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March 3, 2012 • Editorials

Scott Jordan Appears on Shark Tank, but Who Was the Shark? And Who Was the Bait?

If the name Scott Jordan sounds familiar, it’s probably because you’ve seen it in the context of his clothing line, Scottevest. We’ve reviewed many of their products here, and I will say I personally use my SeV gear quite often. However, after seeing Scott on ABC’s “Shark Tank” and witnessing his attitude on the show, I can’t help but wonder how he runs his business!

In case you missed it last night, here’s a shot from Scott’s segment. (The episode is available on Hulu+)

To make a long story short, Scott doesn’t want to sell SEV; he just wants to sell the licensing to his TEC (Tech Enabled Clothing) patent. Basically he wants to keep his profits on the SEV line and leverage the Sharks for his patents. But if he’s projected to do $24 million from the SEV line, why would he even consider giving up control of the patents? Nothing about this makes sense — including the fact that, based on what I know about the history of Apple and the partnership between Woz and Jobs, I wouldn’t ask Steve Wozniak for business advice.

All joking aside, let’s look at this for a second. He has an incredibly lucrative internet business, but last time I checked he sells ZILCH (or close to it) in stores and that’s, where many clothing companies make the serious money. Assuming Scott really did just want to sell his patent licensing, he must know that. So let’s look at the companies who would be his “customers” for these patents.

UnderArmor did $1.6 billion in revenue in 2011.

Nike did $20.89 billion, and apparel alone were roughly $5.4 billion in mid-2011

VF Corp (owners of Timberland, North Face, Levis, etc) had $9.46 billion in 2011

Columbia Sportswear had $1.6 billion dollars in sales in 2011

Meanwhile, Scottevest — a company whose sales are fueled by word of mouth, tech and travel blog reviews, online and print advertising, and a sales website — apparently has $5.1 million in sales for 2011 (I am assuming this filmed last year), with $12 million projected. That’s impressive for a small business, but it is TINY compared to his competition.

There’s room for growth here; I think Scott knows this, and he simply didn’t want to include the sharks in the cut. However, getting the big guy, — the companies listed above — to license TEC requires money and connections, which is ostensibly why Scott appeared on Shark Tank. But how much could TEC possibly be worth, if an entire line of TEC-enabled products only generated $12 million? Even Columbia and UA, who are pretty niche as far as apparel companies, are doing 100x what SeV does in revenue!

Theoretically, these companies jumping on the TEC bandwagon could be extremely valuable … but that’s assuming that Nike, VF Corp, Columbia, UnderArmor, etc., all would agree to pay Scott his royalty / licensing fee rather than looking up his patent and working around it.  That also assumes, as Mark Cuban and Daymond John pointed out, that the garments produced continue to use wires.

Were a company to eliminate the wiring system or alter it,  they wouldn’t technically even need TEC. Basically, the sharks were being asked to throw $500,000 down on something that might or might not actually have a revenue stream. Scott mentioned Gore-tex on Shark Tank, but Gore-tex doesn’t sell their own line along with licensing it to other clothing companies. Is Nike so excited about TEC that they’d be willing to license something a competitor was also offering? Or would they be better off using their own connections, money, designers and other resources to come up with something similar that they don’t need to pay an ongoing royalty for?

At one point the Sharks flat-out asked Scott why he was there, and he declared he wanted their connections and money, but only to license his patents, not sell his clothing. The Sharks’ reactions appeared to run the gamut from incredulous curiosity to thinly veiled animosity.

From last night’s airing of the show until now, those who tuned in have been theorizing about why Scott would bother to appear on the show if he wasn’t willing to give up a share of  his proven moneymaker. These are some of the reasons I believe he did SharkTank:

1) Publicity for Scottevest. He knew the sharks were unlikely to take the patent deal, but they talked up SeV like it was the best invention since the iPod. Free 20 minute prime-time network television ad for SeV!

