Did you know that several soap bars sold in the market use animal fat as an ingredient? Imagine lathering your body with a product containing beef fat.
This unappealing realization convinced Anthony Duncan, Mohammed M. Mahdi, and Mohammed A. Mahdi from Bloomington, Indiana to create The Mad Optimist, a unique line of soap and body care products that are vegan, gluten-free, non-GMO, halal, and cruelty-free.
The trio appeared in the finale episode of Shark Tank’s Season 11 and arguably made one of the stand-out pitches ever on the show with their mix of high energy, madness, and optimism. Their guts and uniqueness paid off in a good way and served as a refreshing and inspirational story on how kindness and good intentions can translate into a viable business model.
“Call us crazy, but doing things a better way just isn’t that hard,” claims the trio on their official website. “We want others to do the same. And we’re eternally optimistic that our good vibes will rub off on everyone.”
How did the Mad Optimist business start?
Duncan and the two Mahdi brothers are longtime friends who decided to start this soap business in 2012. As vegans and Shia Muslims, they don’t consume or eat animal meat. So they also found it appalling to use body soaps that use animal fat as an ingredient.
This is why they decided to create The Mad Optimist, a body care company that uses all-natural ingredients for products such as soap, body soak, spray mist, and lip balm.
What’s even more unique is the fact that the business does not set a fixed price on the custom soap that they are selling!
Customers can log in on the website, create their own soap using their preferred ingredients, customize the name of their soap, and even choose the price they want to pay on a slider bar on the order page.
This “pay what you can” or “pay what you want” business model certainly differentiated Mad Optimist from the rest of companies in the body care industry. This makes Mad Optimist a true “social enterprise” and the company is one of the very few social enterprises that appeared on Shark Tank and received funding from a shark, to boot.
Mad Optimist has been in the business since 2012 and their model is astounding in its uniqueness and simplicity. They called themselves “Mad Optimist” precisely for that reason — they’re crazy and extremely optimistic in their advocacy to change the world.
Did Mad Optimist get a deal on Shark Tank?
Yes, they did and it was against all odds and counter to the pessimistic view of the other sharks about their business model. They appeared on Shark Tank asking for $60,000 investment in exchange for 10% equity in the company.
Prior to appearing on Shark Tank, they have made $800,000 in total sales which was deemed too low by most of the sharks to even consider investing in them.
Not all sharks were amused by story and business model of The Mad Optimist. Shark Robert Herjavec even lectured them on the show, saying, “The open market does not reward good intentions. It rewards results. You are so obsessed with all the coolness of running a business.”
The social enterprise angle, specifically, letting customers decide the price of the product was deemed as “madness” by shark Kevin O’ Leary. “I can choose how much I pay you for? Please help me understand this madness,” decried O’ Leary.
When asked how much revenues the company has earned in 2020, the founders replied that their sales was $91,000 year-to-date, at the time of pitching to Shark Tank, with $21,000 sales of soap in the last 11 months.
The ever-pessimist O’ Leary lamented this financial achievement.
“Why are you optimistic? You have no reason to be optimistic,” O’ Leary told the Mad Optimist owners. “There is nothing here for an investor. Your parents must be asking when you’re going to wake up and get jobs.”
What were the Sharks’ deals for Mad Optimist?
Most of the sharks went out when they learned of the sales numbers ($800,000) in the last seven years but Mark Cuban, the biggest shark on the show based on his staggering multi-billion net worth, invested in Mad Optimist and struck them a good deal.
He first inquired if the trio had the intention to do microsite and verticalizing towards their target niche like vegans and Muslims. The three entrepreneurs replied in the affirmative. He says he likes the uniqueness of the idea, so Cuban first offered a deal of $60,000 for 25% stake. This cut the Mad Optimist’s valuation from $600,000 to just $240,000.
One of the Muhammad brothers counter-offered with $60,000 for an 18% stake. Cuban said he wasn’t willing to negotiate and that giving him 25% equity will make him one of the four owners of the company. He immediately changed his mind and said he’s willing to go down to 20%.
The Mad Optimist founders said they would like to accept this offer, but subject to one contingency: since the taping of their Shark Tank episode happened to fall on the Muslim Ashura holiday, in line with their beliefs, they asked if it’s okay for Cuban as an investor that they donate all proceeds of their Shark Tank night sales to charities.
After a long pause, Cuban said: “That’s your choice. That’s fine.” He continued on with the deal to the joy of the three guys.
