Actor Ashton Kutcher teamed up with Dallas Mavericks owner Mark Cuban to catch the wave of the future in surfing. The Shark Tank kahunas invested $200,000 for a 22% stake in Slyde Handboards in an April 2016 installment. Since the airing, a tsunami of orders hit the San Clemente, Calif. company owned by husband and wife team, Steven and Angela Watts.
Slyde Handboards are shaped like miniature surfboards, for which the company has a utility and design patent. Instead of standing on it, you strap it to your hand. You catch a wave as if you’re body surfing but with the handboard outstretched in front of you. The Watts launched their company in November 2010 and sold their first handboard in summer of 2011 to a customer in the Netherlands.
The handboards are manufactured in Taiwan. They retail for $119 to $199 with gross margins of 40% to 70% depending on whether they’re sold wholesale or directly to consumers. Slyde made $20,000 in sales its first year and doubled over almost every year after that.
But the company never made a profit until appearing on Shark Tank. Thanks to the show, they expect to ride $1 million in sales in 2016. Slyde mostly sells online and has 40 U.S. retailers, a U.K. distributor, and a Spain distributor. Since Shark Tank, Cuban got them into Amazon Exclusives.
Steven and Angela Watts explain how they started a business that rides their passion for surfing and how they’re turning handboarding into the wave of the future for surfing.
Ky Trang Ho: Tell us about your background. What were you doing before you started your business?
Steven Watts: Soon after graduating from high school in South Africa, I surf traveled around the world, going to places like Indonesia, Australia, New Zealand, Europe, North Africa, and North America. After my traveling days, I graduated with a Bachelor of Arts in Product Design from Central Saint Martins School of Design in London.
On a work visa, I was able to come to California and was working as a freelance designer in Los Angeles and teaching surfing in my spare time, until I finally won the green card lottery and was able to start Slyde Handboards.
Carving a Gnarly Niche
Ho: How did you come up with the idea for your business?
S. Watts: I have been surfing and riding waves since before I can remember. As a kid growing up in South Africa, we would find all sorts of different ways to bodysurf the waves. We would use frisbees, flipflops, anything that you could hold in your hand that would give extra leverage when bodysurfing. The fast food tray was our favorite to use because of the bigger surface area, and they were readily available at local beach restaurants.
Over the years, the idea of using something on your hand to get more lift out of the water and speed down the wave evolved into my friends and me using foam from breaking open old surfboards to shape into smaller handboards that were more aquadynamic and worked way better than a fast food tray. It wasn’t until I traveled around the world surfing, meeting other surfers and watermen and waterwoman that I found stories that they had grown up doing the same thing as kids at their beaches from Australia to Hawaii.
We were all finding different ways to use found objects to bodysurf the waves, and that’s when it occurred to me to start Slyde, a brand that was exclusively centered on the sport of handboarding. It was an underground movement of watercraft, and there was no brand centered around it.
Ho: Who is the target market for your product?
S. Watts: The market for Slyde is anyone that visits the beach and likes to get in the ocean. It is so easy to learn no matter what age or skill level you are. Handboarding (or as our customers call it, Slyding ) is accessible to just about anyone, as long as you can swim and feel comfortable in the ocean. It is also a great way for a more experienced rider to experience the ocean differently.
Ho: What made you think it could be a successful product?
S. Watts: It was fairly simple to me: There was nothing in the world I wanted to do more. Success to me is being able to do what I love every day. I always knew it was going to take a while for Slyde to catch on. However, I always had the belief that if I loved to handboard, and if so many of my friends loved to do it, then surely once more people learned about handboarding, they would love it too. And I wasn’t wrong!
We get emails and reviews from people saying that we reinstated their love for the ocean, that they haven’t had this much fun in the ocean in years or that we have helped guys who find it hard to surf because of bad knees, and now they can get back in the water and do what they love. From experienced surfers to young kids getting their first wave, the stoke is undeniable when we get the emails thanking us for changing their lives.
Ho: How much did you invest in your business? How did you get the money to start your business initially?
