tv The Profit CNBC November 13, 2019 12:00am-1:00am EST
lemonis: or at least i thought it was. rob: and i'm glad that they weren't capable of executing it. lemonis: you're glad it didn't work out for my sake? -rob: that's right. -lemonis: i knew you would be. [ amber laughs ] ♪ vinny: come on over, guys. twe've got fresh coconuts here. lemonis: ...a ukulele-strumming hypeman thinks he's cracked the coconut code, creating an exciting new way to market coconut water. vinny: we do 108 to 130 coconuts an hour. lemonis: okay. but is this a viable business concept or just simply a gimmick? michael: it just worries me because when you don't have a patent, then you don't have a product. vinny: but it's gonna happen because the coco dream is real. lemonis: i'm gonna have to help him overcome poor business skills... vinny: when you want to sit me in a room and hammer numbers, that's not my strength. i embody a whole different skill set of coco soul. lemonis: ...ratchet up his work ethic. you showed up late. vinny: you told me to sell coconuts. that's what i'm doing. lemonis: in this box... vinny: i came right back here. lemonis: ...to learn, vinny.
...and drop his las vegas show facade. vinny: how we doing, guys? i'm the coconut man. ukulele and the hat and the coat and the beads. hey, it's not just some schtick. lemonis: are you aware that some people see it as that? i'm marcus lemonis, and i risk my own money to help businesses. i'm not gonna write a check for somebody that doesn't have their act together. it's not always easy, but i do it to create jobs, and i do it to make money. do we have a deal? vinny: we have a deal. lemonis: let's rock and roll. man: yeah! lemonis: this is "the profit." vinny: fresh coconut! we got fresh coconuts right here! lemonis: in 2016, vinny zaldivar launched cocotaps, pioneering a new way to get the juice out of a coconut. it's extremely popular with the las vegas vacation crowd, including me. vinny: open it. drink it. it's really good for you. lemonis: but i want to see if this is a product that will appeal to the mass market.
the coconut-water craze is huge, and if i can tap into this, well, i can make a ton of money. vinny: ♪ life can be a tough nut to crack ♪ ♪ cocotaps will get you right on track ♪ ♪ to great taste ♪ and less waste, too ♪ coconut water just flows right through ♪ woo! lemonis: oh, hi. vinny: hi. lemonis: i'm marcus. vinny: marcus, cocovinny, nice to meet you. lemonis: how are you? vinny: great. good to meet you. lemonis: cocovinny, is that your actual name? vinny: legally changing it this this year, yeah. all-in. lemonis: for real? vinny: full on, coco-committing. lemonis: you got the beads going. you live this lifestyle. vinny: this is it. so this is cocotaps hq. lemonis: i'm marcus. rob: i'm rob. vinny: that's cocorob. lemonis: cocorob? rob: yeah. lemonis: are you changing your name, also? danny-j: hi, i'm danny-j. lemonis: see, thank you, you're not cocodanny-j. danny-j: well, cocodj here. lemonis: okay. okay, listen, right now you're coco-nuts. vinny: that's cocojoe by the way. joe: nice to meet you. lemonis: joe, how are you? what is your actual name, joe? joe: joe cantino. lemonis: are you also changing your name legally like him? joe: no. lemonis: okay.
good. wow, this is big. vinny: we sublease from another produce company. this is our inventory up top. we're all coconuts. we all share the space. it's kind of like a working facility. lemonis: all coconuts meaning that you're all nuts? vinny: we're nuts. we're coco-nuts. this is when we unwrap the coconuts... these come from thailand. lemonis: so how does it come into you, like this? vinny: this just came off the boat. lemonis: so can you take me through the tapping process? vinny: tap crew, set them up, cocojoe. lemonis: let's go. what's up, tap crew? vinny: show him how to tap the case. michael: so we have a branding iron, and we just slowly roll it across to put the logo on. lemonis: that's cool. vinny: we do 108 to 130 coconuts an hour. brand and tap, ship. lemonis: okay. michael: it goes in here. pass it down there. take one of these. it goes into a drill bit that fits perfectly around the plastic part. lemonis: then it gets wiped down, then packed. vinny: right? that's the freshest
coconut water you're gonna ever drink. lemonis: this coconut water tasted different than anything else that i've ever had. it felt so pure and so clean and so refreshing that i know that consumers who like coconut water are going to love this, and i like the fact that vinny is bright, and he's bold, and he's a salesman, and he's got a good idea because the tapping process is clever and actually looks like he's put some thought into it. i'm fascinated. okay, i'm gonna...are there different-sized coconuts? vinny: yeah. lemonis: because this is a lot to drink. vinny: well, and that's why we made it resealable. lemonis: you can put it back in your refrigerator? vinny: yes, sir. this cap system keeps it fresh for up to 3, 4 weeks in the fridge. lemonis: i want to go out into the... vinny: yeah, it's getting cold in here. lemonis: ...warehouse. it's getting cold. and so talk to me about the nutritional benefits. vinny: okay, so this has every electrolyte that your body needs to produce energy -- magnesium, potassium, calcium, phosphorous, iron, sodium. lemonis: do you only sell in las vegas? vinny: right now, we're just focusing on las vegas. retail is huge for us, so mgm resorts international added us into retail.
