Here’s the thing about inventors: They like a challenge.
While other people focus on the problem at-hand, inventors focus on the solution. When the pressure is high, they slow down and get creative. Those are great qualities to have as an entrepreneur — in fact, they’re the very qualities that helped Ray Phillips, the founder and CEO of SoapSox, turn a spur of the moment idea into a thriving business.
Today, SoapSox sells plush bath toys for kids. Both fun and practical, SoapSox resemble stuffed animals but are designed to hold liquid soap so that they can double as washcloths. You may be familiar with SoapSox if you have young kids at home — or if you’re a fan of Shark Tank. Phillips took his young company onto the show in 2014 then turned down a $1 million offer for it. (Talk about high pressure.)
We sat down with the Industrious Pasarroyo member to learn why he says declining that offer was one of his best decisions and how he came up with the idea for SoapSox in the first place.
Ray Phillips, the founder and CEO of SoapSox, at his office in Industrious Pasarroyo.How did SoapSox get started?
In a previous life, I worked as a program director at a group home for kids in Pasadena called Hillside’s Home for Children. I learned to be better with kids and really better with myself over my 16 years of working there.
I got promoted to program director. Really, that means crisis manager — you’re the go-to person for managing challenging behaviors and making sure the program runs smoothly.
One day the staff called me because there was a nine year old boy who refused to bathe. And not only did he not want to bathe, there were nine other kids refusing to take a bath too. So it was like a full-blown mutiny. I was dealing with something a little bit more urgent, so I said to the staff working with him, “He doesn’t want to take a bath? Let me give you some tips.”
It didn’t work. The staff called me a day later and said, “Ray, he still hasn’t taken a bath. You need to get up here.” And again, I kind of blew it off, because I was dealing with something more serious. Day three, my staff calls me, and they are upset.
So I go there and ask him what’s going on. He said, “You can’t make me take a bath, I don’t care what you say.” So I said, “Listen, no one’s going to make you take a bath. We just want to take good care of you. What’s the problem?” And he says the staff won’t let me take my favorite stuffed animal with me in the bathtub.
I was like, oh — wait a minute. Okay, we can fix this. And I did what most parents do. Because when you have a million things to do, you think outside the box. We have a shed with hundreds of stuffed animals. So I went up to the shed, grabbed another stuffed animal, and modified it to hold soap. And he takes a bath, no problem. Then, slowly but surely, this strategy became my go-to trick for getting kids to take a bath.
Why do you think having a stuffed animal at their side makes such a difference to kids?
Bathing can be a scary experience for kids. It’s a big, wide open space. You don’t have clothes on, so you’re already potentially insecure about that. And most kids at that age aren’t comfortable with water. Then unfortunately, if there’s soap that maybe isn’t kid-friendly, you can burn your eyes. So that combination of things creates a potential feeling of being in an unsafe environment.
There’s all these little things that kids tend to hold on to that create a level of comfort — like a binky or a safety blanket. SoapSox transfers that concept into something you can take from playtime to bath time.
When did you decide to turn SoapSox into a company?
I was hanging out with my wife and a friend who’s a patent attorney. And he said, “Ray, tell me about that idea you came up with again. Why don’t you turn it into a product?”
We did some homework and found there was nothing else like it on the market. So after making a few prototypes we launched the product on Kickstarter with a level of success that I was really surprised by. We raised about $52,000 in 30 days from people wanting to buy our product.
Then we went to our first trade show, where Nordstrom saw our product. They brought us in store and — then we had our experience with Shark Tank.
Tell me about Shark Tank. What was it like to be on the show?
To people at Shark Tank and anybody reading this: Shark Tank is real.
My master plan was to go on just for publicity. But I saw an episode probably a week after they said that they were going to consider us with a gentleman who had $150,000 in sales from Kickstarter. At the time, we had $50,000 in sales from Kickstarter.
The sharks destroyed him. They tore him to pieces. And so I went back to the folks at Shark Tank and said we can’t come on; I don’t want to set ourselves up for failure. I think we need another six months to a year to get some true sales under our belt because we get one shot at this.
Over the course of the next six months to eight months, we did $360,000 in actual sales. We reapplied and they said yes. And so when we went onto do our episode, we had the wind at our backs in terms of true proof of concept.
What happened?
Mr. Wonderful did what he does. He ripped us apart because we were selling our products for $19.99 at Nordstrom’s. We did that strategically because we didn’t have a lot of product. He thought it should be priced at $9.99 and he was right.
Through all of those negotiations, we said we would like $260,000 for 15% equity. We wanted to partner with Daymond John. He counter-offered with $260,000 for 33% of the company. So I countered him.
I said we could do 20% for $300,000. As we were negotiating, Lori Greiner and Robert Herjavec came back in and offered to buy us out completely for a million dollars. We were excited about it — but at the same time, we thought, if they’re offering us a million dollars before we’ve gotten our patents, they must think it’s valued at more. So we offered them a partnership with more realistic terms that we thought we could accept, but ultimately they held firm on buying us out.
We respectfully declined and, in hindsight, it was the best decision we could have ever made. The following year we did $620,000 in sales. And the year after, $1.2 million.
Do you have any advice for entrepreneurs for facing similar high-pressure moments?
Slow things down. You don’t have to make a decision immediately; give yourself time to think. Weigh the pros and cons of where you are with your business and where you want to be. If a particular opportunity moves you closer to the goal line and you can do so in a way in which you’re not compromising yourself, your company, and the work that you’ve done, take that opportunity.
But if you truly feel as though you have just as much of an opportunity to reach your goals independently, go that route. Because as long as you have it in you to work hard and keep going despite the challenges, you’ll eventually get there. Grit, perseverance, and just showing up makes a difference.
What do you love about what you do?
I love the fact that I was able to make some early sacrifices — getting four hours of sleep per night, putting in those long days — to get our company in a position where I now have a little more freedom to enjoy time with my family.
So to all those other entrepreneurs, sacrifice early so that later on you can enjoy the things you love more freely!
What makes for a great day at work in your book?
When I come into Industrious, Michelle and Madeline are great. They always have a smile on their face. They create a positive environment here at this location where people are networking, people are sharing their skill sets and what they do. And it makes for a cohesive, positive work environment.
I look forward to coming into my office knowing that they are creating a great work environment. I also have the opportunity to network with a bunch of other amazing entrepreneurs. Michelle and Madeline do a fantastic job. So shout out to them and shout out to Industrious for creating a great working environment for my company and many other companies to thrive.
What’s next for SoapSox?
COVID-19 has been tough on a lot of companies and we’ve been fortunate enough to survive it; we’re coming out really putting our best foot forward and excited about the future.
We partnered with a large distribution company that gives us a significant reach to about 30,000 retailers worldwide. We also have a variety of new products coming out, from hooded towels to some adorable children’s bath slippers. And another win is that soon you can visit your local Macy’s and see SoapSox sold there.
Is there anything else you’d like people to know about SoapSox?
I founded this product in the halls of a group home for kids who were dealing with trauma. Our company’s focus is helping provide safe places for kids. That’s true to my heart — that’s why we started it and that’s what we’re going to be doing on a larger level.
So to anyone reading this, if there is an agency or a facility near you that helps provide safe places for kids, reach out to them, volunteer, give your time, because there’s a ton of kids out there that need good people in their life. Whether you show up for a few hours a week or a few days a month — whatever you can give — I think it’s just important for all of us to do our part.