Dragons' Den Season Finale - Exposed!

Okay, I am live-blogging a sneak preview of Wednesday night's season finale of Dragons' Den. Thanks to the CBC for the preview copy.

I am just going to write down my thoughts as the show goes by. This could be a long post.

Thought 1: It's a special flashback episode exploring the Dragons' roots. Sounds good. The title? The Road to Riches. Seems a little banal. Unless that's all their individual journeys were about - and I'm pretty sure that's not the case.

Brett Wilson: Energy Maverick: Starts out with Wilson's annual garden party for charity. Calgary's "creme de la creme" turn out - can't the CBC writers think in anything but cliches? Now Brett is showing off his "priceless" collection of Canadian art. Then we're off to his hometown of North Battleford, Sask. "We grew up in a province that was built by entrepreneurs," says Wilson. We meet his parents, and Brett chokes up as he tells how his dad gave up a lucrative job in the oil patch to stay closer to home with his young family.

Brett then shows us his dorm room at the University of Saskatchewan, where he was delighted to find a whole roomful of "geeky brain kids" like himself. There "he became a top student thanks to his knack for numbers." (Cue a clip of him ripping apart a hapless pitcher on Dragons' Den. ) Wilson took a job brokering oil properties in Calgary, where he says he and his partners were "in the catbird seat." He was soon making $150,000 -- a month.

But now Wilson admits he neglected his family in those early years, working all the time and pretending it was for them. "My father did it right," he says. "He was around for his family." In 2001 he and his wife divorced. And on the same day he learned he had prostate cancer.

Brett beat the cancer, but he says the diagnosis was his wake-up call to straighten out his priorities. Now a committed philanthropist, he says he's learned that wealth "can create opportunities to change people's lives."

Next, we go back to Zbjeg, Croatia with Robert Herjavec, east of Zagreb. We meet the aunt and uncle who raised him on a farm. "We were poor financially, but we were never devoid of spirit or love... what a great way to grow up."

At 8, his family fled to Italy, then to Canada. We see Robert tear up at seeing his childhood apartment again in Rexdale - a place his wife has never seen. "This country is a great place," he sniffs. "You really can be anything you want. It's incredible."

As we visit his Bridle Path mansion, he says that "my favourite part of being wealthy is the sense of worth and self-confidence it gives me - not just for me, but for my mom and dad, for the sacrifices they made. I feel good about what my dad went through to get to this country." Then the family plays a game of Monopoly.

Part III: Jim Treliving, "Franchise Baron." The ex-Mountie head of Boston Pizza got to the top through hard work, and shows us he still knows how to make a pizza. We go back to Virden, Man., where his father was a barber, and "being a cop is about as big as a boy could dream."

We also visit the house he grew up, where he used to sneak out the back window at night and come back in the same way. At 19 he joined the RCMP: "For nine years Jim moved constantly, policing gritty small towns in the West." (Cue clips of Jim thowing pitchers out of the DD studio for crimes against business.)

Then one day Jim ate at an Edmonton restaurant called Boston Pizza, where he watched young people throw money around and figured the owner earned more in a week than he did in a year. He told his dad he needed a hand to buy into the restaurant; his dad said "No you don't, you need a psychiatrist." We then visit the site of his first restaurant, in Penticton, BC. "After we closed at 3 in the morning, I scrubbed the floor... we never had a day off for two and a half years."

Jim was still living hand to mouth when he met local accountant George Melville , who brought "needed financial discipline" to Boston Pizza. They've now been partners for 40 years. And they still share the same office. "George and Jim eventually bought the entire company and turned it into a billion-dollar empire," says the CBC narrator.

It was no overnight success, says Jim from his two-story penthouse with the floor-to-ceiling windows overlooking Vancouver's North Shore mountains. "It took us probably 10 years to get to where we started to see some actual money that we could hang onto."

"You have to jump onto an opportunity when you see it. Take a ride and see what happens."

Part IV: Arlene Dickinson, "Marketing Maven." We meet Arlene by the pool at sunset at Casa Dickinson, overlooking the ocean in Puerto Vallarta, Mexico. "It's a lifetime away from Arlene's frugal days as a single mother," says the narrator.

