Stephen Chen pitches Petnostics, his patented system that allows you to check your pet's urine with your iPhone, in Shark Tank episode 710. Chen started the business in 2013 to get a better handle on his dog's health issues before they became serious. Monitoring a dog or cat's health can save money on veterinarian bills and, possibly, the animal's life.
The patent is for the cup, which holds pet urine for analysis, and the way the app interacts with the cup's integrated urinalysis strip in the lid. Pet owners collect their dog or cat's urine in the cup and seal it. The urinalysis strip then reacts and the app reads the results. Users nearly unanimously love the product and there have been many instances of serious problems (like diabetes) have been diagnosed early thanks to Petnostics.
Collecting the sample is the least pleasant part of the testing, but very little urine is needed, so it shouldn't gross pet owners out too much. Chen Likely wants a Shark's help with mass distribution. Will a Shark think this is a viable product or will they think they are pissing their money away?
Petnostics Shark Tank Recap
Stephen comes into the Tank seeking an investment of $300,000 in return for 10% of the company.
He demonstrates the cup, showing the Sharks how easy it is to test the pet's urine using the app. “So, Sharks, Austin and I would like to know if you're in,” says Stephen, getting a snicker from the Sharks with the “you're in/urine” pun. He also shows them the Petnostics sample collector- a long-handled ladle that allows pet owners to collect from female dogs and from cats without having to try to hold a cup under their pet.
Although a few Sharks are already shaking their heads at the idea of ladling a pet's urine, they start asking the usual financial questions. Guest Shark Ashton Kutcher wants to know about cost. Steven explains that, currently, Petnostics cups cost $2 to produce, but at volume pricing, he can manufacture the cups for as little as 90 cents. He's already sold 10,000 cups through his website and local retailers over about an 18 month period.
Robert Herjavec asks about the patents. Stephen explains that he holds four patents covering the design of the cup and the algorithm the app uses to analyze the color changes. He mentions that the product could conceivably be scaled to human applications in the future.
Kutcher has doubts about the collection of urine. He thinks that it would be far easier to get a blood sample. Stephen explains that most pet parents don't want to collect blood. Robert Herjavec wants to know what the “added value” is to the consumer. He thinks there will need to be some outside motivation for the consumer to use the product. Stephen agrees that his vision is that veterinarians will encourage consumers to buy and use the product. After some more discussion, he goes out.
Kutcher thinks vets will want the owners to bring the animals into the office. He doesn't think that the idea of analyzing urine at home will catch on. Robert doesn't think the distribution channel is there. He agrees with Kutcher, that vets won't embrace the product. He's out.
O'Leary isn't sure the proof of concept is there yet. He feels the product is pre-revenue. Mark Cuban believes that even though the patents cover applications that could translate into other types of testing, such as water, it's limited by the strip technology. He's out.
Kevin O'Leary makes an offer; $300,000 for 15%. Lori Greiner is also interested. She makes an offer: $300,000 for 20%.
Stephen asks Lori if she'd take 15% for $300,000.
Kevin jumps in, offering to join Lori's deal, and split the $300,000 for 20%.
Stephen considers and accepts the two-Shark deal.
Petnostics Shark Tank Update
It didn't take long for Stephen to hit the ground running with Fetch for Pets, a large pet product manufacturing, and distribution company. In addition to the existing line of strip tests, he's added a “hydrophobic” litter that allows cat owners to collect urine samples without chasing their cat around with the still-available extendable ladle. The company is developing apps for Android and other platforms to complement the Apple app.