Kids and temper tantrums go hand in hand like Big Bird and yellow when you try to wash the mess off of their faces. Stay-at-home mom Danielle Stangler accidentally discovered cleaning her child’s face could be a fuss-free feat when she wiped her 22-month-old daughter’s face with a napkin her husband dipped in lemonade instead of water.
“She responded by saying ‘nummy, nummy,’” Stangler recalls. “And then asked for more. And the idea of a flavored face wipe was born. We had so much fun that day at lunch wiping Taylor’s face over and over, that I knew I was onto the next big idea.”
That big idea became NeatCheeks flavored face wipes, an accidental invention like the Slinky and Play-Doh. Launched in February 2014, it sold at one Walgreens (WAG) location in Colorado. A package of 12 wipes costs $1.50 to produce and retails for $4.99. The mompreneur has a patent pending for flavor in a wipe and various trademarks. Stangler, a former district manager at a Fortune 100 company, invested more than $20,000 to start the company and personally loaned the company a significant amount of capital. Her partner, Julia Rossi, invested around $10,000, and personally loaned the company $3,700.
Stangler and her partner Julia Rossi appeared on Shark Tank in April 2015, seeking $150,000 for 25% equity. After some back and forth, QVC queen Laurie Greiner and real estate mogul Barbara Corcoran both offered them what they were asking for, and they chose to go with Corcoran. The final deal off the air turned out to be $75,000 for 12.5% of the company.
NeatCheeks had only $4,000 in sales at the time of taping. Revenues rocketed to $230,000 in three months after the airing. Stangler estimates sales will total $500,000 this year versus $150,000 without the Shark Tank effect. Distribution went from 50 small retailers and one Walgreens (WAG) to 2,000 stores nationwide including Babies R’Us, Buy Buy Baby, select Harmon stores, Pharmaca, Giggle, Nordstrom Rack, Bed Bath & Beyond, Kroger and Target. It also sells in Canada, Australia, the Philippines and South America. Stangler aspires to be a $20 million company within three to five years by adding new flavors and expanding into cosmetics and senior care.
Stangler, a former stay-at-home mom turned mompreneur, explains how she developed the idea and the incredible sacrifices she made to build her business.
A Sweet Idea
Ky Trang Ho: How did you develop the formula for your product? How did you source the materials and find a manufacturer?
Danielle Stangler: The day after my husband and I had the idea of a flavored face wipe, we immediately started Googling formulation companies. Luckily, we found a local company called Colorado Quality Products, that was perfect for our company. They gave our company the ability to a streamlined process in formulating our product. We work with a wipes manufacturer in California that creates the shelf-ready pack of NeatCheeks.
Ho: How long did it take for you to develop it?
Stangler: The idea was created in June 2011. My husband and I figured out Stevia was a perfect flavoring agent in the first two months of the process and working with our attorney to make sure our product was patentable. We completed an extensive patent search, and were advised to “go for it.” In September 2011 once the stevia was confirmed, and the patent search was completed I decided to bring on a partner.
Ho: What made you think it could be a successful product?
Stangler: NeatCheeks cover three areas needed for a successful product: They solve a problem. There is a large target market. They ignite an emotional response when parents use them during face cleaning. Kids love them.
Ho: What is your background? What were you doing before you started this business?
Stangler: I tried to be a stay-at-home mom in December 2010. I left a corporate sales career after five years. During that time (six months), I became an avid Shark Tank viewer and prayed that I would be blessed with an idea to get on the show.
I quit my job in December 2010, and the idea was created by June 6, 2011. We pitched to the sharks in June 2014 and aired on the show April 17, 2015. I believe if you want something bad enough and you believe it, anything can happen.
Bitter Challenges and Sacrifices
Ho: What hardships did you encounter in developing and launching your product?
Stangler: The biggest challenge was making sure our packaging and marketing were on point to relay what we do and who we are as a company. We started with mediocre packaging. It blended in on the shelf. We used the wrong colors. It just was not compelling enough for a consumer to pick up while in the store.