they did 100 grand with us in their stores, and... lemonis: wow. vinny: you know, we bring that coco love and that vibe. lemonis: yeah. vinny: ♪ that's right, we in the coco flow ♪ ♪ got to tap your thirst ♪ because coco dreams come true ♪ lemonis: isn't cocotap this? vinny: cocotaps. man #2: yes. lemonis: this coconut water tastes delicious, but what i'm not sure of is exactly what product he was making and what he was selling, and is he a coconut importer? is he a coconut distributor? is he a tap manufacturer? what is cocovinny selling that's actually proprietary? in my mind, that's the only way to make money. you buy these from a distributor? vinny: yes. we have a produce provider. lemonis: and how much do you pay for a case? vinny: nine to a case right now. lemonis: puts the cost of one of these at what? vinny: $1.55 on average. plus we add our tap, our labor, our stuff, so we're in at about $2.22 all-in. lemonis: and then what do you wholesale it for? vinny: right now we're at $5.55.
lemonis: at wholesale, $5.55? vinny: yeah, and they're going for 12 bucks on the strip, so they double, triple them from there. we're very successful in... lemonis: so you're the only one with a tapping system for a coconut? vinny: yeah, they're only made in usa. we've got utility patents on the tap. we have a whole bunch of international patents we're gonna be filing for the systems and the procedures. lemonis: a patent is the best way to protect your product and, more importantly, make investors comfortable. if you think about a castle, the reason that the king and the queen are safe is because there's a giant ditch that goes all the way around it. anytime you can have something that protects you from other people copying it, then it gives you real security that the idea is not only scalable, but, man, you can make a ton of money. so what prompted you to get in this business? vinny: i hated my life before. i was the c.e.o. of a gaming company. i was overweight, overworked, unhappy, so i took a step back, and i set my mission to... the next thing that i was going to do had to be good for people, good for the planet and good for me, fun.
lemonis: start over. vinny: start...reset. lemonis: wow, that takes a lot of guts. vinny: i wanted to get healthy. i lost 60 pounds, and all these athletes are drinking packaged, processed coconut water. it tastes like crap. lemonis: yeah. vinny: and it's very polluting to the environment, so 90% of everything that goes into recycle ends up in the ground or in the ocean again, so that's why we're about zero waste. lemonis: i like the fact that vinny is very focused on his business being zero waste, which means everything essentially is biodegradable. vinny: this is the tap. lemonis: but it's plastic. you told me that your whole thing was about not having waste. vinny: it's just costs. i mean, we got to figure that one out. lemonis: yeah. what you have to be careful of is when you have a philosophy about who the company is and what it stands for, you've got to have no instances where people can be, like, "ah! i got you!" vinny: nobody is perfect. lemonis: nobody is, but don't let costs compromise the edict, right? vinny: yeah. lemonis: the manifest of the business. then cocovinny is like cocoscammy.
vinny: i don't know about that. lemonis: no, but i'm not saying that, but you just don't want to let anybody say it. vinny: right, right. lemonis: he told me earlier that he wanted a zero-waste company, and i'm not sure as i stand here, is that a goal in the future, or are you trying to sell me something and trying to convince me that it's correct now? and i'm a pretty good judge of character, but i'm having a very difficult time trying to decipher vinny's real person from this character he's playing. vinny: so you take the tap out. you just turn. if you have a spoon, just spoon out all that meat. lemonis: so i can just...whoa. i thought it'd be harder. vinny: no, it's soft, beautiful. that's a young coconut, and that's the fat. that's the fat. you're not feeling it. so he's not a meat fan, we know that. lemonis: i don't even know how to describe it. don't ever make me eat that again. look, i'm all for trying things, and i know that i probably seem narrow-minded in saying, "never," but i tried it, so he can't say that i didn't try it but never again, ever.
i want to go sit down, and we'll go over the financials, and we'll talk about the business. vinny: okay. ♪ lemonis: hey, bud. vinny: hey. lemonis: so walk me through... i'm struggling with the concept, to be totally honest with you. vinny: okay. lemonis: there's nothing that stops any of these people from getting a coconut and putting a hole in them. vinny: if you put a hole in this and put it on the shelf, it's dead in a day. if you put a tap in it, it's good for 3 weeks. lemonis: do you have your financials? vinny: yes. i just had my guys pull the p&l for year-to-date and then balance sheet, you know? lemonis: well, '13, '14, '15, '16, '17, '18, where are those? vinny: i didn't give last year's. i just gave you current. lemonis: you don't have them? vinny: i have them, but i have to get them sent to me. lemonis: did you think i was gonna ask you for them? vinny: i brought current. i wanted to paint the picture where it's at now. lemonis: so this is year-to-date? vinny: yeah. lemonis: so this is a half a year? vinny: yeah. lemonis: so, so far for the year, $261,000 in revenue,
$171,000 in gross profit, which means the margins are pretty decent. vinny: they're good margins. lemonis: you've done $261,000. vinny: yeah. lemonis: how many units did you sell? vinny: we sold... god, why am i drawing a blank all of a sudden? lemonis: by the way, vinny knew i was coming, and he shows up with no historical financials, and what he has for the year basically is a little bit of revenue. i would say that after seeing that, it's clear to me that he may have come up with a good idea, but the rest of his business doesn't seem to be airtight. cocovinny at cocotaps should know how many coco-nuts he sold. the quality of your financial information and your grasp of the numbers, how would you rate it? vinny: i'm an 8 1/2. lemonis: when it comes to your grasp of the numbers, i wouldn't give you 8 1/2. vinny: that's fair. lemonis: that's troubling. vinny: when you want to sit me in a room and hammer numbers, we can do that, but that's not my strength. i embody a whole different skill set of coco-soul and cocovinny. i'm the colonel sanders of coconuts.
