Business - Doug Richard on Episode 7
Reflections from Series 8, 2010
Doug Richard on Episode 7
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Glossary terms:
The Den, a school for entrepreneurs
What is the role of an early stage investor? I was reminded of that question when watching Letitia and Alex the young couple who made the Survivor Jak a replacement for the survival jacket who presented on the Den this evening.
I could easily understand if viewers wondered sometimes on what basis the Dragons make their decisions. Early on in her presentation Letitia made a remarkably uninformed comment: that more than half the British population were "walkers" by which she meant "hikers" or "ramblers".
But of course more than half the population are not the kind of walkers that might need a survival jacket and it was glaringly obvious to the dragons that she had completely missed the point.
Entrepreneur Doug was a Dragon from 2005 to 2007.
The mistake itself wasn't the issue for them. For Peter and Theo it was a signal that she didn't have the nous to be an entrepreneur.
They assumed, I suspect, that if she managed to make such a simple mistake as that, she would make other mistakes of equal issue in the future.
Doug on the programme
But was it a fatal error? After all, her product had some offsetting accomplishments. Unlike many products in the Den, this product was already being manufactured and it had already been ordered: what appeared to be a substantial distributor had ordered 10,000 units.
The value of an initial order should never, ever be underestimated. Almost all of the biggest risks of a new product circle around whether or not it will be accepted in the market at all, and, even if there is demand, what the path to the market will be. Many great products have died a silent death because they could not find a way to let the world know about it. A significant order by a reputable distributor sweeps those risks away.
Deborah, bless her soul, clearly saw this. She accepted the weakness of the team and the strength of their position and saw what I think more angel investors have to see: that it is impossible to make a bad product good but it is quite possible to coach and mentor young entrepreneurs to become great. I was heartened by her investment.
Last updated: 23rd August 2010. Follow Doug on Twitter
These are the views of Doug Richard, not those of the ´óÏó´«Ã½
What's your view?
Julie & Doug's Den reflections
Each week in the 2010 series Julie Meyer and Doug Richard offered their take on some of the key moments from the TV Den.
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Week 1: Kirsty, the Best of Britain
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Week 2: Called to account
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Week 3: Where pitches go wrong
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Week 4: A school for entrepreneurs
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Week 5: Why evaluation matters
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Week 6: When coup de foudre happens
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Week 7: The role of an early investor
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Week 8: What finishes a pitch
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Week 9: Unlocking an investment
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Week 10: Lessons from the Den
A glimpse behind the scenes with investment reactions.
Dom tests this week's products with the public.
Meet the 2010 entrepreneurs
Other entrepreneurs from this episode:
The Online Den
Highlights from the Online Den
Missed any action? Catch up and find out more about the Online Dragons.
Apply for Dragons' Den
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Comments
Thank goodness for some honest feedback. In this series it looks like the Dragons are only looking for 'no-brainers' where the majority of work has been done and all they need to do is provide their contacts for a guaranteed return. What has happened to their mentoring role? It was obvious that Letitia and Alex were not concerned about the money. It was the guidance to launch a great product. OK they made the mistake about 38m walkers, but they only forecast to sell 0.5% of that market - not an unreasonable target. Come on Dragons lessen your arrogance!
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Thank the lord for Doug and even Deborah. They were young entrepreneurs and made some (large) mistakes in their assumptions and numbers but overall the product looked good and had potential and proven future sales. In the real world I know some Angels who would snap opportunities like this up and provide guidance and management for the youngsters. It seems to me (as proven with the wand) that all you need now is to give the dragons a 3 year plan, a decent speech and a track history of success and they'll invest. Disappointing as I think it's stifling creative business at the real acorn stage, which I thought this show was aimed at.
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