Arlene was born in Germiston, South Africa, near Johannesburg. Her father moved the family to Canada for a better life, but she says they grew up poor. "We had absolutely no money because my parents had given up everything that they possessed in order to emigrate to this country." She takes an emotional trip back to her parents' first home in Calgary, where she lived till she left home at 16.

Dickinson says she bought into the 60s notion of husband, house and kids. "I really did believe it was all about getting married and having children, which was really a goal for me. It was all I really ever wanted." She married at 19, had four kids by 27, and then became a single working mom following her divorce. With no formal education and few skills, she took on a series of menial jobs.

"There's a lot of despair when you're a single mom and you're trying to take care of your children and take care of yourself, and you don't really know how you're going to do that.... How am I going to be able to manage this?"

Her big break came from getting a marketing job with Venture Comunications, later becoming a partner, then sole owner. "Material things are wonderful to have," she says now, "but at the end of the day, nothing matters more than the people you love. Nothing."

"Money is so not the solution to everything," she says. "Knowing who you are, that's the solution to everything."

Part Last: The Dragon King, Kevin O'Leary.
How did Kevin O’Leary become the fearsome dragon? We see his childhood home in a middle-class Montreal suburb, and home movies of his mom and a birthday cake. After his father died, his mother married a management expert who took the family all over the world – to Cambodia, Tunisia, Cyprus, Switzerland.

The stepfather also urged the teenage Kevin to put down his guitar and pick up a book. “Kevin was unpredictable when he was a teenager,” he says now. “We spent many sleepless nights thinking about his future.” Great picture of his mom’s car after Kevin totaled it.

We also visit a shopping centre where O’Leary got his first job scooping ice cream. And where he was fired for refusing to scrape the gum from the floor. “I could buy this place now and bulldoze it if I wanted,” he says. And he means it.

“I have never ever in my life worked for someone again,” he says. “No one has ever had control over me, ever, and never will.” He reaches for a Kleenex to dry his eyes.

Then we see the Toronto basement where Kevin started his first software company – Softkey – with a $10,000 loan from his mother. That journey ended by selling the resulting company to Mattel for $3.7 billion. (By then I had already put O’Leary and his then-partner on the cover of PROFIT Magazine in 1992, kicking off his rise to media superstar, but that somehow got overlooked on the show.)

Finally, we get to see Kevin’s giant Muskoka cottage as he purrs, “Welcome to Fantasy Island.” We visit his wine cellar and see him climb into the hot tub overlooking Lake Joseph. “You have to find a business you fall in love with,” he says. “Because I don't believe entrepreneurs ever do things they don't want to do.”

The show ends with Kevin opining that money gives him freedom, and freedom is power.

Verdict on the show: Fascinating gossipy stuff. Not much about how they achieved their business success, but “Must” viewing if you want to understand where these Dragons are coming from every day.

Few multi-millionaires (or any Canadian TV personalities) tolerate the personal media exposure that Dragons’ Den requires, so the five Dragons have probably become Canada’s most famous and best-known rich folks, ever. (What did any of us know about E.P Taylor beyond his racehorses?)

The Dragons are human enough to fuel any emotion you want: envy, contempt, respect and pride. What you think about the Dragons probably says more about who you are than who they are. And knowing who you are is the solution to everything.

Cheers to next season! Auditions are now open.

Dragon for a Day

I spent another Saturday today as a deputy dragon for CBC’s Dragons’ Den show. (See previous post for my first outing.)

My job was to help the Den’s VC consultant, Sean Wise, audition Toronto-area candidates who want to get on the show. In all, 80 people auditioned today, which represented the biggest turnout DD has ever had.

As usual, the candidates had just one minute to make their pitches, with two minutes more for the Q&A with the deputy dragons. The pitches were better than last time, but most people still botched it, by talking too long about their beloved product or service, and not giving enough (or any) time to outlining the opportunity, the market, or why the Dragons should consider investing in their firms. Remember: investors rarely care what your opportunity is until they know what kind of return it’s likely to generate.