lemonis: i'm not comfortable yet, and because i don't have the financials, and i don't have a balance sheet, i can't even see how the puzzle would be put together, and what i don't like about vinny is that he's now becoming slightly dismissive about the facts that are in front of me. he's almost like, "don't pay attention to the numbers. look at the shiny object over here!" how many of these will you sell a year in vegas? vinny: couple hundred thousand. lemonis: if you can sell 200,000 in vegas, in my mind, that's proof of concept in a very tight radius. pick one market outside of vegas where you'd say, "okay, i'm going to do proof of concept somewhere else." vinny: i'd say between orlando, and between miami and fort lauderdale where you have the resorts, the cruise ships and all the theme parks. lemonis: and would you think about the keys as part of that element? vinny: yeah. lemonis: tourism. vinny: tourism. lemonis: okay. so i'll tell you what i'm willing to do to move forward. i'm willing to put you through coco-boot camp. vinny: how we doing, guys? i'm the coconut man.
lemonis: you didn't follow the task. vinny: you told me to sell coconuts. that's what i'm doing! lemonis: in this box. you showed up late. you're out there walking all over town, and that wasn't the task. (paul) switch to sprint everyone is talking about.s the... (sprintern) the new iphone 11 or iphone 11 pro with amazing all-new camera systems. and you can get both an unlimited plan and the new iphone 11 included for just $35 a month. (paul) and with sprint's 100% total satisfaction guarantee you can try out the network and see the savings for yourself. (sprintern) ahh! it's the best season of the year. (paul) is that your excited dance? (sprintern) what dance? for people with hearing loss, visit sprintrelay.com. am i saying it well, l'chaim, l'chaim. maybe you're making merry. l'chaim! or maybe you're making cocoa. don't spill it. maybe you're with the family you've got. oooo! or maybe the one you've chosen. it's culture salad. maybe there's lights... there's definitely lights.
maybe there's one less this year. or maybe one more. (singing) our holidays don't all look the same. and maybe that's what makes us great. make the dream yours. ikea. lemonis: vinny: okay.to put you through coco-boot camp... lemonis: ...before i can determine what kind of investment i'm gonna make. and so what i would rather do is go into a new market and understand, is the market viable? does the consumer accept it? so the way that i want to do that is to hit the ground in key west, and we're gonna see what that's gonna look like. so normally, at this point, i would understand whether i wanted to or didn't want to do a deal. if i wanted to do a deal, i would start negotiating, but i'm not comfortable yet. vinny doesn't have the basic disciplines required to be a business owner, and i don't understand exactly what he's asking me to invest in. so i'm willing to continue to work with him, to try to help him, and so i'm gonna put him through the paces,
but in terms of writing a check right now? no way. vinny: okay, we'll figure it out. lemonis: no, no, there's nothing to figure out. next weekend... vinny: it's gonna have to be the next one. lemonis: i'm going next weekend. vinny: i won't be there. lemonis: you got a wedding or something? vinny: i have a very important... i've got to travel. we've got a lot of work to do now to get all that stuff there and everything, so i would rather do it in 2 weeks, so... lemonis: i can't. vinny: you're already ready to go, huh? lemonis: i'm going. vinny: that's good. lemonis: okay, brother. i'll see you there. vinny: appreciate it. ♪ ♪ lemonis: what's up, guys? joe and rob: good morning. lemonis: on time. how you doing, brother? joe: doing good. rob: how you doing? lemonis: how you doing? welcome to key west! rob: thank you. joe: thanks for having us. lemonis: you guys ready to get started? joe and rob: yes. lemonis: where's vinny at? joe: vinny is inbound. i think he gets here probably about 10 minutes.
lemonis: alright. alright. let's get started, i guess. in order for this business to be anything interesting to invest in, i'm gonna want to understand the scalability of it outside of the vegas market, so i came up with this idea to set up at my key lime pie company shop. it was a business that i invested in years ago. hi. joe: i'm joe, with cocotaps. stephanie: nice to meet you. rob: i'm rob. stephanie: rob, stephanie. lemonis: stephanie, who's the manager of that location, is a very successful businessperson, and she can teach vinny a lot about business, but i'm here. rob is here. joe is here. where's vinny? so they are from cocotaps in vegas. one problem -- the owner is not here. stephanie: well, we can wait, or we can get started. joe: i'm down to get started. rob: let's get started. stephanie: let's do it. lemonis: i want to get feedback from customers. i want to understand what people think of the product. i want to understand what people think of the price. i want stephanie to understand what the process is like to tap, and i really want to get my head around, is this a coconut business, or is it a tap business?
