Monday, 26 November 2007

26th November - Dragons Den – Questions, Intuition and drilling into vague answers.

Having watched tonight’s episode – I tried following the questions that were asked and some of the comments that were made. Maybe this will enable future entrepreneurs to ask themselves some of the questions and prepare themselves better – if not for TV – at least for investment propositions.

Feel free to add to these questions. What was clear was that the Dragons started with fairly obvious questions – and allowed their intuition, vast experience and detail undertsnading of certain sectors to drill deeper.

What they could not take was an exaggerated valuation from a former investment banker with an MBA!

Here is a headline question:

Does a frozen pitch lead to a loss of credibility?

Theatre Company

If I give you £50k what do I get back
Have you picked those figures from think air? Or what have you got confirmed bookings?
What will make the show stand out from the dozens of others? What is different from all the others you are doing?
Are you taking a show that you have developed at Center Parks and take it to the outside world….What is unique about it
How many Theatres would you play at? (Ans 80)
How much have you allocated in terms of marketing for 80 different locations (£25k)
Is this really enough?

The Graveyard is full of good shows that have not made money and I am afraid that you do not have a new business model – it looks like a failure

I thought your show idea was brilliant – but it can’t turn itself into a business – so I am out.

You have not persuaded me you can make any money so I am out

I do not think your show was that great – and also for the (poor) numbers I am out.

Super digger for children

What is to stop copy-cat dealers

Needs too much money to get it going and is easily copied. All Dragons are out.

Entrepreneurs are not allowed to take notes into the den – they must have all the facts in their heads.

£145k for 10% for Steri Spray

What are the markets? – Hospitals, gyms, schools, showers are fitted where duty of care is required.

Are you saying that LD affected water hits the shower – do you not still have a problem that the bacteria is still in the water – say in the tanks.

What progress have you made so far?

We need to get to a production ready state.
I have filed patents (in many countries)

What is the patent for?

The technology

How costly is it compared to other shower heads? So there is a £50 premium on your taps.

They see inventors have difficulty in pitching their ideas and this one is no different

How may do you expect to sell?

What margins do you expect to make on that?

On the gross and on the net??

With 77% GM – you would have a huge margin so,
Why did not you not work out that if you drop your margin – you could sell your hugely better product at the same price as existing and inferior products – it would be a no-brainer as an investment proposal.

What is unique?
Competition has a filter – holds back bacteria, costs £x and lasts only 3 weeks.
e.g. Hospitals there are 1.5million filtered taps out there in hospitals
At last – the real answer!

Ian I like it – your valuationis crazy (10%)

I will offer you £145k for 40% of business (Deborah and Theo)

Entrepreneur holds his ground by asking of anyone else was interested to co-invest.

Passion, evidence of market need/technology leadership and endeavour overcomes the lack of business experience

He gets his investment after the grilling.

Home Party business

Part plan is a growing sector

How unique is this – then ripped into.

Tournament with a Twist

Foot ball in a swamp – started in Finland….

How can anyone want to do it?
Are you taking the micky?
Looks fun, but I can’t see a return so I am out – as is everyone.

“Yes Super Baby”
10% for £175k

What you wear can stimulate your children.
Ex MBA, investment banker, management consultant – became a mother realised the need for functional fun clothes for young mothers.

Attach bits to clothes - colourful and fun
Have a patent and trademarks
Vision to create a brand for Yes Super Baby – sensory stimulation for babies

Can I look at your scarf?

What have you sold so far? Have you sold anything yet?
I have sold 136 products to parents (£1600)
You were an investment banker before - So how do you get your valuation?
I talked to an expert who values start-ups..
He has put in £50k; I have put in £45k
I cannot believe that someone with your background can be so naïve!
She has aliented James with an unrealistic valuation
This opportunity is as inviting as a holiday in Afganistan! Not for me – maybe for you!
I cannot believe you were a professional advising on valuations. I can’t treat you seriously as an ionvestee possibility.
(Blasted a banker for getting the valuation so wrong)

Who wears? Parents wearing
Parents hand over to nursery staff to create some level of continuity
(I do not believe it says Duncan)
The thing is that kids have a short attention span – not sure what is more ridiculous – the valuation or the design?