And too many people were unable to provide sales projections when asked. Note: If you're ever raising money for a venture, and a potential investor asks you how big this opportunity is going to be, please don't say, “Really big.” It doesn't sound very professional.

(And don't say what one person said, either, which is: “Well, Canada has a population of 93 million, and 5% of them love camping…”)

There were, of course, some great pitches and great opportunities, but I can't tell you about them – you’ll have to watch the show next fall.

One more caution: Angel investors, venture capitalists, indeed any kind of investor (except maybe Aunt Mary, but you can bet she’s thinking it) will demand evidence that what you do is competitor-proof. If you don't have some secret sauce that prevents others from duplicating what you do, why should they invest in your business? If they think your idea has potential, they could just cut you out and start their own venture.

So my most common question to the pitchers was: What advantage do you have that will prevent someone else from duplicating or undercutting what you do?

Here are some of the answers I received. I’ll leave it to you to figure out which ones the investors most want to hear:

“Because I think I can be first to market.”
“Because I've been working on this idea for 18 years.”
“Because I have exclusive rights to distribute these products.”
“Because we have a patent.”
“Because we've applied for a patent.”
“Because we've got clients tied to exclusive contracts.”
“Because the two partners have really great chemistry together.”

(If you really want to know which ones work and don't work, leave a comment below).

Hot Times in the Dragons' Den (a long post, but worth it)

Dragons’ Den last night was mostly a disappointment - with one fascinating highlight. The season finale was a look back at some of the dragons’ most outrageous moments, along with several superficial updates on some of the show's most memorable “pitchers.”

The updates emphasized how resentful (or regretful) the entrepreneurs were regarding their Dragon Day experience. We learned almost nothing about how their businesses have advanced during that time, or what the owners learned from the experience. Probing how they retain their confidence after the tongue-lashings they received from the dragons would have been fun and possibly educational, but the interviews never scratched the surface.

The highlight, though, was the blow-up of one deal, on-camera, when the normally jovial Robert Herjavec ripped up a cheque after the dragons’ strategic plan was questioned by a current director of the company.

Here’s what happened: all five dragons had agreed to invest $40,000 each for 50% of JobLoft, a Toronto-based job-site company founded by four friends from Ryerson University. The deal was just being signed when Ryerson prof James Norrie, who had taught the students and was made a director of the company, took issue with the dragons’ plan to market mainly to employers (he thought the company should target job-seekers, too).

Based on what we saw on the tube, things got out of hand fast. The dragons wanted to know who this guy was and why they hadn’t heard about him before, and Norrie started belittling the price they were paying. He also sniped about how insignificant that amount is to people who fly to meetings in private jets (well, how else is a busy guy like Jim Treliving supposed to get around?).

That was it. The three dragons in the room (the third was Kevin O’Leary) bristled at that last remark, and Herjavec tore up the $200,000 cheque.

You can follow the fallout at JobLoft’s blog, where the four founders posted an official explanation last night after a month of (CBC-imposed) silence. The guys themselves seem not unhappy with the outcome; for one thing, they weren’t getting as much of the dragons’ time as they had been led to believe. (On the original show, O’Leary had warned the kids he’d be “in their face” every day.) But then, the deal hadn’t been done yet: how much time were the dragons supposed to be giving them?

Here’s how one founder, Lee Liu, sized up the problem: The dragons, he noted, “are just very busy people and having a board meeting once [in] a blue moon and at their convenience just doesn’t cut it for a 50/50 partnership. Experience, contacts and business knowledge is great but only if you have time to give it.”

Even better than this debate are the 30-odd (Update: more than 50!) comments that follow, with visitors split pretty evenly between those who think JobLoft had a narrow escape, and those urging them to go back to the dragons on their knees to try to resurrect the deal. It’s an exciting, real-time discussion on an important issue: the role of angel investors/VCs in startup businesses.

Should the guys have saved the deal? They originally agreed to it because they thought the dragons could help them grow their business by leaps and bounds. If they still believe that, the size of the initial investment is almost irrelevant: the pie should soon enough be big enough for everyone.