[ cellphone rings ] vinny: this is your captain, cocovinny. please leave me your name and number, and i'll return your call faster than we can tap a fresh coconut. make it a great day. i'm sending you coco-love. lemonis: hey, coco-love, we are here in key west trying this figure out where you are, so when you land, please call me on my phone. thanks. so do you guys have training modules for all of that? rob: there are bits and pieces of a lot of that documented. lemonis: yeah. because, like, if stephanie wanted to have these in her company, you'd have to walk her through -- this is the cost. these are the elements. this is the labor. this is the process. this is the suggested retail. here's what your margins are gonna be. here's where the distributor is. joe: yes. lemonis: here's how you buy the taps. you got to go in almost and put things... stephanie: as simple as possible for me because i'm gonna get all of these questions, and i'm gonna have more. lemonis: have them all. come on down, folks! you want to try a real coconut with a tap on it? here we go. let's go. coconuts. man #3: over here!
lemonis: how you doing, sir? enjoy the coconut. we'll see you guys later. thank you. how you doing, folks? vinny: you guys enjoying the coconuts? woman: ah, oh, yeah. lemonis: oh, hey. so just out of curiosity, why are you here at 11:00? because these guys all got here. vinny: yeah, well they came from vegas. i came from seattle. lemonis: so i'm just gonna tell you... vinny: okay. lemonis: ...being totally honest with you, you look like a bit of an ass showing up after they were here. vinny: okay. lemonis: when business owners don't show up to a scheduled meeting, it's rude and irresponsible. this is not a good start, vinny. we're here to work. his other teammates flew in. my team is there, and it's a sign of disrespect to the other people that you're working with. look, everybody thinks that running your own business is gonna be easy. news flash -- it's actually harder. we're starting at noon. this is a standalone product that we think has a lot of merit. and so we're gonna want to understand where the price points are. vinny: got it. lemonis: so at any moment where you feel like you need to change prices... vinny: change it up. we'll change it. lemonis: ...you talk to katie and stephanie about it before... vinny: i think i'd like to start it at $12.99.
lemonis: how many do you think you could sell a day? vinny: 500 a day. stephanie: alright. you feel good where we're starting? lemonis: it's...this is... i feel good for you because i know you're fine. stephanie: okay. lemonis: it's him that i'm worried about. stephanie: alright. vinny: i'll go sell coconuts. i'm good at that. lemonis: any time you're launching a product in a new market, it's good to understand what the elasticity of a price is. when you test it, you'll see where the volume works, and where it doesn't, and you'll land on the right price. if you sell 5 at $12.99, 15 at $11.99 and 100 at $10.99, the data has shown you that $10.99 is the most optimum price. start your day with the fresh coconut tap! vinny: fresh coconuts, guys, fresh cocos. lemonis: do you like to dance? just shake it. vinny: i got to learn how to juggle. lemonis: would you like to try a coconut? claudia: i would! lemonis: okay. have you ever tried one before? claudia: no, i haven't. vinny: this is claudia. claudia: hi. lemonis: how are you? do you work at the company? claudia: part-time. lemonis: awesome.
and what's your guys' relationship? claudia: friends... with benefits. lemonis: with what? i'm sorry. i had to...hold on, i have a coconut in my hand. are you guys in a relationship? vinny: yeah. we've been dating for a little while, yeah. lemonis: why don't you guys check your story with each other? vinny: oh, it's just that there's a lot going on. we just... we haven't slept much. we've been on the red-eye, so we're just trying to get our [bleep] together. lemonis: what starts to go through my mind is, is the reason that he's late for this entire process, and the reason maybe he didn't even want to come to key west is because he had alternative plans? but then just own it from the beginning. don't make up some bull [bleep] story about why you couldn't come and why you couldn't be on time. just, like, be honest about it! alright. give me a quick break. vinny: cool. lemonis: look, i wanted to give him and the team a chance to do some work on their own, knowing that stephanie and katie would be taking a lot of notes for me. if this product is as good as you say it is, and you are as good as you pretend to be, prove it. vinny: ♪ selling coconuts is what we do ♪
♪ makes me smile when the coco-cash comes through ♪ ♪ yeah ♪ every day, we just tapping and serving cold to you ♪ rob: fresh coconut samples. would you like to try some? claudia: would you like to try some fresh tapped coconut water? man #4: no, thanks. katie: hi, how are you all? they are $12.99. rob: want to try some fresh coconut water? no? okay, thank you. vinny: we got key lime pie! claudia: would you like some fresh tapped coconut water? vinny: you got to go in and get that key lime pie, buddy! claudia: come on, guys! stephanie: they are $12.99 before tax. vinny: we got to get over to sloppy joe's, so let's do one case for now. what's going on, sloppy joe? how we doing, guys? i'm the coconut man, so if you guys want a fresh-tapped coconut... ♪ take it back and just roll ♪ my name is cocovinny, i've got soul, coco-soul ♪ ♪ that's all i got because i'm gonna take it up ♪ that's right, baby. come get some fresh cocos off the corner, y'all.
alright. listen, coconuts, that's how it's done. you ring the bell. we walked in cold. that's how it's done. you spread the coco-love. lemonis: how's it going? vinny: you missed some action today. lemonis: how many coconuts have you sold here? vinny: here in this spot we sold, what? about six cases? lemonis: let me go check on the numbers. vinny: okay. lemonis: steph, how's it going? stephanie: alright. lemonis: how many cases has he actually sold? stephanie: 10 have sold. lemonis: 10 cases? stephanie: no. i mean coconuts. lemonis: come on, $120? stephanie: yeah, i'm selling them at $12.99. lemonis: hey, vinny? vinny: yeah? lemonis: i just want to ask you a quick question, bud. i was looking in the system, so there's nine in a case, right? vinny: yeah. lemonis: and you said you sold the six cases. vinny: okay. lemonis: so 6 cases times 9 would be 54, right? and there's only 10 in the system, 10... vinny: okay, so... we did goo we tried some different things. i got up onstage at sloppy joe's. i played music. lemonis: he was supposed to be testing prices,
working on the process, teaching stephanie and katie how it worked, proving to me that this was a good idea and not proving to me that he can go to a bar, get onstage and sing. it feels like everything he does, he kind of just wings it. where was that for the goal for today? because the goal when we left was sell coconuts here. let's understand it. let's learn, let's learn here. vinny: well, when you have a shop that was empty and... lemonis: but i'm seeing a lot of people in here. the things not selling doesn't mean that it's a failure. could be price. vinny: that's what we did. we learned that there wasn't a price resistance at $12.99. lemonis: well, there must be if you only sold 10. did you try any at $7.99? vinny: that's the wrong assumption with this amount of traffic flow, period. you could put them at a dollar, we'd sell the same amount. lemonis: did you just hear what he said? because i want to make sure i processed it right. is this guy for real, or is he just t vinny: it's not a price game. this is a traffic game right here. it's 5 bucks... lemonis: that sounds so stupid when you say that. vinny: this is the ultimate vacation beverage. lemonis: if we drop the price of our pie, would we sell more today? stephanie: oh, yeah. vinny: you really think so? lemonis: yes! and you didn't follow the task, which was to learn.
