If you’re still wondering what the result would be if you let a group of excitable five year olds loose with curling tongs and some poster paint on a partially decomposed corpse, then you clearly missed the opening episode of the new series of Dragons Den this week. And Hilary Devey wasn’t the only one to have been given a bizarre makeover. With Peter Jones looking like an extra from a Edwardian period drama and Duncan Bannatyne having the demeanour of a man who had just arrived fresh from taking third place in a Ray Reardon look-a-like competition, it was all a bit odd. Only the contestants restored a sense of normality.
All the usual characters were there- the attractive woman with no head for figures, the rough diamond who the Dragon’s liked but just didn’t have the right product, and the smooth talking chancer who was eventually worn down and exposed. It all makes entertaining viewing, but how much is there to learn about entrepreneurial success and what it takes to achieve it? The record would suggest that it’s not as much as the producers would like us to think.
The programme is now in its tenth series. With such a long history, and with such high profile, knowledgeable and influential backers, you’d expect the success stories to have come thick and fast. But with the exception of Levi Roots Regae Regae sauce (which took off primarily because of the personality of the originator featured on the programme) and a very dull cable tie invention, (which was already a big hit before it appeared in the den) it’s hard to bring any significant successes to mind. I think I know why. They have the wrong Dragon’s.
When I was at University I studied marketing for several years, and not once did I learn anything that I might actually use. Oh sure, if I ever got into the position of being marketing director for IBM, Kraft Foods or Microsoft then I’d have some background knowledge that would help me form a strategic plan. But if I wanted to write a compelling advertisement, order print at the right price, book an effective national press advertising campaign or assess the value of a mailing list – well these were things I’d have to figure out for myself. And guess what, these were precisely the things I did need to know about if I was ever to get a business off the ground.
Well exactly the same juxtaposition seems to be in place with Dragon’s Den. The Dragon’s are operating at a macro level in multi million pound mainstream businesses, and yet they are being asked to judge (and invest in) primarily small-scale, niche businesses. Just as my knowledge of the global strategy of IBM wasn’t a great deal of use when the advertising rep’ came on the phone with his jibber-jabber, the experience gained running a national retail chain doesn’t seem the best grounding for deciding whether a niche website might make £100,000 a year profit at some point. There are horses for courses, and these nags seem to be on the wrong track.
In almost every encounter in the den, Duncan Bannatyne asks the proprietor of some fledgling business to give him turnover and profit projections for the next four years. Is he serious? I’ve been in the same business for 20 years and still couldn’t make a meaningful and reliable stab at that, so what chance has someone with a new concept or idea got? Whatever they may say in response to the question, I’d suggest it’s of absolutely no value in making an investment decision.
In this weeks show, the attractive but numerically challenged lady was asked what her balance sheet looked like. When she appeared confused by the concept, she was treated as though she had just admitted to not knowing exactly what a cabbage is. Well let me tell you – her balance sheet probably looked a lot like mine – a load of numbers on a piece of A4 which mean very little when viewed in isolation. I don’t think I’ve looked at my balance sheet more than once in the past decade. However, I do know how much money we have in the bank, I know what stuff we own, I know what stock we’ve got, I know how much we owe and I know how much we’re owed. What’s more, I know the story behind all these numbers and what it means. It’s a story that a balance sheet can never tell unsupported.
I suspect the lady in the den knew all these things too, and if the Dragons had been less entrenched in their big business approach, they may have found that out. She did get an investment in the end from the decorated corpse, but it was in return for a huge slice of equity, and not before she had been dismissed as an uninvestable light-weight by the rest.
So what’s to be done? Well the obvious answer is to get some more ‘grounded’ Dragons’, and I am making myself available. I already own various suitably unattractive and oddball outfits , am naturally hostile and miserable, and will work pretty cheaply. One proviso though – I will insist on bringing my own make up artist after seeing this weeks show. I don’t want them making me look like I’ve got no hair or something.