Marc Herzberger and Cheng Kue, co-founders of The Hype Company, brought their innovative, customizable slide sandals to the Sharks in Shark Tank Episode 1521. Cheng, who founded the company in 2018, and Marc, who joined in 2022 as CEO, pitched their vision for transforming the footwear industry with a focus on sustainability, customization, and a unique patent-protected design.
The two entrepreneurs share a history at CROCS, where Cheng worked as a shoe designer and Marc handled tax analysis. Their expertise and collaboration in the footwear industry fueled the development of The Hype Company, offering a fresh take on slides with interchangeable, customizable straps and sustainable production methods.
The Vision Behind The Hype Company
Cheng envisioned The Hype Company as a solution to the wasteful practices of traditional footwear manufacturing. They developed a patented two-piece design for their slides, which separates the sole and strap components. This unique feature minimizes manufacturing waste and makes the slides customizable and more practical for shipping.
Their product lineup includes:
- Custom Slides ($50): Customers can select their sole color, size, and create personalized strap designs.
- NCAA Licensed Slides ($60): Featuring official logos and designs for college sports fans.
- Creator Slides: Designed in collaboration with artists, showcasing flags, artwork, and other creative prints.
The standout feature of The Hype Company’s slides is the removable straps, allowing users to easily switch designs for different occasions or moods. This versatility sets them apart from competitors and aligns with the growing consumer demand for personalization.
The Shark Tank Pitch
Marc and Cheng entered the Tank seeking $125,000 for 5% equity in The Hype Company, valuing their business at $2.5 million. They emphasized their goal to disrupt the stagnant fan gear and footwear markets by offering innovative designs and endless customization options.
Key Features Highlighted in the Pitch:
- Utility Patent: Covers the two-piece slide design, making it unique in the market.
- Sustainability: A waste-reducing manufacturing process.
- Comfort and Durability: Slides made with a super-soft, flexible, and long-lasting outsole.
- Customization Options: Personalized slides for sports fans, creators, and everyday users.
The Sharks received personalized samples, which they praised for comfort and innovation. Marc and Cheng also highlighted their current sales channels, which include direct-to-consumer, wholesale, and partnerships with retailers like FabFitFun, Finish Line, and Target.
Sales and Financials
Despite their innovative product, The Hype Company faced challenges in scaling sales. Here’s a breakdown of their financial performance:
| Category | Value |
|---|---|
| Total Sales (4 Years) | $500,000 |
| 2022 Sales | $55,000 |
| Year-to-Date Sales (2023) | $60,000 |
| Retail Price (NCAA Slides) | $60 |
| Retail Price (Custom Slides) | $50 |
| Wholesale Price | $30 |
| Landed Cost per Pair | $10.93 |
The entrepreneurs admitted they hadn’t invested much in marketing, which hindered customer acquisition efforts. However, they expressed optimism about scaling through expanded licensing deals and a focus on the new Slider Pro model.
Shark Reactions and Deal Offers
The Sharks had mixed reactions to The Hype Company’s pitch. While they appreciated the product’s innovation and the founders’ credibility, most were hesitant to invest due to the lack of marketing strategy and low sales figures.
Shark Responses:
- Lori Greiner: Exited early, citing a preference for less competitive markets.
- Kevin O’Leary: Praised the product but wasn’t convinced due to the lack of customer acquisition cost data.
- Mark Cuban: Advised the entrepreneurs to focus on their niche in customization rather than competing in the broader slides market. He opted out.
- Michael Rubin: Believed the business had potential as a small-to-medium-sized operation but didn’t see a large-scale opportunity. He passed.
The Deal:
Barbara Corcoran saw potential in the direct-to-consumer model and offered $125,000 for 25% equity, with half in cash and half as a credit line. Marc countered with a request for more cash upfront, proposing $350,000 for 25% equity. Barbara revised her offer to $100,000 in cash and $250,000 in credit for the same equity stake, which Marc and Cheng accepted.
Post-Shark Tank Update
In May 2024, shortly after their Shark Tank debut, The Hype Company announced a partnership with SnugZ USA, a company specializing in customizable corporate gifts. This collaboration allowed The Hype Company to expand its customization capabilities and tap into the corporate gifting market.
However, by the time the episode re-aired in July 2024, there was no confirmation that Barbara’s deal had officially closed. Barbara tweeted about welcoming The Hype Company to her portfolio on the night of the episode, but her investments page remained outdated, leaving the status of the deal unclear.
The Future of The Hype Company
With a unique product and a commitment to sustainability and customization, The Hype Company has laid the groundwork for growth. Their partnership with SnugZ USA and potential expansion of NCAA licensing deals position them for success in niche markets like sports fans, creators, and personalized gifting.
As the company continues to refine its marketing strategy and capitalize on its patented technology, the future looks promising for Marc and Cheng’s vision to revolutionize the footwear industry.
Conclusion
The Hype Company’s journey reflects the challenges and opportunities faced by innovative startups in competitive industries. Marc Herzberger and Cheng Kue brought a unique vision to Shark Tank, blending sustainability, customization, and a patented design to redefine the slide sandal market. While the company has faced hurdles in scaling sales and marketing efforts, their creativity and expertise in footwear manufacturing have set them apart.
The deal with Barbara Corcoran, if finalized, could provide the financial backing and guidance needed to grow their brand. Meanwhile, partnerships like the one with SnugZ USA open up new avenues for market penetration, particularly in the corporate gifting and personalized product sectors.
As The Hype Company continues to expand its licensing agreements, invest in marketing, and refine its direct-to-consumer strategy, it has the potential to carve out a significant niche in the footwear and customization markets. With their innovation-driven approach, Marc and Cheng are on a promising path to build a sustainable and successful business that resonates with modern consumers.
