Patent Attorney and Founder
Hi sharks, my name is Ming Zhao, and I’m from San Francisco, California. I’m here to seek $500,000 for five percent equity in my company. Sharks, what is the one thing that we all search and pay a lot of money for? The use of our skin. The problem is most beauty companies box us into four crude categories: dry, oily, sensitive, normal, even though our skin is really complex. This dooms us into an endless cycle of expensive trial and error. That’s why I took matters into my own hands to change the skincare industry once and for all. [Music]
Introducing Proven Skincare. Using artificial intelligence and cutting-edge science, we create a personalized and effective skincare regimen engineered for your skin and your lifestyle. To assess your skin, simply log on to our website to fill out your free three-minute skin intelligence quiz. Questions cover everything from your skin concerns to your stress levels, to your locality, and even uncovers your pollution levels. Then, using our award-winning Skin Genome Project database, our scientists create your own Proven three skincare routines: a personalized cleanser, a personalized night cream, and a personalized day SPF. All packed with the right powerhouse ingredients for you.
At Proven, we’re using science, technology, and hundreds of ingredient combinations to create the product that works for you. Sharks, it is inevitable that artificial intelligence will be the future of flawless skin. So, who is ready to shake up this industry with me? $500,000 for five percent imparts a $10 million value.
I’m so excited about your sales; they’re going to be great. Sure, so we were in our beta trial for two months earlier this year. We gained $110,000 in sales. We were selling mostly from digital channels through Facebook ads. How much did you spend to get that $110,000?
So, we spent about $90,000 to get to… We spent $90,000 to get $110,000. That’s right. Okay, then what happened?
And then four weeks ago, we relaunched a new website with new branding. Right, and this month, we’re also on track to do about $65,000. We also have a licensing agreement for $3.5 million.
$3.5 million, that’s right, to use our technology. They want us to create an adjacent category database in the baby care space. That’s interesting. If you really have something proprietary with data, you can sell other large players in the skin space, and you can get $3.5 million license deals. Mr. Wonderful is your man. But this business, the chance that you will get a share in this space is so small. It is so competitive; they will crush you like cockroaches. I have been pitched at least six AI-driven cosmetic companies in the last six months.
But did they win MIT’s AI Technology of the Year award? Do they have any proof? Just cause you win an award, I mean, you know, many times I’ve been tested out, but many have seen all the numbers though. Let’s just go down the numbers. So, okay, let’s take your sales this year. Let’s just be the most optimistic we can be about Proven. Give it to me. We’re projecting to do $3 million. You can make $110,000 sales; you spend $90,000. It’s almost one to one, so you don’t care about that except you gotta raise more dough, right?
Next year, on the $3 million, you think you’ll break even? Um, not yet. Effectively, on your next year’s $3 million, you were planning on spending $2 million or so in advertising, correct? That’s right. Okay, so you’re buying your sales. So, it’s one thing to say my technology is amazing, but when you do that, there should be customer referrals. You’re saying effectively that you’re not expecting anything from your existing customer base because you’re having to buy all your sales. It’s a business decision we’re making to keep on experimenting with new channels, new methodologies. If we want to be profitable next year, we can be.
My Mommy gave me some great skin for my birthday, a little chocolate and everything. It’s amazing. So, I’m not going to waste your time. I’m out. Thank you, Damon. Look, the AI stuff doesn’t add up to me. I don’t think that there’s a lot of organic growth that’s built into this. So for those reasons, I’m out, and I’m going to save you guys some time.
All the sharks ended up passing on this company. So what I will say is that they did have some patents. They had two patents that were issued over this company, which is impressive. Proven has is the name of the brand, the name of the company. I’ll see if I can scroll at the top here. Their patent is called Life Spectacular Incorporated, and Zhao Shiwen is the inventor and the one presenting their at the Shark Tank. So what they had patented, and I’ll share this with you, it’s a method. And apparently, if she’s accurate, they did license this technology to a company, as she mentioned, for baby care, baby skincare. And if that happened, then that’s excellent and wonderful for them. It’s a great way to monetize the patent.
So, what is going on here? This is issued; you can see the issue date, May 10th, 2022. It was filed in 2020, so it took a couple of years, a year and a half to go through, which is pretty quick for a method patent. How do I know that it’s a method patent? Well, you can tell by the drawings that there’s no real product or device here. It’s a system, okay? It’s a system of elements, and there’s boxes and there’s flow charts and it’s how the information flows. I’m going to scroll to the bottom, and I want to show off a little bit about what the patent is. So, the independent claim, you go to claim one, and you can tell everybody it says a method, okay? And so, method is nothing more than a series of steps. It must include a series of elements, and they all must be in place for someone to be considered to be infringing.
So, she has the rights, the company has the rights because they’re the assignee. They can exclude anyone else from making, using, or selling this method. And allegedly, they have licensed it, right? They’ve given another company the ability to make, use, or sell. And it’s unlike maybe even test, right, new channels, new ways that it can be improved upon. So, it’s a method, and it has to be creating a host service, a user skin profile, has to have skin-related information, non-skin related information, okay, fairly generic. So, off to a good start because you want your patent to be nice and broad. The next required element is it has to have, you know, the data, right? Skin and non-skin-related data from a user must be modified. It has to change at least one matrix. We’re calling it a matrix factor, and this is sort of a made-up term that will be defined in the specification of the patent. And if we’re going to go into substantiation, we would want to go look and see what that meant, what a skin matrix factor is, but that’s the way they’re modifying this data that’s coming in. And then there’s still three, well, actually, five more separate elements. So, once they’ve got that modification in their matrix from the user information, they’re going to derive a skin profile identifier, generate a user-specific product ingredient, and then they’re going to select a curated set of products from that.
Even more, right, even more elements are required to provide a curated set of skincare products, right? Recommend, try to sell skincare products based on the user’s skin and non-skin information after they’ve modified a matrix. And that’s not enough; they’ve got actually to do three more things: schedule one automatic update to the user. Okay, that’s a little ascendant. I’m guessing an email, write a text message, and then it’s going to create skincare products for the user with automatic update signals for anticipated changes as the user perhaps ages or who knows what, maybe they’ve got an additional exposure to UV. And last but not least, they’re going to provide. So, they’re going to actually have to transmit and give that user that recommendation. So, it’s a whole host of steps, and let’s count them: one, two, three, four, five, six, seven, eight, nine, ten, eleven, twelve steps to that method against. It’s quite narrow, and I would be really shocked to hear that this was successfully licensed. It’s interesting to hear that, but it’s not impossible. It’s the same with a method like that; it’s very challenging to spot an infringer and make sure they’re actually practicing all twelve of those steps. So, it seems very narrow in what it’s doing, what the invention contains.