8 Lessons for Entrepreneurs--From Shark Tank's Biggest Hit

By Neil Parmar | Small Business

Aaron Krause is behind the biggest success story in 'Shark Tank' history. Here's how to apply what he's learned to win with your own business.

Who knew a bright yellow sponge, with holes big enough to fit a person's fingers, would become the biggest success story in Shark Tank history?

Certainly not Aaron Krause.

But Lori Greiner--the inventor, investor, and queen of QVC--had her suspicions when Krause pitched his product to her on Shark Tank. "What makes it so successful is it's a very unique sponge," Greiner tells me. "Unique is very appealing, so having a unique presence is a good thing--if it's a good product."

Together, Krause, the founder and CEO of Scrub Daddy, and Greiner have managed to sell more than 10 million of these smiley little sponges--worth some $20 million--through major retailers across the country, including Wal-Mart, Home Depot, Bed Bath & Beyond, Kroger, and Ace Hardware. Here are some of the principles Krause followed:

1. Think of a killer idea--by starting from scratch
The spark for Scrub Daddy dates back to Krause's life just after he graduated from college, when he started a car washing and detailing business.

"In that business, I caught some of my employees getting drunk, had to fire everybody, ended up buffing a car and damaged a mirror--and came up with a new idea for a scrubbing pad," says Krause.

2. Trend spot
Know where the market is headed--and stay ahead of that curve.

Krause noticed that urethane foam was becoming more popular than hairy pads, so he began toying with different types of that foam and then filed patents around the most promising materials.

3. Consider your pain points
After getting his hands dirty one day, Krause grabbed one of his foam pads--but the rectangle was hard to hold. So he had it cut into a circle to better fit in his palm and then added holes to wipe grime from his fingers. Maybe a softer version of this could work to clean vehicles, too, he thought.

"Now it looked like it had two eyes," says Krause. "I created some ridges around the perimeter that looked like hair. One of my co-workers said, 'It's like a scrub daddy.' It was a perfect name."

4. Know your customers
The name may have worked but penny-pinching car washes didn't want to buy Scrub Daddys because they cost around $5 each. "No one would buy it," says Krause. "We were a little disappointed but this was just a side business."

Indeed, when 3M acquired Krause's business in 2008, they let him keep his buffing pad venture. And that little yellow sponge sat in the back of a factory for a few years until, one day, Krause was cleaning lawn furniture and accidentally rediscovered it. It could harden in cool water and soften in warm temperatures--perfect for tackling grimy dishes. But it was still missing one last touch...

5. Don't forget the final details
Once Krause added a smile-like hole so the sponge could easily grip and clean utensils, he took his new-and-improved product to market, where it gradually gained sales traction.

First, a friend stocked the product in a handful of his supermarkets. Then a local newspaper ran a story about the invention, which caught the attention of QVC. Krause appeared on the shopping channel a handful of times, first selling around 1,000 sets, and then 2,000, 3,500, and 5,500 sets on subsequent visits. "By the third or fourth show I felt comfortable on TV," says Krause, who decided he should try his luck next on Shark Tank.

6. Scale--by swimming with the sharks
You need to know your potential investors, even before you meet them. So during the months between applying for Shark Tank and securing a spot, Krause took a unique approach to practicing his pitch.

"I had practiced for every shark," says Krause. "I was really shocked people went to Shark Tank and weren't prepared. I watched every episode. I created a flow chart: I know Kevin's going to ask about valuation and a royalty deal; I laid out my answer. I was hoping to work with [Mark] Cuban. I didn't think Lori would be in."

7. Find the right partner
Ultimately, Greiner partnered with Krause.

"She's given me really great advice on how to deal, and talk to, these retail stores," says Krause. "She also understands QVC ... and helped a lot in new packaging and what women want to see in a product. As far as running the business, she knows I know what I'm doing."

"Being on Shark Tank was revolutionary for the product," Greiner says. "It made an awareness of the product and then when Aaron and I started to work together we did a lot of initiatives of getting it into certain strategic places like Bed Bath & Beyond. We had a follow-up on Shark Tank, which also helped drive the business at retail, and then we had successes in other retail locations. QVC is a great driver of the business as well. When you take the culmination of all [these] things, it really propelled [Scrub Daddy] at a much faster rate than a typical product starts out."

8. Find expansion opportunities
Newer versions of Scrub Daddy include a growing array of colors, a "heavy duty" model, and another edition just for wiping countertops.

"We are not a one-trick pony," says Krause. "This is the tip of the iceberg."

More from

Subscribe to our mailing list
* indicates required
Small Business Services