Swimming with the Sharks
How two Fargo entrepreneurs landed on one of TV’s hottest shows
One of the core values of Fargo-based fitness equipment company PRx is to “think big.” It doesn’t get much bigger than an appearance on ABC’s Shark Tank. This is the story of how they got there.
“Alright, people, here’s what you’re gonna do,” a coordinator bellows to the group of 50 companies standing in front of him. “There are five booths. When we call your number, get in there, give your one-minute pitch and get out. Enjoy the experience, it’s going to be great, but we’re NEVER going to call you again!”
The startups he’s addressing make up a fraction of the 700-plus packed into the Miami Beach Convention Center, and they’re all here for the same reason: to get on Shark Tank.
Shark Tank, in case you’ve been firmly planted under a rock for the past few years, is a show on ABC in which entrepreneurs from across the country pitch their ideas to a panel of celebrity investors, known as “sharks,” who then decide if they’d like to invest their own money in the companies. With an average audience of more than 6 million viewers per episode, just getting on the show can have tremendous implications for a business.
The coordinator continues.
“We’re going to see 70,000 companies this year,” he says. “So leave it all on the floor, and that’s it, people! Don’t wait for us to call you. If we want you, we’ll find you. If somebody offers you $1 million a month from now, don’t say, ‘We’re waiting to hear from Shark Tank.’ Because we’re not calling you!”
The products the companies are touting run the gamut, from a handmade, 20-piece desk organizer to a padded bra for female weightlifters to tape that looks like a race track (to keep kids entertained with nothing more than a Hot Wheels car).
There’s also company No. 217. They’re here to promote their space-saving home gym solution, and they’ve traveled more than 2,000 miles from their headquarters in Fargo to do it. They call themselves PRx, and while they don’t know it now, in just over a year, their faces will be seen by nearly 10 times the number of people who live in their home state.
While you wouldn’t call them polar opposites, there are some notable differences between Erik Hopperstad and Brian Brasch, the cofounders of Fargo fitness equipment company PRx.
There are the obvious physical discrepancies, such as height (point: Brasch) and facial hair (point: Hopperstad), but more subtle is the contrast between their unique but complementary personalities.
“Brian likes to put his fancy shoes on and run through the mud really fast, knowing he’s going to get a little dirty,” Hopperstad says. “And I’m more of the throw on the rubber boots, walk slower and don’t get dirty-type.
“You take those two and it’s a nice balance. It’s allowed us to move things forward a little faster than I would normally go but also a little more cautiously than he would. It’s a nice, happy medium.”
Before cofounding PRx, Hopperstad spent about 10 years in sales in the wholesale building products sector. Brasch, after working for a number of years in Japan and San Francisco as a CPA for accounting giant KPMG, “made a killing” selling software in Silicon Valley and Denver before eventually returning home to be closer to family in Fargo, where he’s acquired and started seven different businesses.
The two met through their wives, who were high school friends and college roommates, and in summer 2013, the idea for their company was born around the Mecca of ambitious ideas: the campfire.
Brasch, who, along with Hopperstad, is an avid CrossFitter, says PRx began out of a frustration with what they saw as clumsy, obsolete barbell collars.
“We saw one break during a competition,” Brasch says. “10 years ago, nobody was picking up weights, putting them above their head and dropping them repeatedly. Now, it happens every day in every town across America and across the world.
“The collars today aren’t made to withhold that. They’re hard to put on, they break, they snap open. And that’s really what started it.”
It wasn’t until the owner of a local CrossFit club in Fargo approached Brasch – who has a background in metals – about building a full set of steel rigs and racks for her new gym that he and Hopperstad started thinking PRx could be more than just an accessory company.
By October 2013, mere months after incorporating, PRx had hired its first employee and delivered its first commercial rig and rack setup to CrossFit Fargo, followed by numerous others across the U.S. and Canada. And while they were seeing a good amount of success, logistics were quickly becoming a nightmare and the potential for scalability was minimal.
They decided that in order to grow, they had to shrink.
“That’s when we started thinking, ‘How do we make this stuff for people’s garages so that it takes up just inches on the wall?” Brasch says. “How do we make more space-efficient racks?’ So we went back to the drawing board.”
The solution they came up with was their flagship Profile Rack, a smaller version of their commercial line that’s typically installed in a residential garage and, when not in use, extends from the wall just four inches.
Hopperstad says a consumer option was never about compromising quality but rather about bringing a commercial gym experience to the comfort of someone’s home.
“We never changed anything other than who we focused on as our customer. We still do both (commercial and consumer). The equipment you see in someone’s garage is the same heavy-duty stuff you’d see in a CrossFit gym that we outfit. For a new mom or dad, though, who can’t make it to the gym every day, or someone who lives out of town, they’re still getting that commercial feel right in their house.”
