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Dragons’ Den is a Bare Faced Lie About How Business is Done

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You can usually trust a good comedian to get down the truth of the matter, and David Mitchell has done just this with the Dragons’ Den format.

“Dragons’ Den is a bare-faced lie about how business is done,” he says. “The people who do that job are not rude because there’s no percentage for anyone in them being so.

“They don’t sanctimoniously tick people off nor do they spend 10 minutes thinking up a weak pun which combines their wish not to invest with the field of the invention in question – ‘A new type of cheese, I’d have to be crackers to invest’ as if they’re auditioning for the Beano.

“Dragons den not only misrepresents rudeness for straightforwardness, but also implies that this is how successful business people behave.”

Rudeness aside Dragons’ Den is responsible for other misconceptions that damage the perception of enterprise and entrepreneurship:

  1. Getting investment is a competition. The best entry wins whether it is good bad or indifferent. (Specifically this is what the enterprise professionals ‘teach’ when they try to piggy back on Dragon’s Den to get their engagement numbers up.  The dragons themselves would invest in any and every opportunity that meets their investment criteria.)
  2. Any business that does not meet the criterion for investment from a venture capitalist is not a good business. “It might make a decent business for you and your family – but there is not enough in it to interest me – I’m out“.  This echoes and reinforces the disdain that much of the public sector has for ‘lifestyle’ businesses.  They seem to forget that most entrepreneurs learn the ropes in life style businesses before some of them get bigger aspirations.  As I believe Peter Drucker said – ‘You can’t have the mountain top without the mountain.’
  3. You have to conform to venture capitalist norms and conventions if you are to succeed – everything from the way you dress, your hairstyle through to your knowledge of the numbers (you had better pretend WITH CONVICTION that your crystal ball is good for revenue forecasts at leas three years ahead.
  4. Investment readiness should be evaluated on a single pitch – there is a simple binary response – yes or no.  In fact most investments come as a result of a relationship between an investor and client.

So come on.  Let’s drop the Dragon’s Den emulations.  No more ‘Strictly Enterprise.’

Instead let’s get down to the hard work of having some informed conversations about enterprise and what it can do for our communities.

Economist’s Special Report on Global Entrepreneurship

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The Economist’s special report on entrepreneurship is well worth a read.  Some highlights:

  • entrepreneurialism needs to be rethought: in almost all instances it involves not creative destruction but creative creation
  • the report uses (entrepreneur)  to mean somebody who offers an innovative solution to a (frequently unrecognised) problem
  • its not all youthful techies – Harland Sanders started franchising Kentucky Fried Chicken when he was 65. Gary Burrell was 52 when he left Allied Signal to start Garmin
  • average entrepreneur was 39 when he or she started (their business) The number of founders over 50 was twice as large as that under 25.
  • why have so many once-celebrated entrepreneurs turned out to be crooks?
  • the entrepreneurial idea has gone mainstream, supported by political leaders on the left as well as on the right
  • the history of … start-ups reads like a roll-call of business partnerships: Steve Jobs and Steve Wozniak (Apple), Bill Gates and Paul Allen (Microsoft), Sergey Brin and Larry Page (Google), Mark Zuckerberg, Dustin Moskovitz and Chris Hughes (Facebook). Ben and Jerry’s was formed when two childhood friends, Ben Cohen and Jerry Greenfield, got together to start an ice-cream business (they wanted to go into the bagel business but could not raise the cash). Richard Branson (Virgin) relied heavily on his cousin, Simon Draper, as well as other partners.  [WHY DON’T WE TEACH THE IMPORTANCE OF BUILDING DIVERSE TEAMS?]

Read the full report here.

Are You Biased Towards the Present?

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A paper published by the UK Government’s Parliamentary Office for Science and Technology provides a useful reminder that people do not always/often make rational decisions, and that one of the reasons for the irrationality is a bias for the present.

In short this means that we put off or never do things that are in our own best interest simply because we see the pay-off being to far away in the future.  Hence we stay fat and smoke – because any benefits of giving up won’t be experienced for ages.

It transpires that the poorer you are the more likely you are to show this bias for the present over the future.

This bias would seem to be important for enterprise professionals to :

  • recognise,
  • understand and
  • overcome

Any tips you want to share for helping cleints overcome their bias towards the present?

You can read the full OST paper on Delaying Gratification here.

Fascinating and Frightening in Equal Measures?

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Kanya King is a remarkable woman.  More precisely she is a very unremarkable woman with a remarkable story.  We all have the potential to do remarkable things.  She is best known for re-mortgaging her house to see her dream – The MOBO Awards – become a reality.

She is passionate about giving young people the opportunity to experience enterprise.   To inspire a new generation of business entrepreneurs.

To further this passion she has teamed up with Thomson Local – the database people – to challenge school children (16+) to develop business ideas that will benefit their local community.

The best will secure a  bursary of £100 and mentoring from a ‘business hero’.

Thomson will also build them a web site – apparently whether their business idea demands one – or not.  It might have been more interesting if Thomson helped them to develop a strategy to get to market.  The default position of ‘I need a website’ is not always the best one.

The overall competition winners will win a ‘money can’t buy prize’.  VIP experience at the next MOBOs perhaps?

I love the fact that this kind of stuff happens.  That people care about enterprise.

But I worry too;

  • I worry that they cite research (unreferenced) suggesting that 81% of British children want to run their own business – can this be true?  On what basis has this want developed?
  • I worry that combining the forces of a for profit like Thomson with a business planning competition will further distort what educationalists percieve enterprise education to be all about.
  • I worry that the emphasis on ‘pitching your ideas’ – letting others attach their valuation to your business dream – will emphasise an external locus of control that is unhelpful to the entrepreneur.
  • I worry that asking young people to focus on making things better in their community – perhaps before they have learned how to make things better for themselves might inculcate lessons of selflessness that could be unhelpful.
  • I worry that this type of scheme will attract those who are already destined for an enterprising future and turn off those who think that school based competitions are uncool and that business is for geeks.
  • I worry about the language of supplying ‘business hero’ mentors.
  • I worry about the volume of work that such projects place on students and their teachers at a really busy time in the their school life.
  • I worry about further strengthening the perception that enterprise = business and more teachers resisting the enterprise agenda as a capitalist plot to brainwash young people.
  • I worry about the fact that the website that is the home of the competition appears to have no RSS feed.  I am invited to ‘check back’ for updates!  As if web 2.0 had not happened!!

So I have signed up to offer to be a business hero – notwithstanding considerable reservations.

Let’s see where this takes us!

Definition of Enterprise?

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There are lots of them and most of them are not very helpful.

No, not SEOs.  Definitions of enterprise.

At the moment this is my favourite:

Enterprise  – something, anything, you do intentionally that you believe will help to shape the world more to your liking.

This then makes enterprise a function of your power to shape the world and your self interest – rightly understood and negotiated.

E=PxSI

What is your favourite definition of enterprise?

Prizes for the best!