In cultures around the world, dragons are considered fearsome beasts with mysterious powers. Some fly and breathe fire. Others can talk—and they’re usually wiser than humans.
Whether or not they’re smarter than the rest of us, the millionaire Canadian stars of Dragons’ Den have a magic all their own. After they hear an entrepreneur’s pitch, they seem to have the power to make things happen—whether they invest in a company or not.
PROFIT caught up with at three entrepreneurs who appeared on the Den last season to find out what has happened to them since. As you’ll see, Dragon magic takes many forms.
Janac Sportswear, Burlington, Ont.
Product: sports bras and prostheses for breast-cancer survivors
Janet Cockburn couldn’t believe her ears. Under the glare of the studio lights, the Burlington, Ont. bookkeeper had just asked the Dragons to invest $50,000 for 20% of her company, Janac Sportswear. Given Cockburn’s business—producing sports bras and prostheses for breast-cancer survivors—the five investors had been polite. But one by one, they all turned her down. The time had come for Cockburn to walk away empty-handed.
But Cockburn stood still, smiling, facing down her Dragons. An instinct told her that this wasn’t the way this adventure was supposed to end. For five long seconds, maybe 10, she waited.
Finally, Laurence Lewin of La Senza, a national retailer of intimate apparel, broke the silence. “I think we should help in some way.” He offered to invest $25,000 in Janac if another Dragon would also put up $25,000. After a pause, the sole female Dragon, Arlene Dickinson of Calgary-based Venture Communications, took up the challenge.
Cockburn was thrilled. But as happens so often in business, the final negotiations took a turn she didn’t anticipate. Still, her appearance on Dragons’ Den has offered other happy endings.
Now in her 50s, Cockburn was diagnosed with breast cancer in 1995. After a mastectomy saved her life, she slowly returned to more active pursuits, including joining a dragon-boat rowing team composed of breast-cancer survivors. Her teammates had one other thing in common: a hard time finding a sports bra that would fit them properly following their breast surgeries.
Cockburn, an amateur sewer with business knowledge, had been persuaded by her rowing mates to create a sports bra for cancer survivors—one that would “even out” the wearer’s form after a mastectomy and cloak any scars. She took up the challenge, and by 2003 she had found a manufacturer—Hamilton-based Niko Apparel Systems—to produce 12 prototypes. The entire rowing team met in her home to try out the bras and offer feedback, and Cockburn found herself in manufacturing.
Like most entrepreneurs, however, Cockburn was undercapitalized. Selling through individual boutiques and her own website, she managed first-year sales of $8,800 in 2004 and $25,000 by 2006. Meantime, she continued innovating, coming up with a superior prosthesis to take the form of a woman’s missing breast. Filled with a type of bean used for stuffed animals, the “Been-a-Boob” is lighter, more comfortable and much cheaper (at $35 to $65) than rival silicone prostheses.
Cockburn auditioned for Dragons’ Den, hoping to raise $50,000 to boost her marketing efforts and penetrate the U.S. market. She particularly hoped to attract Lewin, for La Senza’s retail clout, and Dickinson, for her marketing know-how. And with the two Dragons signing on, Cockburn left the CBC studio in May 2007 feeling happy.
But even when the show aired six months later, her Dragons still hadn’t called to close the deal. Finally, Dickinson’s lawyer requested Janac’s income statements to begin the due-diligence process. When the final negotiations began, Cockburn found her deal had vanished. Instead of investing $50,000 in return for equity in the Janac, the two Dragons proposed a $50,000 loan—interest-free, and repayable only when she hit certain income targets. And $12,500 of the loan would take the form of 100 hours of free marketing services from Dickinson’s firm.
Cockburn considered walking away, but decided that Dickinson’s help was worth paying for. The deal finally closed in June—more than a year after the taping. Venture Communications staff immediately embarked upon a rebranding proposal to sharpen up Janac’s image. Although Cockburn was disappointed by the disappearing deal, she learned an important lesson: everything is negotiable, always.
Cockburn’s appearance on Dragons’ Den created a wave of publicity for Janec. And U.K. sales have taken off since Nicola Jane, a specialty retailer catering to breast-cancer survivors, started carrying the Been-a-Boob last year. A trial order for 300 sold out right away, prompting two follow-up orders totaling 1,400 more. At press time, Cockburn had been warned to prepare for a 1,000-unit order—her biggest sale ever.