Brasch reiterates that their products are not an either-or proposition.
“The beautiful part is the same product works for both,” he says. “Because why not have a high-quality, American-made system in your garage? And if you’re commercial and short on space – everybody’s getting into functional fitness. So we’re seeing more and more physical therapy clinics, chiropractors, places that want to add a functional fitness experience to their existing gym. You have a wall? Done.”
Brasch and Hopperstad are jumping up and down on their hotel room beds, having their very own Tom Cruise moment.
After a long day spent competing against more than 700 other Shark Tank hopefuls, they’re back in their room and have just opened an email telling them they’ve been selected to move on to the next round.
They call their wives – who just laugh and believe it even less than their husbands do – they scream and yell a little more, share one last high five and try to get some rest.
They’re going to need it for all the paperwork they’re about to sign.
When Hopperstad first had the idea to audition for Shark Tank, it was less out of necessity and more out of curiosity.
“I was just sitting in my living room one night, watching the show and thinking, ‘How the hell do people get on there?’” he recalls. “I remember we had a friend down in Minneapolis – when we first started the company – who said, ‘You guys have to get on Shark Tank.’ And I didn’t even know what it was at the time. That’s when I started watching it. But it wasn’t until that night – when I saw the open casting down in Miami – that it even crossed my mind that it might be a good fit for us, really.”
This was December 2014, and while their staff and profits had been growing steadily since the company’s inception a year and half before, Hopperstad says they thought that getting on the show could take them to the next level – realizing all the way that it was the definition of pie in the sky.
“Let’s put it this way,” he says. “You’re never going to be able to build and sell a business for $25 or $50 or $100 million if you don’t first think you can.”
They were going to be in Miami for a trade show the next month anyways, he thought, so he sent his business partner a late night email gauging his interest.
Hopperstad says he remembers Brasch’s response well:
“He didn’t even get back to me until the next day, when he just said, ‘I got our tickets changed.’”
It’s a Tuesday evening in early February 2015 – just after 5 pm – and the PRx guys are just more than two weeks removed from their trip to South Florida. They’re at their Fargo offices on a conference call, and the voices on the other end belong to two Shark Tank producers, and for the next few weeks, personal coaches.
“Alright, guys, you’re still in,” one says, confirming that PRx has made it through another week of show cuts. “Let’s hear your pitch. Go.”
The guys oblige and start their mock presentation.
“Hi, Sharks,” Hopperstad begins with enthusiasm, “My name is Erik Hopperstad.”
“And I’m Brian Brasch. We’re from Fargo, North Dakota, and our company is PRx Performance.”
“We are seeking $80,000 for a 10 percent equity stake in our company …”
In addition to vigorously prepping for a potential appearance on the show, the guys faced another requirement.
“We had to create a five to 10-minute video,” says Hopperstad, who explains that while they’d obviously convinced the on-site producers in Miami to put them on the show, the executives at Sony still needed to sign off. “It was about us, our personal lives, our professional background, our business, how much money we thought we’d ask for, what we thought we’d use it for. So there was that, along with a boatload more paperwork. The packet was about an inch and a half thick.
“And the tricky thing is that you’re a startup company grinding every day, and all of a sudden, there’s this new priority. And it’s such a pipe dream that it’s going to actually help your business. But we just stuck with it and stayed the course and kept doing what they asked us to do, and thankfully, they continued to like what they saw.
And then all they could do was wait.
It’s mid-March 2015 – a couple weeks after they’ve submitted their video – and Hopperstad is finishing up lunch with a friend. He glances down at his phone and sees that he has a missed call and a voicemail.
Nothing out of the ordinary here. It’s probably just his wife asking if he can pick up some milk on his way home, or maybe it’s his dentist calling to confirm his appointment next week.
Except then he notices the area code: Los Angeles, CA.
“I got in my truck, listened to the message and about p*ssed my pants,” he recalls. “‘This is so-and-so calling with Shark Tank/Sony Pictures/Universal Studios. Congratulations on making it to the next step.”
Hopperstad’s first call was, of course, to Brasch.
“At that point, it really got real,” Brasch says. “It’s already real but I mean – so many people sent in videos!”
Hopperstad says this was the point at which getting on the show went from being some abstract fantasy to an actual reality they had to start seriously preparing and planning for.
“(The producers) started talking about, ‘Okay, now you could fly out to LA one of two times – on short notice,’” he says. “But, of course, there’s still more paperwork to do beforehand, background checks. It’s a rollercoaster of ups and downs. Were just high on life getting news like that, and then the next day we’re up to our eyeballs in alligators, and we’re trying to get everything done on time.”
