Spark Tank - Edition 12

What we talked about.

In the twelfth edition of Spark Tank, host Sunny Ray joins fellow investors Charles Cormier and Kelly Botenfield to hear pitches from five founders seeking early stage capital. The episode centers on Craig Guile, founder of CoolMitt, a heat mitigation technology that originated from Stanford University research funded by the US military through DARPA. Craig explains how the device cools the body through the glabrous skin on the palms and soles, using convective heat transfer to lower core temperature within minutes. Already adopted by more than eighty professional sports teams, college programs, Olympians and special forces units, the technology is now expanding into a new portable consumer product targeting athletes, industrial workers and eventually medical patients. The panel presses Craig on product design, pricing, distribution strategy and how he would defend the business if a larger player like Nike entered the space, while he lays out plans for a subscription based smart device and a future medical warming product. The episode then moves to Greg Perano of Endeavor Orthopedics, whose pitch on treating avulsion fractures begins just as the recording ends.

A Stanford born, DARPA funded cooling device faces sharp VC questions on design, pricing and defensibility.

The questions, and the answers.

Why not just use a bucket or terminal filled with ice instead of buying this product?

The human body does not work that way. Putting your hand directly in ice causes vasoconstriction, which actually traps heat instead of releasing it. Our device uses convective heat transfer at an ideal temperature, cool but not cold, so it does not trigger that response. People notice a difference within thirty seconds, and two to three minutes tends to be the sweet spot, so it fits easily into an existing hydration break routine.

Shouldn't the shape change so it doesn't just look like a thermos to consumers?

There will definitely be messaging needed to educate the market on what this is actually doing. The final product will be better industrial designed, but we're limited by physiology, if the grip is too narrow, squeezing it restricts blood flow and reduces heat transfer. We're considering messaging similar to Intel Inside to signal the technology working inside, and leaning on B2B sales to educate large industrial buyers who understand the science.

Why not make it a patch instead, similar to how Eight Sleep cools your mattress?

Eight Sleep cools your whole body mass over time, but not very rapidly, while ours works fast. Convective heat transfer isn't as simple as it looks, you need to apply it to the right part of the body and the heat has to go somewhere. A patch alone would only cool briefly because you need to dump that heat into an effective heat sink, which is what the ice inside our device does.

What is your overall go to market strategy, direct to consumer or retail?

Athletes are a high profile marketing launchpad more than the full market. Initially, a lot of our effort is going toward B2B sales into large industrial companies, and the military has a lot of use cases too, though that's a longer, byzantine procurement process I'm familiar with from flying jets for the Navy. I've just brought on a new marketing person focused on industrial sales ahead of this launch.

Are you looking at selling on Amazon?

Education has to happen first. This is a brand new category, so if we threw it on Amazon right now, no one would know what it is. We need to sell through our own channels first to educate the market, then down the road move to distribution partners or Amazon for the direct to consumer sale.

How do you convince everyday consumers, not just elite athletes, to buy this?

A big part is getting the word out through influencers, like a YouTuber with millions of views who just did a workout with our product and his crew. Our published Stanford study showed a 144 percent increase in pull-ups over a four week program. One guy plateaued at ten pull-ups, cooled for a bit, then hit sixteen on the next set, that kind of gain is what gets people talking and buying.

If this works as well as claimed, what stops a company like Nike from copying it?

Our moat is the patents we license from Stanford plus new patents on our own products, but a patent is only as good as what you can afford to defend. The bigger edge is the founding scientists' institutional knowledge of what works and what doesn't, other products entering this space lack that and have limitations. We also see manufacturing complexity as an additional layer of defensibility.