S. Watts: Angela and I have personally invested almost $40,000 of our savings, along with living off credit cards for years while we didn’t take paychecks. I had money saved from various jobs and we also invested $5,000 of our wedding gift from Angela’s dad.
Ho: How did you go about making a prototype, sourcing the materials and finding a manufacturer?
S. Watts: I had been shaping and making handboards since I was a kid, and the process to make a prototype was the same way as making a regular-sized surfboard. I have a degree in product design so making any prototypes are pretty much second nature to me.
Ho: What hardships did you encounter in developing and launching it?
S. Watts: Education has probably been our biggest hurdle, even after Shark Tank. It is still a new concept to people. They have to see a video of it working or try it themselves to understand it. To overcome this, we spend a lot of time creating videos and content and hosting beach demos in the summer.
Slyding Into the Shark Tank
Ho: What did they like most about you, the company and product?
S. Watts: Ashton Kutcher summed it up when he said on Shark Tank “this is cool because you are cool.” Both Ashton and Mark understood our brand and product immediately, and know that there are so many people in the world that are attracted to the surf market and want to be surfers. They saw that Slyde not only is a cool surf brand but also an easy way to get the surfing experience without all the time and skills it takes to be a stand-up surfer.
Ho: How did you prepare for your appearance? What made it a success?
S. Watts: Angela watched nearly every episode of Shark Tank and wrote down every question that the sharks asked. We created flash cards with the questions, with our answers so we knew exactly how we would answer the sharks with no if, ands, or buts. We discussed who would answer what type of questions: Angela any business and financial questions and I would answer any history, brand or marketing questions.
We were also very lucky to be part of a Springboard Program with the San Diego Sports Innovators (SDSI). We had a practice investor presentation in front of the SDSI panel the day before, which made us more confident and helped prepare us for whatever the sharks threw at us.
Ho: What can you teach others about your Shark Tank experience? What are the secrets of a successful audition and appearance?
S. Watts: Practice, practice, practice and then practice some more. Also, know your numbers. Knowing your numbers are by far, and above the most important thing, you can do. You can have all the passion in the world for your business and an amazing story, but if the numbers don’t make sense, you are going to sink.
Also, I think you need to have a reasonable ask for your valuation. If your valuation is crazy, then the whole discussion you should be having about your awesome product is about how in the hell you got to that outrageous number. Remember, that if you were asking any other investor for money, you don’t get the huge benefit of being on national television and the value that one of the sharks bring to your company.
Stoked From Shark Tank
Ho: What kinds of distribution deals/sales channels did you score after being on Shark Tank?
A. Watts: Right after we signed our investment deal we were automatically put in Marks and Ashton’s circle of business teams. We automatically were put on Amazon Exclusives and had a few other cool sales outlets we are working on with them.
Ho: How did the deal that was made on-air compare to what happened afterward? Ex. Did they give you $200,000 for 22% of your company?
A. Watts: The deal we made on the show was the same deal that went through. The due diligence process is a very long and grueling process of getting the sharks financial teams and lawyers everything they need. The entire due diligence process took nearly five months.
Once all papers were signed, and money was transferred to the bank, you would think that you would feel relieved and celebrate. But we just felt more pressure to prove to our investors that we can make Slyde a multi-million dollar global brand.
Ho: What are the Sharks doing for your business? How are you working together?
A. Watts: Mark and Ashton are there for us as a support system for us. Mark’s team has taken over our accounting for us for free and is constantly working on plugging us in different promotions and sales outlets that pertain to us. Ashton has been very generous with his time and has had phone meetings with us to brainstorm new ideas for the brand, social media and how to grow Slyde.
We send weekly updates to both Mark and Ashton to keep them involved in everything we have going on. They respond back with any remarks, comments, or feedback.
Ho: What kind of return have Sharks made from investing in your business?
A. Watts: Our investment from the sharks just came through about five months ago. So they have not seen a return yet on their investment. We don’t have an exit strategy, at least not yet. Mark Cuban says “If you have an exit strategy, it’s not an obsession.” And for as for us, we are obsessed. See: https://www.entrepreneur.com/article/222524
A pipeline of Business Growth
Ho: What are your goals for your business over the next year and five years?
