After seeing Kenny's product, O'Leary had some tough advice to give.
"I don't want to offer you any encouragement," O'Leary says. "I want to tell you to take this behind the barn and shoot it, so that it leaves time for you to do something else. This product is a dog."
But Cuban sharply disagreed. "Ignore him," Cuban tells Kenny, even calling O'Leary an idiot. His rationale? If Kenny is making money on the product, why quit?
According to Kenny, "We've been doing this for a year and a half, and so far, our sales are $50,000."
Cuban was also impressed with the entrepreneur's initiative — some of those sales were due to him cold-calling major retailers, Kenny explains on the show.
"I took the approach of cold calls, because if you go through their online applications and things like that, I feel like a lot of that stuff just gets glazed over," Kenny tells CNBC Make It. "I basically just resorted to finding contacts on LinkedIn and cross-checking it with companies' corporate address locations, and going through reception until I could get a voice on the other line."
Then he'd give the retail buyers his elevator pitch and hope they liked it. A call to QVC landed his product on the air, says Kenny.
"At 1:00 a.m., [I] managed to sell 1,000 of them in five minutes," Kenny says on "Shark Tank." The product is listed on QVC for $20.50.
The strategy also landed him on shelves at supermarket chain Kroger.
"I made a cold call right away to Kroger," Kenny says. "That order was for 130 stores, and they ordered over 1,500 units."
"What a great example to set, that is awesome man," Cuban tells Kenny.
But only 40 percent of the units sold at Kroger, and Kenny admits the chain isn't planning to re-order the product. That was enough evidence for O'Leary to be out.
"The market has spoken, it doesn't care about this product," O'Leary says, advising Kenny to drop the business. While Cuban couldn't see potential for scaling the company and declined to invest, he disagreed with O'Leary, and supported Kenny's hustle.
"Here's the reality. You picked up the phone, you called QVC, you sold $20,000 worth," Cuban says. "You picked up the phone, you walked into Kroger, and you sold your product. That's why you're in the right spot, and he's an idiot," says Cuban, pointing at O'Leary.
O'Leary — irritated at Cuban's encouragement — interrupted by saying, "he made hundreds of dollars!" as a critique of the tight margins on making and selling Christmas Tree Hugger.
Then, it only got more heated.
"Kevin. Somebody spends some time, develops a product, takes the initiative, sells them, in this case $20,000 worth!" Cuban rebutts.
O'Leary wasn't moved. "Mark. Why can't you say just once, this is a dog!" O'Leary says.
Turning to Kenny, Cuban says, "You're making good money! He's an idiot."
To mark his own point, O'Leary demonstrated a dog howl. "My Christmas gift to you is the truth," O'Leary says.