A buyer at a large retailer said the packaging was “too dark, and not playful enough.” Based on that feedback, and the fact that when I visited the Walgreens stores, I could not find the packaging on the shelf when it was right in front of me, I knew we needed to make a change.
I found an amazing design firm in New York City, called Flood Creative, that listened to the need, brainstormed, and the outcome was better than I ever could have imagined. We finally had a fun, playful, clean packaging that enticed customers to pick the package up off the shelf.
Also, during the launching phase, I had to balance being a mother of three kids under the age of 5-years-old, growing an insurance company alongside my husband, and developing a consumer product. My goal was to move the company forward day by day and make all the little accomplishments add up to large accomplishments.
Ho: What sacrifices did you make to start your business?
Stangler: I have sacrificed family time. But I have learned to create a flow to make sure I am successful in both areas. The financial burdens of going “all in” can affect personal finances. But it is all worth it.
I put all of my energy and personal savings into making NeatCheeks a success. I sold my house to fund purchase orders, to make sure we can grow at the pace we need to grow. As an entrepreneur, my goal is to breathe life into the company. The company comes first. To some people, it may seem like a daunting task. But as entrepreneur, I am driven by my heart. An uncontrollable passion and peace come with the journey.
Ho: How much are you paying yourself? If you are not taking a salary, how are are you funding your living expenses?
Stangler: Julia, my former partner, is no longer an employee of the company as of July 2015. I am currently not paying myself any salary. My husband and I decided to sell our home to allow the flexibility to fund purchase orders. The funding of the purchase orders will allow me to scale the business before we need to raise an additional capital investment.
When you are working to make a dream come true for your family, you are willing to go “all in” to succeed. Although my husband is not part of the company, I am lucky to have his support and connections that have been essential to driving this business forward.
Ho: Have you gotten other investors to invest in your business? Who? How much?
Stangler: Yes, I have had influential investors mentor my position as CEO from companies like Crocs and Nextel. I have current investors that have funded the business up until this point, and I am so grateful to have the support and advice from influential people in the community.
We are planning another round of funding for $800,000. It will allow us to grow our team, launch into the international market, and allow a significant marketing push to assist with selling through our current and future distribution channels throughout the end of the year.
A Bittersweet Shark Tank Experience
Ho: Was there anything you wished the producers included that was edited out? Was the edit fair to you?
Stangler: The edit was fair. But I feel our story was not told. It focused on Julia requesting a salary, and that was not what we were about.
Ho: If you could do the show over, what would you do differently?
Stangler: I would have probably waited until we were a little bit further in the process. When we went on the show, we only had $4,000 in revenue. If we went on the show now, we would have had more validation from the market, and the experience may have been slightly different.
I also would have made sure that the question, “what are you going to do with the money” was answered correctly. My partner needed a salary to quit her corporate job, and I need some additional income. But the response should have been “to buy inventory.” Once the inventory was sold, we would generate enough income to pay ourselves. Instead, it was perceived that we were going to take $100,000 out of the $150,000 and pay ourselves. That was not the plan.
Seasoned Business Wisdom
Ho: What business books do you recommend people read and why?
Stangler: The Lean Startup by Eric Reiss: The insight in the book allows even the most grass-roots startup to promote innovation on a very small scale, gain insight, and pivot accordingly.
The 4 Disciplines of Execution by Sean Covey, Chris McChesney, and Jim Huling: It gives insight on laying a foundation of creating perfect execution and accountability in an organization, on a personal level, and team-based.
Ho: What motivates you to continue to pursue your business in the face of obstacles and lack of profits?
Stangler: I am at the point that it is not about the money or the notoriety, it is about creating something from nothing, and succeeding at it. It is also, a lesson for my three kids that life is not easy and if you make good decisions, are honest, it makes life a little bit easier.
My family does not use the word “impossible,” or “I can’t” in our home. Nothing is impossible. No idea is a bad idea. If you can dream, it can happen. This allows ongoing innovation and open communication that will have a long-term positive impact on the company.