Shark Tank Appearance: Dec. 12, 2014
Investors: Robert Herjavec and Lori Greiner
Deal: $150,000 for a 15 percent stake
Results: Total sales increased from $100,000 to nearly $2 million.
When you’re an entrepreneur selling a holiday toy called The Mensch on a Bench, it helps if you yourself possess the mensch-y qualities of honor and integrity. That’s the case with Neal Hoffman of Madeira, Ohio, a suburb of Cincinnati. A few months after his plush doll, the Jewish answer to the nouveau Christmas tradition of The Elf on the Shelf, was featured on Shark Tank, one retailer ordered 20,000 units. Hoffman declined. He could have met the production demands but didn’t think an order that large was right for the business.
“We’re a great PR machine that’s generated over 2 billion media impressions, which leads people to think we’re a much bigger company than we are,” Hoffman says. “That’s great, but retailers can fall into the trap, too, and forget that Jews are a very limited market, only 2 percent of the population in the U.S.”
He structured his company so retailers take delivery straight from the factory in China. That mitigates Hoffman’s risk because he isn’t responsible for unsold merchandise. But he doesn’t want his customers to be burned by loads of languishing Mensches either; he hopes the product will sell briskly so his customer will order again in succeeding holiday seasons. Hoffman persuaded the retailer to cut his order by 5,000. “The retailer is happy because he sold almost all of them,” the entrepreneur says, “so he’ll be back next year.”
Luckily, Hoffman says, Lori Greiner and Robert Herjavec, his Shark investors, share his principles and vision of small, steady growth. Says Herjavec: “I’ve told Neal a few times now that I wish all the entrepreneurs I work with had his commitment, energy and passion. He’s all in, and I love it. Neal has built a brand rooted in both spiritual and family values, and he’s been able to find a way to scale both product offering and distribution to grow into a profitable business. I’m really proud to join Lori Greiner on the journey with Neal and Mensch on a Bench.”
When Hoffman walked on the soundstage of ABC’s Emmy Award-winning business reality show and announced that he wanted to “bring some funukkah to Hanukkah,” he was met with groans and guffaws. Undeterred, Hoffman told the Sharks he was a former Hasbro toys executive who had raised more than $22,000 for The Mensch on a Bench in a Kickstarter crowdfunding campaign and had presales of nearly $1 million from Bed Bath & Beyond, Target, Michaels, Barnes & Noble and Toys R Us. The Sharks were soon biting, and Hoffman left with two mentors.
Related: 10 Ways to Find Your Ideal Mentor
One condition of the deal Hoffman made with Greiner and Herjavec was a Mensch makeover. They felt the doll would be more appealing if his somewhat menacing face was swapped for a more jovial one, and Hoffman agreed. “When I came back to Lori and Robert with a prototype, they loved it,” Hoffman says. “They said it was exactly what they were asking for.” The doll smiles through a gray mustache and beard.
While Greiner has helped Hoffman on day-to-day product development, including packaging, Herjavec has guided brand strategy. “Robert and I had some tough discussions,” Hoffman admits. “He was really pressing me to stay focused. I wanted to launch dreidels, menorahs, party products, paper plates, candles and more. But Robert steered me away from being a mad scientist. He said, ‘Your job isn’t to develop as much as possible. It’s to develop items as intelligently as possible.’ ”
In the end, Hoffman successfully launched an activity book and a singing menorah that teaches Hanukkah prayers to kids. For the next holiday season, he’ll introduce two female dolls. He decided, at Herjavec’s urging, to license the rights to produce a Mensch Munch chocolate bar. “Robert was right,” Hoffman says. “I don’t want to be in the chocolate bar business. It was much better to leave that to someone else and just collect the check.”
The Monday after appearing on Shark Tank, Hoffman quit his job as director of marketing for Evenflo, which manufactures highchairs, car seats and other products for young children. Today he works out of a home office in his basement, and that “has helped me be the person I want to be. Instead of spending two hours a day in the car and working nights and weekends because I’m juggling a job with starting a business, I’m able to pick my kids up from school. I’m so thankful to Shark Tank for making this happen.”
There have been pinch-me moments for him, like being invited with his wife, Erin, to a Hanukkah celebration at the White House. “I’m just a toy guy, and here I am 5 feet from the president and three Supreme Court justices,” Hoffman says. “I definitely felt like I was playing out of my weight class.”
Related: How Bantam Bagels Survived the ‘Shark Tank’
This article originally appeared in the August 2016 issue of SUCCESS magazine.
