Well, this is where you are heading in Block 2 with your business idea….

Into the Dragons’ Den!

I haven’t got a pet dragon – the nearest we have at home is our Berger Belge ‘Julie / Giulietta‘… she does have the teeth for it however!!!

[Notice that the apostrophe comes after the letter ‘s’ in Dragons’ by the way.  Why?  Because there is more than one Dragon in that Den just waiting for you and your business idea!!]

What is it all about?

Background. Well, hopefully from Block 1 you will have ‘got’ the idea that the world is changing and we and every aspect of life and business are changing too….  For businesses this has all sorts of potential impacts and implications: threats and opportunities.  Remember my conceptual diagram of what businesses are continuously trying to do (reproduced below)?  Well we have been working on the right hand side of it: the ‘External Influences’: so in Block 2 we will be dealing with the potential new product and service opportunities (in the commercial and public sectors) as you see them arising from the external environment and how organisations might begin to combine their internal resources (their capabilities) in order to seize such opportunities.

So here is your Block 2 task

(in TWO parts).

Part 1 : Ranking all the ideas you and your colleagues have come up with.

Clearly, before you create a team to run with one of the business ideas, you will need to analyse each one (look at aspects of it in detail) and evaluate it (‘put numbers on it’) so that you can work out which ideas stand a greater chance of success and which a lower chance.  I will then invite you to choose one of the highest-ranking business ideas which appeals to you and work with colleagues (probably in teams of three or four) on ‘fleshing it out‘ and preparing to ‘pitch’ the idea to the dragons for the finance needed to get it off the ground.

So how will you go about this?

Here is my general video introduction to this Block: but DO read the specific instructions which follow below.

INSTRUCTIONS

1. Think (individually) about the work that you did for Block 1 and the implications of the changes in the organisation’s environment and come up with as many new product and/or service ideas as you can – at least 5 for each of the business environments.
2. Share these ideas with all your course colleagues and then, looking at your own team’s list,  compare and contrast, analyse and evaluate these ideas and put them in a ‘pecking order’: a list prioritised according to the highest chances of success.  In order to do this, I would like you to think systematically in terms of the following criteria.:

• ‘feasibility’  – technically, can it be done?  (towards ‘yes, feasible’ gets higher marks)
• ‘timing’ – is the market ready for this business idea – or is it too early / too late? (high level of readiness gets higher marks)
• ‘risk‘ – does your ‘gut reaction’ tell you that this feels very risky or without much risk at all? (low risk get higher marks)
• ‘likely viability’  – although clearly you haven’t ‘done the figures’ yet, in your view, is it likely to sell well and do you think people will be able and willing to pay a reasonable price for it from which you can generate a profit? (decent viability gets higher marks)
• is it a ‘problem-solver’ or simply an idea looking to develop market interest?   Products and services that solve problems tend to have a ready market and fast growth.  Products that don’t solve problems are less likely to succeed. (problem-solver gets higher marks)
• Simple or complex?  If the system of production or the nature of the product is complex and difficult to understand it tends to cost more and turn people ‘off’. (Simple gets higher marks)
• Is it possible to ‘grow’ the business quickly and protect it from competition?  If you can’t grow it quickly and protect it from competition then it won’t survive very long. (Quick and protected gets higher marks).

NB. For each of the criteria above, for each of the ideas, you must award a mark / 10 (and be able to offer a justification and explanation to support it) where:

• 10 = yes, perfect / ideal: 100%!
• 9 = almost perfect / ideal  90%
• 8 = excellent, but short of ‘almost perfect’ 80%
• 7 = good 70%
• 6 = reasonable but uninspiring 60%
• 5 = barely acceptable  50%
• 4 = has potential but too many problems  40%
• 3 = weak and insufficient  30%
• 2 = extremely weak  20%
• 1 = fundamentally flawed  10%
• 0 = totally disastrous – a complete non-starter.

You must then share your ratings in an Excel spreadsheet or Word table then average out your scores for each idea.  Then put the ideas in a ranking order (highest score first) with their respective final average scores.

THEN, TOGETHER we will:-

• finalise the list of the Top Ten ideas
• establish teams of 3 or 4
• choose a business idea to work on from the Top Ten rated ideas. (No duplication)

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[ASIDE: I have spelled this out as a series of questions you might well address, but when, in the future we talk about this, you will probably hear me speak in terms of what business tends to call the  ‘4 Es’:-

• Economic – will it be cheaper than other alternatives?  Can we do it within the budget we have?
• Effective – will it do/achieve more than other options available on the market? How well will it solve the problem or do the job?
• Efficient – will it be simpler, easier and faster than alternatives?  Will its average cost per unit be lower?
• Equitable – (if it is a service operating in the public sector) – will it be perceived as being ‘fair’ by those benefiting [and those not]? ]

Part 2: Take your idea then  develop it & ‘pitch’ for finance in the Dragons’ Den:

Part 1: Set up teams in class.  Choose business ideas and start thinking them through.  Plus ‘homework’ expectation.

