How to win an investment on Dragons Den
by someone who just about managed it !
1. ‘a mythical monster breathing fire, with a scaly reptilian body, wings, claws and a long tail or
2. a fierce or intractable [person]’.
(The Concise Oxford Dictionary)
“Failure begins when you stop trying to succeed”.
That’s what my calendars’ Thought for the Day said on the morning I bought my new ‘going on Dragons Den’ suit. Unlike a guy from the first series, mine was not yellow. Pitch appropriate attire is, of course, just one of a multitude of elements needed for success in the Den. Just ask British Dragon Peter Jones!
Here we’ll consider some do’s and don’ts.
Let’s start by examining some perfectly valid excuses for not bothering.
There’s the very real risk of national public humiliation should your idea be summarily dismissed. Or the fact that, by definition, you are revealing your product / service and divulging details of your business model. To win, according to the strict rules of the game, you are obliged to give away often a substantial chunk of your baby to a third party.
Consider the stats – The original BBC series was imported from Japan ( that should tell us something ) and has been running since 2005. Of the many thousands of applicants across the water only 522 managed to get on screen but only 1.47 investments were made per episode.
Here, in Ireland, after 2 seasons only 20 people can say they shook hands on a deal.
When my wife explained things to her elderly mother, inexplicably unfamiliar with the programmes format, she responded……. “So Mark (that’s me!) is presenting his yoke ,that’s never been seen before, to 5 people he’s never met, with only 2 minutes to speak and no paperwork allowed, in a room full of others and it’s all going to be on the telly….and he has to be given €50,000 by one or more of them before he leaves ….. ah Janey !” Now I’m very fond of my mother in law and all, but I did enjoy listening to my wife call her a few weeks later to announce that it was a done deal.
If you are still reading at this point, here, for what it’s worth, are some of my thoughts on how to win that illusive investment.
People will pay to avoid pain and find pleasure. Your invention or proposal must do one or the other. What problem does it solves? “An ounce of commerce is worth a tonne of work”. So says’ a Polish colleague quoting his grandfather. I was intrigued on first hearing this. It focused my thinking and led to a new approach and ultimately to my particular Dragons Den idea. Yours need not be novel or new but you must have your own slant or USP (Unique Selling Proposition). Be clear on that much.
What are your goals? To get off the dole? To escape the commute and 9-5 existence? To actualize your potential or to simply upgrade your yacht? Have you remortgaged your house to finance your project to date and are desperate for more funding or gasping for the oxygen of publicity? Examine your reasons, as that’s what will drive you when the going gets tough. The idea is the easy part. It’s the legwork that counts. I sometimes think of going on the Den as like being in a nite club or disco (more my vintage) or dancehall. All dressed up and ready for action. Think of the Dragons being like the girls bunched against the far wall. Mildly curious but watchout! They can smell desperation a mile off. Your approach must be confident and chat up lines delivered with aplomb – whether that be sincerity or bravado, the more original the better. Otherwise you face the long walk back with your tail between your legs and the “commani ar an sli” ( the hurlers on the ditch ) sniggering away. Still reading? Fair enough, there are upsides you know.
Know thy enemy
See definition above from Oxford dictionary. Wikipedia was less kind and mentioned something about being crafty and jealously guarding treasure. Fear not! You have the advantage for you have seen them before and they have not yet seen you.
Put yourself in their hoves….er I mean shoes – they too must abide by strict rules, for example they must sit for 10-12 hours, with minimal breaks, for days on end listening to every gobdaw, and more frustratingly seeing good people making the same mistakes again and again.
It’s a public forum. Study old episodes and learn. Anticipate the mostly obvious questions. Remember that, unlike the bank manager, they don’t have the luxury of time, paperwork, background checks, credit worthiness, trading history or reference checks. They’ll first see your gizmo or proposal when the black cloth is pulled off. Make a wrong call or say the wrong thing and it’s their ignorance revealed or bad judgement exposed. They can only go on what you tell them, so help them out. Remember that although drama and confrontation, sweat, egos and arguments make for great TV, you need to communicate a clear concise message and story.
I was in the scouts and their motto is ‘be prepared’. Too many contestants (it is a kind of reality game show after all) fail to cover all the bases. They are so focused on their gig that the big picture gets neglected. Research is key. Question potential customers. I commissioned an online survey of my target audience. Facts and stats are your armour. A comprehensive business plan is your shield. Your presentation and personality are your sword and dagger.
Volunteer 5 acquaintances whose business acumen and opinions you respect and rehearse with them under laboratory conditions. Friends and family are likely to be too merciful! Place 5 chairs in a row. I had a crying baby during my dress rehearsal, which, looking back possibly helped. Face the hard questions. Know that you cannot lie about the future. Have a cohesive and logical answer to any potential question. It may be dead wrong but at least it demonstrates preparedness and competence.
Knowing where the actual show is recorded – in a hostelry normally open to the public, I took the liberty of popping along a week before recording was to start. The barman very kindly showed me up those famous stairs for a quick snoop. I learned that the walk up those stairs is recorded hours before appearing in front of the Dragons. Knowing these details in advance helps. I stood where I would stand and visualised where the Dragons would be situated – we all know in what order – Hi Sean, Yes Gavin, of course Sarah, yes but Bobby, thank you Niall. I saw where the cameras would be, thought how I’d demonstrate my product and found the exit should I decide to run away. To everyone’s credit I’m told no-one had every balked at entering the Den in Ireland once on site. I was also surprised to hear no one had ever come up for a snoop around either! It was worth that pint to the barman!
