I was watching an episode of Shark Tank this past week featuring young entrepreneurs. One of the entrepreneurs was Carter Kostler, the 15-year old owner and creator of Define Bottle, a fruit-infused water bottle. You can watch his portion of the episode here:
About 2 minutes in the episode you’ll see the sharks ask Carter about his revenue – $65k in about 6 months, 50% of which came from online sales. He sells each bottle for $30 at a cost per bottle of $10, so not a bad margin overall.
The reason I’m writing this post is for Mark Cuban’s line of questions that starts around 3:34:
- Mark Cuban: “What about online? Where is your online traffic coming from?”
- Carter: “Well, early on I created fruit infused water recipe websites. My goal was to promote the Define Bottle on those websites.”
- Mark: “OK, what kind of traffic are you getting, what kind of conversion are you getting, and what do you know about your customers?”
- Carter: “We currently get 2000 hits a day on those websites, and I think our conversion rate is about 0.5%.”
- Mark: “Why do you think your conversion rate is so low?”
- Carter: “I don’t know…”
Here’s the deal – Mark’s obviously a smart businessman. But, the point he’s missing is a pretty common one we see from executives who are familiar with conversion-driven online channels like paid search.