If the guys had changed their minds and grown disillusioned with their new mentors, they should have either called off the deal or raised their concerns, in person, prior to the cheque-signing. They should have taken control of the process, instead of letting their professor do the dirty work, or letting dragon-sized egos upset the deal.

Although the four founders were stuck with a legal bill they call “huge,” they still come out winners. JobLoft has received tremendous exposure, and the founders got about four years’ worth of learning in three months.

“Communicate” is the No. 1 lesson I would take away from this.
No. 2? The lawyers always get paid.

UPDATES, Thursday at 10 am
The blogosphere is buzzing about the DD/JobLoft meltdown. If you want to follow up:
* Sean Wise liked the finale episode more than I did. Plus: more JobLoft reactions and a survey.
* Kempton in Calgary offers some wise perspective.
* The CBC's DD site is abuzz. (Scroll about halfway down to pick up the latest comments.)
More to come, I'm sure.
3 pm update: Blogger Ryan Coleman of Found in Translation has some thoughts about the show.
JobLoft Gets Out of a So-So Deal But Still Needs to Dump Norrie says Ben Yoskovitz

The Making of a Dragon

I had great fun Saturday as an “armchair dragon.” But it was also frustrating, as I’ll explain.

Due to the number of pitchers expected at the Toronto audition for the new season of Dragons’ Den, the producers at CBC asked me to help interview applicants. My job was to stand beside the camera as each candidate made his or her two-minute pitch for funding from the show’s millionaire investors. Then I would ask qualifying questions in place of the absent dragons.

Hi,” I said trying to capture the sprit of the show, “My name is Rick and I’ll be your interrogator this afternoon.”

Overall people were very nice and understood that they were in for a grilling. Otherwise, it would be the family dinner table, not Dragons’ Den.

I heard some great opportunities this afternoon, but not many great pitches. You'd think that people who had watched the first season of DD would understand that the dragons are interested in the money they can make from the deal – not the intricate details of the product or service. But again and again people spent way too much time talking about the minutiae of the product, and not the language of the dragons: return on investment.

That forced me to play Bad Cop, trying to ask the questions that Laurence Lewin and Kevin O’Leary would ask if they’d been there: “What’s your vision? Who will buy this product? How big can this business get?”

In 20 years of working with entrepreneurs, I’ve asked questions like these a million times, but never at the pace of television. We had 5 minutes, max, for the whole interview. So after going too soft on the first few pitchers, I fine-tuned my introduction to help them make a better impression. “You've only got two minutes for the pitch,” I said. “Don't focus too much on your product. Get to the opportunity as soon as you can. How much money do you want from these dragons, and what will they get in return? How are they going to get their money out of your business, and how much will they make?”

Yes, I had turned into a Dragon.

Sadly, my advice came too late for many entrepreneurs, who had no idea how to answer those questions. Most stuck to their script, which was all about their product. Which forced me to interrupt more and more to focus on the heart of the matter: Why should investors of wealth and ambition invest in your company? Very few could answer that question.

One of the producers said later that they had learned over their career that you can't tell inventors anything – they're just too wedded to their own ideas. I hope that’s not true. Who wants a business partner who won’t listen?

Thanks to Netta, Sean and Tracie for a great day.
I’ll be back for the May 5 audition, so I hope to see you there. Properly prepared, of course.

For the schedule of upcoming auditions, please see my previous post.

A Day in the Dragons' Den

It was a big day Saturday at CBC’s Toronto broadcasting centres, with more than 120 “pitchers” lining up to audition for the new season of Dragons’ Den. I was one of several outsiders recruited to listen to the pitchers and help recommend who should be invited to the tapings, which take place in May.

I enjoy doing this job (it was my fifth time) because it’s a great chance to help entrepreneurs focus their message (and sometimes their thinking). So I tended to be a little slower than most of the other “deputy dragons,” who are mainly concerned with how these people will come across on TV.

