Commuting is a hassle for most people. For David Patrick, gridlock provided his biggest aha moment.
“I’m driving down the 405 Freeway towards L.A., and all a sudden something hits me—I had this revelation that the way science was looking at things was backwards,” said Shark Wheel LLC’s chief technology officer.
That got the wheel rolling, so to speak.
Patrick’s revelation first inspired him to develop a ball-shaped propeller. Several years later, the idea morphed into a novel design for a wheel.
His new iteration of a shape that dates back to 3500 B.C. involves a single ring or multiple interlocking rings that resemble sine wave patterns commonly found in nature, such as a snake’s undulating slither.
What the company ended up calling Shark Wheel for its resemblance to a shark’s open jaw, outperforms the traditional wheel when it comes to friction, load capacity, longevity and riding on rough terrain, according to Patrick.
Uses for his invention are many—think baby strollers, luggage, farming equipment—but his first break came in the skateboarding industry.
“Skateboard wheels are something you can sell to everyone … and people buy just the wheel,” he said.
Unlike strollers or luggage, for which he’d have to convince the product manufacturer that his wheels are superior to what they already have, he can sell skateboard wheels “one at a time, directly to the consumer, and they can tell me if it’s good or not.”
The Lake Forest-based company’s growth potential was recognized at the Business Journal’s annual Innovator of the Year Awards event on Sept. 20 at Hotel Irvine, where Patrick was among five honorees (see other profiles, pages 1, 4, 6 and 8).
Kickstarter, OPO
Patrick started the company in 2013 with Chief Operating Officer Zack Fleishman, a former tennis player who was looking for his next challenge after recovering from a mountain biking injury.
Another crucial member of the team is Chief Engineer Pedro Valdez, a go-to mold maker in Hollywood for special effects and props on big-budget productions, including “Independence Day,” “Pirates of the Caribbean,” and a slew of superhero movies.
The company’s initial $80,000 Kickstarter fundraising round helped it solve molding issues that prevented mass production.
Two years later, it took the Shark Wheel to the tank—the “Shark Tank.”
The sixth-season finale of the popular TV show resulted in an offer of $225,000 in capital from three panelists—including billionaire Dallas Mavericks owner Mark Cuban—in return for a collective 7.5% stake in the company.
The television exposure brought plenty of positive publicity, along with a few naysayers.
The founders ultimately spurned the offer and today own a majority of their wheel business, Patrick a quarter of it.
“We’re the majority shareholders, and the only voting rights are with us, but I think everybody trusts us … We’re doing a great job. I mean, this company will be worth $100 million in a couple of years.”
Last year, they raised a reported $700,000 in an online public offering, or OPO, after selling about 9% of their company stock. The company has raised about $2 million altogether and has no debt, Patrick said.
Make it Better
The company is on track to double 2017 revenue of about $1.3 million by year-end, half of sales coming from its website, the other half from Amazon.com. It employs about 20, Patrick said.
Shark Wheel’s product lines now include wide, roller-like wheels for pallet jacks and a Harley-Davidson line of luggage products.
“Within the next year, I would like to see that we are fully out there in the major industries that we targeted: agriculture, materials handling and wheelchairs,” he said, adding that future markets will be the lawn and garden industry and all-terrain vehicles.
“We always knew if [the product] was going to survive, it was going to be because it was better,” Patrick said. “If it’s not better, it’s just different … Every market that we’ve entered, we’ve entered because we have a distinct advantage.”
Skateboard wheels are made out of polyurethane at the Elasco Urethane Inc. factory in Garden Grove, using Shark Wheel’s molds and tools.
The company’s products are also licensed to manufacturers that use injection molding and other methods to develop product components. For instance, it picks up $2 in proceeds from every Harley-Davidson sale that features its wheel.
“I want to be very small with staff but very big with intellectual property,” Patrick said. “I want to license that intellectual property to thousands of companies and still stay slim here.
Did it Again
Patrick was an avid skateboarder as a child, but inventing a novel type of skateboard wheel was “never his plan.” Innovation was.
The former Orange Coast College student dropped out of school to pursue a career as an entrepreneur.
His first venture was mortgage technology firm Pacific Western in 1990, which was renamed California Capital. The company funded “tens of millions of dollars in mortgage-backed loans all across the United States.” It was powered by Patrick’s software that automated loan processing.
“It did everything from the absolute beginning to the absolute end,” he said. “It was horrifyingly hard to do every day. There were a lot of moving parts, and I was the monkey in the middle.”
California Capital was sold in 1997 to CMB, and Patrick founded another software company, Provantedge in Irvine.
The second venture focused solely on licensing mortgage software to clients that included SchoolsFirst Federal Credit Union and Boeing Employees’ Credit Union.
By 2003, Patrick said his health was failing, and he decided to take a break.
“I was making a lot of money, and that doesn’t come without a lot of stress and a lot of employees and a lot of responsibility.”
His doctor told him, “‘You’re going to check out. You got like a year left,’ and I was like, OK, whatever, if I don’t have a lot of time, I’m just going to go do what I want. I’m going to go be happy … I took two, three years off and traveled all over.”
The fateful ride on the 405 prompted his return to business and innovation. He also worked in 2005 for 4sphere in Irvine, a research and development effort where he dabbled in “alternating wake turbines and rotors, and silent propulsion systems.”
Shark Wheel is his first successful attempt at creating a tangible product.
He said it’s also his biggest source of satisfaction.
“It’s so much fun to make something that you can hold in your hand that you’ve seen in your head for so long, and it finally comes out, and then other people use it, and you get to see the joy on their face.”
