Gaming tables are a high-end commodity that home-owning geek adults increasingly covet for their dining rooms and game rooms. A company who can produce and deliver such a product was a dream come true for Geek Chic when they appeared on the reality television show Shark Tank. The rise and fall of the company reflects the struggle of geek manufacturers everywhere.
[h=3]Swimming with the Sharks[/h]Shark Tank's reality show premise pitches aspiring entrepreneur-contestants to a panel of "shark" investors, who then choose whether or not to invest. In May 2013, a new kind of competitor appeared on Shark Tank: Geek Chic. Robert Gifford's pitch was $100K for a 5% stake:
The Gazette Review delved into Geek Chic's finances:
The sharks were not entirely convinced:
One of the Sharks brought up an interesting point:
In the end, the two Roberts (entrepeneur Gifford and Shark Herjavec) came to an agreement:
For a time, life was good for Geek Chic -- one of the company's Sultan tables was used regularly on Wil Wheaton’s TableTop webseries. But the company's popularity wouldn't last.
[h=3]A Sinking Ship[/h]After the cameras stopped rolling, Herjavec was no longer Gifford's business partner:
The reason? Gifford found a new investor:
That curious footnote aside, there there were signs of trouble in 2013:
Gifford wanted the company to continue independent of his temporary boost of fame:
Things wouldn't quite turn out that way.
[h=3]Up a Geek Without a Paddle[/h]The company stopped responding to email and phone calls on June 12. On June 13, Gifford released a statement on Facebook:
Polygon posits what might have gone wrong:
Scott Thorne at ICv2 noted that, in addition to costly production costs in the U.S. and a very small target market, competition was likely a factor:
As of today, Geek Chic's web site returns an error message.
Geek Chic's model was challenged by production issues that many other geek-oriented companies face when manufacturing in the U.S. The company's failure is an important lesson about the sustainability of the rising geek marketplace that's getting bigger each year -- but not big enough to support Geek Chic. In the end, it wasn't the sharks on television that Geek Chic had to worry about.
Mike "Talien" Tresca is a freelance game columnist, author, communicator, and a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to http://amazon.com. You can follow him at Patreon.
[h=3]Swimming with the Sharks[/h]Shark Tank's reality show premise pitches aspiring entrepreneur-contestants to a panel of "shark" investors, who then choose whether or not to invest. In May 2013, a new kind of competitor appeared on Shark Tank: Geek Chic. Robert Gifford's pitch was $100K for a 5% stake:
Robert is a self-proclaimed geek. He started designing furniture that is more than meets the eye. The dinner table he has in the tank can be transformed into a game-playing table and desk. There also ways to attach bins, counter holders and even wine glass holders. Robert did $2 million in sales in a year, but they were in the red by $100,000.
The Gazette Review delved into Geek Chic's finances:
The tables run for $3,500 roughly, and Mark Cuban asks about the sales. Robert reveals the fact that Geek Chic did a shocking $2 million in sales last year, which causes Kevin to nearly snap his own neck from turning his head so fast. Robert Herjavec and Daymond are both blown away. Lori asks about the profit, but unfortunately, Geek Chic ran a $100,000 loss...$2 million is what they did in the last fiscal year, and projections for this upcoming fiscal year would be $400,000 to $500,000. With the investment from the Sharks, Robert intends to buy a truck to enable the company to run their own logistics, and even look into purchasing more advanced machinery. The average order is for about $4,500 worth of products, Robert explains. Mark asks about the profit margin on the table, and Robert estimates that is around a 50% split; each table yields about $1,800 in profit.
The sharks were not entirely convinced:
Lori thinks Robert is great and loves his enthusiasm. She just doesn't know how he'll get the competitive edge on the high-end companies. She's out. Even with all the functionality of the product, Mark only sees a table in front of him and nothing more. He's just not that into furniture. He's out. Robert buys into the design, but he doesn't buy into the furniture company. He's out. Kevin thinks Robert is in a really crappy business. He's out. Daymond doesn't know if he can hang with the geek aspect, but he likes the product and how Robert is running the company. Daymond offers $200k for 25% of the company. Robert counters with $500k for a 15% stake. Now Daymond is finding a flaw in Robert's character.
