Dragons’ Den – Season 1 Episode 3 – Full Review

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Tonight’s show is great. I just love it. And my better and smarter half also stayed and watched the whole show with me. And I even got a quote from her, “I like it.” So my boss has approved. (smile)

Here is my full review of s01-e03. By the way, you can also read my reviews of the first episode (s01-e01) and second episode (s01-e02), fourth episode (s01-e04), and fifth episode (s01-e05). (note: if you haven’t watched them yet, skip them for now and watch the reruns first.)
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Jobloft by Chris Nguyen & Lee Lieu, et. al.

I love these four guys and their matching outfit the moment I first noticed them in July (see my comments at the bottom) in Sean’s site. They really have a great product here. The list of companies that used their services were truly impressive two months ago. And I am sure with the current red hot job market for those high-turn over positions, Jobloft will have a bright future.

The five dragons should be able to take them into a new level. And I love the fact that all five dragons are finally in this investment together.

And their matching orange ties with white shirts worked perfectly for their business – make them stand out, young, fun loving. Precisely like their target users.

I will comment more later about their business. [K: I ended up not having time to comment on the business but commented a lot on how the deal break up. Sad.] Without any careful analysis, the first thought in mind is that charging a fix rate of $599 is definitely too little. But even charging $3,500 (as Robert suggested?) is problematic mainly for the reason that there is no back-end volume-linked-revenue. May be $3,500 (or some amount) as a fixed rate for unlimited job posting. And then some much lower amount ($10?) per actual job application or message sent to job applicants. Something like this.

Again, I need more time when I have free time to spend or someone paying me to think about this. (smile)

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FullFill by Matt Dober & Jeff Grout

I actually met Matt and Jeff at the Calgary audition. We all graduated from U of Calgary’s MBA program (me a few years earlier than them) and even had some of the same great profs.

So I felt particularly sad that Matt & Jeff were given a really really tough shake by the Dragons. I think I mentioned to Matt and Jeff that their product would not be an easy sell and their would likely be some legal issues (university campuses being locked up in agreement to sell a particular brand of soft drinks, etc.). But they had thought about those issues and seemed determine to make this product a success.

Matt and Jeff didn’t seem to have the chance to explain one of their niche of aiming at the hearts and minds of the University students who are willing to give the small little guys a chance (going against large-multinationals).

Of course, at the end of the day, the potential risk and competition (if this thing take off) are the key factors that make this not an investable idea for the dragons.

In a smaller scale, FullFill may still have a chance to be successful. But the R&D needed to build a machine, the legal work, etc. will make this a tough path to take. I will send my best wishes to Matt & Jeff here. And if they need my help, it will be my pleasure to try. It is a tough business though.

Good luck Matt & Jeff.

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Bikini Weenie by Amber Christianson

First of all, I admire all entrepreneurs who have the guts and the will to pitch on national TV and still be articulate. I personally don’t quite have that kind of guts yet. (smile) And I think Amber take it even one step further by pitching in Bikini. Let me acknowledge that Amber is a very nice lady and comes off full of energy.

Now, having said the above, I think Amber’s business may be a good personal business but it is definitely not an investable business. And it definitely doesn’t worth any where near the $1 million valuation. (Why so many entrepreneurs like this magic $1 million valuation is beyond me.) The fatal problem is that there is no way to stop people from copying this idea and competing at any location. And this idea doesn’t quite work in winter. And after the novelty wears off, the sales may not be there. Witness the popularity or lack of popularity of the Hooters restaurant chain.

Now, no disrespect to Amber. I think Jennifer is absolutely right that a serious business woman would hire a model for a day to model as the really cute and sexy girl that stands next to the hot-dog cart. You see, if the Bikini Weenie business is to be scaled up to $1 million, the ability to pick and find some cute looking girls for Bikini Weenie becomes a key success factor.

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SnoLimo by Paul & Guy Auger

With Paul & Guy’s business, I see it mainly as a novelty service and don’t see the business being too scalable. But if there are many existing paying customers using the services, I won’t argue with cash.

The issue of a patent was bought up. A figure of $20,000 was used by the dragons for the patent app. Here is my brand of bull shiitake on patent. Patent is a basic defense posture and first step by the entrepreneur to protect a worthy idea. It is more like an entrance fee to any big game. But patent is not an be-all-and-end-all thing. You have to have the money to hire lawyer to protect your patent or license it to some big company which has their own legal department to do stuff like this.

Anyway, back to SnoLimo, without a patent, it just makes the investment more risky for the Dragons. I am going to hide behind the IANAL (“I am not a lawyer”) thing now. The fact that the product has now been shown on TV may affect the ability to obtain a patent. If the key and new idea (the turning of the ski?) has been shown on TV, then all bets are off.

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PDN Medical by Diane Padoin

Hind sight is always 20/20. In a high pressure pitch, sometimes we will do or say things that we will regard later. And Diane seemed to regard the sales figures she quoted earlier. After all, around $500,000 is quite bit of distance from less than $1 million. And Jim (?) said it right, once you can’t trust an important number like the sales figures, all bets are off. Why? Because the investors will *always* wonder this — What else is he/she not telling me? And investors have enough of real challenges to deal with and don’t really want to second guess the entrepreneurs integrity.

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Umpire’s TV by David Yorke

David came off self-assured and professional. The problem is once David got into arguments with the Dragons, the pitch just got side-tracked so quickly and all focus was lost. David walking out on his pitch was just not necessary. And the harsh language used by David in the post-pitch interview is truly unprofessional. Having seen the discussions that happened at David’s pitch, what David said was definitely uncalled for.

