Mark Cuban said “I’m out” and Richard Branson said “I’m in” to entrepreneur, Jamie Siminoff.
Today, the change in that one word became worth over $28 million after Ring, the company that Jamie founded 5 years ago, raised $109 million from Goldman Sachs and Qualcomm Ventures.
This, after an amazing 5 year journey that brought Jamie face-to-face with two of the world’s most recognized billionaires.
In September 2013, a year after launching “DoorBot”, Jamie got on ABC’s ‘Shark Tank’ trying to raise $700,000 for 10% in equity for his company
He pitched his product – an app-controlled smart doorbell and video system for your front door – but then Mark Cuban and his fellow sharks all closed the door on Jamie.
‘Mr Wonderful’, Kevin O’Leary, was the only one who gave an offer. He had no interest in buying equity. So instead he offered the $700,000 as a loan, repaid from 10% of all sales and then once paid off, he wanted 7% of all ongoing sales forever. Plus he wanted 5% equity for free thrown in.
Siminoff said no and Kevin replied “It’s that moment when I say you’re dead to me”.
After leaving the Shark Tank, Jamie turned the mass rejection into a positive, saying “We think we got at least $5 million of additional sales through the airing of ‘Shark Tank’. Everything just popped after that.”
Jamie rebranded the company as “Ring” and doubled down on his focus. He grew the smart doorbells into app-controlled security devices with motion-detection technology and said “We’re definitely focused on the ring of security we can build around a community, around a home. We’re stopping one burglary a day, and we’ve caught multiple burglars, so we’ve already become a very important part of homes.”
Then by luck, one of his new customers ended up on Necker Island, sitting next to Richard Branson when his smartphone rang. A delivery person was at his door. The customer spoke to him and then with one press of a button the app let him in.
Richard was so impressed, he got Jamie’s number and called him, wanting to invest. What was Jamie’s reaction?
“When Richard Branson asks if he can invest in your company, I think there’s only one answer you can give”.
Richard invested in the company, and in August 2015 he led a $28 million funding round for Jamie.
That was followed by a $61 million round in March 2016. Then, today, Jamie raised another $109 million at a likely valuation of around $500 million.
That means if Mark or any of the other sharks had taken Jamie’s 10% equity offer just over three years ago, their $700,000 investment would have grown after dilution by around 40x to $28 million today.
Jamie, who’s products are now in 100 countries worldwide, is now aiming for an IPO at the end of the year. By then, the cost of that “no” could be between $50 million and $100 million.
While billionaires like Mark Cuban won’t suffer greatly from missing such a multi-million dollar opportunity, this story highlights the greatest cost in business: Opportunity cost.
What is the cost of you saying “no” to the right opportunity?
What is the cost of following the wrong opportunities?
What is it costing you by delaying or avoiding action?
Whenever you’re worry about the cost of taking action, remember that the cost of not acting is often far greater.
“There’s no wrong time to make the right decision.” ~ Dalton McGuinty