One of the Sharks brought up an interesting point:
Kevin then says that the furniture making in the United States has been all but destroyed due to sending parts to Asia, so why is Robert not a “dead geek?” Robert explains that they are attempting to minimize the cost, but Asia cannot make the same quality of product out of American wood that is made in the United States. Lori admits that she thinks the product is great and she loves Robert’s enthusiasm, but she has ultimately seen a lot of similar tables. She does not know how Robert can get the competitive edge since some tables are very high end...
In the end, the two Roberts (entrepeneur Gifford and Shark Herjavec) came to an agreement:
Daymond stays firm on his offer, but Robert thinks that his equity stake is too high. Robert the shark then offers $300k for 25%. Robert the entrepreneur thinks Robert the shark is a better partner when it comes to the geeky ways of his business. He accepts his offer over Daymond's.
For a time, life was good for Geek Chic -- one of the company's Sultan tables was used regularly on Wil Wheaton’s TableTop webseries. But the company's popularity wouldn't last.
[h=3]A Sinking Ship[/h]After the cameras stopped rolling, Herjavec was no longer Gifford's business partner:
As can happen on Shark Tank, deals are not final and are contingent on both parties ultimately agreeing; ultimately, both Roberts did not see it fit to form their Robert alliance, and thus, Herjavec is no longer an investor or part-owner of Geek Chic.
The reason? Gifford found a new investor:
On-air deals aren’t final, though. Due diligence allows both parties to say no, and Gifford ultimately chose to go with a better offer from an investor who was already involved with Geek Chic.
That curious footnote aside, there there were signs of trouble in 2013:
While 2013’s numbers have been strong and demand is still high, Gifford says the company might be looking at another minus year. What he cares about most, though, is that their revenue is growing by 50 percent. “It’s hard to not lose money based on that growth,” he said. “The way that the growth line works, eventually you’ll get saturation and you’ll dip back down. Unless it’s a fad item that goes away forever.”
Gifford wanted the company to continue independent of his temporary boost of fame:
I think the company is my baby, but I work hard to make sure that I am not the brand — that Geek Chic itself is the brand that operates independently of me. If I was hit by a bus over the weekend, I want this place to move forward. I like building things. I don’t like to build things that don’t last. And this company has to last outside of me.
Things wouldn't quite turn out that way.
[h=3]Up a Geek Without a Paddle[/h]The company stopped responding to email and phone calls on June 12. On June 13, Gifford released a statement on Facebook:
It is with great sadness that I must announce Geek Chic has ceased operation. Despite heroic efforts by many, this outcome is out of our hands. While I am certain there are many outstanding questions, we are currently limited in our ability to respond. The website will be updated with appropriate contact information and procedures as they become available. I am forever indebted to those who joined us on this adventure, and am absolutely gutted about it’s end.
Polygon posits what might have gone wrong:
The trouble is that Geek Chic required payment well in advance of the delivery of their products, which often ran in excess of $3,500. That means many customers’ tables are finished, or nearly finished, and may never be delivered. When or if they are able to get their money back is an unresolved question.
Scott Thorne at ICv2 noted that, in addition to costly production costs in the U.S. and a very small target market, competition was likely a factor:
Although both said the two companies had a supportive relationship, Carolina Gaming Tables is/was a viable competitor to Geek Chic, offering similar products at substantially lower prices. Customers could look at Geek Chic’s high-end, high-priced products for many thousands of dollars, then look at Carolina Gaming Tables’ selection of similar products, priced thousands less, and opt for those. After all, as noted earlier, there are only a limited number of customers for high-end gaming furniture and Carolina Gaming Tables says on its website that the company currently operates debt free.
As of today, Geek Chic's web site returns an error message.
Geek Chic's model was challenged by production issues that many other geek-oriented companies face when manufacturing in the U.S. The company's failure is an important lesson about the sustainability of the rising geek marketplace that's getting bigger each year -- but not big enough to support Geek Chic. In the end, it wasn't the sharks on television that Geek Chic had to worry about.
Mike "Talien" Tresca is a freelance game columnist, author, communicator, and a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to http://amazon.com. You can follow him at Patreon.
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