Over the past seven seasons of “Shark Tank,” Kevin O’Leary has established himself as the mean, sarcastic investor who either challenges entrepreneurs to better defend their business or else dismisses them as “cockroaches.”
But in a pitch featured in last week’s Season 7 finale he dropped the shtick, and in a state of being genuinely angry and hurt, called an entrepreneur an a — hole and told him to “Get the f — out of here.”
Maneesh Sethi, the founder of consumer electronics company Pavlok, prompted this response when he explained that he had to turn down O’Leary’s offer, even after the other Sharks pulled out, not because of its terms but because of O’Leary’s personality. “I would take an offer from anybody besides Mr. Wonderful,” Sethi said, using O’Leary’s nickname.
We got in touch with both O’Leary and Sethi for their insight, now that the pitch has been seen by millions of viewers. O’Leary suggested he kept his emotions around the pitch within the confines of the Tank, and explained that Sethi has a big lesson to learn if he wants to be successful in business. Sethi said that the 11-minute broadcast version of his 45-minute pitch didn’t accurately portray him or his company, and he explained that he doesn’t regret refusing O’Leary’s offer but wishes he had conducted his presentation differently.
In late 2014, a “Shark Tank” producer reached out to Sethi to ask him if he wanted to apply to the show. The producer had noticed Sethi’s successful IndieGoGo campaign for the Pavlok wristband, which through either a manual or automatic prompt shocked its wearer when performing a bad habit. Using conclusions from existing research on Pavlovian conditioning, Sethi created it with the intention of linking bad habits with an uncomfortable reaction so that the habit could cease being enjoyable.
Sethi is the brother of bestselling personal finance writer Ramit Sethi and a friend and associate of “The 4-Hour Workweek” author Tim Ferriss, as well as the curator of his own personal development blog Hacking the System. Pavlok grew out of the viral popularity of one of Sethi’s productivity experiments from 2012, in which he hired a woman on Craigslist to slap him in the face anytime he went on Facebook when he should have been working.
When he eventually made it to the “Shark Tank” set last September, Sethi was looking for 3.14% equity in his company in exchange for $500,000, giving Pavlok a valuation of $15.9 million.
He told the Sharks that through the sale of some prototypes and then pre-orders of the $200 final product, he had sold $800,000 worth of his wristbands, which were going to ship the next week.
At one point, Mark Cuban asked about what clinical trials Sethi conducted to prove his wristband worked, and when Sethi referred to a pamphlet of research on Pavlovian conditioning from the past few decades, Cuban called him a con artist. The rest of the televised segment highlighted Sethi’s most snarky reactions to Cuban’s and other’s attacks.
“I was caught off guard by how quickly and forcefully Mark turned against us, and that really changed the tone of the pitch,” Sethi told Business Insider. “The Sharks became so focused on clinical studies, I couldn’t really get a word in edge-wise to tell them about the thousands of success stories our real-life users have had.”
Sethi also noted that he worked on a small, eight-person pilot study with the University of Massachusetts Boston on Pavlok’s capacity to deter smoking, which he was disappointed didn’t earn any mention on the final cut of the show.
The Sharks started arguing among themselves over whether or not the product was viable. At one point, Sethi grabbed his face in frustration and said, “You guys are making me so ADD.”
After some more back and forth, Lori Greiner and Cuban pulled out for lack of what they deemed sufficient evidence, Barbara Corcoran went out because she didn’t like the product, and Robert Herjavec didn’t make an offer because even though he actually found the product interesting, he couldn’t justify the $15.9 million valuation.
O’Leary started his reply by telling Sethi, “You’re a combination of spontaneous combustion and ADD. I’m not kidding. It’s very difficult to listen to you.” But then he told him that he had studied aversion therapy as an undergraduate and found Pavlok to be interesting.
To avoid meeting Sethi’s valuation, O’Leary offered the $500,000 as a loan at 7.5% interest for 24 months in exchange for 3.14% equity. Sethi looked wary.
“This is the problem,” he said. “Damn. The problem, Mr. Wonderful, is that we’re not focused on the money, we’re focused more on the habits… Our biggest goal is to break bad habits around the world. Mr. Wonderful, I just can’t work with you.”
Greiner asked him whether he came on the show not looking for a deal but rather a commercial for his product. Sethi said he did want a deal (and he told us that he wanted a deal with either Greiner or Cuban) and that O’Leary’s deal was “actually quite good.”
“It’s the person,” Corcoran offered.
“It’s the person,” Sethi said. “I feel like — I would take an offer from anybody besides Mr. Wonderful.”
“Maneesh?” O’Leary chimed in. “You’re an a — hole. Get the f — out of here.” Cuban hollered and clapped his hands.
“Oh, well… are you all out?” Sethi asked.
“F — you,” O’Leary responded.
After Sethi walked out, O’Leary appeared more hurt than angry, and his fellow investors told him he shouldn’t feel bad.
“The second Maneesh made his refusal he was dead to me,” O’Leary told us. “Regardless of his opinions about me, I have absolutely no time for anyone who lets their emotions get in the way of their money, which is exactly what Maneesh did.”
O’Leary once told Business Insider that the reason he is especially aggressive on the show is to test entrepreneurs, to see if they can handle the pressure. His focus on cash flow is genuinely part of his investing approach, but he often exaggerates this to cartoonish levels for dramatic effect.
Interestingly, Sethi adamantly opposed partnering with O’Leary precisely because of his bully persona in the Tank.
“Going in I knew Kevin was not a great investor fit for our company,” Sethi said. “A lot of people don’t realise investment partnerships are about way more than money. Business style and vision for the company need to align as well. I was concerned he would prioritise monetary returns over number of habits broken, which is our main [Key Performance Indicator].”
Sethi said that in the nine months since his “Shark Tank” pitch, he’s sold a total of 10,000 wristbands and collected more user data. He’s also raised more than $275,000 on IndieGoGo for an upcoming Pavlok alarm clock. He said that Pavlok is profitable.
We asked him if he regrets his “Shark Tank appearance. “If I could film the show again, I would have changed my presentation,” he said. “But I don’t regret turning down the offer.”
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