My Dragons’ Den experience: From ‘prank’ call to being on the telly
John Readman, co-founder of cycling tourism company Ride25 – a Startups 100 company – reveals the inside story of his Dragons’ Den appearance
Ride25, for those who don’t know my business, is a cycling tours company that takes large groups of cyclists of all abilities to some of the great cities of the world such as Paris, Geneva, Milan, and Rome. Eventually, our 25 tours will chart a course from London to Sydney in Australia, realising the dream I and my co-founder, entrepreneur Rob Hamilton, set out with.
Now, I’m normally a cheeky chappy and rely on my personality and humour a lot in business, but my Dragons’ Den experience was something else.
You may have seen me in action on the show by now, but the 10-minute edit you see on screen was just a fraction of what went on behind the scenes. For those thinking about Dragons’ Den as a route to raising money, getting a celebrity entrepreneur backer, or just gaining some publicity, read on before you request the application form.
The call from the BBC
I’m a cynical entrepreneur, so when I got a call from a BBC producer saying they’d like my business to pitch on Dragons’ Den, I thought it was a mate winding me up and told the caller where to go. After their insistence it was genuine I took his number and called back. Turned out it was the real deal.
Apparently, the BBC had spotted Ride25 on Startups.co.uk and elsewhere and noted that we’d already got some recognition, such as our 68th position in the Startups 100 index of the UK’s most exciting new businesses.
Flattery, it seems, gets you somewhere as we ended up applying. Nevertheless, I was reluctant. Why? I didn’t want to pitch Ride25 on Dragons’ Den and be made to look a fool. By now – as this piece went live the moment the show finished – you’ll have been able to make your own mind up!
Thing is, I’d actually stopped watching the show for a couple of years. Duncan Bannatyne had really turned me off it.
I’d also heard that the BBC routinely goes round venture capital houses asking for businesses that have been rejected by investors because they were not investible. Thinking about it now this is probably a sensible place for them to look as VCs often reject earlier stage businesses because they don’t yet have the traction to warrant institutional interest – but do need the money!
Still, I thought about it, weighed up the potential PR exposure, the possible expertise of a Dragon or two if they were to invest, and to a lesser extent the money, and was persuaded.
The application process
I can honestly say I don’t know why people appear on the show and don’t know their numbers if our application experience was the same as everyone else who makes it through. It was rigorous to say the least.
Bank statements, directors’ CVs and backgrounds, customer testimonials and references, proof that we own our domain names and have permission to use our branding and trademarks, were just some of the things we had to submit.
Preparing our lever arch file of information was as demanding as the due diligence process I’d been through as part of a management buy-out a few years back.
Ultimately, just 80 of the 100 who are filmed make the final cut each series – and many more fall at the application stage, so making it to the studio is an achievement in itself.
The preparation for the show
I was confident about our proposition and the numbers, but knew that to get the best result possible we had to do our prep.
Overall there wasn’t a Dragon who stood out above all the others for us. We researched cycling ‘hooks’, plus any related experience that might serve our business.
Charity is an incredibly important aspect of what all Ride25 bike tours achieve, so Deborah Meaden’s charitable work in Africa, her experience in tourism and travel, and her ability as a marketer all stood out.
Nick Jenkins’ online experience from starting, growing and selling consumer-focused gift card site Moonpig.com for around £45m would have offered invaluable expertise in reaching consumers – we’re a business-to-business focused brand at present. Rob and I also gained all of our experience in B2B. Nick Jenkins also has an active interest in cycling events.
And Peter Jones’ little (or big) black book of contacts, his longevity on the show and public profile might have helped enormously in the way he helped to put Levi Roots’ Reggae Reggae Sauce on the map.
We found out that Sarah Willingham’s husband is a keen cyclist, but her experience of running the – unrelated to pedal power – restaurant chain Bombay Bicycle Club was as close as we got to finding a natural fit.
And then Touker Suleyman owns a stake in Bikesoup, an online marketplace for new and used bicycles, but specialises in making money from buying stuff in China and elsewhere, then marketing it in the UK.
Ultimately, we would have been happiest with two Dragons on board to build our profile, with Meaden, Jenkins and Jones top choices.
The Dragons’ Den pitch
We pitched for £250,000 for a 25% stake – but the investment would have converted to a loan, with the money paid back with interest. This is how Rob and I invested in Ride25 from the outset and we felt it only right and proper to offer the same terms.
The figure sought was always likely to be an issue. There have been very few deals made at that level – one I believe. BBC producers tried to persuade us to reduce our demands prior to pitching and it’s possible we may have got it had we gone for less.
