- Company: Doorbot (now Ring)
- Product: Doorbell camera hybrid (security product)
- Owner: James Siminoff
- Asking Price: $700,000 for 10% equity
- Final Deal: None (rejected one offer from Kevin O’Leary)
- Season/Episode: Season 5, Episode 9
Ring Before Shark Tank
Opportunity knocked loudly on the Shark Tank doors, back in 2013, but only one of the sharks seemed to recognize the visitor. Like all brilliant ideas that revolutionize daily life, Ring was ahead of its time, and the market for it didn’t quite exist at the time of its inception. Ring is a simple concept that seems so logical and intuitive that its invention now is almost surprising – because one assumes it had already been invented. Its usefulness is so valuable to society that it fits seamlessly into modern life, as though in hearing about it you do a double-take and think to yourself, “Oh, obviously. You mean, this didn’t already exist?”
But at the time that the product debuted on Shark Tank back in 2013, the mass marketability of this product wasn’t so obvious – at least not to the sharks. Their failure to invest in this product – and to recognize opportunity knocking – would ironically become one of their biggest regrets.
Ring On Shark Tank
Jamie Siminoff, founder and CEO of Doorbot, opens this episode with one of the more memorable entrances in Shark Tank history. Instead of striding through the double doors onto the stage like most contestants, Jamie waits behind the door and knocks politely. The sharks have to guess who’s knocking. “Who is it?” “It’s Jamie,” he says, and Lori tells him sweetly to come in.
“Wouldn’t it have been nice to know who was behind the door before you let me in? With my product, you can.”
Siminoff now has full command of the room, all the sharks rapt at attention. He’s seeking a dizzying $700,000 for 10% equity in his company. (If you’re doing the math, that’s a $7 million valuation. But given that the company, seven years later, is now worth more than a billion dollars, this would have been a steal.)
“Customers are spending billions of dollars outfitting their homes with smart security technologies that connect to their phones,” says Siminoff. “But the doorbell hasn’t changed since it was invented in 1880. Until now!” Adorably excited, Siminoff whips out a prototype of his product, the Doorbot. (Back then, Ring was called Doorbot.) It looks a little like a silver soda can, with a concave glass lens on top and a speaker built into the bottom. Not much to look at, and clumsy in design, the concept is undeniably brilliant.
Siminoff demonstrates the product with a prop front door and doorbell hookup, showing the video feed connected to his smartphone – (with his smartphone projected on a television screen, to make the demonstration easier to view). He rings the doorbell, and the Doorbot app alerts him to the visitor, showing him a live video feed of the front door. The app allows him to see and hear his visitor without opening the door – a revolution in both household convenience and home security. He can either accept or decline the visitor directly through the app.
“Think of it as caller ID for your front door.”
If you hit ‘accept’ on the app, Siminoff explains, your doorbell turns into a standard apartment building intercom, so you can hear and speak to your guest. The product features two-way audio and one-way video. (Essentially, you can see out, but they can’t see in.)
Running the Numbers
The sharks are impressed with the product’s home security potential, but want to dig into the financial details before making any bids.
- Retail price: $199
- Cost of production: $81.83 per unit, landed
- Revenue streams: direct-to-consumer online, with Staples distribution deal in progress
- Sales to date: $1 million over 9 months
- Direct competitors: None
Siminoff is careful to point out the distinctions between his product and the closest competitors on the market. Though there are none that include 2-way communication and smartphone connectivity, there are several companies making products in a similar vein – but these products tend to be multipanel security systems that cost thousands. Doorbot, as Siminoff explains, is the first of its kind: a true original.
Mark Cuban gets into a little bit of a tiff with Siminoff at this point, daring to wade (as only Cuban does) into philosophical waters. He seems concerned that other businesses could come along with a better, smarter product and push this company into oblivion before it takes off. Siminoff counters by asking “What technology isn’t going to be replaced? The doorbell’s not going to change. We’re always going to need this technology.”
Lori Greiner is first to drop out, stating that she isn’t confident enough that the product can distinguish itself from other similar products on the market – especially given the product’s higher price point.
Mark Cuban is next to drop out, and in a scene that is almost comically off-base in retrospect, he says that he doesn’t see what makes this company worth its $7 million valuation. He wants to see something that could “someday be $80 or even $90 million.” (As of 2020, the company is worth $1.2 billion.) He doesn’t see the potential, so he’s out.
Daymond and Robert drop out next, stating that the product doesn’t have what it takes to rise through lower and mid-tier markets. (This reporter would like to note here that Daymond Green’s red-and-white pinstriped shirt with red silk tie is an exceptionally great look during this episode.)
With four sharks out, Kevin is Siminoff’s last chance at a deal. Kevin offers $700,000 for a 10% royalty (in perpetuity) that drops down to 7% after the initial investment is recouped – but he wants 5% equity today. (This is a borderline predatory offer, at which Mark Cuban audibly scoffs.)
Siminoff mulls it over for a moment, but respectfully declines the offer. He counter-offers, replacing the royalty with an interest fee, which he insightfully points out can be paid off – unlike Kevin’s royalty-in-perpetuity offer. Kevin doesn’t like the terms, and Siminoff walks away without a deal.
Final Deal: None (one offer rejected)
Though Siminoff walked away from the tank empty-handed, Doorbot (now Ring) has gone on to become one of the most successful companies to have ever been pitched on Shark Tank. One major takeaway from the Ring saga is that not all the sharks are as good at spotting a billion-dollar idea as they’d like to pretend, or as NBC would have us believe. While Mark Cuban is never one to admit regret, the rest of the sharks’ are open about their mistakes with this episode, seeing it as a missed opportunity to invest in a billion-dollar company.
Ring is now the highest-valued company ever to have appeared on Shark Tank.
In a final spectacular twist of fate, Jamie Siminoff – CEO of Ring – joined the tank as a guest Shark five years after his initial appearance as a contestant, now the CEO of one of the most successful security companies on earth, and a certified billionaire in his own right.
If you liked it, then you shoulda put a ring on it.
Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Doorbot, Ring Doorbell, SharkTank, or any of its subsidiaries.