Dragons Den - Series 6 Episode 3
Aug 05
The first presenter (mobile shoes) did a great presentation despite being understandably nervous. She had enthusiasm, she knew her customers (very well) and she had built up a good business with 21 franchises. She knew her numbers as well (which was very impressive).
The problem she faced is the same that a lot of retail start ups face and is a real problem when your unique selling point is variety and choice. The issue here is that variety and choice means huge stock costs. I hate investing in stock. One of the great lessons I learnt at University was about the Japanese way of just-in-time production. It was all about managing stock costs. Having stock is very expensive. My advice to would be entrepreneurs (and I saw two this morning on this very subject) is to really focus on how you can reduce stock costs. It is a killer!
I am writing this as I watch - as I don’t want to follow the dragons. The glasses idea - wow! I got excited about that. I just know that there is a market for that. London house parties will never be the same again! As for the numbers - they seem to stack up. I get the environmental concerns but I also believe that the team with help and investment can solve that. I am glad he got the investment and it will be interesting to follow this one. In terms of the offer, my standing problem with the program remains, giving up 30% of his business for £40,000 seemed daylight (pardon the pun) robbery. I would have invested in this!
I liked the Barbeskew idea - I did. The solution he offered did solve a real problem. However, the price he was proposing to sell his solution for was way over the pain of the problem he was solving. And as it was not protected, it was too weak a business proposition. I see this type of business a lot sadly - ask yourself before you price your solution - how painful(in monetary terms) is the problem to your consumers your solution is solving!
The PC case - sorry just too boring for me to comment on. Ignoring the business - you cannot put a valuation of 50 times projected earnings - you just can’t!
As someone who did incur a very expensive bill because they filled a diesel car with petrol (back in 1998!) I was very interested in the business to do with the misfuel device. Companies who invent great technology often have a debate on whether to licence or to sell themselves. This is perhaps a blog I can return to at a later date? (Can I also say - a brilliant bit of negotiating by the Entrepreneur - well done!)
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