Shark Tank Appearance: Feb. 3, 2015
Investor: Robert Herjavec
Deal: $110,000 for a 10 percent stake
Results: $500,000 in sales with deals in place at Home Depot and Lowe’s.
It started out more like an episode of The Amazing Race than Shark Tank. In April 2014 Naushad Ali’s real estate business partner ended a late-night phone call by casually asking whether he was going to a Shark Tank casting call on Saturday.
Ali had invented a device he called the Drain Strain, a bathroom sink stopper that prevents clogged drains. Although he was convinced his invention was a disruptor that would save people hundreds of dollars in plumbing bills and make chemical drain cleaners obsolete, his efforts to get funding were stalled. An Indiegogo crowdfunding campaign with a $25,000 goal had brought in only $2,000. And although he’d filled out an online application to be on Shark Tank, he never heard back. Focusing on real estate, he missed the news of the open call that was taking place at the Pan Pacific Hotel in Seattle.
“It was nearly midnight on Thursday, the open call was Saturday at 8 a.m., and I didn’t have a single functioning prototype,” Ali says. The next morning Ali called his design company in the Midwest and told them he needed a prototype produced, assembled and shipped to the hotel in time for the casting call. It was doable, but the cost would be $1,500. This was steep for Ali; his family had just started to recover financially after losing everything, including their home, in the 2008 market crash. But with his wife’s consent, he decided to go for it.
That’s how Ali found himself on Saturday morning with a wristband that gave him the 289th audition spot while hoping desperately for the FedEx truck to arrive. “The front desk said the driver had been there to drop off the package, but since they didn’t recognize my name, they hadn’t accepted it.” It would take nearly an hour of pleading before Ali reached a sympathetic FedEx rep who directed the driver to return to the hotel. Ten minutes before his name was called for the two-minute audition, the driver pulled up and Ali ran through the lobby doors, clutching the prototype.
Several audition rounds and several months later, Ali passed out 3-D prototypes to the five investors of the Emmy-winning ABC reality show. In a surprising turn of events, Robert Herjavec offered Ali the $110,000 he was seeking, but said he would take only a 10 percent stake rather than the 15 percent stake Ali had proposed. Like his fellow Sharks, Herjavec believed that Drain Strain was perfectly positioned for a licensing deal, and he saw his role as “just making a phone call” to introduce Ali to the CEO of a plumbing manufacturer.
That strategy, however, turned out to be the equivalent of circling the drain: a path to nowhere. “Faucet manufacturers were extremely interested, but we ended up not getting to the finish line with them,” Ali says. “We were in contract negotiations with one, but they couldn’t get us into their production and sales cycle for at least two years. That timing didn’t work for us.”
In the meantime, Ali had been running the numbers for selling Drain Strain direct to consumers. “Our sales and profit would be nine times greater if we were successful as an after-market product than if we signed an exclusive licensing agreement,” he says. “Robert and his team were great in asking the right questions and making sure we understood the margins at every stage of the retail supply chain.”
Home Depot loved Drain Strain and introduced Ali to distributors as well as to suppliers in Taiwan and China. But moving from prototype to production revealed the huge challenge of creating a single product that would work for all pipes, including those that were 50 or 75 years old. “We brainstormed for months before we came up with a solution where the basket could conform to the pipes and still allow water to flow through,” Ali says. A host of other problems arose during tooling, all financed by Ali. “Between patents, production and design, I was out of pocket about $150,000,” he says. “It was a lot of risk.” Language difficulties and the need to ship every new iteration from China slowed things down. Finally, in August 2015, Ali flew to the factory. “I went over there with the intention of not returning until we had everything figured out,” he says. “We worked nonstop over five days.”
Back in the U.S., Ali finally signed deals to sell Drain Strain in 1,200 Home Depots and 500 Lowe’s stores by early 2017. The product is also sold online and is used by several hotel chains. Shower and bathtub versions will be rolled out later this year. For now, Ali is still working in real estate. “That’s what pays the bills,” he says. “We’re still a year away from profitability, but I’m confident that in a few years we’ll be the de facto standard in all drains.”
There have been only a handful of prototypes in Shark Tank history, Herjavec points out, that made their way to retail. “Drain Strain is one of them,” he says. “Ali recognized a problem shared by the masses, and he solved it. Sometimes it’s as simple as that. I believed in Drain Strain because it could be leveraged in homes, but it presented interesting opportunities to sell in mass quantities to hotels, cruise ships and hospitals. I liked Naushad’s approach in the Tank and when you have a great idea and a great entrepreneur, we see success.”
This article originally appeared in the March 2017 issue of SUCCESS magazine.