Dragons blown away by “toughest negotiation in the Den” | Dragons’ Den

Next up are Brian Smiley and Euan McCreith Two Scottish techies with a plan to revolutionize the mobile app For our fantastic products it’s you know, innovative disruptive and you know, yeah, it’s very exciting Whenever we pitched, we’ve had a 100% hit rate in terms of them pitched classes investment, so I’m very confident Narrator: No shortage of self-belief, but how will they fare in the white heat of the Den? Hi guys, I’m Brian Smiley founder and CEO of Beezer.com and i’m Euan McCreith, the director of product innovation We’re here today to offer you the opportunity to invest 125 thousand pounds for four percent equity in Beezer.com I was running an award-winning digital agency in Sydney When I started to hear the same story from Sony, and my clients “Brian, we spent a fortune building our app, but nobody’s downloading it” The only way to solve this problem was to bypass the app stores So, what is Beezer? Beezer.com offers the ability to create your own mobile app Using a simple and intuitive online tool. Once you’ve built your app, you can send the app directly to your users using various methods, including SMS, email, social media importantly completely bypassing the app stores. The largest website builder in the world is forecasting 30,000 paid signups by the end of year one, which equates the 150,000 pounds turnover per month at the end of the first 12 months. Our turnover by the end of 2019 is aiming to be 1.2 million pounds with a net profit of 360 thousand pounds So the mark is huge and the time is right for Beezer. I’m gonna hand you over to Euan now, to do a product demo So here we have a Beezer-built app, built upon our platform that will appear on The user’s home screen where they can launch that app They can access the features that we’ve built here for Dragon’s Den One of the features being the ability to vote on the pitches so you could see What you thought of this particular pitch somebody’s interested in investing? So, I think that kind of leads us very nicely onto questions Mobile apps made easy is the proposition on offer from technology entrepreneurs Brian Smiley and Euan McCreith. Who are seeking 125,000 pounds in return for a 4% share of their business Tej Lalvani is keen to find out more about the geezers behind Beezer. Hi Euan, and Frank So, can you tell me a bit about your background? How you guys got into this app? And what did you did before? I’m from a technology background? So I graduated from the University of Glasgow in 2003 from computing science and I’ve been involved with tech businesses for the last 15 years and I was running an agency on Sydney in 2008 and Nine times out of ten when we built an app for a customer. They’ve come back knocking on our door saying Brian This is fantastic, but we just can’t get people to download it from the App Store. How do we overcome this challenge? I’ve got quite a few brands and the world has changed You have the best product in the world, but you come market it. Yep. It’s worth nothing. Sure So if I emailed to my database, mm-hmm the app. Yep, if they click on. Yep Does that go straight on to them from their phone? Yes, (inaudible) absolutely and then they’re into my shop. Yes It’s great for spreading content, but then you can incentivize It going viral. Thanks with downloading our app for every 10 shares we’re now gonna give you a chance to win X or For every share you get we’re gonna give you a further discount off that product Increasing product awareness while boosting sales a compelling combination for any business to business product It’s left the Dragons eager to know more about how the company is set up So who owns the company So yeah equity structure we’ve got I’ve got 20 shareholders in the business all smart money investors I own 32% the company So I’m majority shareholder in the business And we know it’s raised eight hundred thousand pounds to get the idea going to 150 thousand pounds on my own money into the business So I’ve sod my two houses. My fancy art collection. I put everything into this And does the company have any money in the bank? Yes, we have just just under two hundred thousand pounds in the bank still And what she current burn rate of cash? The current burn rate of cash is thirty thousand pounds Okay, so you will have gone through your cash in the bank within the next six seven months Yeah, but we’re gonna be money generating within two weeks. So we’ve been working on the Wix and Weebly integrations That’s the two channel partners we signed up with. Mm-hmm When we turn on the tap, I’ll have funds coming into the bank from that by the end of the year We’ll have nine hundred thousand coming in Who will be your biggest revenue earner of this nine hundred thousand. Wix. Wix.com. Wix.com? Yes. Just talk through that. So what’s a Wix website? Wix is Beezer, for building websites It’s a platform that empowers non-technical people with the ability to build their own websites They’re trying to promote their own business through a digital channel So with a few clicks from the Wix website You can come onto the Beezer platform and put your website in, to then distribute that to amplify reach of your website Bryan and Euans ingenious distribution model cuts out the need for a middleman Potentially spelling the end of the App Store Deborah Meaden wants to delve further into their customer base Where do you see as your primary market, who are you going after first? Well at the moment we’re talking to three major banks, and we we’re really close to securing deals with two of them. One of them was already using the product in one of their sub brands. We’ve had some traction in the event space So anybody who wants to start up in an event? I’m assuming that the other tech companies will follow suit. Is there anybody else out there? That’s all we’re doing in norther. Not actually the way we were packaging it. They don’t answer the problem The problem is apps are not making at the store. They’re sitting there until they died in the wild. But every single day there are developers all over the world creating these types of products and they’re churning them out at a rate of knots you’re You’re losing the opportunity on big data What’s this trust? I don’t understand big data, but you know what? I think it could be the next big thing for Beezer at some point in the future. That’s might be concerning because you’re missing a massive trick If you had an action to go and touch the big data you’re starting to ring fence and protect the very thing that you’re building Help us. You know, I absolutely I’m thinking I I love be- it’s our baby