Mark Aramli’s dive into ABC’s hit business reality show Shark Tank was an entrepreneur’s worst nightmare. The former NASA engineer spent a year and a half and his entire net worth plus some in developing the BedJet, a smartphone-controlled, cooling and heating device for beds. He pitched his product in a February 2015 episode, seeking $250,000 in exchange for 10% of his Newport, R.I. company. Sales kicked off sales two days after his segment aired but the product was still in the prototype phase when he taped the segment.
Mark Aramli pitched the BedJet in a February 2015 Shark Tank episode, seeking $250,000 in exchange for 10% of his Newport, R.I. company. (ABC)
Unfortunately, all five celebrity investors shot it down. They thought he was rude and arrogant. They even insulted his mother during the taping but it was edited out. They told him the BedJet was doomed to failure even though it had received $75,000 in pre-orders on Kickstarter, a crowdfunding site.
“I just don’t like the vibe,” said Dallas Mavericks owner Mark Cuban. “I don’t think you have all the pieces to go forward.”
Real estate mogul Barbara Corcoran didn’t think the Bedjet would sell because it doesn’t fit under high-end upholstered beds. O’Leary Ventures founder Kevin O’Leary said the $499 price tag was catastrophically high and the night staff at bed stores would use it to wash carpets because they don’t know it is.
“The product is dead already,” said O’Leary, inciting laughter from Corcoran and Cuban.
Computer security titan Robert Herjavec liked the product and thought the price point was fine but had reservations because Aramli continued his sales pitch when he was asked a question about the technology. QVC queen Lori Greiner lambasted him for ignoring her questions.
“If you valued me, you would have answered my questions,” she said. Greiner tweeted “1st time I was ever really pissed off by an entrepreneur in the tank! #badtoberude.”
Lori Greiner’s tweet about Mark Aramli, inventor of the BedJet. (Twitter.com)
Aramli tried to salvage the pitch by talking about the retailers that have shown interest. Herjavec and Cuban cut him off, reminding him they were all out and that he blew his shot at a deal.
But the BedJet turned into a dream come true. It flew off the shelves, totaling $3 million in sales in its first 18 months on the market. It retails at Amazon.com, BedJet.com, Brookstone, a few Bed Bath & Beyond (BBBY) stores and events held by Mattress Firm. With a QVC deal in the works, Aramli projects 2016 sales to reach $3 million, a mind blowing 300% spike over 2015. Had the Sharks invested, they would have nearly quadrupled their money within 18 months of the airing, Aramli says.
Aramli explains how he developed the BedJet and how his nightmare in the Shark Tank became a dream come true.
Ky Trang Ho: How does Bedjet work? What key features distinguish it from other products?
Mark Aramli: The BedJet is the world’s first ultra-fast cooling, heating and climate comfort system made just for your bed at home. It installs on any size bed and gives you on-demand cooling or deep warmth via remote control or via Bluetooth from your phone. You will never wake up hot and sweaty and never get into a chilly cold bed wrapped up pajamas.
BedJet has a proprietary night-sweat management mode that is proven to remove body sweat from the bed and keep you more comfortable. The BedJet Dual Zone option solves the age-old problem of married couples with different sleep temperature preferences. You can have half the bed crisply cooled and the other half tropical warm.
Shark Tank investors Lori Greiner and Mark Cuban try the BedJet, a smartphone-controlled, cooling and heating device for beds. (ABC)
Sleeping on an Idea
Ho: How did you come up with the idea for your business?
Aramli: BedJet was a concept I had going back 15 years ago and just never did anything with it. The trigger for me deciding to build a prototype and test the idea out was seeing my mother stuck in bed after surgery for a few weeks.
She lived in drafty 100-year-old Connecticut home, and we were constantly adjusting things to make her more comfortable. Electric blankets, heating pads, space heaters – everything was either too hot, too cold, or too many wires in the bed. I realized there has got to be a better way.
Ho: How long did it take for you to develop it?
Aramli: 1.5 years. This was 14 months of formal development after the company was “launched” and four months of informal tinkering before I ever really decided to turn BedJet into a product.
Ho: Who is the target market for your product?
Aramli: The BedJet does especially well with married couples with have different sleep temperature preferences and menopausal women, who suffer from night sweats and hot flashes. Cancer patients on chemotherapy, who sweat at night, MS (multiple sclerosis) patients, with thermal regulation problems, and athletes also get great benefit. We just sold 15 BudJets directly to the New York Jets.
The Pursuit of a Dream
Ho: What hardships did you encounter in developing and launching BedJet?
Aramli: All the usual ones when you are the sole stakeholder funding your start-up: 12- to 16-hour days, working six days a week. Worry about financial ruin. Total work-life imbalance. Weight gain from late-night pizza while still working at 1 am.
Anything incredibly brilliant and amazing that comes out of an inventor or artist is born out of a moment in time when the creator is absolutely and utterly obsessed with the creation.
Ho: What sacrifices, if any, did you make to start your business?
Aramli: The biggest sacrifice was delaying my wedding. We got engaged before BedJet went into production. That took far more money than I ever expected, by a factor of three.
