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.
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 actually 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.”
Aramli tried to salvage the pitch by talking about the retailers that have showed interest. Herjavec and Cuban cut him off, reminding him they were all out and that he blew his chance at a deal.
But the Bedjet turned into a dream come true for Aramli. 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: Tell us about the product. How does it work? What key features distinguish it from others on the market?
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.
Sleep Number has attempted to create a temperature control product for beds and their product gets 2.6 stars out of five for customer reviews and costs $2,000 for a king-size bed. It’s an awful pig of a product that is very slow to heat and cool and makes you sleep on a stiff mattress pad. I’m surprised a major mattress manufacturer would put their name on something that is so poorly engineered and gets such poor reviews from their customers.
Our BedJet gets 4.5 out of five stars on our customer ratings for less than half that price, with far more features and a more delightful experience and no stiff mattress pads to sleep on.
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. So often we all have great ideas and do nothing with them until we see them on a shelf somewhere, created by somebody else. The trigger for me deciding to build a prototype and test the idea out was seeing my mother stuck in bed after a 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 had my moment then and 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. The first prototypes started out as just a hobby project, designed and built on my kitchen table just to see if I could make it work.
I didn’t spend too much time on it during that period, maybe eight or 10 hours a week and it was fun tinker time. However, the 14 months of formal development is an understatement on the real amount of time it took to develop BedJet. During that period I was putting in 12- to 16-hour days six days per week, including some 20-hour marathon workdays in which I was “obsessed” with the creation of it and barely slept.
Ho: How much does it cost to make? What do you sell it for?
Aramli: Our company no longer discloses this information. But the numbers we shared on Shark Tank were way off – we weren’t in production at the time of the filming. It cost way more to build than I expected.
Ho: How did you develop the prototypes for your product?
Aramli: I built the first BedJet prototypes on my kitchen table. I’m an engineer and have worked on lots of cooling and heating technologies, including some of the climate comfort technologies of the NASA space suit.
Ho: Who is the target market for your product?
Aramli: Anyone who values comfort and a better night’s sleep. I compare the future market for climate comfort beds to heated car seats for folks in northern states. Once you try one out and see how amazingly delightful and comfortable it is, you don’t ever want to go without.
The BedJet does especially well with married couples with have different sleep temperature preferences and the menopausal community, who suffers for night sweats and hot flashes. Cancer patients on chemotherapy, who sweat at night, as well as MS (multiple sclerosis) patients, with thermal regulation problems, also get great benefit from our technology.
Sleep is as important to your health as exercise and nutrition and we are seeing a growing awareness of this with consumers. Even athletes found benefits with our BedJet system. We just sold 15 BudGets directly to the New York Jets for use with some of their top players.
Ho: What made you think the Bedjet could be a successful product?
Aramli: I realized early on that my opinion on the product didn’t matter. The opinions of the top retailers we met at trade shows who loved the product also didn’t matter either. When it comes to radically new consumer products, the only opinion that matters is the consumer who writes the check to buy one.
I market tested the product on Kickstarter to see if BedJet was something people would actually want and would pay for. Our BedJet V2 campaign ranked in the top 25 Kickstarter technology projects of all time. The 4,000 Kickstarter backers who wrote us checks to help develop the BedJet were the best opinion test we could have had.
The Pursuit of a Dream
Ho: What hardships did you encounter in developing and launching your product?
Aramli: All the usual ones when you are the sole stakeholder funding your own start-up company: 12- to 16-hour days, working six days a week. Worry about financial ruin. Worry about ruining my personal relationships because of the work schedule. Total work-life imbalance. Weight gain from late-night pizza while still working at 1 am.
Thankfully that period of the company launch is gone now and I have employees and a more traditional work schedule. One thing I’ve learned from that experience is that nearly 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.
It consumes you completely for a period of time, every waking thought and moment. This happened to me with BedJet. While that moment took a toll, I don’t think I could have gotten the company launched with the budget I had and turned out a product that has gotten such rave reviews without that moment of creative obsession.
Ho: What sacrifices, if any, did you make to start your business?
Aramli: The biggest sacrifice to start my business was having to delay my wedding to my Fiancé. We got engaged “start-up” year, before BedJet was in production. Getting the product into production 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 left in the bank and nothing left I could 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.
I realized that there was a financial risk that I would not be able to write the checks for a wedding date that was only eight months away. I simply had no idea if the product would generate enough sales in time to pay me back and I told my fiancé we had to push the wedding date off to be financially safe. There was enormous stress for both of us associated with that.
This story does have a happy ending. 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 type of wedding she deserved. It was a fairy tale wedding day and she’s been the best thing that’s ever happened to me.
Ho: How much of your own 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 another home that belongs to my mother. This was seriously every penny I could put my hands on. It was my entire net worth I bet on creating and launching BedJet.
I’ve done well in my career but I’m not a wealthy person. This was a lot for me. It was just enough to squeak me into production with my first 1,500 units. I was blessed and fortunate that from our very first month of shipping the company started cash flowing. Failure in getting the business launched wasn’t an option, as it would have taken me 10 years to crawl out from under the debt created by start-up costs.
Ho: How much are you paying yourself? If you are not taking a salary, how are are you funding your living expenses?
Aramli: I didn’t pay myself for the first two years of the business. Now that the company is profitable, I am paying myself the same amount of money I made in my prior jobs to BedJet. It is still not enough to justify the risks I took to get launched and the personal money I had to invest in the business.