A.Watts: Our goal this year is to hit $1 million in sales by making the surf experience accessible for all ages and skill levels. We want to expand our wholesale and distribution channels to Australia and Brazil, along with more retail channels in the U.S.
In five years, our goal is to be a well established global brand, where everybody that goes to the beach will have a handboard, even more so than a boogie board. To do this, we are focusing first on the education of the sport and branding, while we are also working on a lower cost handboard that can be sold at big box retailers.
Ho: What was the most effective thing you did to get more exposure for your business before going on Shark Tank?
S. Watts: The most effective thing we did to get more exposure for our business before going on Shark Tank was our ambassador program and keeping our customers involved with the brand. With the growth of personal sports cameras like GoPro (GPRO), our customers can easily share their experiences online. We have created an ever-expanding sub culture that loves to share their Slyding experiences.
Ho: Have you gotten other investors to invest in your business? Who? How much?
A.Watts: We have two other investors in our business. Our original investor, Russell Ellers, put in $130,000 over the year and owns 30% of Slyde. Slyde would not be here without him, he not only gave the money to start Slyde but also let Slyde set up shop in his Venice Beach garage in 2010.
Just before we pitched on Shark Tank, we got another investor Mitchell Cox, who was randomly sitting next to my brother on an airplane while my brother was editing a Slyde video for us. He saw the video and told my brother he wanted to invest immediately. A few weeks later he invested $75,000 for 7.5% of Slyde.
Takeaways From Business Kahunas
Ho: What business books do you recommend people read and why?
A. Watts: I love Malcolm Gladwell. While not specifically about business, he has incredible insight into the way humans work and interact with the world around them. by Jonah Berger is great insight into how stuff spreads and there are some really great ideas for marketing on a budget.
And I would recommend an aspiring business owner read as much of Al Ries and Jack Trout’s books, especially the . The marketing one is particularly good.
Ho: What are your favorite business websites, tools or resources that you love and why?
S.Watts: Shopify is easily the best tool we use as it is the platform that runs our website. I can’t say enough about how good it is, and I would recommend it to anyone. We use various apps that are installed through the Shopify ecosystem that have a great return on investment. We also rely heavily on emails to stay in contact with our customers, and we use Klaviyo, which I find very user-friendly, and the ROI has been incredible for us on that platform.
A. Watts: Our favorite business resources has been the San Diego Sports Innovators. Since working with them and graduating from their Springboard, we have grown significantly. We would not have been able to close either deal with Mitch Cox or the Sharks if we didn’t have their help and support. They have a group of amazing mentors that we are so thankful for.
Ho: What’s the worst mistake you’ve ever made in business and how can others learn from it?
S.Watts: Starting and owning a business is a comedy of errors. I think the best thing you can do is try to make sure the errors are not life-threatening to the company. One of the biggest mistakes we made was to spend a lot of money on a public relations agency way too early in our growth.
To reduce your tendency toward making really big mistakes, you need to find smarter or more experienced people than you to help you make the difficult decisions. When you are starting out, your only focus should be on making sales.
Ho: What is the best advice and business insights you’ve received from your Shark(s)?
S.Watts: I think the best advice we got from Mark Cuban was to start selling through Amazon Prime more aggressively and really use that as a central sales channel. Our sales have gone up on Amazon by 1000%+ since really focusing on Amazon.
Ashton Kutcher has given us some incredible advice on growing our social media presence. Both have been very supportive in helping us grow exponentially and yet still keeping our surf roots intact
Ho: Is there anything else I should have asked?
A.Watts: A lot of people ask us how we can be married to each other and work together. We are together 23 of the 24 hours of every day because we both workout on our own. We can do that very easily because what Steve is weak at, I am strong at and what I am weak at, Steve is strong at.
We trust each other in our roles at work and to make the best decisions for the company. We let each other do our jobs and consult with each other when we need to. And because we are both invested in Slyde and love what we do, we work longer hours and more days, than most business owners because we get to do it with each other and don’t have a significant other to rush home to.