Just as the product was hitting the first manufacturing run, I was financially depleted with very little reserve money in the bank and nothing left to borrow. Not following through to launch the product would have been financial ruin and I had to burn through my reserve savings for the wedding.
We just got married a few weeks ago and the success of BedJet in the last 18 months has allowed me to give my wife the wedding she deserved.
Ho: How much of your money did you invest in your business?
Aramli: All of it. I mortgaged my home to the max, emptied out my life savings including retirement money and mortgaged my mother’s home. This was every penny I could put my hands on. It was just enough to squeak me into production with my first 1,500 units.
I was blessed that from our very first month of shipping the company started cash flowing. Failure wasn’t an option as it would have taken me 10 years to crawl out from under the debt.
Nightmare in the Shark Tank
Ho: So you did you didn’t get a deal on Shark Tank. What went wrong?
Aramli: The Sharks were incredibly negative on BedJet. The product was not yet in production and we had zero shipped sales. And they thought it was too expensive.
It turned out the price point was just fine – our customers’ average spend is near $600. The Sharks thought the $500 target would be dead in the water. They just didn’t understand the sleep market and what people spend on high-end beds and mattresses.
I probably showed up six to eight months too early. I think had I showed up six months after launching with some revenue, I would have had a different result. Then there was the whole Lori debacle.
Ho: What happened with Lori?
Aramli: I missed answering one of her questions due to the Sharks shouting questions over each other the whole time. It’s sort of like being the president at a White House press conference.
Missing Lori’s question was purely accidental. After I gently apologized and asked her to repeat it, she had decided to make an angry point over it. She raked me over the coals and tweeted “First time an entrepreneur ever got me angry in the tank.”
Ho: What about being in the Tank (or whatever happened before or after) surprised you the most?
Aramli: Our phones rang off the hook for days and we got thousands of emails. Lots of business opportunities and buying customers. But a great number were just folks who wanted to tell us they thought BedJet was a brilliant idea and the Sharks made a bad call.
About a dozen people told me they thought I was a greedy pig and I deserved every bit of the Shark’s rejection for overpricing a product that nobody wanted to begin with. That was the biggest surprise – that someone would take time out of their day to locate our company email address and spend the energy to write a nasty letter in.
Ho: Where and at how many locations were you selling your product before Shark Tank?
Aramli: We started shipping product the same week of the Shark Tank airing in February 2015. However, we began showing BedJet at trade shows as early as June 2014. The response was amazing at the trade shows.
Multiple billion-dollar companies gave us huge smiles and love including Tempur-Pedic (TPX), Mattress Firm and Bed Bath & Beyond (BBBY). Before Shark Tank aired we had handshake deals to test the BedJet with Mattress Firm, Bed Bath & Beyond (BBBY) and Brookstone.
A Dream Come True
Ho: What are your goals for your business over the next year and five years?
Aramli: I believe we are already the market leader for climate control bed technology in the USA. We want to triple our revenue next year and introduce a new product line. In five years, I hope to be a $40 million-dollar-a-year, healthy, mid-sized business.
Ho: Do you have any patents or other intellectual property protections?
Aramli: Absolutely. We have two patents awarded already, with another five pending. I wouldn’t put my life savings into a business and a product that couldn’t be defended against competitors. Patents are one of the areas of the business that I invested in, even when money was short.
Ho: Do you want to raise more capital?
Aramli: We just launched a Series A capital raise for $1.6 million. Thirty percent of this is for working capital, 30% for more sales and administrative staff, 30% for advertising and 10% for next generation product development.
Ho: What other products do you have in the works?
Aramli: We do have another super-secret product in the works that is just as innovative as BedJet. It will appear in late 2016.
Sharing the Dream
Ho: What’s the worst mistake you’ve ever made in business and how can others learn from it?
Aramli: I almost took on an investor in the company just as we were launching and shipping the product. I was financially depleted and worried about whether BedJet would become profitable quickly enough to keep me from going personally bankrupt. I had an investor offer on the table that valued the company at $2 million. The investor would put in $1 million, take half the company but more importantly take over control and I would have been relegated to a chief technology officer job.
I almost took that deal. Not because I believed it was a good one, but because I was overworked, worried and financially stressed. As the negotiations went on for a few months, BedJet started cash flowing and I realized I was better off bootstrapping the company. Eighteen months later the valuation of the company is at $9 million and the company is generating great cash flow. I thank god, in that moment of exhaustion, I didn’t write off half my company.
Ho: What are the biggest challenges facing your business now and how are you addressing those issues?
Aramli: With BedJet, we have created a product type that didn’t exist before. There is no existing demand for us to tap into. Millions of people are not online googling for “climate controlled beds” because they don’t even know an option like this even exists for their bedrooms. Our challenge is creating the awareness that comfy cooled and heated beds are just a click away.
Ho: What motivates you to continue to pursue your business in the face of obstacles and lack of profits?
Aramli: I love my company. I love the product I created. I love that my customers take the time to thank me for inventing this product. Every week I get an email from someone with a medical problem that affects their sleep telling me how the BedJet has changed their life because they can now finally get a good night’s sleep.