Pam and Graham Bavington pitch Hee-Haw Horseradish to the Dragons on CBC's Dragons' Den

(from left)Pam and Graham Bavington of Hee-Haw Horseradish. 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 9, the show’s Holiday Special, featured a family firm with a hot product, a swift solution to homeowners’ winter weather woes and a rocky pitch that ended with a lump of coal.

Hee-Haw Horseradish

Entrepreneurs: Graham & Pam Bavington | From: Victoria, B.C. | Ask: $75,000 for 15%

Manufactures and distributes a line of horseradish condiments

Early-stage entrepreneurs often focus their time and resources on the quality of their offering. Perfect that, the thinking seems to go, and the other half of product-market fit will follow. It’s an understandable but costly mistake. “You’ve got to have demand from customers for it,” says Jim Treliving. “You can create a great product, but if nobody wants it, it doesn’t matter how [good it is].”

When Pam and Graham Bavington pitched their business in the Den, the Dragons were impressed by both the product and market proof they were presenting. The couple’s Hee-Haw Horseradish line had done $105,000 in sales over the preceding 12 months, and they projected that would grow to as much as $380,000 for the following year. Michele Romanow opened the bidding at $75,000 for 20%, before Joe Mimran, Treliving, and Manjit Minhas all matched the Bavingtons’ original ask; they took the latter’s deal.

In 11 seasons of Dragons’ Den, Treliving has seen plenty of pitchers who got the balance wrong. “People keep going over the same thing again and again and again, spending money on nothing—there’s no sales,” he noted in an exclusive interview before the episode aired.

The Bavingtons clearly didn’t have that problem, achieving their impressive revenue figures with an investment of only $10,000. “You guys have come very far with a shoestring budget, and in a very short amount of time,” Minhas told them on the show. “Obviously the product speaks for itself.” Hee-Haw is listed by some major Canadian retail chains, but like many businesses appealing to consumers’ craving for all-natural, local foods, it got its start at farmers’ markets. “We sell a jar … every 50 seconds,” Graham Bavington told the Dragons, joking that he’d been forced to turn the company’s booth over to his daughter because she was quicker.

Post-taping, Treliving notes that while he looks for more proof of demand than success at a few farmers’ markets—he won’t invest unless a product has national appeal—early-stage businesses do benefit from those kinds of opportunities. “It’s more for the entrepreneur than anything else,” he says. “I think it’s a great idea to go to these markets and see whether the public will buy it.”

Whether it’s a farmers’ market booth or a small online store, your early traction—or lack thereof—will show you whether your idea is actually worth pursuing. “If it’s not working, then it’s probably not going to work,” says Treliving. “If your sales are just mediocre and they’re not going anywhere or are [declining], but you keep doing the same thing thinking you’re going to break [through]—it just doesn’t happen.”

So rather than tinkering and tuning your product to get it just right, go out and see how it fares in the real world. “Is there a demand for it?” asks Treliving. “That’s really what you have to do when you’re starting out, is to test it.”

Good Luck Sock

Entrepreneurs: Yuri Gerchikov & Leo Shifrin | From: Edmonton | Ask: $200,000 for 10%

Distributes and retails socks

Does this trend have legs?: Yuri Gerchikov and Leo Shifrin count hipsters, accountants and even prime minister Justin Trudeau among the wearers of their novelty socks. But the Den’s fashion legend had some concerns about the longevity of their business. “Once there’s a trend, then all of a sudden everybody piles on,” observed Joe Mimran. “And they pile on so hard that the consumer overloads, and then they don’t want to see it again for a decade or two.” There will always be a market for socks, Shifrin countered. Early returns were promising—Good Luck was projecting $600,000 in revenue for its third year in operation, with high margins. The company’s sales growth convinced Michael Wekerle to make an offer: a 10% royalty, converting to a 15% equity stake once the capital was paid back. Michele Romanow proposed the same royalty, and 20% of the company, while Jim Treliving wanted a third share. Despite his reservations, Mimran also made an offer, at a 5% royalty and 20% equity stake. “This trend has been sustaining itself very nicely over the last few years, and there’s probably another two, three years left,” he said. After some negotiation, the pitchers got both Romanow and Mimran in at the latter’s terms.

