Already owners of a successful commercial print shop, Brian and Julie Whiteman were looking to create a subscription service for the photo books they produced. Customers would upload up to 100 pictures a month from their mobile devices and have their memories preserved in a custom photo book. While the Whitemans could offer the photo books at an affordable price because they were produced in-house, they were paying up to $4 postage to ship books that were 5×7 inches.
Late one night, Brian was trying to crunch the numbers and figure out a way to make their custom photo book subscription service work. Taking his frustrations out a prototype, Brian began beating it with a pen, destroying the spine of the book. Looking at the mangled book, he had an epiphany. He was so excited that he woke Julie up and just started laughing about his discovery.
Brian had found a cost-effective solution to their photo book shipping problem. Cutting a groove into the book’s spine made it flexible enough to fit into smaller packaging, reducing the rate it took to send to their customers. The process and the name GrooveBook worked, and their subscription service began to take off, increasing their subscription base to 8,000 users.
GrooveBook Enters the Shark Tank
Shark Tank Season 5 Episode 13
Brian and Julie entered the Shark Tank, asking for a $150,000 in exchange for 20% equity in the company.
In this digital age, nearly everyone has a smartphone that can take better pictures than any camera most consumers had ever used. We take photos of everything, from food to babies and pets. These pictures add up and get lost in the deep recesses of our phones’ photo libraries, replaced by the latest snapshots of our lives and forgotten in time. Julie explained that GrooveBook was an affordable solution for people to salvage captured moments and save them forever.
GrooveBook takes the digital photos you take and preserves them in a traditional photo album that can be enjoyed at any time. Photos are dated with the location and perforated to remove and share with friends and family easily. Every month, subscribers receive a new GrooveBook with a different cover design. Duplicate photos can also be ordered to distribute among loved ones.
As expected, the successful business professionals on the Shark Tank panel were first impressed by the price point and the Whiteman’s ability to sell their GrooveBook at just $3 a book. Using their own printing shop and the groove design, Brian created that night helped them to reduce production and shipping costs to $2.30 per book.
Robert expressed skepticism of the business model used to market and sell GrooveBook, worrying that the print shop and the production of GrooveBook were co-dependent. Investing in one of their businesses meant the investor needed to have total faith in the success of both ventures. The couple pointed out that the prior investment in professional printing equipment kept the cost and price of GrooveBook down. They felt that they could continue servicing all of their customers in both aspects of their company.
The Sharks enjoyed listening to Julie’s recounting of how Brian came up with the groove concept while beating up a prototype late one night. Mark referred to the groove as a “value proposition.” Once the patent went through, GrooveBook would hold a unique position in the marketplace.
Mark felt that GrooveBook’s value was more as serving as a middleman between consumers and established photo compilation sites like Shutterfly. A licensing deal would make GrooveBook a one-off supplier for other companies offering photo services, ultimately generating far more profit for the Brian and Julie. Mark then offers the couple $150,000 for rights to licensing the company. Their subscription service would remain, and Mark would acquire the right for one-off applications. Both Robert and Daymond still felt uncomfortable that the two sides of the business were too interconnected, and they backed out.
Kevin then offered to buy the whole company for the $750,000 Brian and Julie had valued their company. The couple seemed uncomfortable with this notion. This was their business, and they wanted to continue running it and profiting from it. Brian was miffed when he responded that the company had an overall worth of $6 million, which is what their price would have to be to sell out. The judges were taken aback. Kevin, who typically would have been done at this juncture, tried to get things back in the groove. He explained he was merely testing the waters to see if the couple was interested in selling out and whether they wanted to maintain majority control.
The Whitemans didn’t come to the Tank to get bought out by the Sharks, and they didn’t like the idea of selling their licensing rights either. Lori offered half of what Kevin had with an offer of $375,000 for 50% of the company. Robert had a change of heart and went in halfway with Lori’s offer. Lori put pressure on Brian and Julie while Mark and Kevin met out in the hallway. Brian was not going to make a deal while the two judges who first offered a deal were out of the room.
Kevin and Mark returned with a modified offer of Mark’s proposal. Because Brian and Julie were so passionate about their GrooveBook subscription service, the Sharks felt a licensing deal would make more sense. They offered the Whitemans $150,000 upfront and 20% of the revenue from the licensing. As they were closing in on the deal, Robert threw a wrench in the process by making an excellent point. If GrooveBook was licensed out, customers would get the identical product with just a single purchase without needing to subscribe to an ongoing service, which could drastically affect subscriber numbers over time.
It was decision time for Brian and Julie. Two offers were on the table, a partial licensing deal, and a 50% equity share investment. The couple decided on the licensing deal and took some time to celebrate with their new partners before Brain took Julie in his arms and left the stage. “They’re still in love,” Kevin said.
GrooveBook After Shark Tank
GrooveBook took off exponentially after Brian and Julie appeared on Shark Tank and struck their deal. Subscription numbers jumped to $85,000 practically overnight and generating almost $500,000 in annual revenue, not even counting the licensing deal.
Kevin toured the facilities to share in the success of one of his most profitable ventures and even mentioned GrooveBook on Jimmy Kimmel Live when discussing the life-changing effects Shark Tank has had on companies and people like Brian and Julie
A year later, the couple returned to Shark Tank, with boasts of up to 500,000 subscribers and annual revenue that was approaching $4 million in profit. They had no idea the best was yet to come. Brian had once found a small problem in the design of GrooveBook and did not give up until he found a solution. His ingenuity and the couple’s hard work was about to pay off in ways they had never dared to dream in the early stages of the process.
The couple walked into the impressive offices of Shutterfly, where an executive of offered Brian and Julie $14.5 million for GrooveBook. The couple accepted the offer almost immediately, and the conference room erupted with excitement in securing the largest deal in the history of Shark Tank.
GrooveBook generally has scored well with online users who post reviews and comments on online rating sites, with an average of 3.9 stars on the Google Play store with over 8,000 ratings. However, you can’t please all of the people all of the time, especially for a service charging only $3 a month. The customized photo book company was forced to navigate through some negative reviews from a vocal minority who peppered social media outlets regarding payment glitches and photo quality issues.
Kevin, Mark, and Whitemans still believe in GrooveBook, and the company is still thriving, as the team told a national television audience on Good Morning America.
Brian and Julie enjoy traveling the world after taking a small family business idea and transform it into a multi-million dollar venture in less than two years.
Disclaimer: The information provided in this article is strictly informational; SEO Insights is not affiliated with GrooveBook, SharkTank, or any of their subsidiaries.
