In December of 2014, Neal Hoffman walked onto the infamously brutal Shark Tank stage and pitched an idea for investment that he had been working on for almost two years: Mensch on a Bench, the Jewish answer to Elf on the Shelf. The sharks ended up investing, and to date, Neal has sold $2 million worth of Mensches (that’s over 100,000 dolls). But his Shark Tank endorsement was only a part of what made the concept so successful; Neal is seriously talented and intuitive when it comes to innovation and strategy, and we’re so excited to have him on board The Garage Group Team as an Innovation and Growth Strategist. We picked his brain about the process of creating a product–from idea conception to grossing millions of dollars in sales–and what corporates can learn about entrepreneurship from his experience.
So, what exactly inspired Mensch on a Bench? What was the “a-ha!” moment when you knew you had to make this into a product?
So, my wife is Catholic, and I’m Jewish, and we decided to raise our boys Jewish. One day around Christmas, my son asked me if he could have an Elf on the Shelf. Not really even thinking about it, I said, “No, but you can have a mensch on a bench.” And that’s how the initial idea was born. But I think that, deep down, it was also inspired by a legitimate insight; being Jewish around the holidays can be tough. It’s hard not to feel left out during the Christmas season, which is basically an annual month-long celebration we’re not invited to. I wanted to create a product that was made for Jews, by Jews to add more fun to our own celebrations–something akin to Elf on the Shelf that fostered the same excitement. But, I didn’t want it to be a knock-off of that product, so I differentiated it further by positioning the doll as a tool to teach kids the values of our culture through instructions and rules that come in the box with every Mensch. The overwhelmingly positive reaction and loyalty from the Jewish community about the product has been incredible. In the beginning, when I would tell people about my idea, they’d say something like, “So, you’re making a product targeting 2% of the market… and it’s only used for 6 weeks out of the year? How is that viable?” But, the thing is, I’m the only guy who’s catering to that market right now, so it became this powder keg that just exploded.
How long did you work on the product before taking it to Shark Tank? Can you walk us through the process of idea conception to the Shark Tank pitch?
The whole process, from conception to the Shark Tank pitch, took less than two years. In the first year, I did a Kickstarter campaign to pre-sell the product; the dolls hadn’t even been made yet. On the Kickstarter campaign page, I literally had an illustrated picture of a logo; I didn’t have a concept drawing or anything. Yet, we had ¾ of a million dollars in sales before we hit Shark Tank. Within 12 months of the initial idea and Kickstarter campaign, we were selling product, shipping, delivering and getting funding. Within another 9 months, we’d gotten ourselves on Shark Tank. Looking back on that initial Kickstarter campaign, the fact we succeeded is a miracle.
But, I think there’s an important lesson here for big corporations that want to act more like startups. Before they launch a product, companies concept test, talk to consumers, do qualification, etc. I launched my product for less than $1,000 on Kickstarter. I didn’t test it in the traditional sense; I let the consumers vote with their wallets. It’s a fast and reliable way to see if people actually believe in your product. Crowd funding is primarily used by entrepreneurs, but it could be used by the big guys, too, to help mitigate the risks while getting the product to market faster.
Going into Shark Tank, what did you think your odds were that the sharks would invest?
If you’re going to do it, you have to be overconfident. I was 75% sure I was going to get an investment. There are some people who go on the show just for the publicity, but I see the strategic values in the partnerships with the sharks, so I did anything I could to get that investment. I was willing to give up money for the long term benefit, so I undervalued my product and guaranteed their payback.
If you had to do your Shark Tank pitch over again, what would you have done differently?
The way it turned out was great, and I’m happy with the results overall. I thought I went in overly prepared, but I still got constructive and negative feedback–and it all turned out to be correct. I was initially pretty cocky and thought I knew the field well enough, but being advised by a group of fellow entrepreneurs who had more perspective on similar challenges was the best thing that could have happened to me. When I look back at the comments they made, 90% of them were completely valid, and the ones that weren’t valid still at least challenged my thinking.