“If I can sell this much in the U.K.,” she says, “then the possibilities are endless.” So, was her trip to the Den worth it? Despite her disappointments, she says it created unbeatable momentum. “As soon as I say I was on Dragons’ Den, people show more interest,” she says. “I’m going to milk it for all it’s worth.”
Russell and Jessica Bohrson
Atomic Tea, Calgary
Product: bubble tea
It was the most startling event in the second season of Dragons’ Den. All five Dragons wanted a piece of Atomic Tea, a Calgary retailer specializing in green and black teas infused with exotic juices and lumps of tapioca that turn them into “bubble” teas. The Dragons were intrigued from their first sips of the products, which brother and sister owners Russell and Jessica Bohrson brewed up in a CBC staff kitchen. But the Dragons were sold when they learned the pair enjoyed a markup of 340% on their hot drinks—and 550% on the cold.
Now, the question was price. To finance two new stores, the Bohrsons were seeking $120,000 in return for 25% of the business. Boston Pizza’s Jim Treliving struck first by offering $120,000 for 50.1% of the company. Calgary marketer Arlene Dickinson of Venture Communications played white knight, bidding $120,000 for 40%. Laurence Lewin of La Senza upped the ante, offering $75,000 if Treliving would put up $75,000, too. Then tech entrepreneur Robert Herjavec offered to throw in $75,000—creating a $225,000 bid for 50.1% of the firm. The Bohrsons couldn’t believe their luck.
But it didn’t last. Cranky TV pundit Kevin O’Leary ordered the entrepreneurs into the soundproof back room and then turned on his fellow Dragons. “What are you bidding each other up for?” he asked. “You guys are bozos!”
Like the scheming witches from Macbeth, the five Dragons cooked up a new brew. When they returned to the set, O’Leary told the pair all five would invest a total of $120,000 for 50.1%. Jessica Bohrson pushed back for the $225,000, but O’Leary shut her down, demanding, “Are you in or out?”
It was a shock for Jessica and Russell, who had felt so elated when the Dragons declared they had never tasted anything like their bubble teas. Jessica, 32, had developed her own specialty tea recipes after travelling and working in Asia, where she studied Chinese. Thinking these drinks would catch on in Calgary—a city filled with adventurous and affluent consumers—she returned home in 2003 and persuaded younger brother Russell (now 27) to join her.
The pair sold their teas and “Atomic shakes” through mobile kiosks in the summers of 2003 and 2004, establishing their product at festivals and the Stampede midway. In June 2005, they opened a street-level store in the heart of downtown under the offbeat, whimsical Atomic Tea brand, and added Vietnamese-style submarine sandwiches to woo the lunchtime crowd.
The Bohrsons won an enthusiastic fan base, as well as awards such as “Calgary’s Best Drink” in 2006. The problem was winter, when office workers avoid the streets by sticking to the elevated walkway system. Sales volume of less than $200,000 didn’t give the Bohrsons the profits they needed to build a retail chain.
A business mentor suggested that Jessica and Russell appear on Dragons’ Den to raise the money they needed. The Bohrsons were reluctant until they realized that working with the Dragons could be more valuable than their money. “We wanted their connections and experience,” says Jessica. “The amount of money we asked for, you can get that from the bank.”
When the Dragons reneged on their $225,000 offer, the Bohrsons swallowed their pride and took the deal—hoping the investors’ passion would match their negotiating skills. After three stressful months negotiating, the deal got done in late 2007. In the months since, however, progress has been slow. The funds were supposed to cover the cost of two new stores in Calgary, but the Bohrsons have been unable to find the right spaces. “We’re pounding the pavement every day,” says Jessica. She remains confident Atomic Tea will open two more outlets by year-end.
Working with Dickinson and Nigel King, one of Treliving’s top lieutenants, the Bohrsons have been investing in marketing, developing new suppliers and creating systems to ensure the new stores will replicate the success of the first.
Meanwhile, Atomic’s TV debut continues to pay dividends. Appearing on Dragons’ Den boosted sales 20%, creating a new core of loyal customers, says Jessica. She also regularly gets calls from would-be franchisees. Her strategy now is to open three or four new stores, learn what works and what doesn’t, and then use that experience to create a franchise system. “We have to get to a franchise position,” she says. “That’s when the Dragons’ experience will really come in handy.” But even in this, the investors’ counsel has been useful. “They keep trying to reiterate that this is something that takes time,” she says. “We think it’s taking too long.”