Valuation is ridiculous, concept is ridiculous and the product is ridiculous you should stop right away
Deborah – You stand and present very credibly. But what you present is not credible…
Concept is somewhat disturbing (I am not a child psychologist) to make the mother both the mother and the toy. It is an addition – to stimulate.
Not a healthy development
I think the idea is brilliant – I have three young kids – this stuff will sell.
I would have invested in this – I wish you had asked for the right amount and the right valuation. But I am not going to….
Dragons do not get any prior prep..

So – no questions – but the entrepreneur managed (quickly) to alienate all the Dragons with an over inflated valuation while presenting herself as a professional.

Food company – Caribbean ready meals

Samples of ready meals
Husband will take it from here
150 recipes from the Caribbean
No artificial colouring or other chemicals
We have super market deals
We need the money for relocating, new packaging etc.,

£100k for 20%

Who is the biggest customer –
We are in 34 stores in Asda?
Is your product in 34 stores in ASda

The other is Morrisons
14 stores now stock it

Who are the entrepreneurs?
Used to be a fashion model
From industry – the shop failed –shut it down
Husband – fashion designer - Not going to make enough money went into sales

In 8 months sold £ half million. Expect to sell £1.5m in the next few months.
Do you have repeat orders – in the pipeline for you to triple sales?
Do you have this information in the bag (no)
Where will the 3 times sales come from if these are not in the bag?
Can you tell me what you have with the clients?

Our product is produced in a factory – outsourced to a supplier.
Why do you want to own the factory. It will cost you a lot of money – why –
Want control

What is the real issue?
We have a distribution problem?

Why have you not gone to other suppliers?
Morrisons – the product has proved itself but they want a reliable supplier
Probably more issues to come to light

What does the company you have outsourced to charge you?

They charge us £1.30 – we sell at £1.60
How much do you pay for packaging? 18p packaging
Delivery – who pays for that – We do at 12p per pack
It costs for £1.60 and sell it for £1.60

Business is easy, buy for less and sell for more – you are not making in money!

The manufacturing deal they have signed up to – does not allow them to make any money

There is not one good reason to invest – other than the taste of the food
You have not shown you understand business

Sunday, 25 November 2007

Awakening Italian Enterprise

A small group of people familiar with entrepreneurship development in cambridge were invited to a day long semiar in Milan - by Il SOle 24 ore - the Financial Times of Italy. The participants from Italy included academics, managers of incubation centres, post docs, and doctoral students from science and technology..

They were certainly high calibre people at the cutting edge of their scientific disciplines.

But what happened to the spirit - the spirit of Italy that we see everywhere else? In football, sport, design, motor racing, the auto industry, design, fashion, food and so much else from Italy?

Is it that the scholarly culture of Italy is so far removed from the day to day of Italy or that Institutions have been set up to deliberatly extinguish the spirit of the people engaged in the pursuit of curiosity. One is of course tempted to think of the fate of Galileo or other "heretics" who challenged the orthodoxy of their period.

I want to know if there is a light burning in Italy and how it can be used to encourage the greater engagement of enterprise amongst such talented people?

Monday, 19 November 2007

Silicon Valley comes to Cambridge

Last week we had a dozen or so top entrepreneurs from Silicon Valley come to Cambridge. It was a real eye opener - in terms of seeing what and how business is being done in Silicon Valley. All the talk was about web 2.0 and manyspeakers referred to "faith and belief" in terms of making money! So - the question is - how many of todays start-ups in this "space" willa ctually succeed and will investors do it all again - have they already forgotten the dot com bubble?

Whatever happens the revolution is here and exciting!

As an educator the question is - what should we be teaching future entrepreneurs about how to gerenate the ideas and evetually monetise the ideas in this virtual world?