and I love Beezer so much and you know If we can create, you know, there’s some real longevity in the business through that big data and play then you know I’m all for that The duo’s failure to harness all the data flowing through Beezer to analyze customer behavior has thrown a potential spanner in the works and Jenny Campbell is confused about why they’ve come to the den in the first place What you need a poxy 125K for? You’ve got smart money. Yep. Do you still need a Dragon? I think you guys- Really? Yeah, I think you guys can add- Are you looking for a particular Dragon? I’d like to get an offer from all five of you today But yeah, they can think the attempt that there’s a couple of Dragons here that know that this is their sweet spot And then what would the Dragon do over and above your smart money? Open doors. I know what I can do I’ve done it from but for my other tech businesses, it’s put them in front of the right people Yeah, so I’ll make you an offer. Give you all the money. I Want 10%. I want to get my money back, I’ll go down to five. Mmhm. An offer, but in exchange for more of the company than the 4% the duo were originally looking to part with Will Tej Lelvani be prepared to match or better it? Guys I think what you’ve built is very clever, you know, I can help you with all the tech contacts and Building your brand in the UK and internationally and that’s what I do day in day out So I too will make you an offer I’m gonna offer you all the money for eight percent. I really like it. HAHAHAHA. You know And I love that it’s disruptive. You know it at the moment businesses don’t have a choice You know and they’re forced between do I have an App or don’t I have an App? Instead of thinking actually there’s a different way of doing this so I am gonna make you an offer and I’m gonna offer you all of the money and I want 6% of the business Okay. Brian and Euan are remaining poker-faced despite the escalating bidding war in the den Will a tech-savvy Peter Jones be next to join the fray? Guys, I think you’ve done really well I Actually believe that you have got something So I’m gonna make you an offer for all of the money. Mm-hmm But on the base of the fact that I hold the golden key to unlocking that value for you. I Want 15% of the company. Now I don’t know whether to cry or fall down Just leaves me, how are you feeling? Good? I’m close to winning a sportsman’s bet. So I’m feeling good All five dragons gonna make an offer. Hey that’s counting your chickens so really It’s an easy follow for me, you know, I’ve got the tech Titan saying “I’m in” you’re very credible, and this is clearly working so why wouldn’t I make an offer but You’re gonna lose your bet I Personally, don’t get that excited about it and it’s important to be excited about what you’re involved in. I know. I’m out. Time to think! Yeah – any chance we can get out the Den?! Yeah. Please. I think we Brian and Euan now have four competing offers to consider But accepting any of them would mean giving away a bigger slice of the business than the four percent that they originally pitched All right. It’s a tough one. So I’ve come in here today and I do wholeheartedly stand by the valuation we put on the business and I’m pleased that I really thank you for all the really nice comments that you’ve given us today No disrespect to the other Dragons and there was two dragons we came along here specifically was keen to work with and that was Deborah and Peter Peter 15% is considerably higher than obviously what we’re looking to sell today I wonder if there was a way that we could get you involved in the business and Anybody’s to get your investment back and lower you down to somewhere in the original six percent. I Want to do a deal And so do I I would be willing to go down to ten percent if I received my investment back. Okay. Deborah would you be willing to move on your equity at all? I I pitched a competitive offer, I saw what everybody else was talking about and I pitched a competitive offer. Yeah. No, I think you did. Yeah Neither Peter Jones nor Deborah Meaden are prepared to bow to Brian’s demands a Risky change of strategy will be needed if he’s to snare his dragons of choice If anybody was prepared to accept 125,000 pounds for 5% equity in the business. I would do the deal here today Otherwise, I have to walk away – I have to protect my shareholders position I’ll do the deal for 8%, but dropped to 5% when I get my money back 125 for 5% is where I’m where I’m at with this. I I believe this business is gonna be worth 18 million pounds in 12 months time I’ll do that deal. You would do that? Anybody else. Tej – I’m going to decline your offer. To Deborah I reach out to you on that. I came in for two Dragons and I’m not gonna be bad to go. Thank you for your offer. Oh, you know what my oppa yeah. Basically you don’t want my offer? Yeah. (Ooh gosh.) I’m out. Thank you Brian has summarily rejected offers from both Touker Suleyman and Tej Lalvani. The entrepreneur has acted in haste, but will Deborah Meaden make him repent at leisure? Oh That’s a shame you did that Until that point you were faultless, but actually that was a bit of an impetuous thing You have got dragons here. You’re gonna add massive value here. I appreciate that. (Ohh…) You know what, Brian, I’m really shocked. You have a potential opportunity with a unicorn here and The very person that can connect you and connect the dots You’ve disbanded and then you’ve alienated one Dragon to my right and then you go straight to Deborah, which has now alienated me. Yeah. On the basis the way you’re handling this I’m, erm, Feeling a little bit strange about it Okay Brian’s brinkmanship is in danger of badly backfiring His chances of securing an investment once rosy, now hang by the slimmest of threads Are you still in, Peter? I Am still in but I’m in at 15% – yeah – dropping to 10. Yeah Okay, so based on the fact we have two two dragons have put in two separate offers and not offered to make a combined offer, do you know what? I’m going to go with my gut on this. And my gut says Go with you Peter. Are you accepting my offer? A 100%. Wow. Well done. Thank you. Pleasure. Crazy excited Thanks. Thank you Brian and Euan have done it They leave the den with a hundred and twenty five thousand pounds and a Dragon with the contacts and expertise to take their business to the next level that Was one of my toughest negotiations in the den, that’s how I’m feeling right now, I’m actually clammy I’m sweating like crazy That experience was like a roller coaster and at one point yesterday. God poured it. Yes, but you know what? Saw it for what it was, clawed it back and closed the deal