Jeff Overall is a rare breed of entrepreneur who managed start a feeding frenzy on Shark Tank. Wearing a company polo and flip flops, the CEO of PolarPro, a camera accessories maker, appeared on a November 2015 episode that featured all millennial entrepreneurs. He hooked solid investment proposals from all but one Shark — Kevin O’Leary.
Overall bit on a $1 million offer from Mark Cuban and Robert Herjavec for a 20% share of his Newport Beach, Calif.-based business. They sealed the deal with fist bumps and pinky and thumbs outstretched. That’s sign language for “hang loose!”
The 26-year-old explains the stunning evolution of how he started producing homemade GoPro (GPRO) camera filters, while a student at UC Santa Barbara. In four years, his company expanded into making a variety of action cam and smartphone accessories.
Bootstrapping an Idea
Ky Trang Ho: How did you come up with the idea for your business?
Jeff Overall: I was spending a lot of time filming with GoPro (GPRO) cameras while on the UC Santa Barbara ski team. It was difficult shooting in the snow due to the extreme lighting conditions, footage was coming back overexposed and washed out. I would get so frustrated with not being able to use the hours of footage I shot and thought that there had to be a solution.
I searched online to see how the production guys were doing it and saw a lot of them using polarizer filters on other cameras. So I ordered a polarizer for a DSLR camera and duct taped it to one of my GoPros. After spending a day shooting I was eager to see the results. When I plugged in the memory card I was blown away with the results, the filter made the footage look much nicer. After outfitting a few of my friends’ GoPros with duct-taped polarizer filters, I started to see potential demand for a purpose-built polarizer filter for GoPro cameras.
Ho: How did you start the business with $2,000? What did you spend the money on exactly and why?
Overall: I actually got the business off the ground with less than $2,000. Over the first four months, I leveraged $2,000 of the college fund my father had set aside to scale the business. In the first two months, I spent only $290 to start the business. After a three-hour brainstorming session with my college roommate, the company had a name: Polar Pro Filters.
- The first expenditure was for the domain name www.polarprofilters.com ($15).
- The second expense was material for my first batch of inventory, polarizer sheets ($100) and a circle punch ($15) to make the filters.
- The third expense came a week later when I got my first website order, shipping envelopes ($50) and postage ($60).
So I actually started PolarPro with only $290 and about 400 combined hours of web programming, video editing, filter fabrication, shipping and customer relations.
After two months of ultra-bootstraping, I knew I was going to need some additional capital to scale. As website orders were increasing, I received my first wholesale order. Because I was in college at the time, I was finding every opportunity to save a few bucks in order to fund the growing inventory demands. I bought old editions of textbooks and ate a lot of my roommate’s food. In all, during this start up phase, I pulled about $1,710 from my college fund.
Ho: What are the steps involved in bringing a concept from idea to consumer? Give us a general overview and then we’ll dig deeper into each step.
Overall: At least for the product I was trying to bring to market, it turned out to be pretty simple to bring that idea from concept to consumer. I knew the polarizer filter helped improve the GoPro camera’s footage. And I knew people wanted it. The only thing I had to figure out was how to attach it to the GoPro, as I was pretty sure people would not want a filter that required duct tape to mount.
The form factor of that camera made it very difficult to attach anything. I figured the easiest way would be to insert a polarizing film in between the camera and the lens. This was the simplest and fastest way to bring this product to market. I knew from the beginning that I would continue to improve upon it. But the small filter insert was my first minimal viable product.
Ho: How did you create the prototypes for your products? What are the costs and steps involved?
Overall: The very first prototype was the filter that was already commercially available to which I added duct tape. This obviously had very little cost. But it was a simple product. The next round of prototypes we cut by hand from a larger sheet of polarizing film. I had to test a few different types of film because some would not conform to the lens shape properly.
Once I found the correct film, the filter punching “production” began. Fast forward four years to our current product line, and a prototype costs way more. Our products are extremely refined and a lot more complex, so the prototyping process is a little different.
Now it is:
1. Engineer the concept into 3D.
2. Print a few prototypes
3. Develop the electrical engineering schematics/layouts
4. Prototype the electrical components
5. Make final changes to the 3D files
6. Make final changes to the electrical components.
7. Ready for tooling. These prototyping costs can range from $5,000 for simple products up to $30,000 for the more complex products that include electronics.
The Hunt for Manufacturers
Ho: How did you find a manufacturer to make the products? What are the costs and steps involved?
Overall: The first eight months I was doing all the manufacturing myself. I literally punched small disks out of the polarizing film, while my roommates threw massive parties at the house. I knew from the beginning I wanted to improve the product and make it easier to install and remove from the GoPro housing.
I started researching manufacturing and found out it was going to be a huge cost. Not only do you need to pay for an injection-molding tool, but also someone to take your concept and model it in 3D. About six months later, from a basic Google search for injection molding facilities, I emailed about 15 of them. Out of the 15 only one got back to me.
We started talking about ways we could make a filter that would snap onto the GoPro housing. The molder referred me to a mechanical engineer. I came to a point where we needed to pay to keep the project going. I put together a pitch and closed our first round of funding with, the toughest venture capitalist in Newport Beach, Calif.: my dad.
Eight months after starting the company, I put the deposit down on the first tool. That $10,000 family investment all went to engineering, tooling, and the first order of snap-on GoPro filters. Today we have in-house engineers and four factories that make our tools and run production (including the very first company that worked with us).
