In their first two years of business, the founders of Nardo’s Natural bootstrapped their business to $30,000 in sales. Even though the four brothers had to figure out how to make this money last to fund all of the operations of their business, they were confident that there was a massive opportunity in their coconut oil skin care line. Their customers loved their products, and they had to make it work.
In this episode Danny Mastronardo, one of the brothers and owners, tells us exactly how the team got their first distribution deal at a 5 Diamond Rated Resort Hotel, and how they quickly became the highest selling product in the whole resort. The team was able to use their family focused brand to close their initial deal, and started building relationships with more and more hotels in the area. Two years later, one of the brothers came across a then new show called Shark Tank and they decided to send an email to the producers on a whim.
Danny tells the hilarious story of how the brothers broke all the rules to get selected to pitch on the show, and why they were ultimately successful in closing a deal with Barbara Corcoran. The advisor and mentor relationship with Barbara continues to this day, and has helped them land multiple appearances on Good Morning America, ultimately growing their brand to millions of dollars. Today, the brothers have diversified their revenue streams to include private label and contract manufacturing, launching over 250 brands in the last year alone.
0:30 Vadim: Today on the show we have Danny Mastronardo of Nardo’s Naturals, one of 4 brothers who started a skin care company in 2009 that ended up making it to Shark Tank and grew to a multi million dollar business.
1:10 They’re now selling in 50 states and have been named top 30 under 30 entrepreneurs on Forbes, and have been on Good Morning America over 7 times, which apparently can drive hundreds of thousands in sales in a matter of hours.
1:30 I met Danny because he was kind enough to speak to my entrepreneurship class, and I love how him and his brothers always march to the beat of their own drum
1:50 Tell us first of all how 4 dudes ended up starting a skin care product, and the story you’ve told me about how you closed your first hotel sale.
2:20 Danny: We just graduated college, I had a job for about 10 months, counting down the clock to get home every day, and said to myself that I didn’t want to be that person just working for the weekend.
3:30 I was a marketing manager for an industrial real estate company, and had 7 people under me and I gave it all away.
4:20 Sergei: Why did they give a 22 year old the responsibility of 7 people reporting under you?
4:28 Danny: It dated back to the college days where I actually enjoyed school and made relationships with my professors and I got a connection through one of my professors who was well known, which carried a lot of weight.
5:34 I ended up giving up the corporate car and corporate apartment to move in to an 1100 sq ft condo with my 3 brothers.
5:50 My older brother who studied health and nutrition in school started importing coconut oil from the Philippines. Mind you this was 10 years ago when no one really knew about coconut oil.
6:18 My brother sold his car for $6,000 to fund it. My father’s a police officer, my mother is a nurse, so there was no silver spoon.
7:53 We ended up taking this jar into this hotel across the street, partly because without a car we couldn’t go very far. And they immediately turned us away.
8:23 Over 2 weeks we made friends with all the hotel janitorial staff and security guards who could let us in to the spa.
8:35 I’m a firm believe in luck, in that the harder I work the luckier I get. -Thomas Jefferson
8:38 The day they let me into the spa to pitch our skin care product, I found out that the spa was actually looking for a local family business to supply their products.
9:05 We pitched them saying we have a “facility” down the street (our apartment) and that a sales rep would come by with samples (my brother). And by making ourselves seem bigger than we are we closed the deal.
9:28 8 months later we became the number one selling product in the hotel.
10:44 We ended up taking the letter the hotel gave us for being the best selling product, and taking it to other hotels to pitch them.
11:30 We sold our actual first jar at a farmers market. I remember seeing people at the market count their money at the end of the day, but we didn’t even count ours. We were just there to learn about what our demographic wanted. Testing the bottle, the color of the product etc. After two weeks of that we took it to the hotel.
12:12 I still visit that farmers market from time to time and I see the same vendors counting their cash 10 years later, instead of thinking about how to grow.
12:35 That first hotel wasn’t about the revenue for us, it was about getting leverage to move to the next location.
13:00 Vadim: You knew right away that you can use the farmers market for customer research but you didn’t want to sell that way. Farmers market are a grind. All business is a grind but you can decide the kind of grind you want to work on. You decided you wanted to get bigger scale through hotels.
13:30 That first hotel also gave you your first win to keep going, something we often talk about is so important in business.
