ZOMM CEO Henry Penix climbs into 'Shark Tank'
BY ROBERT EVATT World Staff Writer
Tuesday, October 09, 2012
10/09/12 at 4:24 AM
Read other tech stories.
Some famous sharks got a taste of Tulsa-based ZOMM on network television last Friday.
ZOMM CEO Henry Penix appeared on an episode of "Shark Tank," an ABC network reality show that challenges startups to pitch their product to a panel of wealthy entrepreneurs or "sharks," who may choose to invest their own money in the product.
Although the sharks, including media and sports tycoon Mark Cuban, praised the ZOMM Wireless Leash - the company's signature smartphone accessory - they expressed concern with ZOMM's financial situation and chose not to invest.
"You went for a home run, and you got a triple," Cuban said. "Even a single would have won the game. Your dream is killing you. You went too big."
In a telephone interview Monday, Penix said he was pleased with the experience overall, even though parts of the aired segment were rough on his company.
"I felt the cuts that were taken from the hour-and-a-half interview for the 12-minute segment were done more for entertainment than anything," he said. "I could have a 15-minute conversation with them, they could say one line, and when the producers and editors put it together, a line would show up without its real intention."
Penix said the show's producers contacted ZOMM to ask for its participation. He said he would have liked to have asked for an investment of $15 million, but that was "outside the parameters of the show."
As a result, he lowered it multiple times - including hours before the taped interview in Los Angeles - to $2 million, still the highest amount asked for on "Shark Tank" to date. The lowered pitch caused him to exclude part of the company from the investment and the pitch - the portion that's developing a low-energy Bluetooth advertising product called Proximity Marketing.
When asked for details of his business during the segment, Penix revealed that the ZOMM Wireless Leash sold $5 million in 2011 and is on track for $7 million this year, $2 million of which is expected to be profit.
He also noted he has not taken a salary for the company and invested $4 million of his own money from the sale of a previous business, and has a stakeholder who owns 17 percent of the business in exchange for $5 million. Penix declined to identify the stakeholder Monday.
During the show, Cuban estimated the company to be worth $30 million. Penix said Monday the number is accurate but only includes the portions of the company that sell the Wireless Leash and Lifestyle Connect, a health monitoring device that also pairs with smartphones, which is planned for future release.
When asked during the show why he needed money, Penix cited the cost of research and development, as well as $2 million worth of excess ZOMM inventory.
"We built a little too much for the last Christmas season, and we haven't sold through all of them," Penix said on the show.
On Monday, Penix said the pre-built inventory can be an advantage for the company, as that cost is already paid, and that the research and development costs include those for Proximity Marketing.
Daymond John, founder of the FUBU clothing line, said during the show that he found ZOMM's financial situation troubling.
"I get the feeling that if I go into your books, it'll be horrific," he said.
Another panel member, tech entrepreneur Robert Herjavec, went further.
"Your company is about to die, and you don't know it," he said.
The show's portrayal wasn't all negative, as the sharks said they liked the technology. Penix demonstrated the Wireless Leash, which sounds an alert if the phone is left behind and can also be used as a speaker or panic button. He also displayed a wall of innovation awards it has won.
Lori Greiner, an inventor and personality on the QVC network, had especially high praise for the Wireless Leash.
"What you've done is brilliant. I think it's a great product," she said.
Penix said Monday that, despite the rough assessment, the show has generated tens of thousands of hits on the ZOMM's website and even interest from other investors.
"We've gotten three offers so far to potentially fund the company, as well as multiple pats on the back and increased awareness for sales and distribution," he said.
Penix said he would gladly do it again, though he would have liked more time to adjust his pitch for the lowered fund request.
ZOMM's website is now advertising a "Shark Tank Special," which offers the Wireless Leash for $42.99, down from its normal $79.99.
Original Print Headline: Tulsa executive climbs into 'Shark Tank"
Robert Evatt 918-581-8447
A pair of ZOMM devices, the black showing the front and the white device displaying the back. Tulsa World file