The take-away from this week’s episode of Dragons’ Den reinforces one of our long-held beliefs: There is nothing wrong with starting small. In business, starting small can mean flexibility, control and even freedom. One woman we interviewed for Mom Inc. told us, “I never wanted to be so tied to my business that I couldn’t walk away from it if I needed to.” For better or for worse, the benefits are starting small were evident in tonight’s show.
Ingrid Johansson and Raf Khoury came into the Den looking for $150k for 20% of their company, MatchMaker Pet, an online ‘dating’ site for dogs. Despite the fact that other Dragons couldn’t see the value in this business, the duo landed a deal with Arlene Dickinson. How? Well, Arlene didn’t offer up a single dollar in cash. Rather, she offered up marketing services – which is exactly what the company needs. They’re small – so they don’t actually need a lot of cash right now – they need to get the word out.
The team from Hart Bros Wrestling did not land a deal. They valued their wrestling entertainment company at over $1 million, despite having little revenue today. And even though they have an excellent reputation in the industry, the Dragons recognized that this small management team simply wasn’t up for the job of putting on large-scale UFC and WWE-style fights. These entrepreneurs were big dreamers, but in reality, a very small company. Big dreams are okay – but these guys just didn’t have the structure in place to support the kind of ask they were making.
Finally, in came Mitch Miller asking for $350k for 10% of his company, North American Card Solutions. With a new software concept, Miller believed he had found the answer to providing gift cards for small businesses – typically a very expensive endeavour. With a valuation of $3.5 million for the company and no sales, the Dragons were insulted. It doesn’t matter how big your business can become, if your business is small today, that is how you should portray it. There is nothing wrong with starting small.
And speaking of starting small, I’m excited for an upcoming episode of Dragons’ Den featuring young Canadian entrepreneurs. They’re teenagers! It’s interesting because when we were conducting research for Mom Inc., one point that often came up was that self-employed moms were proud to be role models for their kids. So who knows? Maybe we’re fostering the next generation of Canadian entrepreneurs right under our own roofs.
Until next week,
Amy
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