2) Throw it against the wall and see what sticks. Maybe Scott thought he’d get a serious chunk of change for SeV out of it, though apparently an amount equaling 10% of his sales so far that year wasn’t a serious enough chunk for Scott.

3) He really genuinely wanted to license TEC.

I really think he went on the show offering a completely insane pitch because he knew they’d talk up his “real” business, and he got the attention and generated more buzz for SEV. He made a poor business decision, because I think those guys would have offered him some serious cash for the clothing business, but he clearly didn’t want to give up his control of SeV. He was foolish to go on the show with this agenda, because this has not and will not reflect well on his image. He’s been whining about the edit on Facebook, and has taken to commenting everywhere that it went down differently than was shown, that he is getting the short end, etc.

Newsflash: reality television is always edited, and it is seldom done in a flattering way if you aren’t the main star of the show.

They have to make it look exciting and dramatic. But here’s the other thing; you need to give them something to work with! Editors can cut comments and try to make things look snippier or more dramatic, but if you said something that could be construed as “good tv” that’s on you, not the editors. I’ll fully admit that someone could cut and paste my words to read as “I really think he went on the show offering a completely insane pitch because he’s a fool.” It changes some of the context of my sentence but at the end of the day I can’t deny that I did say Scott was being foolish, and editing just makes that look more pointed. So Scott, you chose to go on Shark Tank, no one went around kidnapping entrepreneurs and forcing them to make elevator speeches, you signed up for it … don’t complain that you don’t like how they showed you!

The other reason I think this is foolish is that Scott went on Shark Tank and pitched to Daymond John, the founder of FUBU, and Mark Cuban, who knows technology extremely well. These guys now know Scott’s revenue, they probably have a profile on the SeV business above and beyond what we saw on the show, and they know his patent portfolio. They flat out told him how they’d compete with SeV!

I hope for Scott’s sake that there’s a strong anti-compete clause for anyone pitching to the sharks, because otherwise Scott just went on television and explained to a competing clothing company why his company is successful and how to get around their patents!

So while it may be true that Scott got some free publicity and a chance to brag on SeV on national television, the sharks sat around and basically laid out the weaknesses in his business model, but didn’t get to invest in what they felt was the more lucrative business. So who was the real shark here? The venture capitalists on the Shark panel or Scott, who basically got a free 20 minute prime-time ad for SeV?

Or maybe it’s the rival clothing companies, who can now sit down and come up with ways to compete?

Let us know in the comments!

 

Opinions expressed in this post are mine alone and do not necessarily reflect the views of all Gear Diary writers.

25 Responses to " Scott Jordan Appears on Shark Tank, but Who Was the Shark? And Who Was the Bait? "

  1. Very well said Carly … but let me say that those opinions are MINE as well!  🙂

    First off, I love the ScottEVest product, I might not have as much as some here but I wear something from SeV about 9 months out of the year as a jacket.I see much the same thing as Carly:- This IS reality TV, so although these are real investors and real businesses … it still has to be good TV.- We have been watching since the show started (this is third season) – and the Sharks has remained consistent in terms of how they deal with people, each other and how they respond to what the person is pitching – and how they pitch it.- After watching enough of these you DO get used to the flow, and see who is there with a solid idea AND plan, who has no idea how to run a business, who has only a gimmick,  and who is there looking for some great free exposure for their company/product.- And between the attitude, arrogance, and manner in which he handled everything … it was clear that Scott was there for the promo.

    Of course, I don’t know what was in his head going on, but it was clear from the earliest season promos showing Scott that he was going to be a total jerk – and he didn’t disappoint.  My entire family remarked at how they would never want to have to deal with him!

    Today Scott has been in full-time ‘spin control’ talking about how it is a one-sided edit and so on.  And I have no doubt that it was – just like EVERY episode!

    But again, while you can edit the flow of the exchange, there is no mistaking what happened during the extended segments of Scott talking.  He has noted that the session with the sharks lasted ~1 hour, and he had ~20 minutes of air-time.  That means 1/3 of his time is captured!  Compare that with 7 minutes out of an hour for most guests, and you can see that what really happened is BETTER represented here.

