Cringeworthy $10 million fail
A WEARABLE tech entrepreneur "once compared to Elon Musk" has been eaten alive by Shark Tank investor Steve Baxter in a cringe-worthy exchange in which she was unable to explain how her product worked.
Billie Whitehouse is chief executive and founder of wearable technology clothing company Wearable X, which is best known for Fundawear - vibrating underwear for long-distance couples, created in partnership with condom brand Durex and advertising firm Havas.
"Once upon a time I was compared to Elon Musk," said the Australian-born, US-based entrepreneur. "I was nominated as FastCompany's most important person in technology under 30 at the time. If the Sharks invest in us because we are such an early stage and world-first company, they'd be truly believing and designing a better version of the future."
Ms Whitehouse entered the episode seeking $1.8 million for 18 per cent of her business and its new product Nadi X, a yoga clothing line with "woven-in technology" that pairs with a smartphone app to guide users through yoga routines.
"There are sensors throughout the hips, the knees and the ankles as well as haptic feedback - a fancy word for vibrational communication on the body," she said. "The pants provide the touch of a teacher so you can practice anywhere, any time on your own terms."
Boost Juice founder and yoga enthusiast Janine Allis gave the pants a whirl, showing off some impressive moves including a perfectly executed headstand, to the astonishment of the other Sharks.
Ms Whitehouse explained to Janine that the vibrations were "trying to show you where to focus and activate those muscles". "What we've seen in our research is people are practising yoga and they're either doing it really quickly or they're not really paying attention to what's going on with their body," she said.
"The last step actually reads your body, so the sensors are all talking to each other, that's when we're detecting whether you made it into the pose or not."
Asked by Greencross founder Glen Richards how she justified her company's massive $10 million valuation off initial sales of just $70,000, she said it was "based on the sophistication of the platform" and strong sales projections.
"I personally think we're about to hit mass market," she said. "In the first year we're planning to do $1.6 million in sales and sell 4000 units. We're at $7 million for the year after that, selling up to 12,000 units."
Steve, a tech entrepreneur himself, was immediately sceptical about the product. He said five sensors was "not many" for what the pants were supposed to do. "I have a mild electronics background, just to let you know, so I'm keen to understand the engineering here," he said.
But things really started to get awkward when he grilled Ms Whitehouse on the specifics, leading to this uncomfortable exchange.
Steve: "If there's a positional element to it, so it knows where your ankle is compared to your knee, how does it know that? Is there some sort of strain gauge, or is it a measurement thing?"
Billie: "We've collected enough data on hundreds of different yogis."
Steve: "I just know how the tech works. I know intimately how the tech works. Could your software tell if my leg is there or there?"
Steve: "I call rubbish."
Billie: "So what we're doing when it's reading your body, if you make it into the pose then it says, 'Congratulations you can move onto the next pose.' If you didn't make it into the pose, which is how we can tell what your body is doing-"
Steve: "Bodies are subtly different. There's no such thing as an average person. There's no such thing as an average limb length or anything along those lines. So do you have to calibrate it before you start?"
Billie: "You don't need to calibrate it because of the amount of data that we've collected."
Steve: "Oh, no! But there's a technology that allows you to understand the position of those sensors?"
Billie: "It's a software."
Steve: "I want to understand-"
Billie: "Machine learning."
Steve: "Okay, you are driving square pegs into round holes with what you're saying. Is there someone else you've got here that actually understands the tech? Because you don't at this point in time."
Billie: "I'm surprised that you say that because I've spent five years building this."
Steve: "I'm asking about the technology. Fundamentally, the technology, how does it work?"
Billie: "We have 99 per cent accuracy every time."
Steve: "If you do understand the tech you've described it exceptionally poorly, you really have. So that concerns me a lot."
Clearly unconvinced by the technology, Steve dropped out. The huge valuation also deterred Glen and investor Andrew Banks from investing. RedBalloon founder Naomi Simson said Ms Whitehouse was a "wonderful export", but "just saying trust me it works doesn't quite cut it".
Janine said while she found the pants comfortable, Ms Whitehouse couldn't justify her valuation off so few sales - and she preferred working with a yoga teacher anyway.
"Not getting a deal today isn't going to stop us," Ms Whitehouse said. "We're going to keep going and we're just going to have to sell a lot of yoga pants."
Shark Tank returns to Channel 10 on Tuesday 26 June at 8:30pm.