Formal rules are available on RTE’s website and more will be issued to you upon your initial application. Study them but more importantly understand the format, the dynamics and the personalities.
It’s a known fact that most people say they would rather die that speak in public. On the other had its hard to get some people, like politicians, to shut up. I fall firmly into the former category. So even the mechanics of writing, timing and memorizing my 2 minute pitch was a new challenge. ( Hint – if it all fits onto an A4 page you are on the right track. ) A good start is half the battle. Yes you need to explain your concept and present facts but always keep in mind it’s essentially a sales presentation – you are there to persuade them. Combine the visual with the oral. Use props. Give them something tangible to play with. Invite physical examination. Maybe lead with a question yourself. What problem gets solved? Is it a must have or a would like to have? Mention your research, pricing strategy, target market, SWOT (strengths, weaknesses, opportunities and threats), Pull or Push marketing campaign etc as you deem relevant.
In a job interview you’ll often be asked an easy one for starters – how was the traffic? Tell us a bit about yourself? This forum is not so gentle – “tell me Mark, why would anyone buy from you?” “Do you seriously expect €xyz for that?” Roll with the punches. There’s really only so many questions they can ask. List them and address them all in advance. Make eye contact. It’s vital to get across your passion and belief, otherwise how can you expect the Dragons to give a damn. If you want a particular Dragon on board then push their buttons, try to subtly mirror their appearance and even mannerisms. Speak to their needs. If you feel yourself blathering, zip it. It’s impossible not to be nervous. Use that nervous energy to sharpen you up and don’t let it inhibit you. I’ll let you in on a secret, the Dragons are actually real people. Very nice ones at that, by and large. Imagine them in their underwear if that helps. Just don’t antagonise them. Know your own weaknesses. Acknowledge them, at least to yourself. If you have no head for figures that’s okay but at least demonstrate a grasp of the basics – year 1, 2 + 3 sales projections , expected profits gross and net, and expenditure plans for the investment. Personally I set myself the challenge of understanding the difference between markup and margin. Imagine my disappointment when it never came up. But that’s the point, it might have and ignorance of such distinctions should they be relevant to your pitch is enough to get a chorus of “I’m out !”
Stand up straight. Be animated. Know your bottom line. Your percentage equity offered and cash figure sought reflect, like it or not, a suggested company valuation. If you offer 10% could you be negotiated up to 49%? That’s a decision best made long before traipsing to the back of the room. Funnily enough the whole process is a bit like writing this article – one is anxious to give good information and get a favourable response, whilst being very wary of appearing too arrogant or smug. It’s a delicate balancing act.
90% of all communication is non verbal. Watch the clarity, tone and tempo of your speech. Your stance and anti perspirant deodorant are also quite important. Consider what to do with your arms and hands. Not something we normally think about but when the lights and cameras are on you it’s not really the time to start thinking “what should I do with these?” Do I just let them hang? Clasp them, defensively in front of my genitalia, casually on hips or in pockets (not recommended) or just generally wave them about? (This can get a big distracting!)
When answering a specific question initially look at the questioner but address your answer to all by glancing around to keep them involved. During my questioning there were several long pauses which was unexpected and quite disconcerting. Be patient. Volunteer further relevant information if it occurs to you. Stay cool.
Giving hostages to fortune
They say when you are about to give up smoking you ought to tell everybody you are giving up and then, so the theory goes, you’re more likely to stay off them because you’re publically committed to kicking the habit. It’s your choice whether to tell people you are going on the Den. Personal I found great benefit in declaring my intentions. Mentioning are you going on opens a lot of doors. You’ll get entertained by people who might otherwise be too busy to help you. To the many who applied and to those who appeared and didn’t get the handshake I say fair play. You have at a minimum earned the right to sit back on the couch and pass all the comments you like. My best advice – use deadlines. Work backwards from when you know the recording is likely to be, set dates for pitch perfection, prototypes, business plan completion and research.
On the day
Much like getting married, you’ve had your rehearsal, your duds are all ready, shoes polished and speech firmly tucked away in your pocket. A prayer to Saint Anthony and away you go! Much like any other competition, you’ll meet your rivals hanging around beforehand. You are not really encouraged to interact. Don’t. You’ll share a strong bond afterwards but right there and then just concentrate on your own presentation. The production company has a very nice lady who’ll hone your pitch and relax you as much as possible, although there’s only so much she can do at the 11th hour. Don’t forget to smile and breathe and if you can only manage one of these I’d go with the breathing.
When playing golf you’ve a lot to remember, the correct stance, right grip, don’t break your wrists, keep your head down, – now forget everything and just belt the ball. That’s why you practice. In the Den do the same – relax and just belt the ball! It’s a daunting experience. It’s TV so it’s meant to be dramatic and stressful but keep our eyes on the prize. Don’t just lay a trip on the Dragons and look to them to rescue you. There is little room for pity. Their overriding priority is – if I commit my hard earned cash to this person will I ever get it back, how much more could I get back and how soon?
The law of attraction says ‘what you think about you bring about’. This is a once off opportunity. The key is to enjoy the whole experience. The process can often be more valuable to you in the long run than the result. The rewards are there. You get the money you need. You have a defacto product launch to a huge and mostly sympathetic audience watching at home. You get personal mentoring from one or more business tycoons. You get your 15 minutes of fame (I actually only got 13 minutes of airtime!). You get to pursue your dream. You get a great excuse to throw a party. And it’s true what Duncan Bannatyne says “ anyone can do it ”.