    I also agree with you Carly that this makes Scott and SeV look weaker than ever.  There are multi-pocket jackets out there, but SeV stuff is unique – and I ALWAYS get asked about my jackets …especially when I pull out an iPad!  But that isn’t part of his IP portfolio!  I foolishly assumed that the ‘jacket-area-network’ was only part of the IP, not the whole thing!  That really does limit the reach of his business – and informs competitors how to destroy him!

    That said – look at how much we have all been talking about this!  That is ultimately what Scott wanted – ink and chatter!

    Eek!

    • dancohen says:

      There is a reason I would NEVER go on a reality tv show and this is it. You don’t have control over how they edit and they WILL edit for drama and conflict. That noted, Scott did say one of the sharks was “out” and did say at the end “I don’t need you” and that is not the result of the editorial process. Neither were some of the interplays. Sure they may have been out of context but they did occur.
      I’ve watched the clip a few times and tried to look from different people’s perspectives and I have to come to the conclusion that, were I one of the Sharks, I would not have been really thrilled with spending an hour that way.
      There is rarely a day when I am not wearing something from SeV and I was a customer long before I reviewed any of the company’s items. Still, not sure this show helps build the brand. I guess I just don’t subscribe to the “any pr is good pr” mindset.

  2. Ken says:

    I’ve been a customer mostly from the reviews that I’ve read on your site.  After watching him and his actions he seems like a pompous tool and I will no longer by anything from them.  it won’t matter to him, but I don’t really need to support someone with an attitude like that.  Just my opinion

  3. dbmurray says:

    It was number 1.

    He was just looking for free publicity. Robert and Kevin’s offer for his retail business was clearly too low, but he never made any sort of counter offer. He said everything was negotiable at one point, but never bothered to negotiate.

    • loopyduck says:

      “He said everything was negotiable at one point, but never bothered to negotiate.”
      I’ve never watched more than a couple snippets of the show so I don’t know how the offer process works, but is it possible they could have edited out his counteroffers because the producers thought it was pretty boring/not serious enough?

      • No – as part of his endless whining on Facebook he has stated that he never made counter-offers.

        And as I say, my family hooked into the show from the start – it is always a nice quick math test as well 😉  And this is no different than ANY other episode.  Scott is playing this from any angle he can come up with.

        If you have seen him on Facebook – he IS this person shown in the edited version.

  4. The process is the same for every episode, and has been reported again and again by participants.  Someone saying it suddenly changed … just not even worth debating.

  5. If you have watched other episodes you will see that Scott was treated no differently than others – and in fact Cuban was much nicer than he has been at other times this season.  Which is amazing since it was pretty clear WHY Scott was there.

  6. Quantum says:

    Wow, having never heard of this douche before Shark Tank, I know have heard of and will work tireless to promote AGAINST this douche.  

  7. patrickj says:

    I always thought he seemed a bit of an arrogant *%$!% – his 15 minutes of fame did nothing but reinforce that notion.

  8. TechAuthor says:

    Here’s a tidbit that speaks volumes, nearly to the point of being a straight indictment of Jordan’s honesty: on Friday after the show, someone asked Wozniak on his Facebook page what his business involvement was with Jordan. His answer? NONE. Just a nice friend who sends him free stuff. Everyone in tech who’s ever known Woz knows that’s his thing: He’s a nice, surprisingly accessible guy who makes friends with people. And it’s a reasonable bet that others of the “big names” on Jordan’s “board” are in a similar position: free stuff and Scott’s friendship in exchange for using them to advertise a largely-fabricated management team. I’m all for celebrity endorsements, but come on, call them what they are.

    TV entertainment or not, the Sharks were dead-on. Jordan was trying to sell them at worst vapor, and at most, an investment in him making more money in a separate, going business they would not be allowed to participate in. An absolute scheme and PR play. I also seriously question whether all the big name clothing companies are actually paying him ongoing royalties as he very nervously and hesitantly claimed when pressed. Clearly there is no way to get the “evidence,” but I very, VERY seriously doubt it.

