4 Lessons Entrepreneurs Can Learn From Dragon’s Den
by DJ Miller
For rising and aspiring entrepreneurs alike, the BBC’s Dragon’s Den television series offers a multitude of learning experiences. After all, the show is essentially about pitching a burgeoning business in order to secure venture capital funding. Even if a concept is a viewer favourite, it’s held under microscope by the Dragons and dissected on the spot.
Given this, here are four lessons any wannabe entrepreneur can learn from this show.
Establish Company Paradigms Before Seeking Capital.
One of the first things the Dragons are always interested in is how the company actually runs on an operational level. This means that, if your company is operating under a certain paradigm, they’re going to be really interested in how and why this particular procedure exists. In fact, this is true with any group of venture capital investors.
Subsequently, it’s in your best interest to have a well-established structure for how you run your business. If your organization has a BYOD policy, for example, be prepared to explain why you allow your employees to bring their devices and how this works from a security standpoint. You’ll likely see the best results if your company is using comprehensive bring your own device solutions that will allow you to monitor your network and data. Of course you’d also want to be able to explain to the Dragons that a BYOD policy increases employee productivity and job satisfaction.
Do the Requisite Research.
Knowing all the relevant facts is crucial when you’re approaching heavyweight investors, whether they be the actual Dragons or another group of venture capitalists. You’ll need to appear fully prepared and in complete command of the facts if you have any hope of securing their funding. If you’re unable to answer basic questions, your concept will seem knackered and you’ll be begging for quid elsewhere.
Know who your target market is and be able to explain why your product is necessary. Concepts like profit margins, overhead, and sales projections should be able to roll off your tongue without a second thought. If you watch the show enough, you’ll see that the people who get denied most frequently, the so-called Dragon’s Den failures, are the ones who are unable these questions. Don’t think it’s any different if you’re talking to a savvy investor elsewhere, either.
Each Opportunity for Investment is a “Dragon” Opportunity
If you’re trying to take on venture capital funding, you might as well take on any opportunity as though you were going up in front of the Dragons. Think of it as an effective means of stress-testing your business plan and concept. It also means you’re taking the concept to its most logical end and figuring out whether it’s viable from a purely objective standpoint.
Are you necessarily going to agree with potential investors’ opinions (or the Dragons’ for that matter)? Of course not, but if you’ve primed your mentality to present your idea to the most discriminating and skeptical minds, you’re much more likely to secure some serious funding as a result. At the very least, your role as an entrepreneur is to pitch your idea to as many people as who will listen to it, so you’ll be refining your sales pitch like a champ.
Cash is an Unfeeling Master.
Simply put, money is a not a boss that cares very much about how you feel. If you’re attached emotionally to your business concept, then you’ll probably need to get over it. While it’s understandable, you need to ensure it’s profitable and, quite frankly, have a viable exit strategy lined up. Many entrepreneurs get so emotionally invested in their business, they don’t understand when it’s time to let go, and this can be dangerous for everyone involved.
The Dragons (and via the transitive property, any venture capitalist) will want to know about how you plan to divest yourself of the concept at hand. They aren’t necessarily asking you about your exit strategy because they lack confidence in your business plan, but they do want to know if you’re a savvy business person who’s capable of seeing the endgame.
Take heed of these four lessons, and you’ll considerably increase your chances of taking on some venture capital funding — this is true whether it be with the Dragons or otherwise. What other valuable advice do you have for entrepreneurs looking to fund their companies? Share your thoughts in the comments below.
[Image via Flickr by UncleEed]
DJ Miller is a graduate student at the University of Tampa. He is an avid gadget geek who spends most his time writing on anything tech related. In his spare time he likes to travel, play soccer, and watch movies. You can follow him on Twitter: @MillerHeWrote.
This is an article contributed to Young Upstarts and published or republished here with permission. All rights of this work belong to the authors named in the article above.