18-12-2007
Dragons’ Den - A seasonal series round-up
by Rosie Beasley
The season of goodwill was bound to bring out the Dragons’ generosity, even if only for a humanitarian cause.
All five Dragons ended up investing equally in ROSS – the wheelie water filter designed for the parts of the world where fresh water is scarce. And given that it was a good cause, the Dragons didn’t try too hard to bargain for a higher percentage of contestants Amanda Jones and James Brown’s company.
This was to be the final presentation in a series that, like a fledgling business, is growing and learning each year. Look back to series 1, and you’ll find that the Dragons’ questions were far less probing and their criticisms less scathing. And although it may seem like every new batch of contestants has learned nothing from previous series, the quality and content of (most) pitches has definitely improved.
Much of this last episode was devoted to following up on some of the investments made during the series to see how their businesses have been shaped with the input from the Dragons. Or, if no investment was given, have they managed to succeed on their own?
With an investment from Deborah Meaden, the YouDoo Doll from entrepreneur Sarah Lu seems to have developed in leaps and bounds during the three months since filming. Deborah’s hands-on approach ensured that the product improved in four key ways: packaging, re-design, distribution and manufacturing.
Creating smaller boxes and clearer branding turned the product into a more attractive proposition for retailers. Moving the manufacturing to China brought the unit cost down so that the margins would be better. Finally, taking on a UK distributor and storage company made the processing of orders smoother and faster.
Deborah was clearly aware of the need to get the doll into the shops for the Christmas rush and also of its potentially short shelf-life. She therefore lost no time in working towards recouping her investment as soon as possible.
Deborah also put her money into Max McMurdo and his environmentally friendly furniture business, Reestore, partnering with Theo Paphitis. Despite showing concerns in the Den that the furniture side of the business would be a loss-maker, in the end Max used the investment given by Deborah and Theo to develop it further by purchasing more tools and moving to a larger work space. This enabled his operation to expand enough to create a line of products that could be introduced to shops through the Dragons’ contacts.
Most of the entrepreneurs interviewed cited the Dragons’ extensive contacts as the most valuable asset they gained from the investment. In life and in business certainly, it’s not a case of what you know but who you know. In some instances it may well be worth giving up a chunk of equity in your business to gain access to that kind of contacts network.
Other investments made by the Dragons have been much slower to find their feet. Gaming Alerts, for example, took three months just to clear the vetting and due diligence procedures and so had only just taken possession of the £200,000 investment from Theo Paphitis when the show was filmed. Mark Champkins and his range of ‘Concentrate’ products for children are still very much in the development phase while Peter Jones waits for the inventor to come up with a winning product.
Anne Hempstock, creator of cream liqueur Cream Cutie, was one entrepreneur out to show Peter Jones that her product has legs despite being rejected in the Den. No doubt with a boost from the publicity from being on the show, Anne has nevertheless managed to double her sales since filming. The product can currently be found in supermarket chains in Scotland.
So, what advice would these entrepreneurs who have braved the Den and come out with the prize give to future applicants for the show? Here is our top ten:
1. Value your business at a realistic price
2. Know your business plan inside-out
3. Know your product inside and out – including its flaws
4. Don’t lie, or try to hide any negatives
5. Apply for a patent before coming on the show
6. Conduct research and testing in advance
7. Make sure your prototype works
8. Helping the environment doesn’t hurt
9. Secure some orders in writing
10. Don’t allow the Dragons to manipulate the situation
