Praveen Udagani pitches Flaxy to the Dragons on CBC's Dragons' Den

Praveen Udagani of Flaxy. Photo: CBC

More than a decade in, Dragons’ Den continues to inspire and amuse Canadian TV audiences. But the CBC’s hit show isn’t just meant to be entertaining. It’s a televised school for entrepreneurs. For each episode of Season 11 (which airs Wednesdays at 8 pm ET), we’ll be talking to one of the Dragons to get a behind-the-scenes glimpse of their decision-making process and hear what they hope viewers learned. And we’ll be examining the pitches for smart strategies and useful tips that entrepreneurs can use to make their own businesses better. Episode 14, the Canadian Dream special, featured three products trying to bridge the healthy-tasty gap, and the potential Uber of tooth cleaning.

Flaxy

Entrepreneur: Praveen Udagani | From: Mississauga, Ont. | Ask: $50,000 for 20%

Manufactures and wholesales flaxseed-based food seasoning

Contrary to the popular entrepreneurial adage, you don’t actually have to spend much money to make money. “You can always do things the $5 way or the $500 way,” says Michele Romanow, who’s built several companies on slim startup budgets.

Praveen Udagani certainly didn’t need a lot of capital to get going. The entrepreneur turned his mother’s recipes for ground flaxseed into substantial sales with an initial investment of just $28,000.

That’s “peanuts” says Michele Romanow, especially for the consumer packaged goods sector. “He had just been so capital efficient.” Udagani’s thrifty approach wasn’t the only thing that impressed her. “The problem with flaxseed is no one likes to eat them, [but] his product is super, super-tasty,” says Romanow. “I get tons of products from Dragons’ Den, [but] his I have every single morning with my cereal.”

The other Dragons seemed to like what they tasted as well. Flaxy sparked a bidding war. Michael Wekerle, who usually avoids products with expiry dates, made an exception for Udagani, matching his ask. Manit Mihas went next, proposing the $50,000 for a 15% stake, and Romanow joined her bid. And though Jim Treliving tried to undercut them with a 10% offer, it was Minas and Romanow who got the deal.

Health-conscious consumers have long been aware of flaxseed, of course, but Udagani managed to make it tasty. “This is the only flaxseed that I’ve ever been able to eat straight,” said Minhas. Just as importantly, Udagani made the crop functional, creating sweet and savoury ground forms that can be added to meals. “Eating healthy is really about making it very easy,” observed Clearbanc co-founder Romanow in an exclusive interview before the episode aired. “[Flaxy is] not a cereal, it’s really like a topping. There’s a couple of unique ways to incorporate it into food.”

While good-for-you products are certainly on-trend, you need more than a timely idea to be successful. “It’s not great until he gets the distribution, figures out sales and marketing—all of that type of stuff,” says Romanow. “You still have to build the business.” Udagani is a one-man operation, handling everything from procurement and manufacturing to packaging and distribution. Romanow praised his do-everything philosophy. “That’s how I started.”

Shiny new equipment and fancy offices aren’t what make a startup successful. Operating within your means at the beginning is key. Take the bags a product hits store shelves in. There’s no need to commission a bespoke shape and size if something readily available will do. “Do you need brand new packaging?” Romanow asks. “Can you use pre-existing stuff and see if the customer likes it?” While branding and marketing matter, the goal is to grow a following, not simply to show off how much money you’ve spent.

Since the Den appearance, Flaxy hasn’t needed much by way of capital, but Romanow says she and Minhas have been providing advice and assistance, and she still considers the deal to be in due diligence. And she continues to be impressed by Udagani. “He really put his heart into this.”

Oatdeal

Entrepreneurs: George Barrerras & Hiscay Rivera | From: Saskatoon | Ask: $250,000 for 25%

Manufactures and distributes oat-based smoothie mixes

Look further afield: George Barrerras and Hiscay Rivera’s “oatmeal in a cup” may be nutritious, but it didn’t go down well with all the Dragons initially. “The mouth texture is not my cup of tea,” said Manjit Minhas. But shoppers seemed to feel differently—Oatdeal had done $185,000 in sales the previous year. And the couple were eyeing a much bigger potential customer base. “We started this business because we wanted to target the Hispanic market,” Barrerras explained. “It’s a huge market in the U.S. [and] this is a product they know.” Minhas saw the opportunity. “I didn’t love the taste of your product, but I don’t think I’m your clientele,” she said, offering the $250,000 for 30%. Jim Treliving, meanwhile, matched the pitchers’ ask. Barrerras ultimately convinced them to go in together at Minhas’ valuation.

Otimo Brazilian Style Cheese Puffs

Entrepreneurs: Silvia Martinelli & Bruno Waqued | From: Maple Ridge, B.C. | Ask: $65,000 for 20%

Manufactures and distributes Brazilian snacks

Mind the trend: The Dragons deemed Silvia Martinelli’s take on a favourite snack from her homeland delicious, but not all of them liked what they saw on the product’s ingredients list. “There’s no nutrition in there,” said Manjit Minhas. Nor in beer, shot back Boston Pizza owner Jim Treliving. “I love cheese, I love flour,” he said. “We’ve done okay with that kind of stuff.” But Michele Romanow thought Otimo was on the wrong side of consumersÆ shopping habits. “Everything in the frozen aisle is in decline, because people are looking for fresh food,” she said, citing her experience working with food companies at previous venture SnapSaves. Otimo was launching a DIY dry blend, Martinelli responded. But none of the Dragons proved willing to go against the trend, and the couple left without an offer.

Smiles on Wheels

Entrepreneur: Balbir Sohi | From: Brampton, Ont. | Ask: $40,000 for 10%

Franchises mobile dental hygiene operations

Convenience is key: Dental hygienist Balbir Sohi has taken her practice on the road, offering cleanings anywhere she can find a parking space for her van. She’d made $165,000 in the 12 months before entering the Den, working part-time. But that wasn’t the limit of her ambition. “I want to franchise it [and] have a fleet across Canada,” she explained. One Dragon saw huge potential if Sohi tweaked her model. “Is there a way you can offer this on-demand, so it’s like you’re calling an Uber except you’re calling a teeth-cleaning?” asked Michele Romanow. Lots of customers have expressed an interest in such as service, Sohi confirmed. Michael Wekerle made the first bid, asking for 2% of franchise fees for 10 years in addition to the original 10% equity stake on offer. Manjit Minhas went next, matching Sohi’s terms, and Romanow proposed the same deal. But it was franchise king Jim Treliving who won the bidding, proposing $240,000 for a 25% stake.

Jal Gua

Entrepreneur: Emmanuel Jal | From: Toronto | Ask: $100,000 for 5%

Manufactures and distributes grain-based “superfoods”

Mind your multiple: Emmanuel Jal’s sorghum and moringa mix is nutrient-rich and fat-light, a combination that should appeal to health-conscious consumers. “I love sorghum,” said Manjit Minhas. “I make gluten-free beer with it. It took me two years [to] make it taste good, though.” Recording artist Jal’s product needed some work to pass the taste test, she suggested. With monthly revenues of $10,000 and 30% margins, the company was making good money—just not good enough to justify the $2 million valuation its creator had placed on the business. “You’re getting good cash-flow from this, if you keep doing what you’re doing,” observed Jim Treliving. Minhas made the only offer, the $100,000 for a 25% stake. Jal tried to negotiate her down, but when she wouldn’t budge, he walked away from the deal.

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