An entrepreneur turned an appearance on Shark Tank into $5 million in sales and a UPS delivery into a $28 million investment from Richard Branson. I talked to Ring CEO Jamie Siminoff about his Ring Video Doorbell product and how big of a role luck can play in business.
The Ring Video Doorbell is a gadget that sends video to users’ smartphones so they can see who’s at their front door from anywhere in the world. The Ring is my favorite smart home gadget of the dozen or so that I have installed.
Ring CEO Jamie Siminoff called the first iteration of his product the Doorbot, which he pitched on Shark Tank two years ago in an attempt to raise $700,000. He didn’t strike a deal with any of the show’s investors but business really took off after his appearance.
“By far the biggest early success was Shark Tank. It’s not even a question,” said Siminoff. “We did an additional $5 million from being on the show and that amounted to $2.5 million in free cash flow.”
The investors on the show didn’t understand that people are indeed willing to pay a couple hundred dollars for a video doorbell that helps people feel safer. Billionaire Mark Cuban also couldn’t see the company’s value growing from about $7 million into $80 or $90 million.
After rebranding Doorbot to Ring, Siminoff started pitching his company to investors that understood his company’s mission was much bigger than a video doorbell.
“People confuse mission and product. Our mission is to reduce crime in communities,” Siminoff said. “Missions are much bigger than products and something you can do over 10, 20 or more years. Today we believe we are reducing burglaries by at least one per day. We’ve caught people in the act.”
The mission of creating safer neighborhoods struck a cord with Richard Branson, Shea Ventures and American Family Insurance, with the trio leading the $28 million funding. Shea Ventures is one of America’s largest privately owned home builders.
Siminoff isn’t afraid of hard work. He’s pounded the pavement and flown over 250,000 miles per year to do everything from promoting Ring at trade shows to closing deals with retailers like Best Buy. But it was absolute luck that he ever connected with Richard Branson.
“How do you get to Richard Branson? You don’t,” Siminoff said. “Richard Branson got to us. There’s probably 90% luck involved and 10% blood, sweat and tears. I don’t mean to discount how hard it was, but the fact that we can have him see Ring and come to us… there’s just so much luck involved with that. You have to work your ass off, but sadly a lot of the outcome is determined by luck. A lot of people work hard, but that doesn’t guarantee anything.”
A Ring customer that Siminoff was acquainted with was on Richard Branson’s private island in the Caribbean a few months ago. Meanwhile in San Francisco, a delivery guy rang his Ring Video Doorbell. He told the delivery guy where to safely hide the package. At dinner, Richard Branson asked his guests what’s new and the Ring user showed off the video recording of his interaction with the delivery driver.
Branson was impressed by the impromptu demonstration and asked for an introduction to Siminoff. The introduction turned into a three-hour long email exchange. The round of funding was nearly full and Ring was just about to close it.
“He asked if he could invest and I said of course you can,” Siminoff said. “Within 24 hours of the email exchange one of his investment guys was in my office.”
The deal came together in short order and Ring now has a valuation of $60 million, more than eight times the valuation Siminoff was hoping for when he appeared on Shark Tank. The company now has 120 employees and counts Best Buy, HSN, Home Depot, Lowe’s and Target as retailers.