Be Your Own Boss - Episode 1: Commentary & Observations
Entrepreneur Richard Reed looks for the next generation of start-up superstars, setting aside up to a million pounds to invest in three of the big ideas pitched by 500 hopefuls. Episode 1 of the excellent Be Your Own Boss was shown on BBC Three and well worth recording to use as part of any unit on entrepreneurship and enterprise.
500 people have been given £100 each by Richard Reed. That's a very speculative investment of £50,000 by Reed to gain some insights into potential business ideas that might start to generate a return on the risk he's already taken.
What do you think of some of the business ideas featured
Porridge Power - potential for a chain of porridge bars when you can already get porridge on the go at Pret and elsewhere? Reed seemed to like the idea and was taken by the energy of the entrepreneur.
Innocent Chicken - another food concept, perhaps a little close to the name of Innocent Smoothies. But a terrible pitch - there is no product! That was a waste of £100.
The Lazy Camper - another startup wanting to take advantage of the festival market. But do you believe their assertion that they can make a profit margin on a value camping kit priced at £60?
Poetic Studio - a novel take on art exhibits? But can it be a business?
Squick - bet you never thought of a product for catching sick!
Mango Bikes - this looks interesting! Customisable bikes provide a great example of how to add value through the personalisation of a product. Reed obviously likes this one too - a credible business idea and the entrepreneurs seem to have done their homework.
Next Reed starts to decide which startups will receive an initial investment of seed capital.
The Lazy Camper gets £3k, with an instruction to focus on achieving initial sales rather than wasting the investment on "brand awareness".
Poetic Studio are the next team to get seed capital. Reed is struggling to make the distinction between whether Poetic Studi are really artists or entrepreneurs. This one is a high-risk play for Reed; he's clearly not expecting to make a return on the investment, but it comes off it might be big!
Mango Bikes complete the first three startups that gain seed capital. Will Facebook really generate any real customers? I doubt it, and so does Reed. But Reed really likes these two entrepreneurs and he invests £5k of seed capital.
Each business then has six weeks to demonstrate that they can get their business moving forward.
The Lazy Camper: remember that the selling price (£60) was cheap? One reason might be the even cheaper and poor quality tents that the entrepreneurs have sourced from China. A classic headache for a startup business! Their first attempt at direct sales at a local festival is also pretty disastrous, raising questions about their credibility.
Poetic Studio: go for their drinks dispenser, priced very high at £8,500. Not surprisingly, they get very few orders. The dancing fireplace looks even crazier. Can these two people ever come up wth a product concept which might have some commercial potential?
Mango Bikes look like a much better bet, but I'm nervous with the celebrity-endorsement deal. They're giving away a bit slice of margin - potentially a very costly way of building distribution. It's very easy to get carried away with potential partners who promise the earth! It also looks like they've got themselves hooked up with a dodgy website designer. A schoolboy error, though I doubt they've lost amy online sales - you have to work harder than that!
The final part of the programme features a more in-depth examination of the progress of idea and the viability of the business plans. In fact, this part of the process is really about Reed making a decision about whether he believes in the credibility of the people who are sat opposite him. Do they have the required entrepreneurial flair? How committed are they to their business idea? Liking the people involved is really not enough.
Mango Bikes gets the nod - an investment of £50,000. That feels to me like the right call, though I'm not convinced by one of the two entrepreneurs in the team. Mango Bikes has a distinctive name and a highly differentiated product with reall potential to add value. Will be interesting to see if it can succeed.
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