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8 Responses to Dragons’ Den – Season 1 Episode 3 – Full Review

  1. [...] Oct 18th, 11:50MST update: I’ve now completed a full review of season 1 episode 3. [...]

  2. Austin Hill says:

    I enjoyed your review of this episode. While I enjoy the show, I have a very different take on the benefits of having 5 dragons invest in the Jobloft project in this format. I think it is bad for the company and the dragons. This isn’t specific to Jobloft, but more a critique on the entire format of the show.

    My own review of the series so far can be found at

    http://www.billionswithzeroknowledge.com/2006/10/24/puff-the-magic-dragon-lives-on-cbc/

    *********************

    Hi Austin,

    Thanks for your feedback and comment. You have written a very detailed review in your site indeed, I will definitely take a look. I don’t know if I will agree with your comments (I suspect I will disagree) but I will have to read them to understand your reasoning first. Hope you will watch the 4th episode tomorrow (Wednesday 8pm at CBC) and review it as well.

    Cheers,

    Kempton

  3. [...] <>Note:  Here are my reviews of season one episode number one, two, and three. <>******************** [...]

  4. Earl Colby Pottinger says:

    I disagree with Hill. Having five dragons as partners when you still control 50% means you only have to convince 1 dragon out of 5 that your idea is the right one! And if all 5 disagree with you it probably is because your idea is a bad one.

    As far as I can see in a 50-50 split, the more dragons you spread the 50% among, the more control of your company you keep.

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    Hi,

    Thanks for your comments. For the issue of “control”, I think it still depends on the shareholders’ agreement created. In some sense, I do think that having more than one dragon on board may mean that easiery decision sometimes. Imagine this, if another dragon who has domain (i.e. the specific business) knowledge or specific insight is convinced by the entrepreneur, then I suspect other Dragons may follow too. This also shows why it is important to have domain knowledge.

    Cheers,

    Kempton

    P.S. I like the operating system BeOS but there is really no good reason to leave a .zip file as your URL. Please respect my site as you hope others will respect yours. Thank you.

  5. Website should be correct now.

    That is one thing I have noticed on the show. More than once a dragon has deferred thier opinion to that of another that they feel is more expert in some domain. While this weakens my claim about control of the company, it also mean there would be less in-fighting between these investors atleast – leading to quicker decisions.

    There are a number of things I don’t like about the dragons if I were in business with them, but the lack (reduction) of politics/egos between them is a great plus!

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    Hi,

    Thanks for fixing your URL.

    I think the Dragons/investors in general are there to make money. It makes sense to defer to someone else if other investors have more experience and knowledge. I don’t think playing politics/egos will be a big problem in the projects that the Dragons invest in.

    By the way, if an investor don’t see something in a venture, investing can still be risky. But investments should be calculated risk anyways.

    Kempton

  6. david yorke says:

    I guess everyone gets their 15, and these dragons as they’re called on the show, are only game show hosts, and yes that makes me a game show contestant,
    That’s it, if everyone just called a time out, took that time to realize that the show is a show, nothing more, and unfortunately a lot less.
    If there are entreprenuers/business people who have ever had a 3-5 minute pitch to explain an idea, concept, or strategic direction, then they’re in the wrong forum, and pitching to…a game show format.
    Add all that to the expertise these show hosts were exposed to, studio directors pointing out which camera angle is on them, how to execute a scowel, a frown, how to raise their voice for the right inflection, etc, then you’re lost in outter space,
    I point all this out because, I am a TV/commercial producer, yeah an umpire, but, as for the show, I was asked to participate from a friend, I gave good show, that’s it
    If you need to see what umpires tv is about, then check this out,

    and you will see umpires tv on many MLB video boards next season, and with some added luck with a major sponsor on US TV broadcasts
    david yorke

    ————
    Hi David,

    Thanks for your feedback and comments.

    I am not sure if I am fair, but I think I still sense some remaining anger in your comment. May be this is part and parcel of being an inventor/businessperson but I don’t really see you being angry at the Dragons/investors will benefit anyone.

    Now, let me focus on the fun stuff — your two YouTube videos.

    The first one is just great. I think it will be a ton of fun for the baseball fans in the park to play along and it draws great ads potential too. And now, David, don’t shoot the messenger. I think it is your job to be your best to explain to people who don’t get your product right away. Like a good show, a good pitch needs its context and setups, etc. Tell a great story to *help* your investors to *see* what you know for a fact as a great investment potential. That is your job. When you got into arguments with the Dragons, and got a bit too excited, then your pitch was basically a lost cause.

    Now the second YouTube clip obviously had some nice production planning and work done on it. I do see some potentials in the various concepts. Although, if I were involved in the project creatively, I may have different creative inputs about some of the executions and the productions. Also, unfortunately, this YouTube video’s compression also had some clearly obvious compression artifacts — eg. pixels blocks on the pretty lady’s face, etc. I am pretty sure it can look better than what we are seeing now.

    Overall, both videos are nice steps in the right directions to promote your products and services. After seeing them, I feel that if less time was spending arguing, then more time (on the show) could have been spent on explaining the products in a clear way for the potential investors.

    Good luck David and you do seem to have something potentially quite interesting here.

    Cheers,
    Kempton

  7. [...] It deeply saddens me to see the way the JobLoft deal felt apart on national TV. (Here is my previously review of the JobLoft team’s pitch and deal.) To be sure I didn’t miss anything, I watched it three times (twice on tape). I will now share with you my view of what happened without writing a point by point transcript-style review. [...]

  8. [...] “met” Chris Nguyen on CBC Dragons’ Den when he and three others young guys pitched JobLoft. (See my previous articles about Chris.) So it is interesting to see Chris again on The Globe and [...]

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