This could be the biggest miscalculation ever made by the judges of Shark Tank, the entrepreneurial reality show.
An idea — a smart doorbell — that was brutally rejected five years ago on the popular entrepreneurial show has just been sold to Amazon for US$1 billion ($1.37 billion), making it the second largest investment that the company has ever made after the $13.7 billion deal it did for Whole Foods Market last year.
The product, Ring, is a Wi-Fi-enabled video doorbell that allows users to see who is at their door by simply looking at their smartphone.
In what is now a monumentally embarrassing moment in Shark Tank history, when entrepreneur and Ring founder Jamie Siminoff entered the Shark Tank with his pitch, his company was valued at just $7 million.
He went on the show seeking $700,000 from the judges for a 10 per cent stake in his start-up and was told by Mark Cuban, "it could be worth $7 million, $80 million, $90 million, [but] I just don't see the progression, and for that reason, I'm out."
Amazon certainly sees the progression, though. The buy is a crucial part of a massive play by the online retailer to completely dominate the home-services sphere and edge out competitors Google and Apple.
The acquisition of Ring means that they are able to take all of the various products and accessories, the video doorbell among them, and make them exclusive to Amazon's Alexa product.
Package theft is a significant problem faced by the online retailer and has meant Amazon delivery people need to photograph packages left at doorsteps and then email those photos to customers.
The takeover of Ring will change that. When Amazon is controlling home security systems, it will be able to send delivery people into homes and safely drop packages or groceries off without facing the threat of items later being stolen by thieves.
So, not only did the judges on Shark Tank sleep on one of the most valuable ideas the show has ever seen but they also clearly aren't as visionary as they claim to be if they couldn't see the link between home security, smartphones and the internet that makes Ring so innovative.