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Cellhelmet Gets In the Shark Tank

on Tue, 03/12/2013 - 09:58

Greensburg natives Dave Artuso, Michael Kane and Bryan McHenry dreamed of attaching their financial future to Apple’s iPhone from the very beginning. “Apple comes out with a new phone, everyone buys it and it’s going to be out for the next two years,” Kane told the Pittsburgh Post-Gazette in September 2012 of their reasoning. “If we were coming out with a completely new concept, we didn’t want to take the risk on a device that might not last.” Selling accessories on eBay proved to be a lucrative start for the trio, but not the cash cow they had hoped. Other companies, meanwhile, were making headway in the selling of iPhone cases that guaranteed the safety of the devices, which gave Artuso, Kane and McHenry the idea they were looking for—an iPhone case that was not only durable but came with a one-year warranty as well.

Dave Artuso put up the initial $10,000 to develop their product, which was named cellhelmet, then turned to the Internet for additional funds via Kickstarter. Although the March 2012 campaign was only set to raise an additional $10,000, cellhelmet almost doubled that amount with a total take of $19,080. The first batch of iPhone protectors began rolling off their Latrobe manufacturing center shortly thereafter, resulting in 1300 units sold during the company’s initial four months of operation. In order to expand further into the lucrative iPhone market, however, the three friends needed even more money. Instead of going the traditional route, they again turned to the unconventional by appearing on the ABC reality show Shark Tank on Friday, March 8, 2013, with the hopes of attracting a $160,000 investment for a twenty percent stake in their company.

Shark Tank features a group of five successful entrepreneurs who hear pitches for up-and-coming projects that are in need of funding. Contestants are given a limited amount of time to explain both their concepts and potential business models, then answer questions from the panelists themselves. Each entrepreneur has the ability to sign on and give the needed fund in exchange for a percentage of the infant company, or reject the proposal outright. Dave Artuso and Michael Kane represented cellhelmet on Shark Tank, and quickly offered an overview of the company that included the smashing of various competitors’ safety devices.

“Are we saying that our cellhelmet cases can withstand all kinds of crazy abuse?” Michael Kane rhetorically asked. “Absolutely not. If a cellhelmet case does fail to protect your device, we’re going to repair it or replace it for fifty bucks. Are we magicians? Not at all. We just happen to be the only company on Earth who’s bundling our protective accessories with a safety net of accidental damage coverage.”

Despite their passionate sales pitch and dramatic presentation, however, Dave Artuso and Michael Kane failed to sway the panelists, who either saw too much financial risk in the potential replacement of a new iPhone or believed that the three-day guaranty to fix or replace a damaged item was too long of a time period. Fellow Pittsburgher Mark Cuban—one of the billionaire investors on Shark Tank—came the closest to believing in cellhelmet, but ultimately felt that it was too easy for a better-funded competitor to undercut the cellhelmet business model.

While Shark Tank may not have resulted in an additional $160,000 in funding that Dave Artuso and Michael Kane were looking for, the publicity for appearing on the ABC reality show resulted in a number of websites—including ZDNet and The Gadgeteer—offering positive reviews of the cellhelmet product, proving that even bad news can be good news in the end.

Anthony Letizia (March 12, 2013)

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