Back in November I described an event, held by the Edinburgh and East of Scotland branch of Business Forum Scotland, as a cross between Dragons’ Den and that modern boy meets girl phenomenon known as speed dating.
Officially called the “Hi-growth, Speed-pitch Challenge”, the idea was to give five directors of small, relatively new businesses the chance to compete for a prize of £500 through a ten-minute window – five minutes addressing a large gathering of members and the other five answering questions put by members of a special panel of five business angels.
Once the pitches were completed, the audience (and panellists) choose a winner through a secret ballot.
The successful candidate that evening was Cally Russell of Mallzee, the trade name for an app dedicated to shopping for clothing and footwear online (although my own vote went to another contestant).
In an impressive pitch, Cally clearly won over many in the audience with his claim that the app simplified life for online shoppers by fine-tuning their clothing and footwear desires and requirements, thus taking away the need for constantly switching between numerous retailer websites and also reducing transaction times.
Last month, Cally – son of Mike Russell, the SNP MSP and former Holyrood cabinet minister – was a contestant on the real Dragons’ Den, seeking a £75,000 investment in Mallzee for a 5 per cent stake in the business.
Four of the five Dragons, while impressed by the concept, took the view that Mallzee was not worth a 75 grand punt, so it came as some surprise when Peter Jones said he would provide all the money but for a stake of 20 per cent.
The young entrepreneur hummed and hawed for a bit before turning down the proposal, even though Jones offered to reduce his stake to 15 per cent once (or if) he had got his £75,000 investment back.
Cally was quoted as saying immediately afterward that he “really could have made a bad decision” and spoke about the temptation of forcing open the door of the famous industrial lift and returning to the Den to plead a change of mind with Jones.
However not long afterwards Cally revealed that he had signed a deal with Samsung UK and Ireland, under which Mallzee will be available on Samsung Galaxy apps and other channels during 2015.
Alluding to the refusal of his fellow Dragons to invest, Jones said that Mallzee was worth either “£100 million or nothing” and that one had to be “ballsy” to invest in it.
Some might say that the young Scot also showed a lot of “balls” in turning down Jones’s offer but on the other hand was his firm stance assisted by a presumption that a deal with Samsung was on the cards?
With the Samsung deal and earlier backing to the tune of several hundred thousand pounds from angel investors, Mallzee would no doubt have passed the due diligence test which follows every offer that comes out of the Den.
However it was recently revealed that more than 50 per cent of the investments agreed on screen actually fall through, because those pitching for money have been either over-confident or less than honest about the financial structure of their ventures.
It was also said that many of the contestants are not looking for investment from the Dragons but simply see the programme as a platform to display their wares – perhaps to controllers of funds groaning with cash who are prepared to lend money rather than seek a stake in the business. Others, clearly, are owners of failing businesses for whom Dragons’ Den is a last throw of the dice.
Although the brinkmanship shown by Cally Russell appears to have paid off, I often sit in amazement at the values some contestants put on their companies and their refusal to understand why a Dragon might want 20 or 25 per cent to justify the investment risk rather than the proffered 5 or 10 per cent. In fact invariably I find myself screaming at the box: “You idiot! Without this offer of investment your company is going nowhere. Don’t you realise that 75 per cent of something is better than 95 per cent of nothing?!”
As for those who pitch what are essentially lifestyle businesses which might tick over nicely but will never make a fortune: why don’t they just get a job in the public sector with its generous holidays and sick pay scheme?
This should give them sufficient free time to supplement their income with profits from the business while enjoying the security of a regular monthly pay cheque and the reassurance of an index-linked pension in retirement.
TWEET QUOTE – BUT WHO EXACTLY?
Every competent reporter – whether engaged in gathering the news of the day or working in a more specialist field such as business – has (or used to have) an extensive book of personal contacts.
Contacts are, or were, essential to the reporter for two reasons: i.e. they supply information or comment which either engenders a new story or adds gravity to a story already being worked upon.
Maintaining this book used to mean keeping in regular touch with contacts, either personally (over lunch, a few drinks or just a cup of coffee), making regular telephone calls, or using the relatively-recent medium of e-mail.
But it would appear, sadly, that some journalists no longer feel the need to keep a healthy contacts book but instead are happy to scour Twitter (or Facebook) for comment on a story, whether it’s about the Budget, the latest escalation of the crisis in Ukraine or an episode of Coronation Street that has caught the imagination of the nation’s telly-viewers.
For a while this seemed perfectly logical when Tweets from senior politicians, Premiership footballers or Hollywood stars on topical issues of the day could be accessed through the click of a mouse. But now this has extended to total nonentities among the general public.
For example, coverage in one national newspaper (the paid-for printed version not the free website) about the identity of the killer of Lucy Beale in EastEnders was liberally sprinkled with Tweets from disgruntled viewers. But who these people were, what jobs they did, what marital status they held, what age they were and which part of the country they came from was not explained. Yet this used to be staple information in stories of this type – e.g. “Mrs Nora Simpkins, a 44-year-old mother of three from Milngavie, who works as a bank teller, said…”
Is this a reflection of further cost-cutting in newsrooms and the pressures reporters are under to get out a story against a backdrop of ever-tighter deadlines; or just lazy journalism?
Either way, it certainly appears to be another reflection of the waning power and gravitas of the contemporary Press.