Overview
Pluto Pillow is a California-based pillow manufacturer that designs custom-built foam pillows based on the user’s sleeping style. The company was founded by Susana Saeliu and Kevin Li in 2018.
The company’s unique algorithm allows them to manufacture hand-crafted pillows specifically tailored to the needs of buyers.
Pluto Pillow’s Shark Tank Pitch
Susana and Kevin appeared on season 12 of Shark Tank seeking $400,000 for a 5% equity. With an $8 million valuation, it appeared the entrepreneurs were more interested in the publicity rather than making a deal.
The Sharks were intrigued by the product initially but their interest faded once the founders revealed the product cost $95 with an $18 shipping fee.
Four Sharks backed out one by one. Robert Herjavec took everyone by surprise when he proposed $400,000 for 20%. However, the founders believed the equity was too much and went home without a deal.
Update After Shark Tank Episode
Before Shark Tank, Pluto Pillow mostly relied on social media and creative PR campaigns to promote their business. After the episode aired, it drove a lot of traffic and new orders on PlutoPillow.com.
The startup later launched three funding rounds, which were led by three venture capital investors: K2VC, 500 Startups, and Lombardstreet Ventures. This helped them introduce 35 different variations on their website and Alibaba.
Despite selling an expensive product, it is highly rated on Amazon with nearly 1,500 five-star reviews, indicating that the customizable design works.
Pluto Pillow currently makes around $5 million in annual revenue and is worth an estimated $8 million.
The company published a blog post in May 2021, explaining what happened on the show and why they couldn’t accept Robert’s offer. It turns out Pluto Pillow already had other investors on board and didn’t want to impact future funding rounds.
The Founders
Susana Saeliu and Kevin Li are the founders of Pluto Pillow.
Susana has a degree in entrepreneurial studies from the USC Marshall School of Business. Before founding Pluto Pillow, she founded Kora Branda, a startup that sold bamboo bath tissues.
The startup became a huge success, and she sold it in 2011 to found a marketplace called TRADEX, Inc.
Kevin is not vocal about his personal background.
Establishing Pluto Pillow
Susana worked in the customer service department and found out that many shoppers asked for a refund if the pillow they bought wasn’t comfortable.
When she came up with a solution for this, she teamed up with her friend Kevin to create a pillow design that can be modified to a user’s sleeping pattern, schedule, and comfort level.
They sought out help from physical therapists and sleep specialists while developing their product.
The company uses a unique algorithm to manufacture hand-crafted pillows that are specifically tailored to the needs of buyers. The business launched in 2018 and made $473,000 in sales the following year.
Lessons From Pluto Pillow’s Success
Based on the Shark Tank episode about Pluto Pillow, here are three practical tips for aspiring young entrepreneurs:
1. Leverage data and personalization
Pluto Pillow’s approach involves using customer data and personalization to stand out in a crowded market. By collecting information about customer preferences and sleep habits, they can create customized products that better meet individual needs.
Aspiring entrepreneurs can apply this strategy by gathering and analyzing customer data to tailor their products or services, thereby increasing customer satisfaction and reducing return rates.
2. Be prepared to defend your valuation
The founders of Pluto Pillow demonstrated a strong understanding of their business’s value and were prepared to negotiate accordingly.
When Robert Herjavec offered $400,000 for 20% equity, they confidently declined, believing in their higher valuation.
Entrepreneurs should have a clear understanding of their business valuation and be ready to justify it to potential investors, maintaining confidence in their worth while being open to reasonable negotiations.
3. Highlight unique selling points and patents
Pluto Pillow emphasized their unique selling points, such as their custom algorithm and utility patent, to differentiate themselves from competitors. They also highlighted their substantial customer data points as a competitive advantage.
Entrepreneurs should identify and emphasize what makes their product or service unique, and if applicable, secure patents or trademarks to protect their innovations.
This can provide a competitive edge and attract investor interest.
These tips can help young entrepreneurs navigate the complexities of launching and growing a business while effectively engaging with investors.
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