It strikes me that there is a basic formula for success on Dragons Den with a new product idea. Here is a list of things that you need before climbing that now famous staircase to present a new product idea:
A product that is designed well – I have lost count of the number of times the Dragons have lost interest in a product because either it looks shody or there is a fundamental design flaw. For example in episode 2 of series 8 a couple of entrepeneurs approach the dragons with a secure food storage system for having your shopping delivered when you are not there. They had spent £900,000 so far but within a few short minutes the dragons pointed out that it looked like a wheelie bin and that a child could become locked inside. For £2000 they could have had a product designer develop the product so it solved both of those issues and the dragons wouldn’t have lost confidence in the intrepid entrepeneurs.
Evidence that the product has a market – the most successful pitches can prove by a letter of intent or thorough market research that someone will actually buy their product. This needs to have strong evidence to back it up not just an assumption or feeling. If your idea is protected by a patent or registered design, then why not approach potential retailers with the idea and establish some interest? There is nothing better for proving interest.
IP Protection – why would anyone invest in something that could just be copied? A granted patent is best but patent pending is still good. Ideally this should have been done by a Chartered Patent Attorney.
An investable character – time after time the Dragons say that they like the product but can’t invest in the person. What can you do about this as an entrepeneur – I have no idea, self help books maybe? “How to Win Friends and Influence People” by Dale Carnegie is probably a good start! Alternatively employ someone to pitch for you.
3 Basic figures – Cost to produce, profit per unit and amount spent so far. I would say that you don’t need projected sales figures if you have letters of intent as mentioned earlier. People may well add a good knowledge of future projections and a business plan to this list – however I am uncertain how necessary this is. The Dragons are expert at that anyway and have invested in people who openly admit that they haven’t the skills to put that together. I think the key with that is to be humble and admit that what you have managed so far doesn’t stretch to that. You also risk getting into an arguement with the Dragons about the figures. If you avoid projections all together and focus on the above elements I think you have a much better chance.
So there you have it:
IP protection+ evidence of the market + a decently designed product + an investable character + some basic figures = A strong chance of investment
The Idea Launchpad 