038: Scrub Daddy Inventor talks Shark Tank, Car Washes, Product Pricing, & … The Aaron Krause Story.

Background on Aaron Krause of Scrub Daddy:

Aaron Krause is an accomplished entrepreneur/inventor with 20+ years of experience in patenting and manufacturing industry. With patented products in major big-box retailers by such industry giants as 3M Company, Mr. Krause prides himself on hard work, dedication, and imagination.

Aaron received national attention when he appeared on the ABC show Shark Tank with his invention Scrub Daddy. After successfully pitching the sharks Aaron received a capital infusion from inventor and celebrity mogul Lori Greiner. Since then, Aaron and Lori have sold millions of “the smiling sponges” to well-known retailers including QVC, Bed Bath & Beyond, Wal-Mart, ShopRite, and Buy Buy Baby. Scrub Daddy has exceeded $15 million in retail sales and continues to gain recognition as a household brand.

Time-Stamped Show Notes:

[0:46] Aaron is the Daddy behind the famous Scrub Daddy, the most successful company in the history of Shark Tank.
[2:25] Aaron started his entrepreneurial journey when he was 10 with the motivation of his father.
[4:37] After graduating from college, he decided to focus on his car washing business which leads to his family’s disappointment.
[8:12] While polishing a car, Aaron accidentally damaged the car because of the shape of the buffing pad. So he decided to reshaped and redesign the buffing pad.
[8:45] He applied for a patent and started selling it. After 6 months, he was selling all around the world.
[10:30] The business was growing fast that he decided to sell his car washing and detailing business.
[12:30] Aaron borrowed $5,000 from his Dad for the patent and spent money looking for a company that can help him develop his sponge.
[13:22] All the companies he went to declined his proposal because they don’t have the equipment to do the product that he wants
[15:47] “I can never work for someone else in my life.”
[16:04] His friend, who’s in the manufacturing business, helped him create the equipment he needed to create the product.
[21:00] Aaron got a bank loan and spent $85,000 for a robotic equipment.
[23:54] In 2000, he invented quick connect/disconnect automatic centering double sided reversible buffing pad.
[24:51] The multinational conglomerate and Fortune 50 company 3M made a deal with Aaron.
[30:55] “There’s so many ways to skin a cat. You don’t just sell your company, you can do all kinds of really creative deals.”
[39:46] “If you want to go into a business, you need to understand that you’re married to the company.”

Fabulous 4 Questions (the best answers given by a guest to date):

📖 📚 Favorite Book(s)? The biography of both Alexander Hamilton and Benjamin Franklin. These two great American forefathers each have had a big impact on me. Hamilton who many did not know well until the popularity of the Broadway musical is responsible for our current banking system, the stock market, and the US treasury. He basically crafted the world of business that I navigate daily as a business owner. Benjamin Franklin is revered by myself and many others as one of the most prolific inventors of his time and many of his inventions are still in use today such as bifocals. I gain a lot of inspiration reading about him especially since he shares my hometown of Philadelphia as his birthplace and final resting place. As I have very limited time and very rarely sit down with a book, I read both of these biographies by listening to them on my commute to work daily on audio.
🙌😎 Favorite Amazon.com purchase? While searching Amazon for a new type of cat litter I stumbled across a fully automatic cat toilet that even flushes! I have bought 4 of them now from Amazon and have them upstairs and downstairs in my home! If you have a cat or get one this is LIFE CHANGING! (the CatGenie Self Washing Self Flushing Cat Box)
🌱💸 Favorite Tool that's GROWN your Business? I am a big proponent of automation. It keeps labor costs down, increases production, keeps us cost competitive, and puts my valuable human assets on more important tasks that are not mundane and can cause repetitive motion injuries. This year we purchased a $200,000 packaging machine for our 2 and 3 count boxes. It has taken us from 20 people on a line packaging about 10 boxes a minute to 3 people packaging 27 boxes a minute. We plan to purchase another such machine “tool” in 2018.
💭💡 BIGGEST Challenge keeping your Business from GROWING? We are so busy just keeping up with current demand and growing demand for our new products launched in 2017 including the Scour Daddy and the Scrub Daisy that we are just out of time to devote to new product development and implementation. It’s a good problem to have but frustrating at the same time. Sometimes you grow too quickly to sustain new growth. We hope to normalize in 2018 and perhaps add some more staff to relieve the bottlenecks and get a few new items such as our exciting Soap Daisy product launched in 2018.