Watch a clip of the final negotiation of Mad Optimist in this YouTube video from ABC:
What happened to Mad Optimist after Shark Tank?
The whole thing totally blew up on social media after their super memorable episode. The Mad Optimist founders announced that, after the Shark Tank episode aired, they earned a whopping $80,192.39 sales in just one night!
All those revenues will be donated to charity, they said. They kept their promise to honor the Ashura holiday of Muslims and donated every single cent of the revenue for the cause of the refugees, the homeless, and the LGBT community.
People loved their philosophy in doing a business and were all rabidly ordering from the site to support their cause. They also got an outpouring of support on their Facebook page.
The influx of orders, coupled by logistics issues brought by COVID-19, however caused delays in production and delivery. In their official Facebook page, the Mad Optimist owners posted:
“We want to take a moment and say THANK YOU. After our appearance on Shark Tank, we were overwhelmed with orders and have been working around the clock to execute. Ramping up production in the midst of COVID-19 was a challenge, and we apologize for the (sometimes long) delays some of you have experienced. We are so thankful for your patience, and we’ve implemented a more efficient production process to avoid this in the future.”
What is the Net Worth of Mad Optimist now?
The founders came to Shark Tank with a company valuation of $600,000. But Mark Cuban’s final deal of 20% for $60,000, which the founders accepted, basically halved the valuation of Mad Optimist to $300,000.
So far, the only disclosed revenue is the one made on the night of the Shark Tank episode (which we can surmise as their best day of sales in all their history). Assuming they only make 10% of this sale daily and continued selling until the end of the year, Mad Optimist is on track to earn as much as $2 million in 2020.
The actual revenue and net worth remains to be seen, though, given the positive publicity of Shark Tank but tempered by the COVID-19 pandemic.
Can I buy Mad Optimist products on Amazon?
Yes, Mad Optimist is selling its products on Amazon. Here are sample products of Mad Optimist available for sale and their current prices:
- Mad Optimist Lav-ida Loca (Lavender Bar Soap for Dry Skin, 4 Ounce Bar) – $10.00
- Mad Optimist Cool Headed (Rosemary & Peppermint Shampoo Bar Soap, 4 Ounce Bar) – $10.00
- Mad Optimist Peace Tree-Tea (Lavender Tea Tree Bar Soap for Neutral Skin, 4 Ounce Bar) – $10.00
- Mad Optimist Love Thy Lips (Lavender Lip Balm, 0.15 Ounce Tube) – $5.00
- Mad Optimist Up And At ‘Em (Eucalyptus Spray Mist, 1 Ounce Bottle) – $7.00
- Mad Optimist Lav Of Luxury (Lavender & Fir Needle Bath Soak, 6.8 Ounce Bottle) – $14.00
- Mad Optimist Mother Pucker (Tea Tree Lip Balm, 0.15 Ounce Tube) – $5.00
Is Mad Optimist still in business today?
Yes, they are thriving and have cult-like following from impressed people who watched the show but the rose is not without its thorns. The newly famous business is also now faced with the challenges that Kevin O’Leary ominously warned them with during the episode.
Mixed with rave reviews who already got their customized soap products, there are also now a lot of complaints and bad reviews on their Facebook page regarding problems in order fulfillment. They announced on their website that orders of the custom soaps will be delayed by 2 months because they got overwhelmed with the influx of sales that came from their TV appearance.
The demand was so high that even with the new people they hired to help produce the soap and fulfill the orders, they’re still dealing with a huge backlog. No new variants or products have been posted yet recently as the team has been incredibly busy handling backlogs from customer orders since the Shark Tank episode and the onset of COVID-19 pandemic globally.
Lessons from Mad Optimist on Shark Tank
The business model of putting people first definitely comes with a cost because they have to customize each soap according to the customers’ preferences. This takes a lot of production time to create one by one as compared to having a uniform soap production line with the same ingredients.
However, despite the dismal forecast from the lens of the smart businessmen in the Shark Tank, they still own this very compelling and heart-warming story which struck a chord to millions of people. If they successfully address the issues on order fulfillment and delivery, they still have a chance in making it in the long-term as a sustainable, profitable, people-oriented line of body care business.
As they have shown in surviving the worst of the comments from the sharks in the tank, their undeterred and relentless optimism, plus drive to keep going against all odds, could definitely keep them in business. But as a social enterprise that lets customers decide to pay what they want, the risk to profitability is always there. Are they plain crazy or genuine mad optimists? You decide.