The Pitch: Self-help Unleashed

March, 2009

Unleashed Technologies! LLC produces self-help materials marketed via direct response TV, a.k.a. infomercials. The self-help product is faith-based but aimed at a secular audience, and provides motivational and applicable advice paired with real-life stories.

Our product — “Your Power, Your Strength, Unleashed!” — details a proprietary 17-point plan and will be delivered via audio CDs, book and DVD. By using the infomercial system, we can pinpoint our customers and determine immediate metrics.

I am a former Hawaii state representative and, in 2002, ran unsuccessfully against the late Patsy Mink for the U.S. House of Representatives. After the election, I hit rock bottom; then I turned my life around. I have come up with 17 principles, each reinforced by verses from the King James Bible. I am the executive director of the nonprofit Navy League of the United States, Honolulu Council. We believe self-help materials offer hope and inspiration. We have partnered with Nancy Marcum, a 25-year infomercial veteran who has placed more than $500 million in infomercials. I also presented my business plan at The Hawaii Entrepreneur Investor Pitch Competition presented by Enterprise Honolulu, HiBEAM and High Technology Development Corp.

We will be competing nationally against products like “The Secret.” Since we will be using local video production, audio files and interactive computer technology, we believe Unleashed is Act 221 eligible. The basic package, a 4-CD set with success journal, will cost $49.95, but we offer additional “upsells,” like a Web subscription to one-hour monthly interactive coaching ($24.95) or a 200-page book ($15.95).

We are looking for a $500,000 investment that will go toward production, inventory and media testing. Media companies advance funds based on successful media tests and use the infomercial as guarantee of payment. Media companies do this by discounting our invoice. After the infomercials have aired, they collect the full gross media expenditures (including the discount) from our cash flow. The discount is the fee for fronting the advertising money – in other words, the fee is included in the customary 15 percent media agency fee. This discount arrangement is used by most agencies in the direct-response TV business. Our total net profit is estimated at $7 million two years after launch.

Expert Feedback:

Joseph Sugarman, chairman, BluBlocker Corp., and producer of 13 infomercials
Write a mail-order ad for placement in print to get your main selling points on paper and to test response to your product, or test it on the Internet. Infomercials are expensive to produce and testing your product’s sales potential beforehand is a good way to avoid a major loss. Often with infomercials you make your money on media-buying savings, so partnering with a media-buying firm is a good move. Finally, to predict a product’s success you must test.

Mimi Beams, vice president of business development, Chamber of Commerce of Hawaii
Investors want to understand the value of your product in relation to the customer and the need you fill in the customer’s mind. Your success will be not with the features (which are impressive), but with the benefits your customers reap by choosing your product. It is important that you present a specific, unique and credible business proposition that will be competitive in your marketplace. Separate yourself from your competitors. It is best to focus on the positive as you tell your story.

Susan Yamada, executive director, Pacific Asian Center for Entrepreneurship, Shidler College of Business
McDermott seeks to enter a highly competitive, established self-help market with an unproven, slightly differentiated product. Raising $500,000 to implement an info-mercial advertising and distribution strategy, without documentation of the product’s success from satisfied customers, will be difficult. He should consider bootstrapping lower-cost distribution vehicles such as a Web site and/or publishing his 200-page book. Less startup capital is required for these efforts and, if is successful, raising funds for the infomercial should be much easier.

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