vinny: you told me to sell coconuts! that's what i'm doing! lemonis: in this box, to... vinny: i came right back here. lemonis: ...to learn, vinny. vinny: that's what i'm learning right now. lemonis: you told me that you guys sold six cases, which is actually not true. you showed up late. you're out there walking all over town, and that wasn't the task. if you're looking to take your business to the next level, log on to... wean air force veteran made of doing what's right,.
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leyou're out there walkinge. all over town when that wasn't the task. vinny: by the way, i also recorded some instagram videos and facebook, and i'm driving traffic. i just went live about an hour ago. lemonis: folks, i'm sorry. please step forward. i apologize. we're here, acting a little coco-nuts.
woman #2: that's so funny. lemonis: you and i are going to take a walk. vinny: okay, sounds good. lemonis: actually, we'll just jump on the cart and go. vinny: alright. lemonis: the one thing that vinny has done really well is surround himself with a great team, but right now, i want to just spend all of my time working with him. he hasn't made a good first impression, second impression or third impression. like, is this [bleep] really happening? more importantly, why am i still here? i don't know who the real vinny is, but i'm gonna find out right now, or i'm gonna send him home. vinny: hemingway home. how long has this place been here? lemonis: let's go find out. vinny: oh, wow. it's nice and cool in here. lemonis: the history is pretty amazing. vinny: it is. lemonis: part of the reason why i wanted to take vinny to ernest hemingway's house is because this is a gentleman who obviously wrote a lot of fiction, and what i can't tell with vinny is the difference between fact and fiction. so this is pictures of hemingway at different periods,
and in every single picture, he looks like a different character. vinny: he sure does. lemonis: that's the creative side of him, but when it comes down to how many books were sold, if he made or lost money, it's hard to mix the two worlds. i'm trying to be patient, and i'm trying to be open-minded. i just don't understand what's going through his mind, and i'm not sure if his insecurity and his nervousness and his anxiety have kicked into overdrive, and it's just making him say and do silly things. vinny: you know, cocovinny is somebody that was invented by me. lemonis: so it's fictional... vinny: sure. lemonis: ...like ernest hemingway. vinny: but i also get to play that character, and i am that character. i'm shy. i've been a fat kid my whole life, so maybe it's a part of just wanting to fit in, so there's a real story, a real person. i grew up really fast. i had to be really responsible really young, so i just wanted to make my life as fun and as carefree as i possibly can. that's why it's not just some schtick.
lemonis: are you aware that some people see it as that? vinny: sure. lemonis: i do feel like sometimes, you get caught up in the character. if you could work on putting some precision behind the facts and just checking yourself because i think what happens is, it undermines the character. vinny: right. lemonis: it starts to click for me that he is the way he is because he's trying to overcompensate for some insecurity that he has, and i'm more sympathetic to that, but we have to understand when to turn it off. i think vinny struggles with the dial. i think you have to look at what you've created totally differently. vinny: okay. lemonis: what's the golden nugget the business has? vinny: the tap. lemonis: that's it. now, i'm gonna test out this theory with you. vinny: okay. lemonis: if i were you, i would think about how i could split up the world geographically and financially to monetize my invention. vinny: territory licensing is what you're saying. lemonis: just for the distribution rights of the tap.
so the way that i want vinny to think about this is how to slice and dice the united states in a way where the areas can be defined as territories. he would give people the rights to sell exclusively this tap in a specific geographic area. the easy thing for vinny is that now, all he has to do is invest in inventory and taps -- no manufacturing, just simply buy the taps, shift them to the distributor and make the difference between the cost it took to make the tap and the amount of money that you could sell the tap for. that was pretty cool, wasn't it? vinny: that was cool. thanks for showing me that place. ♪ hey, marcus. lemonis: yeah, hey, buddy. vinny: good to see you. lemonis: how are you? vinny: i'm good. i'm good. oh, this is nice out here. lemonis: isn't it nice? you look nice. vinny: thanks. lemonis: so where do we go from here?
