This is the second guest post from Aaron aka TechThinker.com, an awesome guy with a great ability to making things seem so much simpler, Aaron over to you;

7 Lessons Learned from the Dragons

As an Online Entrepreneur one of my favourite TV shows is the Dragons Den. In this show entrepreneurs present their products and business ideas to a panel of top business executives (known as the Dragons) with the hope of securing some form of investment from the dragons.

In this post I look at the lessons that we can learn as entrepreneurs from this TV Show. Please note that my observations are based on the Canadian version of this show that airs on CBC.

1. Giving it Away for Free

There have been instances where the dragons were impressed by a product but pulled away from making a deal because the creator wanted to give away the product for free! The creator’s intention was to offer the product for free and make revenue via advertising. For example, offer a free software on the Internet to create and print body tattoos and monetize the website using advertisements. If your product has a value, don’t give it away for free. Try to make some money by selling it!

2. Poor Presentation

Many times in the show the product or idea is right away rejected by the Dragons. One of the reasons for this quick rejection is that the idea was not presented well. Presentation is key to sell your ideas and concepts. If you fail in this activity it is less likely that someone is going to embrace your product or concept.

3. Overvaluation

At many occasions the Dragons are not willing to invest their money because the entrepreneur has over valued the business and asking for more cash for a low percentage of stake in their business. As an entrepreneur you have to be realistic in your valuations.

4. Great Product but no Market

Often a product is dismissed by the the Dragons because the product does not have a market for itself. Surely the product is a great invention in its own right, but the demand for the product was very minimal. A machine that separates oil from water, is a classic example. The machine has very less use in the consumer market.

5. Poor Track Record

Another reason a product gets rejected is because the entrepreneur has good ideas but do not have a track record in the past to back it up. There have been occasions where the past year sales figures didn’t impress the dragons and made them to back away from the product.

6.Incorrect Revenue Model

In many instances a product is rejected because it has a poor pricing or revenue model. Pricing and revenue model are two important factors that determine the success of a product. I have observed that the dragons are more interested in securing recurring revenue streams such as subscriptions and royalty fees.

7.Falling in Love with your Product.

As an entrepreneur it is ok to have passion in what you do. But, you should not fall in love with your ideas. Once you fall in love you start losing reality and common sense. Many entrepreneurs who came on the show were in love with their products and ideas. As a result they have spent thousands and thousands of dollars in a concept or prototype that doesn’t generate any cash. These folks were often very upset when the Dragons reject their idea.

Have you made any of the above mistakes with your products and business ideas? Feel free to share your experiences.

Feel free to go and check out Aaron for more of his work, techthinker.com

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Filed under: Guest Post • Motivation • Useful

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