Todays manufacturing processes is still similar:
1. Finalize 3D renderings
2. Finalize electrical engineering
3. Send the files to the manufacturers
4. Manufacture sends back tooling analysis
5. Final changes are suggested to make the tooling easier
6. You have to make a deposit to get the tooling started
7. Create packaging artwork
8. Create assembly instructions
9. Establish quality control instructions.
Tooling costs for us have ranged from $7,500 all the way up to $125,000 for our most complex product.
Selling Online With eBay and Amazon
Ho: How did distribute the product and sell them to consumers?
Overall: I started out with a basic website, which allowed me to sell direct to consumers. After about a month I opened up eBay (EBAY) and Amazon (AMZN) stores, which produced some decent incremental sales. Two months in, I received an email from a German company that wanted to buy 200 filters for resale (keep in mind I was only selling about two per day at that point).
I realized I needed to shift my strategy to target stores, which were selling GoPro cameras, where I could extend the reach much faster and move more volume. This initial reseller relationship continued to grow and it eventually became our wholesale distributor for Germany about a year later. Currently, we are in 1,200 stores and have 15 distributors covering 40 countries worldwide.
Harnessing SEO to Market and Advertise
Ho: How did you market and advertise your products?
Overall: I found the fastest and most efficient way to reach customers was by studying up on search engine optimization. Since no one had ever heard of PolarPro Filters, no one would be searching for it online. I focused on a couple key search terms, and taught myself how to optimize the website to rank well for them.
I started with “GoPro filter” and “GoPro lens,” at the time 80% of our traffic came from those search terms. I also used YouTube as a marketing platform. I made a few comparison videos, which showed the difference with and without a filter. In addition to that about 10% of the traffic was streaming in from various GoPro forums to which I was contributing. While it did require some dedicated research, none of these initial marketing methods costs anything other than my time.
Ho: How did you distinguish your products from competitors? What makes them superior?
Overall: In the beginning, we did not have any competition. It was the first product of its kind, unless you called duct taping polarizer filters competition. What I was producing was superior to do-it-yourself solutions. It didn’t rely on duct tape, had a much cleaner form factor, and was less expensive than those designed for full-sized cameras.
As the company grew larger some other competitors popped up. But by they time they arrived, we had already moved onto the next version. We are always a couple steps ahead of the competition. We certainly pride ourselves on developing innovative, high-quality products. We’re able to deliver on those core values while selling them for less than other inferior quality offerings out there.
Scoring on Shark Tank
Ho: How did you get on Shark Tank? Why were you looking for outside investors?
Overall: I landed in the Shark Tank by going to an open casting call in Los Angeles. I crafted a mildly funny laid-back pitch the week prior. When I got to the casting call at 7:30 a.m. there were thousands of people waiting. The organizers told me to come back at 4:30 p.m. I was not about to sit in L.A. traffic to go home and back again.
I was pretty frustrated and remember thinking that I have a business to run, I can’t be waiting around all day for this. I got into my car and was about to go home. But as I sat there for a little, I was thinking though all the work I put into my pitch, and talked myself into working at a coffee shop until the afternoon call back.
Seven months later I was walking through the doors into the Shark Tank with 15 cameras on me. It’s a good thing I went to that coffee shop. I have been watching the show all seven seasons and had been prodded by family every to go for it for the last few years. Until this year, I did not have a clear need for outside capital but now we are at another expansion point. I’m hoping to grow our vertical markets and enter into mobile phone imaging and wearable tech markets soon.
Usually all of our product ideas relate to GoPro usage or the unique challenges of drone flight. We have some very interesting product ideas in new spaces as well. What we have in mind requires a lot of capital to build. We could not fund it on our own. Due to timing I was not able to pitch these products on the show. I stuck with the current product line instead.
Ho: How did you value your business on Shark Tank?
Overall: I had a lot of help with company valuation from my uncle, who is the controller and chief accounting officer at a large publicly-traded company. He worked with me on a few different valuation methods such as discounted future cash flows, earnings multiples, and revenue multiples for a few different industries.
As predicting future cash flows and assigning a discount rate can be very subjective, I relied mostly on a revenue-multiple model. I researched a bunch of consumer product companies who have been on Shark Tank and found most of them established valuations at one to two times revenue. I decided to go in with a 1x projected revenue (2015) at $5 million.
Ho: What deal did you get on Shark Tank? Have you gotten the money? What did you spend it on?
Overall: On the Shark Tank episode I was able to land a $1 million investment for 20% of my company, with Robert Herjavec and Mark Cuban each investing $500,000 for 10% of the company. In the on-the-spot negotiation, the original valuation stood and Mark was onboard right away. But I wanted to get both Robert and Mark on my team. So I sold an additional 10%.
The Shark Tank Effect
Ho: How has a Shark investment affected your business? How did you grow as a result? What were your annual sales before and after Shark Tank?
Overall: The Shark Tank definitely increased exposure of PolarPro. The night of the airing about 9,000 visitors came to our website. Normally there are about six. Sales the following week of airing were up about 2,500%.
Ho: How many retail outlets are you in now because of Shark Tank? Which ones?
Overall: Within two weeks since airing, I opened about 15 new wholesale accounts stemming from the appearance. Potentially the biggest account is an opportunity to land in-store at Best Buy (BBY). I have been meeting with them for about two years and it looks like we will finally have a good shot at getting in-store now that we have Mark Cuban and Robert Herjavec.
Ho: What are your growth plans for your business over the next year and five years?
Overall: The plan for PolarPro for this year is to maintain our foothold with our drone and GoPro accessory lines, while also investing in a few mobile phone products and a couple of wearable tech products. We will try to grow these two categories over the next year or two while keeping our ear to the ground for the next tech trend.
Technology is always changing so it’s tough to say exactly which products we will be making in five years. However, whatever the next big technology is in five years, I will be involved with it in some capacity.