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'Shark Tank' winner gives AFA cadets a lesson in entrepreneurial spirit

November 8, 2014
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photo - Beatbox Beverage CEO Justin Fenchel, left, who closed a million dollar deal with investor Mark Cuban on the TV show Shark Tank, talks to cadets after presenting to a Technological Innovation Management class Thursday, November 6, 2014. Michael Ciaglo, The Gazette
Beatbox Beverage CEO Justin Fenchel, left, who closed a million dollar deal with investor Mark Cuban on the TV show Shark Tank, talks to cadets after presenting to a Technological Innovation Management class Thursday, November 6, 2014. Michael Ciaglo, The Gazette 

Justin Fenchel and his co-founders at BeatBox Beverage did their homework before going for a swim in the "Shark Tank."

They watched every episode of the hit television series, which gives budding entrepreneurs a chance to make a pitch to a panel of celebrity investors - who may, or may not, bite.

They researched each shark investor, what businesses they previously backed and who was part of their investment network.

They came up with a plan to hook the biggest shark in the tank, Dallas Mavericks owner Mark Cuban, and landed him hook, line and sinker. He invested $1 million for a one-third stake in the company, which makes a wine-based cocktail in a box that looks like a 1980s boom box.

"We want to do for wine what Red Bull did for energy drinks: create a brand around a product. We want to be the centerpiece of the party," Fenchel said. "Mark Cuban told one of the other sharks that if we are not at $100 million in sales in five years, he will have failed miserably."

Fenchel took his story to the Air Force Academy on Thursday, where he gave senior-year cadets in a management class a lesson in overcoming obstacles, perseverance and achieving goals that most would dismiss as unreachable.

"Nobody cares as much about your business as you do," Fenchel told the cadets. "It is difficult to get people to respond to your calls and emails in the early stages of starting your business. If you think you have a great idea and really believe it, don't give up."

Capt. Matt Schmit, who teaches the technology innovation management course with Capt. Bryce Luken, asked Fenchel - a University of Texas business school classmate - to speak to the class to help cadets prepare for developing their own ideas into business plans. Schmit and Luken plan to enter some of the student business plans into competitions hosted by Colorado State University, the University of Nebraska, Texas Christian University, Chapman University and San Diego State University.

"These cadets will be managers and leaders in the Air Force, and they need to know how to work as a team and overcome obstacles from somebody who is outside the military," Schmit said. BeatBox is "a great story about how to bootstrap a company."

Fenchel, a high school friend and a business school classmate started the company in 2011 in Austin, Texas, with money borrowed from friends and family. They faced several challenges, including a revamp of their product because of liquor laws and an agreement to sell BeatBox on consignment so it could get shelf space in liquor stores.

In its first 14 months, BeatBox generated $235,000 in revenue. Then, after Fenchel and his partners signed with the largest beer and wine distributor in Texas, sales skyrocketed. In the most recent quarter, BeatBox had $120,000 in sales.

To push growth more, the founders turned to "Shark Tank." After several rounds of auditions, they were selected this year to appear on the show in late October.

"It was surreal. All you do is live, breath and sleep 'Shark Tank,' " Fenchel said.

In the two weeks since the show aired, the company has sold $40,000 in wine boxes, mostly online.

BeatBox is using the investment from Cuban to expand its distribution beyond Texas and Oklahoma and hopes to have its wine boxes in Colorado in the next few months.

Cadet Carter McElhany said Fenchel's message about no one caring about their business as much as the founders stuck with him, showing him and other cadets that they should continue to pursue their dreams and not give up if they face challenges.

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