The producers assured them they wouldn’t be going it alone, though.
“You get them on the phone,” Brasch says, “And they’re like, ‘Alright, guys, our job is to help you get a deal. All we can do is prepare you for it, and then it’s up to you. But we’ll give you as much knowledge as we have.’ They’re in your corner.”
It’s Father’s Day morning 2015, and PRx is on its way to Hollywood.
After months of preparation, planning, and jumping through hoops, they’re scheduled to touch down in SoCal by lunchtime.
It’s getting more and more real.
They’ll set up that night, rehearse all day Monday and then Tuesday is showtime.
Brasch can’t help but chuckle at the fact that, even after all of this and despite the fact that they’re literally hurtling toward Sony Studios, there’s still a chance they won’t ever appear on the show.
Minds could change, filming could run long, their crate could not show up. Brasch and Hopperstad are prepared for any outcome.
And while they’re treating it like the business trip that it is, they’re really just happy to be here.
One of the biggest challenges of preparing to face the “sharks,” according to Hopperstad, is trying to anticipate the questions and tendencies of five different venture capitalists, as opposed to just one.
“When you’re raising capital and dealing with one VC,” he says, “There’s either one person there or a group of people on the same team. So they’re going to ask questions, you’re going to have time to answer, and it’s more of a back-and-forth dialogue.
“Where in the Shark Tank, you have five VCs now. And they all want to know what they want to know right now. Because they want to see value before any of the other ones do.”
For those unfamiliar, the basic format of the show is that companies make a minute-and-a-half-long pitch to the investors, who then take turns grilling the contestants for sometimes up to an hour (this portion gets edited down to about five or six minutes in the broadcast version).
While contestants don’t know for sure which five sharks they’ll be facing – there are six full-timers, as well as guest sharks – Brasch says that if you put in the time, you can figure out some of the tendencies and investing background of each one.
“What I did to prepare,” says Brasch, who watched every episode of the first six seasons of the show to prepare, “Was first talked to another company who was on the show and did a deal. And we asked them for their help.
“And one of the things they told us was to make sure that each of us was in charge of a certain type of question. So Erik was in charge of sales, I was in charge of finance, some operations. And he was marketing, strategy, installation/technical.”
Hopperstad chimes in.
“It’s so that if they ask a question,” he says, “We’re not both starting to answer at the same time. It has to be clean.”
Brasch says that in his marathon viewing session, he wrote down which shark asked what kind of questions and what their focus was. The guys then made a spreadsheet of 80 questions, wrote out the answers and memorized them.
They knew that a few curveballs were inevitable, but they were as prepared as they were ever going to be.
This is it.
Brasch and Hopperstad wait patiently, if slightly on edge, behind the double wide door that will lead to them into the feeding frenzy.
They spent yesterday’s rehearsal talking to black-and-white cardboard cutouts, but today the faces will have more color and a lot more questions.
They’ve practiced their spiel nearly 250 times – to each other, to their families, in the mirror – but as they say, nothing can fully prepare you for “the moment.”
The door swings open, they stride confidently to their marks and … they stand in silence for a minute. The 23 cameras that now surround them need to grab their angles and B-roll.
This is the first time Brasch and Hopperstad are seeing the sharks in person, but they’re going to have to get over the surreal feeling pretty quickly or risk making their national TV debut on “Worst Shark Tank Pitches.”
“Begin,” a producer finally says.
The guys don’t hear.
Yelling this time, “Begin!”
It’s like riding a bike at this point.
“Hello, sharks, my name is Erik Hopperstad.”
“And I’m Brian Brasch. We’re from Fargo, North Dakota, and our company is PRx Performance…”
The pitch goes well, with Hopperstad explaining a few of the finer points of the Profile Rack as Brasch demonstrates.
They end with: “Which one of you sharks wants to help us shake up the fitness space by taking up as little space as possible?”
Now, the real work begins.
With their heads on swivels, the guys begin fielding questions.
Herjavec Group CEO Robert Herjavec: “How does it lock into place? How do I adjust it? Can I make (the top bar) go up and down? Is there a consumer line? How much would a consumer one be? How many have you sold since Q3 of last year, and did you make money?”
FUBU Founder Daymond John: “How’d you come up with this?”
O’Leary Funds Chairman Kevin O’Leary: “Most of the weight is on the two actual posts, right? What’s your gross margin on these new units? How would you pay back an investor who gave you $80,000? What do you think the average selling price will on those 300 units?”
Dallas Mavericks Owner Mark Cuban: “How long have you been selling? How much have you been selling?”