Part 2: Business idea development. ‘Pitch’ preparation. In class plus ‘homework’ expectation

Part 3: Dragons’ Den ‘pitches’

This should take us almost towards the end of our S1 programme…

INSTRUCTIONS:

In teams sized as above….

1. SO you have now selected one of the highest-ranking ideas from your list which you would like to take on board and develop. PLEASE, before you start rushing off and developing it kindly ensure there is NO DUPLICATION of ideas.  The one you choose does NOT have to be an idea that you or your Block 1 team came up with.
2. Take your No.1 idea and ‘flesh it out considerably taking a ‘What / Why / Who / When / Where / How‘ approach to it in order to define it rather more fully.
   • WHAT exactly is the big idea? What makes you excited by it?  What makes it different and superior to other such products and services?  What are your sales revenues and costs likely to be?  Therefore what will your profit be – because your Dragon investor will get a % of your profit in accordance with the % of your business you sell to him in exchange for his money invested. [Example: if you pitch for and receive from your Dragon 200, 000 Euros in exchange for 20% of your business, this means a number of things:
     • you are valuing your business at 1,000,000 Euros (20% of which is his/her 200,000)
     • from every year’s profit, your investor is thus entitled to 20%
     • If your profit is:
       • 100,000 Euros in Year One – your investor will receive 20,000 (20%)
       • 300,000 Euros in Yr 2 – investor gets 60,000
       • 600,000 Euros in Yr 3 – investor gets 120,000
       • 1,000,000 Euros in Yr 4 – investor gets 200,000
       • SO: at the end of year 3 your investor will be very happy – he has all his investment returned – and in year 4 he will be have made 200,000 (i.e. he has doubled his money in 4 years – a rate of return of 100% over the period and 25% per year.   [Set against current interest rates at the bank of less than 3% per year and normal investor expectations at 8% return per year or more, then the 25% is bound to be exceptionally interesting….  IF (and ONLY IF!) you can convince your dragon that your forecasts/projections for annual revenues, costs, profit and rate of growth are realistic!!!
   • WHY are you convinced it will work? [Think about the reasons for the rating you gave it in Block 2 Part 1 and the criteria I asked you to apply… explaining your evaluation to the Dragons might be an idea….]
   • WHO is the product / service aimed at [can you actually draw a profile of Mr & Mrs Typical Target ?]…. WHO are your competitors?
   • WHEN will the market be ready for the product/service (too early and you may overshoot it / too late and someone else may already have done it) …  How long do you think it will take to break even and make a profit (in some businesses, the set-up costs are considerable and it can take quite a while to arrive at a profit – Tesla took years to get there … but then not everyone has someone like Elon Musk prepared to take the loss) ?
   • WHERE will you market it and to whom?  Where will you find your finance?
   • HOW might you get the idea developed and defend against someone else simply ‘cloning’ it?  … and, above all, HOW will you ‘pitch’ your idea to the Dragons (see 3 below)?   You will need to develop the answers to these questions to a reasonable level to be convincing to the Dragons. You will need to think about:
     • perhaps 5 years of projections of estimates for sales and prices, cost of sales, turnover and profit not forgetting the return for the Dragon!
       
3. Review the BBC’s Dragons’ Den website and do a YouTube search and have a look at the sort of ‘pitches’ that people make to the Dragons for funding support (how they use their time, present the information, appear up-beat and confident, have convincing information at their fingertips and deal with penetrating questions from the Dragons), and the comments and advice from the Dragons about doing ‘pitches’ etc.  If the ‘pitches’ are not available in France… have a look at some of them on You Tube. The Dragons’ top tips on business start up will be useful, for example:

• Evan Davies’ (presenter) Tips for DD Pitches
• Theo Paphitis’ Tips
• Peter Jones’ Tips..
• Deborah Meaden’s Tips
• Duncan Bannatyne’s Tips
• Dragons’ Den pitches – lots of choice here! See how it is done … …. and isn’t!

3. Prepare your Pitch for the Dragons’ Den (and work with me on any difficult business questions, presentational strategy or business vocabulary issues).

Here is my video introduction to the Dragons’ Den task…. but once again, see below the OUTPUT required.

OUTPUT REQUIRED

1. Deliver your team 15 Minute Max ‘pitch’ to the Dragons at the end of the block (date to be advised).     [EACH TEAM MEMBER MUST MAKE AN EQUAL CONTRIBUTION].   Copy of your accompanying Powerpoint / Prezi file also required – send to my email address as usual no later than the date of your presentation!
   
2. Answer the Dragons’ questions competently and comprehensively. The Dragons are likely to be me and other members of the teaching team – there may even be some people who are my teaching colleagues from the Fonderie.
   
3. Receive your Dragons’ Decision and feedback. ‘To invest … or not to invest… that is THE question’
   

Remember …

the Dragons are out there…. and they’re waiting for YOU!

Link to Block 3:  Now we have dealt with an introduction to doing business research and business planning and forecasting, we are going to move on to the subject of Marketing….