But the company is still very young and we are growing fast. I expect to pay myself back my initial investment in another year to two. That’s fast by startup standards.
Nightmare in the Shark Tank
Ho: So you did you didn’t get a deal on Shark Tank. What went wrong? Should you have done anything differently?
Aramli: The Sharks were incredibly negative on BedJet very fast. I believe the primary reasons were 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 nearly $600 with us and the Sharks thought the $500 target we shared would be dead in the water.
They clearly just didn’t understand the sleep market and the kind of money people spend on high-end beds and mattresses. At the time of our filming, there really wasn’t anything I could have done to change these two issues. I probably showed up six to eight months too early for the Sharks. I think had we showed up six months after launching the product with some revenue results then would have had a different result with them. Then there was the whole Lori debacle.
Ho: What happened with Lori?
Aramli: I missed answering one of her questions due to the Sharks talking over one another. What most folks don’t see from the production editing is that the Sharks are shouting questions over each other the whole time. It’s sort of like being the president at a White House press conference with everyone speaking over each other.
Missing Lori’s question was purely accidental but she decided to take it personally, interpreting it as being intentionally ignored. She wasn’t. 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 later “First time an entrepreneur ever got me angry in the tank.”
Usually Lori is one of the kinder and gentler Sharks and after the airing even her own fans gave her grief on social media for that unusual harsh approach towards me. I went out and got my QVC deal on my own, without any of the Shark’s help and without having to give up a piece of my company.
BedJet will be airing on QVC very soon with myself as the on-air guest host. I am especially proud of this distribution deal because the “Queen of QVC” was one of the harshest Sharks during my time in the Tank.
Ho: What about being in the Tank (or whatever happened before or after) surprised you the most?
Aramli: After airing, I was incredibly surprised on how a primetime TV appearance creates a dynamic where some of the viewing public feels they need to share their opinion of you with you. Our phones went off the hook for days after our first airing and we got thousands of emails. Lots of business opportunities and buying customers. But a great number of those calls and emails were just folks who wanted to tell us they thought BedJet was a brilliant idea and the Sharks made a really bad call. They were sending in messages of support and I was really touched by those folks.
Then there were a very small number of people, about a dozen, calling or writing in to tell 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. TV does funny things to some people.
Ho: If you could do the show over, what would you do differently?
Aramli: I don’t look backwards.
Ho: Where and at how many locations were you selling your product before Shark Tank?
Aramli: We starting 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. Titans of the sleep and bedding industry came looking for us and telling us our product concept was great and that they had been searching and wanting to try out something just like BedJet.
These were multiple billion-dollar companies giving us huge smiles and love at the trade shows and included folks like Tempur-pedic (TPX), Mattress Firm and Bed Bath & Beyond (BBBY). Before Shark Tank aired we had hand shake deals finalized to test market 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 right now 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: What was the most effective thing you did to get more exposure for your business before going on Shark Tank?
Aramli: Trade shows, we met incredible retailers very quickly and easily this way. I attribute part of that having a unique new product that nobody else had.
Ho: Do you have any patents or any pending, copyrights or other intellectual property protections? Absolutely.
Aramli: I put my entire personal net worth into BedJet and in the process managed to create a completely new consumer product category. 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. We have two patents awarded already, with another five pending.
Ho: Do you want to raise more capital? How much? What do you want do with the money?
Aramli: We just launched a Series A capital raise for $1.6 million. The company is already profitable, but we do need more money to accelerate our growth. 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? When are they set to launch?
Aramli: The BedJet has helped create a whole new consumer product segment of climate controlled bed systems. Our little band of ragged engineers on a shoestring budget managed to out-engineer and run circles around billion-dollar sleep companies like Sleep Number and Tempur-pedic. This is in terms of creating a sleep temperature product that just works better and provides a much more delightful customer experience for dramatically lower cost than the best those guys could do.
This is shown by our unprecedented 92% five-star rating on Amazon. We do have another super-secret product in the works that is just as innovative as BedJet and will also run circles around products released by the big players in the sleep industry. 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. Taking that deal would have been a huge mistake. 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 singular moment of exhaustion that I didn’t write off half my company.
Ho: What is the best advice and/or business insights you’ve received from your Shark(s)?
Aramli: I got none from them. But I can share what I learned from being there. Wealthy and successful business people aren’t right all the time. They aren’t even right 90% of the time. You don’t need to be right 100% of the time to make a grand success and create wealth in business. You only need to be right a few really important times.
When you meet these successful people and they tell you will fail, you need to trust your own instincts and remember the only opinions that matter are from the folks who will actually buy your product.
Ho: What are the biggest challenges facing your business now and how are you addressing those issues?
Aramli: Our biggest challenge is that we have invented a whole market that never existed before and thus we are not tapping into any pre-existing consumer demand. There are mattress startups whose revenue has reached the tens of millions in just a second or third year. These startups are tapping into existing demand for an existing product (mattresses) that has an existing huge market by simply offering a better mousetrap.
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. This is a marketing challenge but one that comes with big budgets to really get the awareness out there.
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. That’s really rewarding and fulfilling. Plus, seeing the company start to generate profits is incredibly exhilarating after the ride I’ve been through to get here.
This story was originally published in Forbes.com in February 2017.