My most common advice to pitchers:
1) tell me what your product or service does before giving me all the history;
2) make sure you know what your customers want, not just what you want to produce;
3) never, ever, say,"I just know this will be successful." Give me some evidence.

The good news is, there were a lot of great pitches. We actually met people with established companies and real products, who were looking for dragon capital to get their business to the proverbial next level. Most often we see people pitching unproven concepts. The Dragons will occasionally consider products that have been undermarketed, or are close to hitting the market, but they, like all investors, prefer to put their money on products with a track record.

Potential is good, but the best way to test potential is get out there and actually sell your products and services in the free marketplace.

We also saw a few people with what I call “Forbid” ideas (a concept borrowed from dragon Kevin O’Leary, who once told a pitcher “I forbid you to spend any more time on this idea”). Here’s a clue: if you have been working on your idea for years, if friends and family are not fighting to invest in your business, or if you can't convince any retailer to carry your product, chances are you've been spending your time on the wrong thing.

Yes, miracles can happen – but smart entrepreneurs don't count on them.

And don't expect high-priced angel investors such as these Dragons to give you the hands-on coaching you need to succeed. They want to invest in people who know what to do and where they're going, and just need more cash to get there.

As I Twittered on Saturday evening, if you don't have a product on the market yet, at least be talking regularly with your potential customers. If you want me to invest in your company, tell me stories that illustrate how badly the market needs your product, and how impatient the marketplace is for your solution. Get me excited about what you're doing. It’s not the product that angel investors or VCs are buying. They're buying your unique abilities to make the product successful.

Robert Herjavec Exits Dragons' Den

Robert Herjavec is leaving Dragons' Den.

The young immigrant tech entrepreneur from a poor Croatian family - so many good storylines - won the hearts and minds of Canadians in his career on Dragons' Den. Now he says it's time for a change.

This evening Robert reported on Twitter:

"thanks everyone for great comments -nothing but wonderful things to say about #cbcdragonsden - fantastic experience for me - chnaged my life"   (sic)

Pressed by me (and perhaps other Tweeters) for details, he Tweeted once more:

"its true-time to move on-most grateful for the opportunity 2 inspire others (in some small way) but mostly to be inspired by them in return."

Gracious, but not very informative.

My first clue was a Tweet earlier this evening from former dragon Brett Wilson, who noted Robert's decision and asked, with a wink, if this means he can get his old chair back.

The announcement upstaged the new Dargons' Den spinoff show, CBC's "The Big Decision." This week's episode featured tall dragon Jim Treliving's decision to invest in one of two flailing family businesses. It wasn't scintillating. In fact, Robert's announcement made Twitter more interesting during that hour than our National Public Network.

(The dullness wasn't Jim's fault. The companies - a fence producer and an icewine producer - were not very interesting, and both had made so many mistakes that viewers might well question either company's right to still be in business.)

Robert will be missed on Dragons' Den. Go to http://www.twitter.com/ and do a search for #robertherjavec), and you'll see how upset Canadians are. "I am also going to miss your gorgeous blue eyes and stanfields," tweeted one loyal fan.

I've seen in the analytics for this blog how popular Robert is. A lot of people search for info on him by typing in "Robert Herjavec married?".

I'm sure Robert will stay in the public eye. But we will miss the warmth, wit and sense of fun he brought to Dragons' Den.

(So far, Robert seems not to be responding to questions about whether he is leaving the U.S. version of the show, Shark Tank.)

Robert's 4 Monday night Tweets - saying goodbye. (Click pic to read)

UPDATE: The day after this post, in an email to the Toronto Sun, Herjavec said his move would have "no impact" on Shark Tank.

Score one for Hollywood.

Be a Dragon for a Day

My column in this week's Financial Post recounts my recent adventure as a deputy dragon, helping to audition entrepreneurs in Toronto who want to pitch their ideas on Dragons’ Den.

The CBC-TV show is now gearing up to tape its fifth season, and there seems no end in sight to resourceful, ambitious entrepreneurs.

But not all of these pitchers deserve funding. Some of their ideas are just bad. How do you help people who have no idea how big their market is? Or who are too shy to call potential customers? Do you become Kevin O’Leary, and forbid them to spend another cent on their ideas?

