I recently came across Darrell Kopke's article denouncing the Dragons' Den and its American parallel, Shark Tank for their promotion of a "pitch-first" attitude to entrepreneurship. Kopke claims this approach is "killing businesses," however, there are two fundamental problems with this conclusion.
First, no matter how you stack it, pitching is an incredibly important part of any business. Whether pitching friends to become cofounders, acquaintances to become early customers or potential investors to become partners, if you are unable to communicate your idea, it's going nowhere.
Dragon's Den showcases the excitement that can be generated from a brief and articulate pitch without hiding the pain and awkwardness created by those who fail. Being exposed to these two outcomes and having the opportunity to learn from others' experiences should be immensely valued by both budding and seasoned entrepreneurs.
Second, Kopke distinctly implies that, in some way, the popularity of Dragons' Den and Shark Tank is BAD for business on this continent. In his book Decisions, Dragon Jim Treliving states, "I'm continually amazed at how Dragons' Den has enlivened the spirit of entrepreneurship in this country... I love that. And to think, I almost passed on the chance to be a Dragon."
How many millions of people have had living room or water cooler conversations about their newest idea that was inspired by something they saw on Dragons' Den or Shark Tank? I can't imagine anything else that could so successfully drive innovative thinking and encourage people to take a leap of faith.
Where I do agree with Kopke is that the "raise-money-first" mentality is not the best method for creating a new venture. This is a debate that has been widely discussed and largely resolved by the startup community over the past ten years. Led by game-changing entrepreneurs like Steve Blank and Eric Ries, a systematic process for customer development has replaced aging methods that provided inconsistent results.
Since Blanks was published in the Harvard Business Review, these ideas have escaped the startup community and gone mainstream. Entrepreneurs, business schools and Fortune 500 companies around the world are adopting the Lean Startup Principles of Customer Development with resounding success that is fuelling much of the new job growth in North America. While these principles continue to evolve, they are not new, nor are they hotly protested. Instead, they are becoming systematically ingrained as foundations required for consistently creating new ventures and successful products.
Additionally, the sound business values the Dragons themselves promote on the air should not be overlooked. Jim Treliving regularly tells founders they shouldn't bet their family's financial security on any venture. Arlene Dickinson is highly supportive of social ventures and environmentally conscious products. David Chilton and Bruce Croxon both personally advise and mentor companies they've chosen NOT to invest in. And even Kevin -- the cutthroat capitalist of all capitalists -- was extremely helpful to our venture without any financial prerogative.
Innovation is the means by which North America will compete in a world increasingly dominated by a never-ending stream of "emerging economies" that can out-manufacture and out-engineer former North American mainstays at a fraction of the cost.
Dragons' Den has inspired millions of budding innovators to take that pivotal first step -- pitching the idea. Even if someone's pitch is just to family, friends or their own shadow, this is the critical and unavoidable first step to creating something of value.