Nevertheless, we ploughed on regardless. We high-fived in the corridor beforehand, made an eye-catching entrance cycling around the studio in our branded lycra, handed the Dragons branded Ride25 shirts with their names on as well as caps, and I got ready to stand up to scrutiny.
And scrutinised we were. With my legs shaking I fielded a battery of questions from the very serious, professional and stony-faced Dragons. Deborah Meaden immediately fired a question about the £1m valuation. I explained that I wasn’t valuing the business at £1m but £750,000. The £1m would be a post-money valuation if I managed to successfully pitch to them.
How had I come up with the valuation? It was based on our turnover and the gross profit achieved from sales per rider, per event. It was a simple and standard equation – a multiple of five times our run-rate of £150,000 gross profit. If anything was a little racy it was using the run-rate rather than the previous year’s figures, but this was all contracted bookings – we knew how many people were due to go on tours and what the gross profit would be for 2015 already.
What is more, we have a repeatable and scaleable business where 80% of the business we do comes from corporate customers, including Google, DTZ, Liberty Global, Facebook and Vodafone. We’ve organised bespoke tours for the Royal Air Force and double-Olympic champion Dame Kelly Holmes’s Trust. And we’ve struck deals with Brompton Bicycles, Strava for mapping software, and the world’s largest cycling paraphernalia site Wiggle for marketing.
I was asked what we do for the charities Re~Cycle and 1moreChild, about the bikes, and so much more. In total I faced a grilling for an hour and a half, but on returning to the team I was convinced I’d only been gone 25 minutes. It seems my military training as a youth helped me to stand on parade without wilting under the glare of the spotlights. The only shrinkage may have occurred from choosing to wear lycra for the Dragons’ roasting, although I don’t feel I got chewed up and spat out.
While I’ll willingly admit it’s one of the hardest things I’ve done – and I’ve done a lot of public speaking – I was told that we have a good business, to keep what we’re doing, but (oddly) not to be so ambitious!
Touker Suleyman pointed out that we take a deposit up-front and don’t pay our costs until the event, so why do we need the money. It was a fair question and my co-founder Rob would also be in a position to invest following the sale of his web-based office rental marketplace Instant Offices. In fact, we deliberately chose not to talk about Rob’s business success as we didn’t want to distract the Dragons and their focus on our business. Rob also had no interest in making a TV appearance.
I hope the argument for our decision to appear on the show will be borne out in other ways thanks to the publicity we hope to gain.
The post-pitch activity
First, one small ‘gripe’! Evan Davis doesn’t do the post-pitch interviews – you speak to a camera and he films his links in his own time (clearly too expensive to have on-hand all day!).
On that note, I must commend the BBC for providing own-brand chocolate and instant coffee from a well-known supermarket. Disappointing as it might be to taste, at least we can all rest-assured licence fee payers’ money is not being squandered on high-priced fripperies.
And given we – and the Dragons – were there from 8am to 6pm at night, with the Dragons filming four or five pitches a day for three or four weeks, there’s a good deal of time and effort put into the show.
Moving on, how have we sought to make the most of the experience? The biggest thing we’ve done is lots of housekeeping. What does this mean? We busily updated images on the site, on our Facebook pages, made sure our blog was looking good, got recommendations from customers and I tidied up my LinkedIn page. These are all fiddly bits I’d been putting off.
We also stress-tested the site to take another 3,000 visitors at once, using software to simulate the likely impact. From experience I’ve Googled companies on the sofa on my iPad or mobile only to find their site had crashed. With foresight I’d hope the same fate won’t befall us.
There will be no special offers as we have no reason to devalue the brand, but we’ll issue a press release this week about our bookings and partnerships for 2016. Any opportunity we can take now to wring every last drop of benefit out of the appearance will be taken.
The next bit?
I’ll probably come back and update this at some point, as I’ll be fascinated to see how our appearance on Dragons’ Den has a longer-term effect on the business – good or bad.
Having been on the show, it’s easier to reflect now. For example, I know that individually the investment was too high for the Dragons and as money wasn’t our primary motivation for appearing, we could arguably have made our offer ‘too good to refuse’.
Is there anything to stop a business owner going on the show seeking £1 for a 10% stake if they feel the profile and expertise are what they need? It would clearly have had no residual effect should the company be sold in future. A lesson learned perhaps – or perhaps not.
After all, we’re in a strong position and growing nicely. We’ll continue as we are in terms of the B2B focus that has so far enabled us to pay the bills.
Are we glad we did it though? Too right. I’ve changed my view of the show in many ways. It was eye-opening and from a geeky point-of-view I now can’t wait to watch the web analytics to see what impact it has. I hope I’m not disappointed!
John Readman is the founder and CEO of cycling tours company Ride25.