|Q&A: Williams Senior Takes Big Bite Out of 'Shark Tank'|
|By Stephen Dravis, iBerkshires Staff|
04:03AM / Monday, February 01, 2021
|Williams College senior Zachary Schreier, right, and his partner, Nick Hamburger, in an image from their business' website, quevos.com>.|
WILLIAMSTOWN, Mass. — Like any reality television show, ABC's "Shark Tank" sometimes can feel a little overdramatic by building a "Will they? Won't they?" suspense about whether entrepreneurs will strike gold with the show's celebrity investors.
In the case of Williams College senior Zack Schreier and partner Nick Hamburger, it was pretty clear that an offer was in the offing.
"You two are two impressive guys," veteran shark Robert Herjavec said early in the episode that premiered Jan. 22. "I think you two guys are two of the youngest most impressive people we've ever had out here."
Later, Herjavec added, "You guys are so solid. It's a pleasure watching you."
And viewers of the show went on to watch Schreier and Hamburger secure a deal with Kind Snacks founder Daniel Lubetzky to invest in their snack food company Quevos.
Quevos -- a portmanteau of quick and juevos, the Spanish word for eggs -- is an egg white-based snack chip that has more fiber and protein than conventional chips.
Childhood friends Schreier and Hamburger started the company in 2018 with help from Kickstarter and last year did $1.3 million sales.
The impetus for the business came from Schreier, who told the story of his inspiration on the show.
"It all started 10 years ago," he said. "I was diagnosed with type 1 diabetes. I went from being a kid who loved to snack, all the time, didn't think about it, to being somebody who had to watch every single carb I put into my body. I realized one day, those crispy pieces of egg white that coated the pan when I made an omelet, they crunched, kind of like chips. I thought, 'Hey, maybe I can make a chip out of this.'
"Fast forward about eight years, as we're going to college, revisited the idea, I called Nick up."
The pair were no rookies at making product pitches when they entered the "Shark Tank." As they explained during the show, they participated in the Springboard Incubator Program at Chicago's Kraft Heinz Co. in 2018. Last year, he took top prize pitching a different business at a Berkshire County event sponsored by the nonprofit Entrepreneurship for All.
Schreier, 22, is back in his native Chicagoland these days and took some time last week to talk with iBerkshires about his experience on "Shark Tank" and the success of Quevos.
Question: Were you on campus this fall or are you going to finish your senior year on campus?
Schreier: I will have been remote all year.
Q: Not that anybody likes the pandemic or feels good about isolation, but I'm guessing there are some advantages for you running a business to have the flexibility to do your classes remotely.
Schreier: Absolutely. I've actually enjoyed the flexibility of not having to be on campus. It's actually been, honestly a better school year than most for me.
Having taken a year off to work on the business, most of my friends have graduated, so it's not like I'd be coming back this spring to be with them.
I took the year off between my sophomore and junior years, so last year I was at school.
Q: What was the process like of getting chosen to go on 'Shark Tank?'
Schreier: One of the producers reached out to us. They had seen us on a local TV channel promoting our Kickstarter in early 2019.
We went through the whole application process and talked to producers every week for a few months.
At the very start of my junior year -- so after the gap year -- we were out in L.A. for the filming. We were the eighth in line to go, and things were running slow. There was a family behind us, and I guess kids can't be on set as many hours, so they got moved ahead of us. They got to pitch.
At that point, the Sharks were too tired to do another, so they sent us home. And we didn't get the opportunity to film that season. They brought us back a year later.
We were disappointed, but I think we were pretty underprepared the first time around. Our revenue wasn't where it was a year later. It was really a great thing that we got to come back and pitch with more preparation and more of a track record.
Q: So that was when, the first time you went out?
Schreier: I think that was September 2019.
Q: And the episode that just aired, I'm sure was taped far in advance.
Schreier: We filmed this in August 2020.
They had switched the location to Las Vegas instead of Los Angeles. And we had to quarantine in a hotel for eight days -- literally not allowed to leave the room.
Q: So you're in one of the biggest tourism cities in the world and you can't leave your hotel room.
Schreier: The view was nice. I got to look at Treasure Island.
Q: I'm a fan of the show and have done some reading on it, and I've seen that there is a lot more discussion and negotiating that goes on that gets edited down for the broadcast. Do you remember how long you actually were in the 'tank?'
Schreier: It's hard to say. It goes by so fast. Our guess was about 40 minutes we were out there. There's definitely a lot that wasn't shown. But what the viewers saw was pretty representative.
Q: The little skit you did at the start of your pitch where you came out with chicken costumes and did a little play-acting, how long were you working on that first part of your appearance?
Schreier: That was a fair amount of work. We practiced something that the year before. Leading up to the 2019 trip to L.A., we had probably gone back and forth with producers 10 times, making revisions.
For this year, we had something pretty close to what we ended up doing. We made some last minute edits that we had to get down.
Probably 10 to 15 percent of our practice time was dedicated to the pitch. The other 85 percent was Q&A. We made a list of questions relevant to the business and thought about answers.
