By anyone’s standards, the first episode of Dragons’ Den South Africa was something of a mixed bag. Outside of the random assemblage of people calling themselves entrepreneurs and pitching ideas they’d thought up during the week (these are the same people who believe they can win Idols based on their solo shower performances), there were a couple of promising ideas, one that was “too polished” and a single actual investment.
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The second episode delivered more, not least because the dragons — the wealthy business individuals who must decide whether or not to invest based on the entrepreneurs’ pitches — appeared to come into their own.
Going mobile
First up in the den was Ntokozo Biyela of Mzansi Mobile Units, a seven-year-old company that specialises in the manufacture of mobile fridges, freezers, VIP Toilets, kitchens, butcheries, and bars, among other things.
Biyela set his targets high, asking for R1-million for a 15% stake in the company. While he claims that the company has clientele across all nine of South Africa’s provinces, the amount he asked for seems especially audacious when you consider that he had to re-establish the company in 2012.
Given the niche that Mzansi Mobile Units operates in, it should hardly be surprising that the dragons were particularly concerned with the company’s production costs and overall sales figures. Once it was revealed that the company had made a net loss, the dragons came down hard.
“I’ll give you some of my thoughts,” said Gyft founder Vinny Lingham. “First of all your valuation is too high[…] I also think for me, this is not the type of business that I typically get involved in and am interested in”.
Gunguluza Enterprises & Media’s Lebo Gunguluza and Vusi Thembekwayo, CEO of Watermark Pan-African Capital followed suit soon after, dissuaded by the amount of work that would need to be put into the business.
Polo Leteka Radebe, CEO of business advisory group Identity Partners and Director of South African Venture Capital Association, and Creative Counsel co-founder Gil Oved then put in a joint bid that would’ve seen them become majority shareholders in Mazansi Mobile Units.
Unsurprisingly, Biyela was unwilling to give away so much of his business, although Oved said he was “making a massive mistake”.
Getting the message through
There are times, between pitches, that Dragons’ Den veers into Idols territory. Episode two was no exception, featuring people who had failed to clearly tell the dragons exactly what it is they do.
To be fair, some of the ideas are pretty ridiculous, but anyone with half a brain can see that in much the same way as anyone can see that the crappy singers on Idols have no hope of getting anywhere.
The only real lesson here is that it’s sometimes worth listening to your friends when they tell you your great idea sucks.
The inventors
The Dragons’ Den contestants who build actual products tend to be a little more interesting than the ones who have service-based businesses. Michael Grunyuza and Sol George were no exception.
Grunyuza came to the dragons with a “smart jug” that was really just an ordinary jug with measurements on the side to help you get your juice concentrate to water mix right.
Despite his clear enthusiasm for the product, it was an emphatic no from all the dragons, plenty of puns along the way.
George meanwhile is the current owner of Ecotaps SA and, while he clearly has a far more established product than Grunyuza, he is far less chilled out.
Ecotaps claims to have built the world’s smallest geyser, capable of “delivering continuous hot water between 30 and 60 degrees within seconds and reducing the flow rate from 14 liters plus per minute to an average of 5 liters per minute”.
George asked the dragons for R1.5-million in return for 20% equity to help build a manufacturing plant for the device in South Africa.
Things really got interesting though when the dragons started grilling George.
When he tried to explain his business plan to Lingham for instance, the immediate response was: “That doesn’t make any sense at all”.
Oved, meanwhile, told him he needed to learn to relax. “If there’s even a small chance of us doing business, you’ve got to stop selling me so hard. Chill china, chill,” the ad man said.
As it turned out, George isn’t so much an inventor as an importer, making it extremely difficult for the dragons to find an aspect of the business worth investing in.
The magic whiteboard guys
Next into the den were Shane and Justin from Moxiwall, a company that’s created a dry-erasable whiteboard paint that can help you turn pretty much any smooth surface into a whiteboard.
Their pitch was slick, obviously well-rehearsed and clearly outlined the advantages of the product. The R300 000 they were willing to take from the dragons in return for 20% equity was probably also the most realistic investment pitched for on the series to date.
A lack of direction around what the two entrepreneurs would do with the capital they were asking for appeared to frustrate the dragons, as did the fact that they were only pursuing the business part time. That said, they did manage to spark a bidding war between the dragons with the business founders, eventually accepting a joint offer between Oved, Lingham and Thembekwayo for one and a half times what they were asking for and 60% of the company.
Put it on a billboard
Last into the den was Bonani Mashila, who was looking for R600 000 in set up costs in return for his digital LED billboard company. While there are a number of companies operating in the space in South Africa, what sets Mashila apart is the fact that he’s looking to set up his business in less economically well-off areas.
Despite clearly having enjoyed Mashila’s pitch, Oved was out immediately and was followed soon after by Lingham and Radebe. A major problem, as Thembekwayo pointed out, was that Mashila had valued the business at more than R6-million before he’d even opened the doors.
That did not however, stop Gunguluza putting an offer on the table (contingent on convincing Thembekwayo that it was a good idea). When that failed however, it meant that all the dragons were out and Mashila walked away empty handed, something he’s evidently become used to over the years. Here’s hoping that if Gunguluza was serious about the job offer, the young entrepreneur takes it.