14:05 Danny: I always think about what Mark Cuban says which is that there are so many businesses that can succeed in this world and unfortunately, so many give up too soon.
14:30 Sergei: One article I read said that before Shark Tank you guys made just about $30,000 over 2 years. What made you continue to push and see the opportunity in this business?
15:00 Danny: We just kept looking at the big picture. My dad used to tell me that eventually that customer is going to run out of that product and it’s up to you to make sure they buy the next one from you. So we focused on customer service and retention and the business grew.
17:02 Initially the plan was just to continue to sell to hotels, even up until the time we got on Shark Tank. We also started selling through our website direct to consumer once people started asking for it after using it in hotels.
19:00 Sergei: Let’s talk about Shark Tank. I feel like skin care products even back then were a dime a dozen, so what did you guys do in your video to get on to the show?
19:11 Danny: You’re right, they are a dime a dozen.
19:32 This was season 2 of Shark Tank and my brother KJ found out about it. We started watching it that day and we knew right away it would be great for us. Not so much for the exposure, but because we really did need some help from more experienced people.
20:58 The first step was to submit an email. So we emailed them a picture of all of us wearing matching denim outfits saying “believe it or not, these brothers make the world’s best skin care.
21:14 15 minutes later we got a call from the producer, she told us we had 5 minutes to pitch our company to her so I gave the phone to my charmer brother, who kept her on the phone for 45 minutes.
22:43 Even after that call went so well, we got an email telling us there were still 30,000 applicants between us and the finish line.
23:06 Then the video submission part came where they asked you these boilerplate questions. I went on Youtube to look at other submission videos, and I saw that everyone was doing the same boring thing.
23:48 So I started filming my brothers getting ready to record, one was pumping iron to look bigger, the other was arguing, and we just submitted this silly video breaking all the rules.
24:12 About a month and a half later they had a limo show up, and flew my family out to LA to record.
24:32 This goes back to the Thomas Jefferson quote that the only way to get lucky is to get off your rear end.
25:00 Vadim: so tell us about the day in the Shark Tank, what was that experience like?
27:00 Danny: you know we knew our stuff but before recording we were just hanging out with our parents enjoying the free vacation, while seeing others arguing with each other while prepping. One guy was practicing with cardboard cutouts of the Sharks.
27:50 Once we got in the Tank it was very intense but part of what helped us is we always had one of the brothers who could pick up the slack and answer a question. The reason why Barabara ended up investing is not because of our product but because she believed in us and that we would persevere.
29:00 Vadim: how long did the actual taping take?
29:07 America sees about 15 minutes of the pitch, we were in the Tank for about 2 hours straight, no breaks or redos.
30:00 Sergei: Many people don’t know that the deal you negotiate on the show, whether it airs or not, is still up for negotiation after, and may not even happen. You guys offered 12.5% for $75,000 and I read somewhere that later Barbara negotiated 50% of the company for $75,000. Was that the final figure, and what did she actually do to help you? We don’t actually get to see how the Shark really is involved after that would warrant the ownership amount.
30:52 Danny: I can’t disclose the terms of what was negotiated, but I can say that Barbara was very generous. She understood that 4 brothers needed to have meaningful ownership to stay motivated.
31:52 She knew we would have to be the ones who pushed. She helped with the financials, the books. And I really did ask her for all of her contacts list. Who she knew who could help us out. We ended up getting on to Good Morning America because of her. She’s good friends with Tory Johnson who has her own segment on there.
34:00 Vadim: All these years later, how has the business evolved? Do you mainly sell direct to consumer now? How big is the team?
34:10 Danny: We have a chemist now, a manufacturing facility, 1099 sales staff. We’ve turned it into a self running machine.
35:19 Our biggest source of revenue now is private label, where we do the manufacturing for others and put their label on it. We launched about 250 brands last year alone.
36:30 Sergei: Danny, what would you say to someone who wants to start their first business and they don’t know what business to start or don’t know if it’s the right one, since you guys started an unlikely type of company.
37:07 Danny: For me, I say just find something you’re interested in and people you want to build something with, and if you truly want to do this, then start working on it. If you’re doing it just to get rich you won’t make it unless you love what you’re doing.
39:46 Sunday, January 20th the brothers will be back on Shark Tank for a new episode.