I'm sure I wasn't the only viewer who noticed a hint of contradiction in presenter Evan Davis' wrapping up of last night's Dragons' Den season opener. He stated that deals in the Den "are always based on cold hard facts and numbers" - but actually the show's opening pitch proved that that is not necessarily the case.
Bee London, seeking £85,000 for a 10% stake in her company Weave Got Style, demonstrated a lack of knowledge about the costs involved in running her three hair extension bars in London and Manchester department stores. However, she still received an investment offer from Hilary Devey - albeit at four times the equity share originally proposed - because the uniqueness of her proposition was considered more significant than the blurriness of her balance sheet.
Weave Got Style's service takes just an hour to complete, whereas the norm for similar treatments, London claimed, is five or six hours. This is obviously a very attractive selling point, but for me it is also the factor that actually makes the company's concession model viable. This is because the quick turnaround time means department stores and retail centres can offer browsing customers an on-the-day service. Weave Got Style, meanwhile, benefit from high footfall and brand visibility: they are effectively showcasing their service every time they do a treatment. What's more, the model means the company's expansion plans are simplified by removing the financial and logistical headaches that come with acquiring new premises - and overheads are more straightforward to anticipate and manage.
Interestingly, Devey was not put off by Peter Jones' reservations that London's service could be easily copied - perhaps because Weave Got Style already has a head start on potential competitors - but the threat of replication proved to be a decisive factor in two failed pitches later in the show.
Ex-professional boxer Clay O'Shea's straight-talking presentation is perhaps the most noteworthy of these because the Dragons acknowledged that his product - a padded strap that fixes to the lower back and ensures a safe body position when doing sit-ups - provided an effective solution to a real problem. However, the fact that he didn't have a patent meant that big players in the sport and fitness market could simply make their own version and knock 'Abs Pak' to the canvas with stronger branding, lower production and distribution costs, cheaper shelf price and a bigger buy-in from retailers.
You can understand the Dragons' decision - but you can also understand why O'Shea had no patent. Attempting to acquire intellectual property can be expensive, time-consuming and ultimately fruitless, so often proves too risky a process for would-be inventors - especially when the finished product has a modest margin and a limited market. This is a theme to which I'll inevitably return over the next few weeks, but here's my hunch for now: if we're a nation that's serious about backing inventors who create something truly unique, shouldn't their products be given more than a fighting chance of staying that way?
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