no sales reps. Even with no active sales efforts, she's managed to clear a profit of $660,000 in gross profit, with $270,000 net profit.
Kevin O'Leary points out that she's asking for an investment that's more than her net profit in the previous year. Dr. Amy brings up Ava the Elephant as an example, but Barbara Corcoran counters, telling her that she ended up investing much more than the initial deal before Ava made it to market, and that the consumer medical device market is extremely difficult to break into.
The tactic backfires. Barbara has already “climbed a mountain” with Ava the Elephant, and is unwilling to take on another medical consumer product. She's out.
Kevin O'Leary is unimpressed with the valuation, and with her lack of a cohesive sales strategy. Dr. Amy needs the money to scale. She wants to move Buzzy into big box stores. Kevin O'Leary thinks going into a big box store is a mistake.
Lori Greiner agrees with O'Leary's assessment, and tells Dr. Amy that she should be selling directly to doctors, not to consumers. She's out.
O'Leary makes an offer; $500,000, for 20%. Robert Herjavec is willing to partner with O'Leary on the offer.
Dr. Amy believes it's too much equity.
Mark Cuban makes the same offer, of $500,000 for 20%.
Barbara Corcoran tells Dr. Amy that “I'm afraid your arrogance is going to make you walk out these doors because you think you can do it yourself.”
She's right. The Doctor sticks to her valuation, and turns down the offers. She leaves the Tank without a Shark deal.
Buzzy Shark Tank Update
Since turning down the offers on Shark Tank, Dr. Amy has continued to sell her Buzzy pain reliever directly to families, hospitals, and clinics for an average cost of about $40. She estimates that Buzzy is now in about 5,000 hospitals and clinics.
Buzzy may be making sales, but it hasn't reduced the sting of having to market her own product without a Shark backer. Dr. Amy's pride and determination to keep her valuation high may have cost her a good deal of time and money. With a Shark behind her, Buzzy surely would have become a household name, but going it alone, all while running her full time medical practice keeps sales smaller and her reach limited. She provides details her post-Tank experiences in the book Shark Bites.
This is one entrepreneur who avoided being bitten by a shark, but in doing so also avoided the success that comes with the backing of a major investor's expertise.
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