The Art of the Pivot: Analyzing The Lip Bar's Shark Tank Pitch

When Melissa Butler stepped into the Shark Tank, she came with her MVP prepared to present to the investor panel. She had already been in business, but just selling lipsticks as the main product to test out into the market.

There were many factors that indicated that the company may have needed to pivot. One of which is the over-saturation of the beauty and makeup industry.

To date, the global beauty industry is worth over $530 billion.

This would make any beauty entrepreneur excited to launch their new product. However, if the Lip Bar had continued to just sell lipsticks and not diversify its product line in today’s business landscape, it would have suffered tremendously in the market compared to other larger beauty brands such as M.A.C., NARS, and Morphe.

Another indicator, according to the Sharks, was the misalignment between the brand voice and the brand image. During the pitch, Butler emphasized how the names of each lip product were named after an alcoholic beverage and they wanted the packaging and overall experience to mirror the look and feel of a classic, elegant bar. They also emphasized the importance of women's empowerment and sustainability. Keep in mind, Butler is a woman of color looking to pitch a business centered around empowerment and sustainability. Back in 2015, when the episode was aired, these kinds of mission statements were not really emphasized as strongly as they are today in the makeup industry. The trouble came, though, is when they presented the bar inspiration for the packaging, mixed with the empowerment messaging. From the Shark’s point of view, they could not connect the dots and see how the two ideas could merge and resonate with audiences, and then lead to sales. Both Mark Cuban and Robert Herjavec stated that they would not have their daughters buy their product, because they could not see how their then alcoholic beverage inspiration behind the brand’s former logo and branding, equated to their women empowerment and sustainability.

When it comes to brand image, according to Forbes, it is much more important than people perceive it to be.

It makes an impression on people, as it is people’s first introduction to your brand without reading further. This is not to say martinis and relaxing at the bar aren’t activities and substances that women cannot indulge in (because they absolutely can, and can feel empowered in doing so depending on their personal interests, values, and what they do for leisure). But the brand was unable to translate the brand’s message in its overall aesthetic according to the Sharks, causing them to not buy into the company and invest in its expansion. Since then, the company has rebranded and has a more minimalist, neutral tone to it that ties more into its brand’s mission and audience as well.

THE LIP BAR’S OLD COMPANY LOGO

THE LIP BAR’S NEW COMPANY LOGO

Finally, the financial outcomes troubled the Sharks. During Butler’s pitch, she shared that within the first two years of the company’s inception, she had only made about $107,000 through web/online sales. Additionally, within the month prior to filming the episode, the company sold $8,000 worth of product within that month. This was a red flag for the Sharks, because, in their eyes, the business and the product didn’t seem as profitable mostly due to the limited amount of product that was being produced at the time. The Sharks were also taken aback by not only how much they’ve made in a two-year span, but how she looked to invest the money back into the product as well.

Financials are super important for investors, and they need to know that the entrepreneur is smart and financially savvy enough to understand where their investment is going.

Since the show, the company has undergone a rebrand, expanded its product line and retail options, as well as accrued over$2 million in funding. The beauty of business is that they can always pivot, and The Lip Bar has shown the power of the pivot and how it can help propel a business forward to success in the long run.

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