What Happened When Spikeball’s $500,000 Shark Tank Deal Fell Apart

Courtesy: Spikeball

A decade ago, Chris Ruder and six buddies set out to revive Spikeball, an obscure 1980s lawn and beach game designed by a toymaker and cartoonist named Jeff Knurek who didn’t bother to patent his invention. Two teams of two players each Smack a ball onto a small circular trampoline, attempting to prevent the opposing team from returning it. By day Ruder worked in ad sales for Live Nation Entertainment while building Spikeball after hours. Priced at $49, the game built a viral following. By 2013, the company had annual revenue of $1 million and Ruder went to work for Spikeball full-time. Two years later he scored a spot on ABC’s hit business pitch show Shark Tank where seven million viewers watched him Strike a $500,000 deal with urban apparel entrepreneur Daymond John. What they didn’t know: the deal had fallen apart months before the show aired. But the TV exposure gave Spikeball a huge boost and the game continues to win fans. Based in Chicago, the company has 19 employees and logged 2016 revenue of $13 million. In this interview, which has been edited and condensed, Ruder, 41, describes how he built Spikeball despite knowing nothing about manufacturing, marketing or sports product sales, and what happened when his Shark Tank deal fell apart.

Susan Adams: Where did you get the idea for Spikeball?

Chris Ruder: On a trip to Hawaii in 2013, some friends and I had an absolute blast playing Spikeball on the beach for five days. Strangers kept walking up to us and asking the same three questions: What’s that game? How do I play it? Where do I get it? We’d bought our old beat-up set at a toy store in 1989. It was only on the market for two years. A light bulb went off—could we bring this thing back to life?

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Adams: Did you launch your company right away?

Rude: At first we just talked about it. Then a few years later, in 2007, I consulted an attorney and he said the trademark had expired and there was never a patent on the product.

Adams: How did you get the business off the ground?

Rude: Six of us, including my brother and cousin, together chipped in $100,000. We hired the product design company that made the plastic toys for Happy Meals to make the game more solid and change the colors, and we built a website. I knew nothing about manufacturing overseas so we hired a US rep who had a relationship with a factory in China. We’d meet at Starbucks, he’d bring me prototypes and I’d suggest changes.

Adams: What made you think people would buy the game?

Rude: The reaction we got when we played it and how much we loved it. We didn’t do any market research and none of us had any background in Sporting goods or creating a brand.

Adams: How did you divide up the labor with your partners?

Rude: For five years, I’d come home from my job at six, Hang out with my wife and three young kids until nine and then work on Spikeball until two in the morning. We had all agreed we’d do equal amounts, but six months after they wrote the checks, the others didn’t want to do any work.

Adams: Were you upset your partners dumped all the work on you?

Rude: I was initially. But then we agreed that if I hit certain sales goals over three years, I’d get more equity.

Adams: How did you get the game into stores?

Rude: We answered the phone. For the first five years, we were 100% ecommerce, Mostly from Spikeball.com and a little bit from Amazon. Our product is viral.

Adams: Didn’t you do any marketing?

Rude: We heard from three groups, PE teachers, Ultimate Frisbee players and Christian youth groups, so we shipped the teachers and the youth groups free sets and we Sponsored college Ultimate teams. That was our marketing for the first five years.

Adams: How did that get you into retail stores?

Rude: In September 2013, we hit $1 million in annual revenue with zero full-time employees. My wife and I agreed it was safe for me to quit my job. Three months later Dick’s Sporting Goods called and said we’d like to carry your product. I thought I was supposed to call and beg them. Then REI called and Modell’s and then Big Five.

Courtesy: Spikeball

Adams: How did you decide on the price?

Rude: We just threw a dart. Originally I wanted to charge $40. My partners said we needed to charge $50, and that we could always come down. Then we improved the quality and added a few more balls and raised the price to $59. We paid $13 a unit.

Adams: How did you get on Shark Tank?

Rude: I met a guy at a conference who had been on the show and I sent him a note and asked if he’d introduce me to his producer contact. The producer replied to my email immediately but then he was replaced with someone else. We had to submit paperwork and an iPhone video of ourselves doing our practice pitch.

Adams: What happened when you filmed your segment?

Rude: Is Shark Tank, you serve two masters. The Sharks care about the quality of your business. The producers care about entertainment value. If you’re boring you’re not going to make it on air.

Adams: How did you strike your deal with the sharks?

Rude: The dream team would have been Mark Cuban and guest shark Nick Woodman, the founder and CEO of [action camera maker] GoPro. But we got a $500,000 deal with Daymond John for 20% of the company. He’d built FUBU into a major brand and I hoped I was getting his brain power.

Adams: What happened to your deal?

Rude: It never closed. Daymond had friends at Marvel Comics and they wanted to make a Spiderman Spikeball set. We consider Spikeball a sport. If we made a Spiderman-branded set, my fear was that people would think it was a toy. That cheapened the product for me. He knows a lot about Licensing but that wasn’t in the playbook for us. I didn’t want to do a deal just for the sake of doing a deal. We didn’t need the money. There were no hard feelings. But our deal was dead before the show aired in May 2015.

Adams: Did the show boost your sales?

Rude: Seven million people watched that Friday and the show continues to re-air. It’s the gift that keeps on giving. But after you shoot, for months you don’t know if your segment will air. Still we had to prepare. Almost all of our money went into carrying more inventory for eight months than we actually needed. It was worth the risk.

Adams: What’s your next challenge?

Rude: Figuring out how fast to grow. Can we get to $50 million or $100 million and if we do, will it still be fun to run a company of that size?

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