because i have no interest in investing in the coconut business. vinny: okay. lemonis: it's a fun thing, but it's just not my thing. i have interest in understanding where money can be made as it relates to the tap. vinny: great. lemonis: so where's your paperwork on the utility patent? vinny: so i have all of our attorneys' paperwork. lemonis: and has the patent been issued? or is it... vinny: no. lemonis: ...patent pending? vinny: no. we filed a very, very broad patent. lemonis: and when do you expect to actually be issued that patent? vinny: well, i've talked to the attorneys, and i'd say, at the most, a year. lemonis: so the offer that i want to make to you right now is that i'm willing to give you $100,000 down payment. i would want to be absolutely clear that i can bring in two to three licensees inside of my territory, and they, without question, can get an absolute clear training-module presentation on how to start,
how to executive, how to fulfill. vinny: which territory would you want to talk about? lemonis: well, the only territory that i have any interest in is south florida. vinny: south florida meaning miami? lemonis: i would say orlando down. vinny: orlando down? lemonis: yeah. vinny: that's all of florida. lemonis: alright. all of florida. but if your utility patent is denied, the agreement is off. the other requirement is that i'm gonna want to see true financials on the las vegas market, okay? vinny: yeah, okay. lemonis: do we have a deal? vinny: so basically, when we work together... alicia: do you have an offer for me? vinny: yeah, we definitely can...yeah. lemonis: i really think there's a deal here, but you got to get your [bleep] together.
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chills, muscle aches or coughs, or if you plan to or recently received a vaccine. ♪ nothing is everything ask your dermatologist about skyrizi. walkabout wednesdays are back! get a sirloin or chicken on the barbie, fries, and a draft beer or coca-cola - all for just $10.99. hurry in! wednesdays are for outback. outback steakhouse. aussie rules. well you remember what happened last year. you can't bring a backup thanksgiving to my sister's house. it's not like we're going to walk in with it. we'll bring it in as we need it. ...phase it in. phase it in? yeah, phase it in.
phase it in? the agreement is off. for me to allow that money to be deposited is that i'm gonna want to see true financials on the las vegas market. vinny: yeah, okay. lemonis: do we have a deal? vinny: so i land a multimillion contract for 20,000-plus coconuts a week out of your territory, you got to figure out how to fulfill it. lemonis: well, if i'm fulfilling it, then i would say... vinny: or i could fulfill it, whatever. lemonis: i would say, "high five, brother. you get your $1 a tap. congratulations, proof of concept." if you fulfill it, then i would say i should get a small sliver of it because you stepped on my coconuts. vinny: got it. lemonis: do we have a deal? vinny: we have a deal. lemonis: okay then. vinny: thank you so much. lemonis: alright. vinny: thanks, marcus. lemonis: see you in a few weeks. vinny: okay. whoo! ♪
lemonis: how you doing, buddy? vinny: good to see you. lemonis: nice to see you, brother. i'm taking vinny to beyond green, which is a biodegradable company that makes things like storage and shopping bags, and i want to see if they could actually make a biodegradable tap so that when the coconut gets thrown in the garbage, it actually totally biodegrades. so what is this? is this it? veejay: yes. lemonis: and how does it happen? do you melt it? and what does it cost to manufacture this? veejay: at maximum, for 25 cents apiece. lemonis: and what do you currently buy your taps for? vinny: we're in that same range. lemonis: to make a smart environmental business decision that has a price difference of essentially nothing, well, there's no question about it. we're moving forward with the biodegradable one. so you and i are gonna work on how the presentation
of the product is going to work, how a licensee would understand, what's the steps to actually get somebody to actually buy off on, okay? let's go. vinny: alright. sounds good. ♪ lemonis: i'm gonna give you a marker, so you can outline how you believe the coconuts' territories should be divided up. i felt it would be a good idea to actually start to develop how the territories should be divided and clearly define what that would look like. vinny: i need to focus on hot tourism spots. just gonna... lemonis: what are you doing? vinny: i'm just circling territories. lemonis: you're circling states that... vinny: yeah, well, i mean, some of these states, i know... lemonis: ...that our forefathers already mapped out for us. vinny: i mean, the top 10, i believe, are all right here. lemonis: alright. so why don't you rank those territories from 1 through 10? vinny doesn't seem to necessarily have much thought about how the territories should be divided, and i would have thought that he would have mapped it out,
he would have thought about it, but i'm standing here like i'm talking to a deer in headlights. number six is what? vinny: i'm gonna say austin, texas. do you know where austin is? lemonis: i do. vinny: can you show me? lemonis: no, sir. vinny: alright. i think that covers austin, too, so we'll just call it west texas. lemonis: so where's vegas? vinny: i'd say vegas is probably number eight? lemonis: you need to get more granular than just drawing giant circles. vinny: okay. lemonis: it can't be like you're gonna get coco-love, and you're gonna get me, and you're gonna get the brand. vinny: i get that. lemonis: because you're gonna find that some people will get that, and they'll appreciate it, and others, it's gonna feel intangible to them. vinny: okay. sorry. ♪ woman #2: ♪ oh, no ♪ lemonis: hi, there. alicia: hi. lemonis: are you alicia? alicia: i am. lemonis: how are you? i'm marcus. i'm taking vinny to meet alicia. she's the entrepreneur that owns a number of restaurants in huntington beach, right on the beach.
