As a child, product design engineer Amelia Cosgrove loved building forts, time travel machines and other wild ideas that tested the limits of her imagination and resources. One day while reminiscing about her childhood fun with fellow product design engineers over lunch, the proverbial light bulb went off in her head.
“The idea hit me,” Cosgrove said. “Why not enable kids to create their custom toys, and use modern innovation like on-demand manufacturing and technology to do so?”
That aha moment formed the pillars of Austin, Texas-based PopUp Play, which Cosgrove launched in November 2015 with her husband Bryan Thomas, who serves as CEO. Thomas became an entrepreneur at age 18 and had been involved with three startups that sold for $160 million in total. Cosgrove has more than 10-years of experience as a product design engineer
Their PopUp Play Build Lab online app lets kids build castles, gingerbread houses and rocketships with custom windows, doors, and other details. The company then prints a 4-feet by 4.5-feet version of the design on fiberboard and mails it to customers within a week for $99.
“We set out to change the way kids play and make the idea of creating your toys a reality,” said Thomas. “We continue to pursue excellence in all that we do for PopUp Play because we genuinely believe we’re onto something big here.”
The company has switched from a business-to-consumer model to a business-to-business model in which it produces custom-branded designs for client companies.
“We are continuing to develop partnerships with some of the nation’s leading brands in travel, automotive, e-commerce, restaurants, and consumer packaged goods,” said Thomas.
Beyond child’s play, the web and iPad apps have the potential to design imaginations made of metal, wood, and plastic. Since its launch, the company has morphed from a business-to-consumer model to a business-to-business platform that lets client companies create custom branded products.
“PopUp Play started with the mission to empower the youngest generation to build and create their own toys,” said Thomas. “We’ve accomplished that, and we now have an even bigger mission that we continue to strive for: to enable major brands to bring this unique digital-to-physical to kids all around the world.”
Playing With the Sharks
Within a year of their launch, Cosgrove and Thomas pitched their business to investors on Shark Tank. In an episode that aired January 27, 2017, they asked for $250,000 for 6% equity, valuing the company at $4.17 million. Even before going on Shark Tank, the company won the 2016 SXSW Pitch Competition and awards from American Airlines, Apple, and several other distinctions.
PopUp Play’s revenues of $330K over 11 months delighted the sharks. But they were hardly amused when they heard nearly all of it — $300K — came from one automaker. Some $15K came from a Kickstarter campaign, and the other $15K came from regular orders.
Chris Sacca, the founder of Lowercase Capital, was the only shark to show any interest. He offered $250,000 for a convertible note if he could invest on the same terms and valuations as their previous investors — Capital Factory, Silverton Partners, Floodgate, and TechStars. Cosgrove and Thomas took the offer after quickly checking in with each other. A convertible note is a type of debt that could turn into equity at a predetermined valuation. In this case, it was set at $3 million maximum.
In the week after appearing on Shark Tank, Cosgrove and Thomas have received nearly 600 inquiries about their business. Web traffic over the following three days eclipsed all of 2016.
Thomas advises aspiring entrepreneurs openly share their ideas and vision with friends, family, and co-workers. The most valuable part of a business lies in its execution — not ideas.
“When you share an idea with trusted and respected individuals in your life, you can receive some monumental feedback that can ultimately improve your product or cause you to change direction entirely,” Thomas said. “That has played a big role in getting PopUp Play to where we are today.”