What’s happened to your business since Shark Tank aired?
At this point, we have sold almost $2 million worth of Mensches, or over 100,000 Mensch dolls. We are really gaining mainstream traction as a new Jewish tradition to facilitate meaningful family moments. Another exciting thing is that, on the marketing side, I think it’s safe to say that we’ve officially entered the zeitgeist of American culture. There was a question about us on Who Wants to Be a Millionaire?, and we’ve even had a passing mention on The Tonight Show; the fact that they didn’t even have to introduce and explain the concept was awesome. I am also continuing to work with the sharks. I’m the only full-time employee at my company, so I have to operate as a lean machine with all of this going on; we’re a small company thinking like we’re big.
What did the Shark Tank experience teach you about…
Pitching?
The single most important thing is authenticity. If you don’t genuinely care about what you’re selling, people can see right through you. I think one of the biggest reasons for the success of Mensch is that it came from me, a Jewish dad who truly wanted to bring his family and culture together. I don’t think it would have been as successful being produced by a bigger company. You have to let your passion shine through, which is scary. It’s a combination of confidence and knowing what your message is. In my original Kickstarter campaign, I was at about a 3.5 out of 10 on the passionate scale, but on Shark Tank, I was at an 11. Now, I’m at an 8 most days. Today, looking back on my Kickstarter video, I don’t think I would have invested in me. I watch it and ask myself, “Who is that guy?” Well, that was a guy who hadn’t succeeded yet. The confidence I gained from building up the business and seeing the continued support and excitement around it helped grow my passion.
Entrepreneurship?
You don’t need to take one big risk. You can have one little risk followed by another little risk until you build what you want to create.
Branding and product positioning?
Having a true insight is vital to a really successful concept. And, don’t be afraid to embrace your brand’s character. My brand is based largely on humor, which can be tough to do. But when you hit it right, it can work great. I mean, c’mon, it’s a Jew in a box! Have some fun with it! We want people to have fun, and the stuff I put out there probably wouldn’t get approved by legal and PR in a lot of companies. But you are who you are, so embrace the voice and run with it.
Iteration?
Don’t be afraid to iterate. The most important thing is forward progress. I started out with a Mensch that I thought was good, and the sharks said that I could do better. So, I didn’t take it personally; I just went back to the drawing board and did it. If I had waited to get it perfect the first time around, I never would have gotten it out in the first place.
Resources?
Oh man, I learned a ton about resources. First of all, use your network. People are inherently good, and they want to help you. I had a friend from high school build my website, and a friend from business school recommended the person who would eventually become my illustrator. As you grow, it’s ok to recognize what you’re good at and what you’re not good at, and find people to help fill in those gaps. And sometimes, you have to recognize when to hand something off to someone else, even if you enjoy it. Even though I’m good at PR, I had to outsource it because of all the other things I had going on. I never would have been able to get 7 million media impressions this year by myself. Also, by hiring on contractors and agencies vs. hiring staff, you mitigate your risk. If things don’t work out, you don’t have to fire anyone or lay anyone off, and there are no hard feelings.
Investing?
You have to invest in yourself, and you have to believe in your idea in order for others to follow. And then, when it comes time to bring on investors, it totally changes the game. Accountability goes from 0 to 100. It was a learning experience for me, because I don’t typically like to keep detailed books. But my partners want quarterly reports and certain measures in place–which is a good thing. When you bring on investors, it exposes your weaknesses and forces you to shore them up. I also believe in full transparency with my investors so there aren’t any surprises.
What’s next for Mensch on a Bench?
Basically, we’re focusing on transitioning from a product to a brand. We’ve launched an app and are working on creating female Mensches and other product extensions. The plan is to put something out each year and see if it works. If it doesn’t, we’ll iterate and move on to the next thing.
The Garage Group enables corporate teams to innovate and grow like startups. Our Innovation & Growth Strategists (including Neal) work with teams to imagine and develop truly breakthrough ideas.
Image courtesy of Neal Hoffman.
