Dragons’ Den Season 3 episode 1 review

(Cross posted at Kempton with possible additional readers’ comments)

The following are my brief reviews and comments on the Dragons’ Den Season 3 episode 1 pitches/ideas. The lead-in description sentences are from CBC.

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The Dragons’ dynamics between Arlene, Brett, Jim, Kevin, and Robert works out nicely.

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Fit 2 Touch – by Peter Pereira and Edna Melculj from Mississauga, ON

They are personal trainers who were making a workout DVD designed for couples when they ended up falling in love.

- Asking $100,000 for 50% of business. $24.99 per DVD. Sold 300 so far.

The couple are cute to look at but cute couple doesn’t mean there is a viable business.

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KickSpike – by Darrel & Colleen Bachman from Penticton, BC

They have invented a golf shoe which solves the problem of ruined greens due to spikes.

- $1 million for 10% of business.

- Entrepreneurs claim to have obtain a solid worldwide patent.

* Final deal is five dragons split $1 million for 30% of company ** contingent ** on the entrepreneurs getting a licensing deal.

* I want to make a special comment on Brett making an initial deal of 25% and the discussions that came after. Ultimately, Brett asked the entrepreneurs if they would let him off that deal and have a new deal with all five dragons for 30% of the company, a potentially better deal with more expertise. It is important for Brett and I think it is the right thing to do in asking for the entrepreneurs’ release.

* Now, this deal is “contingent” on getting a licensing deal first. To me, it is very close to a risk-less “investment”. There is no investment, no money down, when there is no licensing deal.

I won’t mind investing $1 million for 30% of someone’s lottery tickets ** contingent ** on one of the ticket is a winning $30 million ticket. :)

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Kuli Kuli – by Pedro Baquero from Toronto, ON

Pedro invented this booty-shaking game after watching videos on MTV.

Big smile but not a business at all.

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Bee Gone – by Tom Filler from Kitchener, ON

Tom has come up with a unique approach to getting rid of bees.

Asking for $50,000. No go at all.

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Pizza Pak – by Ron Fisher from Toronto, ON

Ron has designed a plastic pizza case that would replace cardboard boxes and help reduce waste.

Asking for $500,000 for 50%

Unworkable idea. Not worth my time to review and critique it. Jim said it all, returnable pizza box is a no go.

Very sad that Ron just doesn’t get it even Jim gave him a straight forward critique.

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Wrinkles – by Shari Petro from Milton, ON

She has written a reality book for kids from the perspective of her pug dog, Wrinkles.

* $100K for 30%

* Oh, no. An entire business empire based on the dog Wrinkles. No go. Forget about it. Not really a business.

Kevin is toying with the entrepreneurs, as he likes to do it sometime. Bad habit dies hard, I suppose.

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The Litter House – by Daniel Dykens & Robert English from Orangeville, ON

They have created a deluxe cat litter box that keeps mess & odour contained.

- $100,000 for 10% of business

Cute cat. But simply bad business. Worked on it for 8 years? a cat house for $80. Not a good use of time.

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Hybrid Backpack – by Aphirath Vongnaraj from Winnipeg, MB

Aphirath has invented a backpack which can be attached to a bicycle.

$2 million for 30%. No good. And just bad.

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Softshell Computers – by Raul Rupsingh & Steven Breath from London, ON

They are software engineers who have developed an interface for seniors to send & receive email & photos.

- 200K for 30%

- Touch screen. User interface. Beta tester use it for 10 months.

- Arlene, Jim, Robert – 200K for 50%. They’ve got connections.

They see a business in this but I don’t. I guess thats why they are investing in it and I am not. :)

Learning from Warren Buffett

This entry is not about Dragons’ Den but I suspect many entrepreneurs go into businesses to try to make some money and want to be “rich” one day.

Warren Buffett is one of the richest men and one of the smartest investors in the world, and I think there is much to be learned from him. There is a new biography about Warren to be published tomorrow (Sept 29, 2008), here is my early review of the book. Hope you enjoy it and learn something from it.

Kempton’s Review/Best of “The Snowball: Warren Buffett and the Business of Life”

Some videos to watch before DD starts in 2 days

Here are some fun and cool videos to watch before CBC Dragons’ Den is to start in 2 days.

Two more weeks till Season 3

Wow, it is only two more weeks till Season 3 of CBC Dragons’ Den starts on Sept 29th, 2008. I am very much looking forward to watching and reviewing some pitches and businesses.

Now, may be I am too strict on this (I think I am stricter than CBC), here is what I have been telling Dragons’ Den entrepreneurs who want me to feature them before the season starts.

In keeping with my “tradition” of not featuring any entrepreneurs (whether they will surely be on TV or not on TV), I am sorry that I won’t be able to feature your business. [...]

As I have been telling all aspiring Dragons‘ Den entrepreneurs that I’ve come into contacts with, I admire every single one of them as they had taken the challenging first step to try to create a viable business. Some will be more successful than others, but that is the nature of business.

First Tax Fraudster on Dragons’ Den

Well, this is a case that shows why due diligence is extremely important. I just noticed that Vancouver Sun has reported in June 2007 “Promoter of SmartCD nailed for tax fraud, fined $75,000“.

I remember when I spent 2+ hours to do my due diligence/research on SmartCD (see my season 1 episode 5 review), I wrote as bluntly as I could without getting myself in any potential legal trouble of saying the SmartCD technology is likely unworkable. Well, I guess CRA found out what really happened (excerpt from Vancouver Sun report),

The [Canada Revenue] agency said that to generate refunds under the federal Scientific Research and Experimental Development program, Ross submitted $385,359 in expenses he claimed had been incurred by his company, Systemhac Corp., which is developing the SmartCD.

These expenses included payments to employees who never received the money, and photocopies of cheques and invoices that proved to be forgeries.

During a search of Ross’s home and the offices of his accountant, CRA investigators found a cheque that had been altered with correction tape. Photocopies of that cheque had been provided to CRA to support Ross’s tax credit claim. Had the claim been accepted, the company would have received a $134,876 tax credit to which it was not entitled.

On June 4, Ross pleaded guilty to one count of tax fraud in Robson Square Provincial Court. On Tuesday, he was fined $75,000 and given a 12-month conditional sentence.

Here is a YouTube clip of Arie Ross’ Dragons’ Den contest entry.

Here is Arie in “happier” time.