One of the biggest Shark Tank failures?
Elephant Chat is designed for the “we need to talk” conversations. Elephant Chat is a stuffed animal that a person can place in the room if they want to have a serious talk or discussion with his/her partner.
It is inspired by the phrase ‘elephant in the room’. It is created to have those unwanted conversations which are usually being ignored but need to be discussed.
Elephant Chat is a stuffed toy elephant in a glass case. It can be used to indicate by a person to indicate that he or she wants to discuss some serious issue with the partner.
As described by the founders, the elephant comes in a silver case. It should be placed where it is visible. When the spouse wants to talk about something, he/she pulls out the silver cover, takes out the elephant from the case, and places it where his/her spouse can see.
Another catch is that only the person holding that elephant gets to talk and his/her partner has to keep quiet and listen.
Elephant Chat at a glance:
- A stuffed elephant to signal a serious talk.
- Founder: Jason and Amanda Adams
- Asked for $50,000 for 20% at $250,000 valuation on Shark Tank.
- Currently out of business.
Index:
Who are the Founders of Elephant Chat?
Jason and Amanda Adams founded Elephant chat. They had met just a year ago before starting their own business. They met on a blind date and ended up getting married 6 weeks later.
Jason and Amanda believed that communication is key to having a relationship. This inspired them to start the Elephant Chat.
How was their Shark Tank pitch?
Jason and Amanda appeared in episode no.509 which aired on 25th October 2013. They were seeking a $50,000 investment for 20% equity. Amanda and Jason started the episode by talking about their personal stories and what inspired them to start this business.
Amanda gave their personal experience as an example, she said whenever Jason leaves the toilet seat up, she simply pulls the grey box up and places the elephant in the plastic box where Jason can easily see it.
Their pitch did not go well. The sharks were unhappy about the production cost. They questioned the concept because none of the founders is a therapist. Lori was unhappy about the price point. She said that stuffed animals are not that expensive to make and they are spending too much money on tooling. So she is out.
Daymond said everyone knows that wives are always right. Kevin was not happy about the costs either. Mark said they are in a conflict resolution business but their progress right now isn’t great so he is out. All the sharks refused to take the deal further, so Elephant Chat was left without a deal.
What happened after Shark Tank?
This business affected their personal life. The couple’s relationship ended in a divorce. Which resulted in their products not being available for sale. Elephant Chat went out of business.
Elephant Chat is considered a classic Shark Tank failure. The main reason was the cost of the product was way too high and just like Lori had said, they spent a lot of money on tooling and stuffed animals are available for a much cheaper cost and are inexpensive to make as well.
Even though the idea was unique, it was clear that people are less likely to invest in such products.
How Elephant Chat makes money?
The couple said on Shark Tank that their friends had invested some money in the company. Their seven friends came together and had invested $100,000. Jason revealed that the first 500 units cost $22 each to make.
The couple sold the elephants later for $59 each. Which is expensive for a stuffed animal locked in a plastic box.
The couple ran a Kickstarter campaign to fund the tooling for the injection molds. Their goal was $13,120 but they did not receive a good response.
That’s why they decided to appear on Shark Tank seeking a $50,000 investment for 20% equity.
What’s the Valuation of Elephant Chat?
While pitching the product on Shark Tank, the couple was seeking a $50,000 investment for 20% equity and the implied valuation of the company was $250,000.
Several friends of the couple had invested $100,000 in the company. The couple had come to Shark Tank seeking $50,000 investment but had to leave the show without a deal.
Competitor analysis:
Elephant Chat was made so that couple could discuss a certain issue without any misunderstanding and conflict. But instead of investing in a $60 stuffed animal, people will prefer visiting an actual therapist.
Is Elephant Chat dead?
The company failed to generate sales and went out of business soon after their Shark Tank appearance. Elephant Chat products are not available for sale anymore.
Interesting facts
- The couple in the pitch had mentioned that communication is a key to their relationship. But soon after that, they ended up splitting.
- Jason and Amanda’s son Koa faced some medical issues and Jason started an IndieGoGo Campaign named Stand Up for Koa.
- Since the Shark Tank episode, many articles were written about Elephant Chat and the couple’s personal life was also discussed in these articles.
- Elephant Chat is said to be one of the biggest Shark Tank failures.
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What is Elephant Chat?
Elephant Chat is designed for the “we need to talk” conversations. Elephant Chat is a stuffed animal that a person can place in the room if they want to have a serious talk or discussion with his/her partner.
Who Founded Elephant Chat?
Jason and Amanda Adams founded Elephant chat. They had met just a year ago before starting their own business.