Having watched the first couple of Dragons’ Den episodes I thought I would start compiling a list of things that you need before climbing that now famous staircase to present a new product idea:
A product that is designed well - I have lost count of the number of times the Dragons have lost interest in a product because either it looks shody or there is a fundamental design flaw. For example in episode 2 of series 8 a couple of entrepeneurs approach the dragons with a secure food storage system for having your shopping delivered when you are not there. They have spent £900,000 so far and in a few minutes the dragons have pointed out that it looks like a wheelie bin and that a child can become locked inside. For £2000 they could have had a product designer develop the product so it solved both of those issues and the dragons wouldn’t have lost confidence in the intrepid entrepeneurs.
Evidence that the product has a market – the most successful pitches can prove by letter of intent or thorough market research that actually someone is likely to buy their product. This needs to have strong evidence to back it up not just an assumption or feeling.
IP Protection – why would anyone invest in something that could just be copied. Granted patent is best but patent pending is better than nothing. Ideally this should have been done by a patent agent.
An investable character – time after time the Dragons say that they like the product but can’t invest in the person. What can you do about this as an entrepeneur – I have no idea, self help books maybe? “How to Win Friends and Influence People” by Dale Carnegie is probably a good start!
3 Basic figures - Cost to produce, profit per unit and amount spent so far. I would say that you don’t need projected sales figures if you have letters of intent as mentioned earlier.
In conclusion, people may well add a good knowledge of future projections and a business plan to this list – however I am uncertain how necessary this is. The Dragons are expert at that anyway and have invested in people who openly admit that they haven’t the skills to put that together. I think the key with that is to be humble and admit that what you have managed so far doesn’t stretch to that. You also risk getting into an arguement with the Dragons about the figures. If you avoid projections all together and focus on the above elements I think you have a much better chance.
Phil Staunton is Managing Director of D2M Innovation Ltd.
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