    Interesting that he wasn’t allowed to say the name of his clothing company (and/or it was edited out). Must have driven him CRAZY to not get the PR he *really* wanted.

    I don’t know Jordan but I know enough about him to suspect that if I did, I’d want a bottle of Purell handy. He is an infamously narcissistic BS artist who has pulled stunts ranging from clever, to cheesy, to sleazy. He’s started fake controversies with everyone from Steven Colbert to Delta airlines and milked the hell out of them. He’s now buying Google ads saying “Tech enabled clothing on Shark Tank,” subliminally implying a positive when in the final cut, he got kicked off the show.

    Frankly I feel sorry for him. It’s a shame that a presumably smart guy with what people seem to think is a decent product has to throw character and integrity to the wind to build his business, rather than just honorably selling on his own merits. Fortunately, intelligent people seem to see him for what he is, so at some level it’s just an entertaining joke. But as a business? Pretty classless and gross.

  9. gorkon says:

    I think if we knew even a little of what the leaders of the companies we buy things from do, we wouldn’t continue to do business with them.  

    I am afraid for Scottevest.  What Scott did obviously wasn’t the best thing for the company.  Scott has great products and I’ve had nothing but the best service from them as a company.  Their products are very good and I wear them about as much as Michael does.  I also usually don’t have too much of a problem with Scott as a person.   So I am not ready to throw him under the bus.  He made a mistake.  He can recover from it, but I only hope he does so before a great product is lost.

    • TechAuthor says:

      The problem is that this is not a one-time thing and definitely not a mistake. He is, as they say, “dumb like a fox”. This is absolutely classic Scott Jordan behavior and tactics…. now he is challenging Mark Cuban on Twitter to “be a man” and debate him, he’s issuing “Official Company Statements” and on and on. Every bit of it is calculated PR sleaziness. His products may be nice, and I believe they are, but he is simply a slimy business person.

  10. Scott Jordan says:

    First of all, let me say that I have had a great working
    relationship with GearyDiary for a long time. I would hope that they – of all
    people – know how straightforward I am and how passionate I am about my
    company. I went on Shark Tank to pitch my licensing company TEC. TEC was my
    first company and my dream. While waiting for the patent to issue we built
    SCOTTEVEST as a proof-of-concept. As SCOTTEVEST took off, the commitment it
    required from my wife and me superseded any efforts we could take in regard to
    TEC.

     

    I have seen every episode of Shark Tank and I know how
    important patenting is to them.  They
    always ask if an idea is patented – always. I thought that my licensing company
    could be a successful business to pitch to five of the most influential, connected
    and willing investors out there, and I was excited to take it to the tank.  As soon as they smelled the blood in the
    water (SCOTTEVEST, my other company), they refused to let it go. Despite my
    efforts, with five of them and one of me, it became impossible to re-direct the
    conversation. For any business an entrepreneur mentions or “pitches”
    on the show, Mark Burnett productions automatically receives a portion of that
    company. I wasn’t on Shark Tank pitching SCOTTEVEST or looking to get a deal
    for it.  SCOTTEVEST is no longer a
    startup company and I didn’t need their help with it nor did I want to give up
    any percentage.

     

    Based on the comments I have read, I see that many of you
    think that my behavior was out of line. 
    I disagree. The sharks were greedy and wanted something I wasn’t
    offering. I was there to get a deal for TEC and was willing to defend myself,
    my company and my patents. If they had been willing to negotiate for TEC sans
    SCOTTEVEST, we could have come up with something. The show is called Shark Tank
    for a reason, the sharks are fierce and intimidating.  Unless you stand up for the offer you think
    is fair, they will eat you alive.

     

    Click here to see the full story: 
    http://www.scottevest.com/company/shark_tank.shtml

  11. TechAuthor says:

    Sorry, not buying the impassioned, innocent plea — anyone who’s seen your antics before, whether with Delta Airlines, Stephen Colbert, or any number of other stunts (all easy for anyone to find in your very admirably-active social media presence) knows you are an absolutely insatiable PR hound with few, if any, boundaries. It is clear that you LIVE for these moments (and here I am adding to the delight). 