What’s a Dragon to do?

So my column looks at three of the pitches I heard (revised slightly to protect the guilty), and asks, What would you do?

Excerpt:
Ariella, an energetic woman with long blonde hair, wants to create a national franchise that specializes in raking lawns. You'd be amazed how large the market is, she says. Yet leaf-raking businesses tend to be small and unprofessional, with no training and no performance guarantees.
With a nationwide network based on formal training, Ariella contends she can sell consumers on a branded leaf-raking service -- and thus earn fees from franchisees eager to get in on a new service brand. What would you say to her?

You can read the full story here.

The Dragons Cometh

Less than two weeks to the debut of Dragon's Den, the CBC-TV show that positions real-life millionaire Canadian entrepreneurs as potential investors in startup businesses pitched by other real-life Canadian entrepreneurs (who presumably hope to become millionaires themselves one day). It looks like it'll be a great combination of original business information and fun, personality-driven entertainment.

If you've read my previous posts, you'll know the show was shot last month, and goes for five episodes in October. Watch the first one, because if you like it, you'll want to watch 'em all.

Dragon's Den should provide great lessons in how savvy entrepreneur/investor brains work, as well as in the many, many mistakes that people make when pitching for startup funds. As well, there were a few deals made, so you'll be able to see the approaches the "dragons" make and how much negotiation it takes before you come to a deal.

(Lesson One: Even if you set the terms going into a pitch, expect them to get redefined pretty drastically.)

And believe me, this stuff is real. These dragons are spending their own money. They've done some due diligence since the taping, of course, but I hear the first deal is supposed to be signed next Monday.

By the way, the drama on these post-show deals is so intense (with debates about where the businessesd should go next and how the investment funds should be applied) that the producers have started to film one of the deals in hopes of doing a follow-up show later in the season. So watch now to boost the ratings if you want more later.

(BTW, the British version of the show continues to do well on BBC2. In fact, with Dragon's Den in its schedule BBC2 recently garnered higher ratings than BBC1, traditionally the more "mass-audience" channel.)

I had a chance to interview each of the five Canadian Dragons for a special supplement in PROFIT magazine. The result is in the October issue, on sale now. You can also read it for free here, but don't tell them I told you.

Final tidbit: The show's theme song is quite apt: "Put your money where your mouth is."

Dragons on the Prowl

While Dragons' Den auditions continue across the country, (click here for the schedule, or click here to read how the auditions have been going so far), Enterprise Toronto is holding its own special event next week.

Dragon Robert Herjavec and DD host Dianne Buckner will be at City Hall from 6 pm to 8:30 pm on April 7 to talk about the "Dos and Don'ts" of asking for capital.

Sure, it's a game show, but most of the lessons apply to all of your business life, so why not come out if you're in town? I will be one of the roundtable of guest "business experts" helping people hone their pitches.

This is not an audition, but pitchers hoping to come out to the April 18 Toronto audition - or anyone working on their presentation skills - would be well advised to take advantage of free coaching.

Click here to register.

Related notes:

* You can also audition for Dragons' Den online. (Or watch the video pitches so far.)

* I am scheduled to help out with the April 18 auditions at the CBC in Toronto, so come on down.

* Click here to read my account of being a "Dragon for a Day" in this week's National Post.

Dragons' Den reels 'em in

It's not enough that the CBC's Dragons are ridiculously smart and rich. Now they're some kind of superstars.

The season finale of Dragons' Den on Wednesday night attracted almost two million (1.956 million) viewers.

The Dragons' heartwarming personal stories won the 8 pm time slot, with almost 4.1 million watching some part of the show.

The CBC says Dragons' Den achieved a season average of 1.75 million viewers per episode, reaching over one in three Canadians.

Pretty remarkable for a business show.

The US version, Shark Tank, rarely reached 5 million viewers in a country with 10 times the population. Although it's not very fair to compare a new show with one that's been building for four years.

