25 March 2006

Baby Dream Machine

I have never been able to watch Dragons' Den. To my mind it borders on voyeurism. Watching four supercilious business people (one of whom came to grief herself) grilling folk who have put their hearts and souls into their business or products reminds me of 18th century gentle folk visiting the poor lunatics in Bedlam. I had the chance to ask Doug Richard why he did it at last month's Venturefest. He admitted that it was "for a hoot".

One of the first pitches (if not the very first) was Graham Whitby's "baby dream machine". Essentially it is an electric rocker. A video clip on Graham's sit actually shows it working. It appears to consist of a set of rollers connected by a belt and powered by an electric motor. The baby is placed in a pram or push chair, the back wheels are placed on the device, the motor is switched on and baby is lulled to sleep. At least that is the theory.

Now Graham and his partner Barry Haigh who invented this contraption didn't get very far on Dragon's Den. The dragons appeared to like the concept but they thought that Graham and Barry were asking too much for their investment. So they sent them off empty handed. But they did not give up. They found support from a local business angel and with the help of Huddersfield Business School Lecturer and marketing consultant, Nadio Granata, and his contacts they are well on the way to a successful re-launch.

One of the milestones on the re-launch was yesterday's "Enterprise Event" at Huddersfield University. This is one of a series of seminars arranged by Nadio around a real business. After drinks and canapes it starts with a presentation by an inventor or entrepreneur. It is followed by cross-examination by a financial journalist and is completed by some pearls of wisdom from an expert panel and one of the professors from the Business School.

Much of the discussion was about price and distribution but I thought that there was a very real issue about IP. I asked Graham about whether his company had any specialist insurance. He said he hadn't but when I told him about Mandy Haberman's battle over the anywayup cup (see her article "Insure or Unsure") I got the impression that he was certainly going to think about it.

Although I have never managed to sit through a whole programme I have met quite a few Dragons' Den contestants - the snowbone man and the interflush to name but two. The thing that impresses me is that they are all sensible folk. I wish them all well. They deserve to be taken seriously.

2 comments:

Anonymous said...

Jane,

I can't imagine that you watched the same show that the rest of us did. The dragons offered Graham and Barry 150,000 pounds for a mere 15% - AND would help direct things and put in a proper management team that all parties would agree to. That IS being taken seriously. When I watched that offer I said to myself, "man those guys are going to be so rich - wow what a great offer". And then I was shocked beyond belief that they stood fast at 10% and wouldn't go further.

Unfortunately (especially for Barry), Graham is hugely arrogant and stupid. He failed to realize that 85% of a multi-million dollar business is a whole lot better than 90% or even 99% of a mediocre or failing business. The dragon's could have made a few phone calls and they would have been up and running with a distribution channel across the US, EMEA and UK in no time flat.

What happened next? Barry and Graham went back a year later - asking for 250,000 - and by then there was competition in the marketplace. What are they up to now? Graham has retired, but still owns 60% of a company that is STILL not making a profit. This is from the info that Barry told to all of us on a recent review show.

If they would be smart enough to get out of their own way, they would be RICH in 2-3 years. I'm in sales and business, not law, so in this area my expertise counts.

Broadly, the dragons can be a bit greedy. But that's business. And even 60% of SOMETHING is much better than 70% of a COULD-HAVE-BEEN. Some of those people really should understand what their real bottom line is - BEFORE they walk up those stairs and ask for all that money.

Jeff K said...

Truer words were never spoken. We saw this show way back when and I was literally screaming at the tv at what idiots those guys were for not taking the deal with both hands. I am also in sales. 85% of a huge business is MUCH better than 99% of a small business, which time has proven that it is all that came of it.

We've watched many episodes of this and the US version. To date, there isn't another mistake anywhere near as large as this one. Heck, even if they wanted 25% ... GIVE IT TO THEM - and they will MAKE YOU RICH ... fast!

Most of the ppl on these shows don't understand just this simple fact of business economics. It's not the % that counts, it's what your % will MAKE YOU and how FAST - period!

5% or 90% - who CARES! How much are you going to make and when! That's what matters.