For Your Ease Only Founder Lori Greiner: “Does it come with the weights or do you have to have your own set? How easy is the installation? Can you do it in five minutes, 30 minutes? Do you have a patent on this? Have you gone to the Patent and Trademark Office and said there’s an infringement to try and fast track it?”
Brasch and Hopperstad answer questions and quell the sharks’ concerns for about 40 minutes, with four of the five sharks “going out,” or declining to invest. That leaves only O’Leary, who says he really identifies with the product, as his wife is building a home gym in the basement of their new lake home.
After a few minutes of negotiating, the two sides settle on a deal that gives O’Leary 20 percent of the company in exchange for an $80,000 investment and a line of credit.
There’s a handshake, and that’s it. Brasch and Hopperstad walk out of the Tank and share a high-five that you can likely hear outside the building.
Their episode didn’t actually air until Feb. 21, 2016 – about eight months after the June 2015 filming.
And if you don’t know how serious networks are about NDAs (non-disclosure agreements) – which are contracts that dictate what contestants can talk about to whom and when – let Brasch and Hopperstad be the first to tell you that they are serious business.
It was eight months of telling no one anything. Not friends, not neighbors, not kids. Only their spouses even knew they’d flown to LA to shoot their segment.
It was yet another stroke of good fortune, too, that even allowed the local TV audience to see the company in the national spotlight.
“We were supposed to air on the 26th of February, which was a Friday,” Hopperstad explains. “And they gave us really short notice and said we were instead going to be airing on Sunday the 21st.
“So we scrambled and let everybody know that our viewing party was going to change and after the fact found out that had we aired when originally planned, the episode wouldn’t have aired locally here until like 1:30 a.m. because the state hockey tournament was on TV.”
With the capital infusion from Mr. O’Leary and their faces seen by millions, PRx is hoping to parlay the positive press into dollars and cents. They’ve signed deals with a number of large fitness equipment distributors across North America – including Scheels – and have even launched a Kickstarter for their Talon barbell collars, the product that sparked the idea for their company in the first place.
Their days have gotten longer and their nights shorter, but if their experience on their show has taught them anything, it’s that sharks never sleep.
The guys get their chance to react to the four sharks who didn’t give them an offer.
“You have to (get your gross margin up to 50 percent). Because there’s so much capital outlay for inventory, you have to turn a lot. And, guys, that’s really my problem. What you’re doing is good for two guys owning a business, trying to make some money. But to bring in an investor, that changes everything. Because then you have to start worrying about our return or re-investing in the company, and you’re way, way, way too early. You guys are two guys who have a good product, but I just think it’s not quite right for me, and for those reasons, I’m out.”
“Our revenue was down from the year before because we had switched our focus and how we were going to market. So his perception that we were too “early” was inaccurate. We had to take a bit of a step back in order to get further. And we didn’t have the right conversation while we were in the Tank.”
“I love the fitness industry. I’ve done a bunch of investments here. Here’s what I’ve learned. If you want to make a lot of money in the fitness business, you want a product that appeals to a very wide group of people that’s easy to use. The challenge with this is it’s going to scare a lot of people. It’s technical, it looks complicated, it looks hard. The idea of me assembling this is never going to work. I mean, I don’t know how to find a stud in a wall. I think it’s not going to appeal to a wide enough base of people where I can invest and see it scale. I’m out.”
“For installation to inhibit somebody who’s not that handy,you’re building yourself to the real opportunity. And I think that’s what happened to Robert. You can call a handyman and he can come over for an hour. We’ve had a lot of handymen do installs. And if you can’t find a stud in the wall, odds are you have a handyman.”
“I know how to find a stud in the wall, believe it or not. All kidding aside, I think it’s brilliant. It’s a great space-saver. I don’t think it looks difficult to install. I hope you get your patent, and then you’ll be able to really move forward in this space. Right now, you’re early for me. I’m out.”
“She knows patents inside and out.”
“I happen to know this space fairly well. There are two types of users. (The first type of) user who’s an enthusiast, 99 percent of them put it underneath their bed, and they need to buy a duster with the equipment because they never use it. Or you have the enthusiast who pays $300 a month to be a member. I see this as being that area where it’s very, very hard to grab one or the other. And for that reason, I’m out.”
“I think something we really missed on was that we also sell consumer units to gyms. We didn’t focus on that. They thought, ‘Here’s this company. They have one product, and they have one narrow market.’ In reality, we can completely outfit gyms. We have access to thousands of products that we resell that we don’t manufacture, and we didn’t really get a chance to talk about that. So they didn’t see the full scope of our business. They just saw this one product and thought it was maybe a little too narrow to scale.”
NOTE: Kevin O’Leary not pictured, as he was the only shark who made PRx an offer. (this text can be small, but I would like to include Kevin’s head shot as well)
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