What do you think? Are you eager for more of the Dragons? (There will be a full 20 shows next year - about as long a season as any show gets these days.) Do you think Canadians are learning anything from the Den? Please leave a comment below.

Don't forget, the Dragons are back auditioning for next season: click here for the remaining schedule. You can also apply online.

And watch Monday's Post (Mar 22) for my column on my day as a Deputy Dragon.

You too can be a Dragon!

With the season premiere of Dragons' Den looming (Sept. 19), CBC publicity is pulling out all the stops. This show is one of their biggest hits ever, so it's fun to see how they ramp things up every year.

Check out what they're saying now:

For the first time ever, people at home will have the chance to have their say in the Den. By visiting www.cbc.ca/dragonsden, viewers at home will be able to play along with the show, and have their activity displayed back on TV - in real time. This kind of social TV integration is the first of its kind in the world to occur live, in each time zone.

Become an Armchair Dragon and play along while you watch Dragons' Den on CBC with an interactive platform that allows you engage with the broadcast in real-time. For the best experience, participate using your mobile device or PC by visiting www.cbc.ca/dragonsden during Dragons' Den Wednesday evenings at 8 PM.

 

Also, this season there's another new Dragon in town. Replacing the ever-popular Robert Herjavec is David Chilton, aka "The Wealthy Barber." Here's his official bio from the CBC (believe it or not). Read it with tongue firmly in cheek:

 

David Chilton is an economics graduate from Wilfrid Laurier University. In 1985, he won the award for the highest mark in the country on the Canadian Securities Course. Cheating was never proven but widely suspected.

In 1989, he released The Wealthy Barber. It went on to sell an astonishing two million copies in Canada. After milking his one and only good idea for years, Dave left the personal-finance field to home-school his children. His daughter escaped after a few months, but his son served out his entire sentence of three years less a day. Both children somehow overcame the experience and are now attending university.

Over the years, Dave also published the bestselling cookbooks Looneyspoons, Crazy Plates and Eat, Shrink & Be Merry! along with authors Janet and Greta Podleski. Adding no value but taking a third of the profits, guilt finally overwhelmed Dave and he left the sisters' business in 2007. They just recently noticed.

His true professional passion, however, remains the field of personal finance, where he tries to mix humour and common sense to help people handle their money more wisely.

 

The morning I attended a taping last spring, David was pretty quiet. But I hear rumours that he didn't stay that way...

Last Call in Calgary, and Founders' Error

Contrary to last week's post, there is one more audition for Dragons' Den. Aspiring Alberta entrepreneurs will be pleased to know the CBC TV show is returning to Calgary on May 16 for one more day of pitching.

If you want to face the Dragons, head to the Calgary Chamber of Commerce's historic headquarters at 100 6th Avenue SW (4th Floor), from 11 AM to 4 PM. (Seems that the CBC producers' trip to Calgary last month coincided with the Great April Blizzard, so they're back to give you one more chance.
For more info on registering or auditioning online, click here.

Last Saturday (May 10) I played "deputy dragon" again at the Toronto auditions. It was a high-energy day with lots of great pitches. If I don't find time to blog about it in full, here's one thought: more entrepreneurs need to be more aware of where they add value.

One question I asked the pitchers quite often on Saturday was: "Why are you the right person to make this business succeed?" Or, "Why should the Dragons want to work with you?"

Ironically, the only person to answer this well was a former civil servant now promoting medical tourism. He was was able to concisely describe his background, his vision, and how both help create significant competitive advantages.

Most of the pitchers who answered this question committed the classic "Founders' Error": they assumed that starting the business gives them some innate edge in running it successfully. Many people answered my question by saying they have the "vision." They are hard workers; they have the desire.

Of course, all of these are definite assets, good things to have on your team. But none of them are as important as industry knowledge, management experience, a track record of achievement and execution, or experience working successfully with investors. This is what Dragons and angels and other venture investors are looking for. Your love for your idea is a minor plus, but it is not a competitive advantage. In some cases, if you're the type of person who falls in love with your own ideas, it can even be a disadvantage.