Little Box of Rocks

Entrepreneur: Kiera Fogg | From: Winnipeg | Ask: $50,000 for 10%

Distributes a novelty gift product

Don’t look a gift rock…: Millennials’ supposed distaste for traditional tokens of affection like flowers and chocolate inspired former model and singer Kiera Fogg’s earthy alternative. Some of the Dragons were skeptical. “Does anybody want a box of rocks?” asked Michele Romanow. Fogg’s rock ‘bouquets’ had attracted positive attention from celebrities Gwyneth Paltrow and Cameron Diaz. But that exposure hadn’t translated into sales, in the Dragons’ estimation: Little Box of Rocks had made just $80,000 before Fogg entered the Den, with $50,000 of that coming in December 2015, when Paltrow featured the product on her Goop lifestyle website. The company’s valuation, coupled with concerns over the way Fogg had calculated her growth rate, didn’t help her chances of a deal. But Joe Mimran recognized the product’s appeal. “My wife loves collecting crystals, and she believes that they hold magical powers,” he said. He offered $50,000 for a 25% stake. That was too much dilution for Fogg. Her hesitation didn’t sit well with the other Dragons. “Kara, you need Joe—trust me,” counselled Jim Treliving. But Fogg wouldn’t go higher than 15%, and Mimran wasn’t willing to deal.

Winnipeg and Canada Plow

Entrepreneurs: Bryce Brousseau & Peyman Assadi | From: Winnipeg | Ask: $70,000 for 12.5%

Operates a driveway clearing service

Fast, good, cheap—pick all three: Winnipeg winters proved the perfect proving ground for Bryce Brousseau’s snow-fighting machine. The company claims its equipment can clear a driveway in as little as 15 seconds, with prices starting at $349 for an entire shovelling season. The Dragons were suitably impressed. “It’s too cheap,” said Manjit Minhas. “I pay more than that per month at home.” Plenty of customers seemed to agree—the company had made $550,000 in revenue from four machines in its local market the previous winter, and was projecting $1.8 million for this one following an expansion to Regina and Saskatoon. And the Dragons could see the potential for expansion. “The key difference here is speed, which allows you to make so much better use of your people, which allows you to make more money,” said Michele Romanow, though she was the only investor not to make an offer. Joe Mimran and Jim Treliving both matched the pitchers’ ask, while Minhas proposed $150,000 for a 20% stake. “I do think you need more money, because you need to do this fast before anybody else comes into this market and discovers how lucrative it can be,” she said. Wekerle concurred, and offered $200,000 for 25%. Brousseau tried to get all four in on the deal, but when they proved unwilling, the pitchers shook hands with Minhas.

Treemote

Entrepreneurs: Martin & Shelby Schenk | From: Victoria, B.C. | Ask: $100,000 for 10%

Manufactures and distributes a remote for Christmas tree lights

Sales can turn doubters into backers: When the Schenks pitched their remote switch in the Den two winters ago, they got a frosty reception. “It’s only the fact that it’s shaped like a Christmas tree that gives it a point of difference, and I’m not sure that’s going to be enough to gain traction with the public,” then-Dragon David Chilton told them. Consumers clearly thought otherwise—in between appearances on the show, the Treemote had been listed by Canadian Tire, Home Depot, Best Buy and others, and Martin Schenk claimed the company was on track for $1 million in revenue for 2016. But not all of the Dragons were convinced. “You guys have got a single SKU, seasonal product,” observed Michele Romanow. “How do you grow this business beyond just Canadian and U.S. retailers?” By expanding to Europe, where Treemote was seeking IP protection for its product, said Schenk. Manjit Minhas was skeptical. “That patent’s really not worth anything,” she said. “The next generation of this absolutely will be doing it on your smartphone.” The $600,000 the Schenks had invested in the business also worried her. But Michael Wekerle—who in Season 9 had memorably dismissed Treemote in verse—made an offer, matching the pitchers’ ask. They took the deal.

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