Anivac Corp., Dundas, Ont.
Product: vacuum-bathing system for horses
Never confuse a Dragon. Even if it means bringing a horse to a TV studio.
Dundas, Ont. entrepreneur Dave Hachey learned this lesson when he appeared in front of the Dragons with his dog and a vacuum-bathing system for horses. Even though Bailey, a black Labrador, had been specially “dirtied up” for the occasion, the Dragons were clearly thrown off. “I like you, I like the dog, I like the product,” said Robert Herjavec of the Toronto-based Herjavec Group. “But I don’t know if I like the business.”
Even outspoken Kevin O’Leary had trouble assessing the pitch by Hachey, who was requesting $150,000 for 20% of his business. “I never have a problem making a decision in between crap and good,” said O’Leary. “But I’m in pain thinking about this decision. And for that reason, I’ve got to say I’m out.”
In the end, all five Dragons rejected Hachey’s deal. And he’s a happier man because of it.
An inveterate tinkerer, Hachey got into the animal-grooming business when he owned a hairy Newfoundland dog who always smelled—even after a rigorous shampoo. “No matter what you did, you couldn’t get the smell off of her,” says Hachey.
The problem is that animal hair is naturally resistant to water—so shampoos rarely reach the dirty skin. Hachey adapted a carpet-cleaning wand with a comb that penetrates to the roots, where it sprays pressurized water from multiple nozzles. “It cleans from the skin up instead of the top down,” he says. He added a vacuum head to suck up loose hair and water, creating a fast-drying bathing solution.
After patenting his invention, Hachey quit his job as a purchasing manager in 2005, took out a mortgage and formed Anivac Corp. to sell his cleaning systems. His first target: dog groomers. According to Hachey, just 7% of dog owners visit commercial groomers. Surely a faster, easier system would multiply their market share. “I invested $40,000 in the dog market, but I didn’t do enough research,” he says. “The groomers were hostile. They said it was the dumbest thing they’d ever seen.”
With time and money running out, Hachey got a new idea. If dog groomers wouldn’t buy his idea, he’d prove its worth by opening his own shop. In January 2007, he opened the Animazing 15-Minute Pet Bath Centre at a strip mall in Burlington, Ont. It bathes up to four pets at a time, for between $30 and $60. The store broke even in its second month.
But Hachey never wanted to get into the service business, so he began targeting the show-horse market. Bathing horses is a big deal: conventional scrub-downs require a separate stall in the barn, consume 100 gallons of water and rarely reach ground-in dirt that can cause career-ending skin infections. Marketing through horse shows and trade shows, Anivac reached sales of $500,000 in 2007.
Still, Hachey wanted more. He hoped to sidestep those dog groomers by producing a consumer product for washing dogs at home. He applied to Dragons’ Den to raise $150,000 to develop the new product, but his appearance didn’t go well. First, Hachey got stage fright and couldn’t speak. When the producers let him start over, he had trouble explaining why he’d brought a dog to demonstrate a machine for cleaning horses—and the Dragons never got a clear idea of his market plan. “I really screwed up,” he says.
Brooding on his failure to entice the Dragons, Hachey e-mailed the president of the U.S. company that manufactures his machines and asked for help. (He was too nervous to phone.) The supplier agreed to meet the following week. Admiring Hachey’s work ethic, the supplier wrote Hachey a cheque for close to $80,000 to get things moving.
Hachey asked how he could repay such generosity. “You’re going to keep buying machines from me, aren’t you?” the supplier asked. Says Hachey: “We’ll be buying machines from him forever.”
After Hachey’s pitch aired on Dragons’ Den last fall, Hachey says his phone rang for two weeks with folks offering to invest. But he no longer needed them. Last fall, he signed a worldwide distribution agreement with Australia-based Equissage Pty. Ltd., which produces physiotherapy products for horses. With more time and cash to focus on Anivac’s consumer business, Hachey expects to debut his $150 home dog-washing system next spring. “That’s where the market is,” he says. “It’s going to be massive.”
Hachey laments his failure to get his message across to the Dragons—but he doesn’t regret it. The experience led him to make the call that got him the money he needed without giving up equity. And he wonders how many other entrepreneurs have willing partners like his who are just one phone call away.