Step back from your business. Know your strengths and weaknesses. Understand where you are adding the most value. Make sure you know how to explain what your unique abilities are. And let us know how you are addressing your weak points.

Entrepreneurial passion is not enough. If you can objectively assess your tangible contributions to the business, the more chance you have of a) landing outside investment, and b) succeeding in your marketplace.

Match your pitch to your audience

The other day I met one of the "pitchers" who has been selected to appear on the new CBC show Dragon's Den (click here for my previous post). He will have just 5 minutes or so to explain his business idea (on camera) and try to convince the panel of 5 "dragons" (flinty-eyed entrepreneurs who've seen it all) that they should invest in it.

The pitching gets underway in a week or so; the show launches Oct. 4 (lots of time for editing out the boring bits).

The pitcher was taking all this very seriously. His first point, he said, would be to tell the Dragons that 5 minutes was nowhere near enough time to discuss a business idea with the complexity and potential of his concept. So he would really only be able to give a slice of it, and he would hope to talk to them about it afterwards...

I had to stop him in my tracks. "Are you treating this as a standard investment opportunity?" I asked. "Or are you treating this as television?"

He seemed unsure of the difference. "If you play to the panel as if this were a normal venture discussion, you'll be so boring you'll be cut out of the show," I said. "If you treat this as TV entertainment, with its main goal of maximizing ratings, then you take their 5 minutes and make it the most entertaining 5 minutes you can."

(He seemed stunned that the CBC would be in this for the ratings, but I had to explain that if the ratings are low, the show will sink after 5 episodes and ever be seen again.)

My suggestion was that he go for the simplest, most comprehensible, most viewer-friendly pitch he could muster. That way, even if he fails to interest any of the Dragons in investing, he will have the chance to use that pitch over and over again by showing the tape to future potential investors.

Promising to overhaul his whole pitch, the pitcher thanked me for the advice.
"Elementary McLuhan," I thought to myself.
Every one in a while, my degree in Communication Studies still comes in handy.

For more on these Dragons see http://www.cbc.ca/dragonsden/

D-Day (D is for Dragon)

For the third year in a row, I will be helping to audition “pitchers” for Dragons’ Den tomorrow at the CBC Broadcast Centre in Toronto.

If you're there, come up and say “hi.” But Expect No Mercy.

My job is to help separate the posers from the pitchers. I’ll be asking pitchers the usual revealing questions: “How big is your market?” “What makes your product/service unique?” “What will it sell for?” “What kind of market research have you done?” And, of course, “What makes you the one person in a million on whom I would want to risk my personal money?”

Potential pitchers (whether in the Den or elsewhere) should also be able to defend their valuations. If I ask you how much money you want from the Dragons, and you say “$1 million for 50% of my company,” then you'd better be able to explain why your idea/product/business is worth $2 million.

If you need more time to practice, I am also scheduled to help out at the second Toronto audition, which will be held Saturday, April 18.For more information see http://www.cbc.ca/dragonsden/apply/

An Evening with Innovators (and one Dragon)

Here's an upcoming event that sounds like fun.

Innovators Alliance, a group of Ontario's fastest-growing companies, and the Ontario Ministry of Small Business and Entrepreneurship are hosting "An Evening with Innovators" at the Schulich Business School in Toronto on Dec. 4.

Things get underway at 4 pm with EDC economist Peter Hall leading a discussion on staying competitive in the global economy (sounds timely me). Then there's networking with other growth-oriented CEOs, then dinner. Then comes an address by technology entrepreneur Robert Herjavec, who has launched two fast-growth companies and is now turning heads as the most interesting (and occasionally compassionate) multimillionaire on CBC TV's Dragon's Den.

They'll probably also try to get you to join Innovators Alliance. And why not? They have lots of services, including peer groups, targeted at CEOs who want to grow their business smarter. It could be the best investment you ever make. (And it's not as expensive as you think.)

For more information on An Evening with Innovators, call Leytha Miles at 905-332-0340, ext. 24. (That's in Burlington, so it's long-distance from most of the GTA.)

I have to speak in Vancouver that day, but I will be with you in spirit.