Umay's first date with a Dragon went well. Now Sharmin and Ali Habib are working on determining whether this is going to be a long-term relationship.
The siblings behind Rest, a tool to soothe eyes and encourage relaxation, were offered a deal on the season premiere of Dragons' Den, CBC's long-running reality TV show in which investors hear pitches from companies. The Habibs asked for $380,000 in exchange for 5% of their company.
Dragon Michele Romanow tipped her hand early in the show, declaring: "I can't believe you're solving this problem. I would literally buy 100 of these for myself right now." As it turns out, she had suffered from eye strain to the point of blurred vision after the pandemic had her staring at screens for hours upon hours.
When Romanow described her eye troubles, "I had tingles," Ali said. "I had no idea (about) the stuff that she had gone through personally."
For Sharmin, the greatest victory was getting the sense that their story had been heard. "There was a moment of resonance," she said of their appearance, which was recorded in the spring. "There was an understanding of the problem, there was an understanding of who we were, what we were trying to present. It felt that we were taken seriously and authentically."
Most of the Dragons passed, but they said positive things about the company, which had $650,000 in sales in its first six months for a device that retails for $499. Manjit Minhas's offer of $380,000 for 8% was followed by Romanow's offer of the same amount of money for less of the company. The Habibs said yes.
That said, the on-air deal is just the beginning. "They met you for the first time on a TV show, right?" said Sharmin, noting that the next steps are more than just the due diligence one would expect from a prospective investor. "They want to get to know what's your vision, what's your dynamic with each other, tell us more about the business, so that they can catch up. That's fair. You're kind of creating a new relationship."
Romanow suggested during the show that Umay's business model might need a tweak. "The hardware business is so tough," she said, encouraging them to charge for software updates to monetize and scale. "Working on a subscription sooner rather than later is mission critical for being successful."
The Habibs admit they applied for Dragons' Den without knowing all the answers regarding how best to structure the business.
"One of the things that we were going back and forth a lot on was, 'Are we a (business-to-consumer) company or are we a B2B company? Or a B2B2C company or a B2C2B company?'" Ali said.
Their early customers were optometrists like Sharmin, but their current marketing is toward consumers, and they are still feeling out how best to position themselves. However, thanks to the accelerator program they were in at the time, they were clear on their value proposition and what they would do with investment. And the opportunity to apply for Dragons' Den seemed too good to pass up.
"Ali was like, 'Hey, we should do this. What do we have to lose?'" Sharmin recalled.
Now their social media channels are blowing up, and they're scrambling to ensure their supply chain can handle the demand. Regardless of what comes of the deal, they have already benefited from the exposure, and they have had an experience to remember.
"The entire room was rooting for us," Ali said. "It was actually really cool."
Hear Sharmin and Ali Habib's full interview with Faaiza Ramji on an upcoming episode of Bloom, Taproot's podcast about innovation in Edmonton.