    It’s OK and all-American to be a PR hound. It’s just not OK to pretend you’re not, or to be otherwise deceptive in the way you present and represent yourself.

    Wozniak says on his own facebook page that he is NOT an advisor, when asked that question very specifically and directly. He says “just friends,” says you’re a great guy (which you may well be), and that you send him free stuff. The fact that you call him an advisor and put it on your website doesn’t make it true. Again, showmanship and PR are AOK, but dishonesty — or even shades of it — is not. The fact that you deny virtually all criticism of your tactics and paint yourself as a victim leaves intelligent people incredulous.

    What about your hesitant answer when pressed on the show about getting ongoing royalties from the laundry list (forgive the pun) of clothing companies you mentioned… are you really? VF, Ralph Lauren and all the others are using your technology and sending you royalty checks? Will you confirm that in writing here? It doesn’t pass the smell test, sorry.

    Maybe I’m old-fashioned, but you seem to me to be a guy who could succeed without any of this BS. I sense you’re smart, clearly you spend a lot of time on your business, and according to many of the comments I’ve seen, your products are nice. So deny it if you will, but it’s just sad that you feel you have to stoop to cheesy tactics to get attention.

    By the way, when you say “For any business an entrepreneur mentions or “pitches” on the show, Mark Burnett productions automatically receives a portion of that company,” are you saying that they now have an ownwership stake in TEC (or will you say “I’m bound by confidentiality not to answer”)?

    As for Gear Diary, I don’t know what kind of relationship you have with them, but I completely support and admire them for running an op/ed without “fear” of ticking someone off. It’s refreshing to see in an era of completely amateurish and pandering pseudo-journalism.

    Just run a nice, classy business and let your products and service speak for themselves. THAT is what makes America great, not the right to sue.

  12. My Brush with Reality TV and the Ensuing Hate Mail | The NitPickPocketeer says:

    […] my employer, Scott Jordan, was on Shark Tank last week. He is emerging as quite a controversial figure. He tottered on the fence between assertive and confident to rude and arrogant for much of […]

  13. Meni says:

    I was not very impressed with the quality of the coat I have. I a shot time after purchase, started to get problems with the zippers, one of the pockets got torn and I had to sew it.
    Meni

  14. Gazz says:

    The sharks are a bunch of con-artists trying to get a piece of something that was not on offer. $500k for 15% of a company that makes $2m profit annually. LMAO that values your company slightly over $3m.

    They are idiots of the highest caliber.  Good on you scott for holding your ground.

  15. […] couple of weeks ago we wrote about Scott Jordan of SCOTTEVEST appearing on the ABC ‘reality investment’ show ‘Shark Tank’. It was an […]

  16. Eileen Finn says:

    I saw that jerk on tv and will make it my goal to never support anything he makes. I can’t believe that he was that disrespectful and I’m glad that he’s not a lawyer anymore. The world needs less jerks like that in court.

  17. John Leece says:

    Amazing how think skinned those “sharks” are. They normally bully and intimidate people, often in to taking bad deals. The best example is the guy who invented the wine balloon. There was an offer of $600,000 and because he wanted to take a minute to think about it and negotiate, Mark Cuban low balled him with an offer of $400,000 and said take it right now or no deal. Good for Scott for standing up to the bullies and giving them a taste of their own shark medicene.

  18. […] hold several day’s worth of clothing. What an original concept. I wonder where they got the idea […]

  19. […] While certainly, these products are designed with tongue at least partially in cheek, we spend a lot of pixels here talking about ways to carry our gear with us at all times. So why not give the same treatment to your beer as you do your gear? These products are like the SCOTTEVESTs of booze, but without all the Shark Tank drama. […]

  20. […] hold several day’s worth of clothing. What an original concept. I wonder where they got the idea […]

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