my primary objective here is to see if vinny has learned anything since the day i met him, and does he know the difference between cocovinny and vinny the businessperson? vinny: so this is a fresh-tapped coconut. alicia: so let me ask you this. you have the patent for this? vinny: i'm the inventor of that. alicia: okay. vinny: we're patent-pending right now. alicia: okay, got you. vinny: so basically, when we work together... we're doing licenses right now. we show you how to tap and brand your own coconuts. alicia: so almost like a franchise. vinny: there you go. yeah, so... lemonis: you're confused? alicia: yeah. lemonis: can i grab him real quick? alicia: sure. lemonis: alright. vinny: time-out. lemonis: so this is why i wanted to see you do this because it's clumsy as [bleep] you've got to be able to give people a path, and it feels clunky right now. vinny: yeah, it is. i haven't sold it yet. lemonis: so i need you to slow it down, super clean, super tight. vinny: got it. let's do this again. lemonis: it's not that vinny doesn't know the concept. he doesn't have it written down and organized
how to deliver a pitch in a very methodical, step-by-step way. vinny: so right now, if you would buy this product, you would actually own this. nobody else could do it. you would control the supply and the demand of the fresh-tapped coconuts on bolsa chica. alicia: okay, so do you have an offer for me to do bolsa chica? vinny: yeah, we definitely can offer you that to you, so, yeah. i mean, that... lemonis: i really think there's a deal here, but you got to get your [bleep] together. this mechanism was filed before yours was filed. it looks pretty similar. vinny: it's a little bit coco-crazy right now. i've never seen that before. lemonis: do you believe that this is what is preventing him from getting a patent? dylan: oh, absolutely.
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[johnson groans] (bert) grover is a monster of many talents! (burke) and we covered it. at farmers, we know a thing or two because we've seen a thing or two. (bert) mmm. ♪ we are farmers. ♪ bum-pa-dum, bum-bum-bum-bum vinny: yeah, we definitely offer can offer you that to you.ca? lemonis: i really think there's a deal here. vinny: okay, i do. lemonis: but you got to get your [bleep] together. vinny: we would come up with, like, a small down payment. call it 20 grand, right? alicia: okay. vinny: something like that. to keep your exclusivity, it would be like 10,000 taps a year, and then you would pay $1 a tap, and then we would come in and train your staff on how to produce them. you would be our exclusive licensee distributor on bolsa chica. alicia: okay, so here's the deal. i like the brand. i like the concept. the only thing is, $1 is just a little bit too expensive. vinny: you know what else i see is, i play the ukulele. so i'd be down here with the whole crew, and we could actually come and promote this and get behind it. lemonis: no, no, no ukulele, dude. let's just sell some taps here. make some money. then you can buy another ukulele, whatever.
alicia: in order for me to get behind something like this, what i'm gonna need back is some support, and that support has to come past a ukulele. yeah. vinny: we'll come up with that. alicia: okay, yeah. vinny: we'll work that out together. lemonis: i'm disappointed. he didn't have his training tools right. he didn't have his pitch down. he didn't understand the economics, the numbers and the territory concept. i wanted him to get a deal done. you got to have your pitch right because it throws people off. vinny: yeah, i know. ♪ so this is sales training and production training, so it gives you the overview. lemonis: it's been a week since the botched presentation at sealegs, and i'm back to check in to see how the training module is going, which, by the way, was due, like, 3 weeks ago. vinny: we educate the people about the coconut, packaging and labeling, palletization. lemonis: well, where's the... you said that the distribution was in here?
vinny: no, that's not in here. lemonis: where do i get the coconuts from? how do they need to be stored? what temperature does it need to be in? where is that in here? we need to add that in. vinny: we need to add that. lemonis: okay. i don't feel like he's putting in the effort and the thought to lay out a plan. i can't afford to have him winging it with other people's money. it's too dangerous. so i would encourage you to go back... vinny: okay. lemonis: ...and really think about refining this. vinny: yep, agreed. ♪ so that is called a diamond-cut coconut, and what we invented was the cocotap. lemonis: i wanted vinny to pitch his concept to contemporary marketing. it's a company that i've worked with with lots of different projects. michael #2: oh, yeah. lemonis: they represent tons of brands to lots of retailers, and i thought, "if vinny can make a good impression on mike and adam, then maybe there's actually something viable here. if not, then maybe my gut is telling me something different."
vinny: one thing that nobody is gonna have is the colonel sanders of coconuts, and that'll hold strong to the end of time. we're building something that is coco-love. this is a purpose, a passion, a... michael #2: well, that's good, but let's... can we get into the numbers? because that's really where, "how do i make money?" vinny: sure. adam: and what's your growth from day one? lemonis: do you have your financials with you? vinny: actually, i just have my license and pitch. michael: there is a patent? vinny: we're patent-pending right now. we have protection. michael #2: that just worries me because anybody can change a little bit of a widget, and your patent is blown up, and you don't have a patent, then you don't have a product. vinny: but it's gonna happen because the coco-dream is real. lemonis: to be honest with you, i'm getting kind of embarrassed by what's happening here. instead of vinny dropping his facade, he continues to put up his wall and his facade confusing not only me but almost annoying everybody else. vinny: great meeting you, too. michael #2: nice to meet you, too, man. lemonis: look, vinny has continued to string me along with this whole patent-pending process. i've seen no documentation and have no confirmation.
at this point, i want to get confirmation right now. ♪ dylan: dylan. lemonis: hey. hey, marcus. dylan: how's it going? it's good to meet you. lemonis: how are you? nice to meet you. so i decided to hire a utility-patent lawyer. all these documents and all the applications are public records, so i asked the attorney to actually pull all the records, so he could explain, how close are we to getting the patent? dylan: they've gone through a series of rejections and responses, rejections and responses, and they haven't been able to get the rejections resolved to the point where the examiner is convinced that what's claimed is new and nonobvious. lemonis: how many times has the "this is what makes it different" rejection happen? dylan: four rejections and then responses to those rejections, and they currently have a rejection that came out late last month where all of their claims are rejected. lemonis: so if you were going out on a date, you'd probably move on at some point? dylan: yes. lemonis: hey, bud. vinny: how's it going? lemonis: how are you? vinny: good to see you. lemonis: how's it going? vinny: good. what's your name? dylan: dylan adams. vinny: hey, dylan. dylan: good to meet you. lemonis: so i reached out to him.