And we ended up watching a lot of the show.
Q: I was going to say because it seemed like -- again, as a viewer of Shark Tank -- you guys did not fall into some of traps or make some of the mistakes that other people do. It looked like you were ready for anything they were going to throw at you.
Schreier: We definitely knew what our weakest points were, but we both believe the business is fundamentally strong. There was no reason to think that if things went right we wouldn't succeed. We weren't ready that we weren't viable.
It was a matter of getting the right answers to the questions that are going to be toughest: What are your margins? How are you manufacturing? Are you burning a lot of cash?
Having eight days [in quarantine] going through all these questions, watching all those episodes -- we were grounded. We were living and breathing it for those eight days.
And I have to admit, I think the Sharks were in a good mood. They could have been upset with me for going back to school. [Hamburger, Schreier's partner, left the University of Chicago after two years to focus on the business].
Q: It also looked like you two were really well prepared for the strategies you would use in negotiation. You were really ready for that give-and-take. Sometimes, watching the show, it looks like people talk themselves out of potential deals in that process.
Schreier: We did have a pretty clear sense of what was palatable in terms of a deal. We didn't just invent the $4 million [company valuation] we came out with initially. Those were the terms of the fund-raising we did so far. With $1.3 million in revenue last year, that's a fairly typical multiple.
We thought it all made enough sense, but we thought they'd want more equity. We wanted to anchor it with something that was low enough knowing they would try to push us to that same amount of cash with 10 percent [equity]. We didn't want to give more than 10 percent, and we wanted to keep the valuation as close to $4 million as possible.
The day before or two days before, we made a little formula for what would be palatable. The idea was, keeping those guidelines in mind, either Nick or I could answer a question about valuation knowing the other had consented.
Q: How excited were you to see Mr. Lubetsky [not a regular on the show] on the panel?
Schreier: We were very, very happy Daniel was on the panel. Going in, of all the Sharks -- guests and regulars -- he was the one we most wanted to pitch to.
I believe in our deal guidelines, we even gave him more leniency.
Q: A premium, given his expertise in that industry?
Q: Again, going back to what I've read about the show generally, it's my understanding that not every deal that we see on air ends up getting closed after the fact. Were you guys able to close?
Schreier: Yes, we signed with Daniel. I can't disclose the terms. But it's roughly what we agreed to on the show but with more clauses and whatnot. He was good to work with. It was clear that he wanted to work with us, wanted to get the deal done. It was clear from both sides.
Now, he's an investor and we're consulting with him.
Q: How long did it take to get everything signed?
Schreier: About three months.
Q: Whenever I've talked to someone for a story who has been on TV, I'll ask about the 'watch party.' I'm guessing that you can't have a watch party in the middle of a pandemic.
Schreier: We didn't get together with family because I didn't want to put my parents at any risk. I've been living in an apartment in the city. We do have a few friends who -- one had already gotten [COVID-19] and one tested positive for antibodies. Nick and I decided to take the risk and watch it together.
Q: What was that experience like, watching it on the show? Obviously, you were there, but it was months ago, and, like you said, it went by in a blur.
Schreier: The one thing I distinctly remembered was how nice Robert [Herjavec] was to us in the taping. I remember each of those comments and a few others that didn't make it in. I was relieved they included some of that stuff. They didn't have to include it. I thought that was generous.
Q: It's no secret, in fact they talk about it on the show a lot, that businesses that appear on 'Shark Tank,' whether they make a deal or not, benefit from the exposure. Have you seen a bump since the episode aired?
Schreier: I shouldn't share specific numbers, but we've definitely seen a huge boost in sales. That's been awesome. We built up a ton of inventory going into the episode because we had heard from other food entrepreneurs, in particular, that we would need it.
We did not know exactly when it would air. Starting in September, we knew it would likely be shown. But we didn't know until the start of January that it would be the 22nd. We built up a few hundred thousand bags of inventory, so that was good.
Q: When you taped last summer, you projected $1.3 million in sales for the year. Did you end up making those projections?
Schreier: Everything went smoothly. One thing we discovered is people are not buying as many healthy snacks around the holidays. But we know come January people are trying to eat healthy, and there was an influx of keto dieters.
The big question that's pretty open is, after the "Shark" Tank buzz dies down, how much is our baseline level of sales going to be lifted. Things look pretty good. It's been tapering off a little since the first few days of the episode, but it's at a higher baseline.
Q: Are you guys working on something new?
Schreier: We have a honey mustard flavor that is new since the show. There's a mesquite barbecue that is exclusive with Vitamin Shoppe and, in about a year, will be sold to all our accounts.
In terms of future expansion, we're probably going to continue to add a flavor every quarter or so for about a year. At this point, every flavor we develop is better and better because we can spend more time fitting the flavor to the chip.
Now that we're patient and able to launch products whenever we feel, every flavor is better than the last.
Quevos are available from Amazon.com or, according to Quevos.com, at Hannaford stores in New York and Southern Vermont.