Last year, I wrote about Sleeping Baby, a Texas-based company that won on Shark Tank. With $1 million in revenue, Sleeping Baby was rolling toward a $200,000 investment by retail mogul Daymond John in exchange for a 20% stake in their babywear company.
A year later, Sleeping Baby is going it alone: The Parkers didn’t take John’s investment in the end, but they expect to surpass $3 million in annual revenue nonetheless.
I think their story offers lessons about company culture and values — and long-term goals.
Entrepreneurs usually take money for one of three reasons: mostly because they need it, because they need it to grow as fast as they want, and to gain access to the wisdom and involvement of the investor. In Sleeping Baby’s case, Brett and Stephanie Parker say that although a buyout is not beyond the realm of possibility, they are growing fast enough for their aspirations. And they say that John was willing to be a sounding board even absent the equity investment.
The company has done a lot in the past year to establish its identity. CEOs and business professors emphasize and re-emphasize culture as companies scale up. “The thing that companies that were successful at scaling all have in common — regardless of size — is that they were thinking of scaling as spreading a mindset, not a footprint,” Stanford’s Bob Sutton said last year in an interview about his book, Scaling Up Excellence, the best one I’ve read lately about culture.
But before there is culture, there has to be story. In the early days of your company, your decisions build the company’s identity. The Parkers — who started their company so Stephanie could stay home with their daughter — are building an operation that values independence and celebrates faith. And they’ve just launched their first major philanthropic effort as part of that, to help a baby named Finn.
Here’s the backstory. The Parkers went on Shark Tank last fall and told about their journey: One night when their daughter couldn’t sleep, Stephanie Parker, out of desperation, sewed a new kind of sleeper – and it worked. “She slept 12 hours,” Stephanie told me. At the time, Stephanie wanted to stay home with her children rather than return to work, so the couple took a big gamble: they started selling the Zipadee-Zip.
Starting with a few hundred dollars, they built their company up, with help from women at the local fabric store who served as the company’s first manufacturers. In 2014, as they hit $1 million in annual revenue, they went on Shark Tank.
They went into the show thinking they had enough product for six to nine months and sold out within a week. Zipadee-Zips were selling on eBay for $150, says Stephanie Parker. The irony was that the surge of demand after Shark Tank taught them everything they could do alone.
“Shark Tank forced us to grow at a pace that we never could have imagined and we found that we truly had the pieces of the puzzle in place to make it happen without giving up a percentage of our company,” Stephanie Parker told me by email.
Shark Tank winners go through what is sometimes a months-long due diligence process and other companies have turned down their offers in the end. But still, it takes guts to turn down cash and Daymond John as an investor. The Parkers said he was gracious when they backed away from the deal and remains a mentor.
“We are grateful for the roll that Daymond plays and we lean upon his wisdom and guidance for many business matters on a regular basis,” Stephanie wrote by email.
They have spent the year since growing the company. They outsource their manufacturing between two companies overseas but have opened their own warehouse in Fort Worth, Texas. And they plan this fall to launch a line of baby clothes and add embroidery to their current offerings.
When Shark Tank aired, according to the Parkers, an expectant mom saw the show. Kelly Blumenthal had just been told that her baby had a likely fatal heart defect and she and her husband had been considering ending the pregnancy. When they saw the show, Kelly Blumenthal, who lived in Fredricksburg, Va., changed her mind, she told the Parkers.
“I need to have more faith and stop being scared,” Blumenthal wrote the Parkers at the time. Born Jan. 2, Finn has had multiple surgeries and is expected to need more, but he’s gone home from the hospital. Finn was born with TAPVR, Pulmonary Stenosis, DORV, Complete AV Canal Defect and Heterotaxy, according to the Blumenthals.
They have a Facebook page, where they’re raising money to cover Finn’s medical bills, and for the University of Virginia, which did Finn’s surgery. And Sleeping Baby launched a line of Zipadee-Zips named for Finn, and say they will donate 10% to Ronald McDonald House for each sale, plus a dollar to the Blumenthals.
To learn more about company culture, check out these articles:
- How to Create a Culture of Teamwork
- How to Establish a Culture of Creativity
- Merging Company Cultures
This article was written by Elizabeth MacBride from Forbes and was legally licensed through the NewsCred publisher network.