Ben Austin, CEO of SEO Positive, reviews the latest episode of BBC TV's Dragons' Den.
Dragons' Den terrifies me. It’s addictive viewing but I find it provides more hiding behind the sofa moments than any episode of Doctor Who ever did! Sunday night rolls round and there I am, on the sofa, glass of wine in hand preparing to cringe and watch through my fingers!
The first pitch was pleasantly surprising though. Emma Jones and Mark Ferguson from Cheshire came up with the idea for 'My Bungee' whilst relaxing on a skiing holiday. The ingenious rubber cord was designed to help prevent mobile phone loss and breakage, and it fitted any phone from the latest smart phones to ancient Nokias. An ex-headmaster and celebrity PA they had knocked on doors, had been persistent and had secured 12 distributors including one in Australia, but they were struggling to secure a network in the UK. Emma blamed this on many businesses in the UK having a 'no name policy' when you cold call them.
I found out early in my career that in the absence of a Dragon to mentor you and give you access to their contacts, buying high quality lists was vital to achieving good sales and distribution. Whilst he wanted the biggest stake in the business, it was Peter's promise to get them 'in front of the top 50% of mobile phone retailers in the UK overnight' that was the most compelling. This offer of non-financial support and access to UK distribution channels was almost more valuable than the original £70,000 they wanted,
Next up was a skills sharing site called 'Amazings' which promotes the skills of the over 60s. Examples include knitting lessons and hairdressing.
It was really hard to see how money could be made from it. As the Dragons got into the figures it became clear that despite recruiting 25 'Amazings', it had failed to return a profit. They were making a small bit of commission on each of the lessons sold but this had only turned over £6,000 last year. The Dragons liked the idea but they advised the entrepreneurs to keep it 'not for profit'. It is very difficult to for something so altruistic to make money as people like the feel good factor but they are not prepared to pay lots of money for services like these.
DJ Mark Thompson was next to hit the decks and treated us to an excruciating role play that involved two scantily clad females dancing in extremely high heels . It was all in the name of some insoles he had invented to combat women's achy feet at the end of a night out.
His idea come during his time as a club DJ when he observed how women like high heels but they hurt after many hours fancing! It was a good idea but as Deborah Meaden pointed out, Scholl already provides a solution to the problem and his invention wasn't different or unique enough to warrant further development or investment.
As she said 'what reason does the consumer have to leave the market leader and buy into a newcomer?' Mark had already invested a lot of time, money and heart into creating his product but he was not, as pointed out by Hilary Devey, 'a natural born marketer or sales man'. He had been unable to shift 2,000 units for over a year. Mark had fallen into the trap of failing to be honest with himself regarding his business limitations and wasn’t going to make this business work.
A bit of light relief was provided by the CARBQ; a BBQ in the bonnet of the car! Danny Kean & Phil Austin, two amiable chaps from Gloucester, had created the CARBQ to be the envy of their friends and neighbours! They had sold 'two and a half' models to date! Whilst they enjoyed the pitch, none of the Dragons were biting and the feeling in the Den was summed up by Deborah Meaden when she said they should enjoy doing what they're doing and not formalise things with an investor. Important point that; not all hobbies make good businesses!
Lastly it was a classic ‘behind the sofa’ moment for me. Two blokes so nervous that it made for very uncomfortable viewing. Luke Booth and Chris Eves are design graduates from Central Saint Martins College of Art and Design. Focusing on the food and drinks carriers they were showcasing two packaging designs. By their own admission they aren;t business men; they are designers. It soon became apparent that they needed investment in them and their designs rather than the business. Without a Dragon's mentorship they wouldn't be able to move the business forward. Yet again for different reasons we see that non-financial support is just as important as the money. After a bleak start. their passion, intelligence and talent managed to convince Theo to take a punt and they eventually secured the deal for £50,000 and a 30% equity.