Dragons' Den 2011: Episode five review - The essential (and missing) ingredients in the pitching formula

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It was a busy night in the Dragons' Den last night. There was tension as the Dragons competed to secure investments; high energy with Pantomimes and jogging marketeers; and a little light relief with a natty portable commode.

 

But what separated the winners from the losers? Two important things. Firstly, the winners all faultlessly delivered the 3 Ps: Person, Product and Pitch. Secondly, they all focussed on where their product is going: Dragon’s Den is not about providing a snapshot of where your company is now – it’s about presenting a vision of where it can go, and a clear plan of how the Dragon’s money can get it there.

 

So firstly, let’s take a look at last night’s winners. When Kate Castle began to present her ‘Bog in a Bag’ idea, I immediately bought into the person, but not the product: it was the final of the Apprentice all over again: why was such a credible candidate presenting such an uninspiring idea? But as the professional pitch progressed, it became clear that she was onto a winner. Campers. The Festival Market. The Armed Forces. They could all find uses for this product. I began to consider if I could fit one into my life.

 

Twitter lit up with it. In fact, ask a person who watched the show to name the main product they remember and I guarantee it will be Bog in a Bag.

 

But the other thing that Kate did really well was to demonstrate to the Dragons that she had a clear path forward for the product and knew how she was going to invest the money to pay real dividends. It was irresistible, and Theo Paphitis beat two other Dragons to invest, admittedly for more of an equity stake in the company that Kate had asked for. But Theo was her preferred Dragon.

 

The formula was repeated again – with similar results – with Jog Post, a direct marketing company that uses joggers to deliver marketing materials door to door in London. Henry Buckley and JJ Harding were a couple of impressive, passionate young business men who were pitch perfect, and had already proven the concept of the product. They came to the Den at the point which they needed help with internal processes to help them become better organised, more efficient, and more successful. A gift for any experienced investor – and this was borne out by the Dragon’s interest. Deborah Meadon was lucky to beat three other Dragons on that occasion. The young entrepreneurs later revealed that she was their preferred Dragon and had offered a deal they had agreed beforehand they would accept: 20% stake in the company. A true result.

 

So what of the unsuccessful pitches? What part of the formula was missing?

 

Polka Dot Pantomimes: A sound pitch but not a sound business proposition.
Polka Dot Pantomimes gave a fantastic pitch; all the Dragons gave it a ringing endorsement. However, at the end of the pitch I understood exactly what the product was, but not what the investment was for, or how it was going to take its business forward.

 

Maiberg Designs: A fantastic product but not a fantastic business investment
The artist Steven Maiberg created some amazing pieces of garden furniture (for want of a better term- perhaps hanging garden art would be more accurate?) at premium prices, and had already had success in selling them. But his pitch was not a meeting of minds. He is a fantastic artist with no real experience of business, and needed the Dragons to invest not only money but a huge amount of time and energy to increase his sales by 400%. It was just not a sound business investment.

 

Chocolate: Weak pitch, weak business plan.
The chef from Bristol had what looked like a great idea – chocolate bars flavoured with essential oils and herbs. But the range was too large and the losses were astonishing: in year five he made a loss of £100,000. Perhaps most telling, he didn’t seem to think this was a problem, feeling it was a necessary part of the investment process – you invest heavily and, at some (undetermined) point in the future, you go into profit. Without a clear plan to illustrate how he was going to go from loss to profit, this was a doomed pitch.

 

But when we talk of winners and losers, it’s important to remember this is a TV show. That’s not to belittle its importance and as I am sure Bog in a Bag and Jog Post will attest, it can be life changing. But to lose on the show is not the end of your business. There are plenty of companies that didn’t get investment but are still going strong – including mine.

 

Companies lucky enough to be chosen to go into the Den are given a fantastic opportunity to bounce their ideas off some of the most astute business minds in the UK today, and that fact alone means they’re winners. Also, the preparation that *should* get put in by companies prior to appearing on the show pays long term dividends, even if you don’t walk away with the investment.

 

Before stepping into the Den, contestants should critically audit their pitch, their product, their business model and their strategy, before the Dragons do.