he was able to pull all of the applications and all of the time lines. dylan: so the rejections are based on prior art, and this is the current prior art that is being used to reject them. lemonis: "young coconut insert that is used to deliver the contents of a young coconut in a hygienic and safe manner." you created a device that goes into the coconut and has a cap on it. vinny: right. lemonis: they have a device that goes into the coconut and has a cap on it. vinny: okay. lemonis: do you believe that this artwork is what is preventing him from getting a patent? dylan: oh, absolutely. lemonis: it looks pretty similar. i mean, if you look at it... vinny: it's a little bit coco-crazy right now. i've never seen that before. lemonis: while i don't think vinny was being blatantly dishonest about it, i think he likes to just glaze over the details like the important ones, like the fact that you applied and were rejected four times. this mechanism was filed before yours was filed. vinny: mm-hmm, okay. lemonis: but this is the exact same thing. you told me that you were the only one that had it, and you invented it. vinny: i did invent this. lemonis: you invented that? vinny: yes.
i have more foot to stand on with market success. lemonis: but the fact that it's been rejected four times is a problem. all along the way, you've said one thing, but the reality is something different. vinny: okay. lemonis: and rather than following it up with true data and facts, you go into a different direction.
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vinny: i have more footler. lemonis: but the fact to stthat it's been rejectedess. four times is a problem. vinny: i don't agree with you. dylan: there's no way he's going to be able to get a patent on the broad idea of sticking something in a coconut and then having it be sealed. lemonis: we also don't know that somebody else couldn't just create one. it may have different functions and features.
vinny: right. lemonis: but if they create something that goes into a coconut, they're not gonna get protection, and you're not gonna get protection because of this. vinny: one thing we are protected against is that there's a real cocovinny that can sell this through. lemonis: i'm sorry. i don't understand. what's the patent on cocovinny? vinny: there's only one of me, and that's the brand, and that's the real true coco-soul and coco-love that's gonna drive this to the end of the earth. lemonis: you can tell that vinny is getting uncomfortable, and he's retreating back into his sales-y kind of pitch. when he gets into trouble, he starts selling me about coco-this and coco-that and coco-love and coco-soul. coco-stop. the real business here is the tap and not cocovinny. there's nothing legally prevents somebody from entering the space. vinny: okay. lemonis: thank you so much. dylan: yeah, for sure, absolutely. glad to help. vinny: appreciate it. dylan: good to meet you. lemonis: hi, bud. vinny: hey.
lemonis: did you bring any updated financials with you? vinny: they're all coming together. i've been working on it ever since we had that meeting. lemonis: okay, so in process. vinny: yes. lemonis: okay. i've asked vinny to meet me at my office where i can have an honest conversation about where his financials are, where the training module is and where we are on the patent. are the training modules totally complete? vinny: no, they're coming along, though. these didn't exist before. lemonis: all along the way, you've said one thing, but the reality is something different. vinny: okay. lemonis: and you have a tendency to speak in tenses that make it seem like it already happened, and what you dream and what you want and what exists... vinny: i'm morphing something into reality. you're making it real before it's real. lemonis: yeah, and rather than following it up with true data and facts, you go into a different direction, and i think it hurts your credibility. look, i think the idea that you came up with is really good, but i'm not here to be a licensee today. i just think that, for me, the risk is too great.
vinny: okay. lemonis: like, you're a good dude, but i don't want to be coco-nuts myself by moving forward. i give you a lot of credit for putting your heart and soul in it. vinny: i've grown so much since we met. it's been challenging. you've brought some amazing ideas, advice. thank you. lemonis: and i give you a lot of credit for that, and i think you're a super dude in that regard, okay? vinny: thank you. i really appreciate it. lemonis: i wish you a lot of luck, buddy. we'll see you around. vinny: alright. thanks, marcus. lemonis: ultimately, i blame it on myself because i wasn't able to get him to learn the important building blocks required for running and owning a business. i hope he learned through this process that ultimately, business isn't just about being silly or funny. vinny: oh, that kind of sucked, but actually it didn't, i guess. ♪ won't you be my sexy coco-queen? ♪
♪ scream and shout ♪ you know we tap it out ♪ you're so fine ♪ you make me blow my mind ♪ tonight coco-love always. rob: what's up, guys? it's rob here. woman: okay, guys. we're rolling. welcome to my office. this is a very special episode of "the profit." amber: but see that's what we need is a professional here because clearly it's not us. -lemonis: go ahead, finish. rob: welcome to an inside look at "the profit." i am rob dyrdek, and you are here today at the dyrdek machine, and what are we doing? amber: we're taking a look back... lemonis: rob, rob, rob. rob, this is not "ridiculousness." this is my show. amber: rob, tone it down a little bit. -rob: oh, bring it down? -lemonis: bring it down a little bit. -rob: oh, this is a business. okay. go ahead. my intro didn't work. go ahead. lemonis: over the years that i've been making "the profit," i've visited countless businesses. let's go make some money. [ horn honks ] and i've traveled the country, trying to fix the people... and you do a million dollars a year. -you should be proud of that. -man: yeah, but we don't know how to keep any of it. lemonis: ...fix the process... i see. it is flimsy.