The Dragons’ Den effect: Buzz, sales and more investment
The BBC notoriously doesn’t do advertising, but you could have fooled Snugs CEO Paul Jobin. He has pitched his 3D-printed earphone business over 100 times, but the ten-minute edit in which he faced the investors on Dragons’ Den and 2.72 million viewers at home turned out to be particularly significant.
The Snugs website used to get a couple of hundred visits per day. On the night the episode went out, the Visits column of Google Analytics hit 21,000, and by the end of the month this had more than doubled. This has translated to cold, hard sales. “February was over 245% up on February of last year,” Jobin tells me via phone. “It’s usually our worst month of the year, and it’s been our best month so far – so thank you very much Dragons’ Den!” As he speaks, The Who’s “Baba O’Reily” goes off as a ringtone in the background – it’s the perfect kind of uplifting backing you’d expect from reality TV, even though Jobin left the studio nine months ago.
This kind of instant buzz isn’t guaranteed with TV exposure – some things barely register a pulse, no matter how prominent the exposure – but Snugs are a very good product, as you can see in our review. They’re custom 3D-printed earphones guaranteed to match the unique shape of your ear canal. That means that they don’t slip out, and the sound quality is top-notch. As Jobin explains, they’re like little Savile Row suits, tailor-made for your ears.
Not only did Jobin have plenty of experience pitching Snugs, but he was extremely familiar with Dragons’ Den as a programme. Before he emerges to meet the Dragons face to face on the show, he explains to the camera that he used to watch the programme with his father. So how was the day, and did it match his expectations?
“It wasn’t quite what I expected actually. To go on the show myself was a hugely exciting. I knew it was going to be a once-in-a-lifetime opportunity, so I set out to thoroughly enjoy the day – which I did in the end,” Jobin explains. There was certainly plenty of it to enjoy – he was there between 8am and 6pm as the green room gradually emptied of his fellow entrepreneurs looking to pitch. “You have no idea how the others have done – they don’t tell you anything.”
When 3pm came and he was called up himself, he had to do a three-minute pitch without any notes, surrounded by cameras – something Jobin describes as “one of the most stressful things I’ve ever had to do,” which is something to bear in mind next time you see someone crash and burn in front of the TV cameras. “You never ever pitch without your financial numbers in front of you on a piece of paper to refer to. I’ll never do that again – certainly not under the stress and strain of a TV studio!” Although Jobin’s pitch was tight and fluid, he has every sympathy for people who fall at that hurdle: “When you watch the programme and you see people bottle up and forget what they’re going to say, I completely understand that.”
Although it looks like he was in and out in ten minutes, he was actually pitching to Deborah Meaden, Peter Jones, Nick Jenkins, Sarah Willingham and Touker Suleyman for around an hour and a half. “I am told that if you’re in and out of the Dragons’ Den within about 20 minutes to half an hour, that’s what they call the ‘train crash’. If you’re in there for more than two hours, they’re going to make you an offer for your company.” Given Snugs’ current investor put in a “seven-figure sum” based on three questions in two minutes at an Expo, it’s clear that the time spent speaking doesn’t always correspond to success, but in this case the numbers were correct: the Dragons ultimately didn’t make Jobin an offer for his company. But he clearly made an impression on Peter Jones, who ended the segment by saying “I hope to see Snugs on the high street, because I’m a buyer.”
Was Jobin expecting to leave the show empty-handed? Yes, Jobin says, because he was asking for £80,000 investment for a 5% share in the company – a price that Dragons tend not to bite at. “The producer of the programme tried to encourage me to go at a different price,” he explains. “For commercial reasons, I wasn’t able to go at a more appealing price for the Dragons in front of me. I already had investors – and I couldn’t sell my existing investors up the river for a celebrity investor.”
That might be for the best anyway, Jobin concedes. While he found the Dragons generally pretty impressive (“they all came over as knowledgeable investors”), there’s a question mark over how they would be to work with on a day-to-day basis, given their large organisations and layers of staff. “How much actual quality time you get from them as an individual is possibly doubtful,” he speculates.
In the end, there were two main bones of contention that prevented him testing the theory. Sarah Willingham highlighted the lack of immediacy in purchase to delivery – the need to have your ears scanned, she believed, would really put a dampener on the company’s potential. This is, according to Jobin, “absolutely valid” – indeed, he’s more upset that the TV edit made him look unpleasant to her that anything else. “It sounded like I was rude and cut her down,” he explains. “I wouldn’t be rude to her! She was very polite and had very, valid points.”
Less valid, he believes, is the second criticism: the cost of the ear scanners, which come bespoke from a company originally working in dentistry. The Dragons (in the edit I saw anyway) seemed to physically balk at the $10,000 cost of the first-generation ear scanners that the company uses. “Our second-generation scanners are twice that price, and I just received a verbal order for over 100 of these scanners from the Asian market,” he tells me, explaining that it’s just a case of “sweating the assets”. On the show, Peter Jones draws a parallel to the first generation of photo booths, which were a huge initial outlay, before being in every Woolworths in the high street with the advent of the 99p passport photo.
But both points are being addressed in a way that Jobin won’t go into just yet. “The scanning experience is a key bottleneck in the rollout of this. All I’ll say is that Dragons’ Den was recorded in May of last year – nearly a year later, we’ve made fantastic head road into addressing both those issues.” Nonetheless, if a Dragon had bit that day, they would have already seen an impressive return on investment: “Nick Jenkins said ‘I don’t see this as a very exciting investment or a very good return’. If he had bought the shares on the day of the show, they would be worth over two-and-a-half times the value he paid for them in just under a year’s time.”
That’s just the way it goes with investment opportunities. I ask Jobin if there was a risk his appearance on the show could have backfired, as apparently contestants have no say over how their footage is used. “At one point they were asking me very detailed questions about my cost base, my margins, how much I pay and so on, and I thought to myself ‘oh dear, if they use that on TV, I’m giving fundamentals of the business model away’,” he laughs. But in any case, it wasn’t too big a worry: “If someone’s only just worked out where we were in May last year, they’ve got nearly a year’s worth to catch up on,” he explains. That competition seems to be theoretical for the time being in any case: “I don’t have any real competitors at the moment – to be perfectly honest, I could do with some as it would make my market more credible. Competition is good.”
Any competition would have to get around what I see as the main difficulty Snugs faces: how do you market a product that you can’t experience until you have it custom-made for you? “Think of Snugs as like holidays – you have to go on them to experience them,” argues Jobin. “But once you’ve had the experience and you have come over to our side… In my analogy, if you’ve ever been to the Cape Verde islands, you’ll never go to the Canary Islands again.”
The question, perhaps, is would Paul Jobin go on Dragons’ Den again? He sounds astonished that I’d even ask: “Oh, absolutely,” he replies instantly. “We’ve had conversations with other investors; we’ve had investors who watched the programme contacting me since; I have two investor meetings in London tomorrow with quite large hitters. Plus for us to say we’ve been on Dragons’ Den, I’ve got the footage, we’ve got the quotes from Peter Jones. It’s hugely valuable.”