The Dragons’ Den delusion…

Edited about 1:30 into a short video on London Business School’s ‘Enterprise 100’ homepage (click on the [Play] button near the top right to see it), there are two short presentations by BBC TV presenter Evan Davis. His presence there should be no great surprise: Davis’ pre-TV background was as an economist at the Institute for Fiscal Studies and at London Business School itself (for a while). I’ve transcribed what he says below, because I think it’s quite revealing as to what Dragons’ Den is all about:-

“[…] I don’t think television people had clocked (until Dragons’ Den came along) what a funny lot – and interesting and entertaining lot – entrepreneurs are. And so this whole new sort of sector of the world has just sort of walked forward to show off their delusions and their insecurities, and their hopes and their dreams. And I mean, the truth is personality – mostly – is what makes TV good, and I have come to the conclusion that entrepreneurs are an interesting and funny lot: and by and large, you don’t have to be deluded to be one but it does help.”

Davis then continues to warm to his theme in a second section:-

“The qualities of good investors are those that see through the excesses and delusions of the people presenting to them, and can also see through the weaknesses of the people presenting to them. They’re not just looking (I think) for somebody who is going to be pitch perfect… you want to see if they’re not pitch perfect, whether the proposition is still fundamentally sound despite, errr, you know, a weakness in the pitch or a failing in the business plan.”

The point I think he’s making is that Dragons’ Den is all about exploiting delusional entrepreneurs to make good TV.

Really, for all the popularity of Dragons’ Den, it leaves me stone cold both as “entertainment” and as entrepreneurial business: the people who pitch there are not statistically representative of the startup people I get to meet. No: applicants are filtered out, initially by self-selection (you don’t have to be mad to apply there, but it helps) and then by the producers (for what do you think they want, good investment opportunities or good car crashes?), until only the (very few) madly bright and the (majority) brightly mad remain – the outliers on the startup bell-curve.

To acknowledge that this all came from an LBS promotional video, here are all my thoughts on the subject brought together using that most classic of MBA consultancy tools, a 2×2 grid. There is a fine (and, in this case, dotted) line between self-confidence and self-righteousness, as well as one between positivity and delusion, and from my point of view it seems that Dragons’ Den joyously fetishizes exactly the wrong side of both of those lines:-

All the same, if Dragons’ Den was merely a Schadenfreude-soaked reality TV business show whose most notable achievement was sustaining rating success without dispatching truckloads of cash to Jordan’s capacious bullion vault, I probably wouldn’t find it so awful. But right now, we’re in a gigantic startup financing crisis where VCs have abandoned any pretence at early stage venturing in favour of late stage expansion, and where angels have abandoned risk altogether (they want bank-level risk with “home run” 10x payouts) – and what conceptual template does Dragons’ Den offer? Whether delusional nerds and greedy egomaniacs can find a workably inequitable way of collaborating. Riiiiiiight.

As to its overall cultural impact… though I don’t for a minute believe that Dragons’ Den has caused the current UK startup finance crisis (even TV producers’ egos aren’t quite that big), I do think that its contribution to the overall discourse on UK startup culture has overall been thoroughly negative. While many UK angels are looking for ‘top left’ role models (there’s certainly no shortage of angel money in the UK, even if most of it was made in a bull market), surely Dragons’ Den’s relentless focus on the ‘bottom right’ unreality of startup business and the apparent egomania of its “Dragons” make it probably the last place anyone should be looking for them. Oh well!

Entrepreneur Role Models…?

Who should entrepreneurs see as role models? When Microsoft @bizspark tweeted this general question a few days ago, my immediate thought was that there were plenty of bits of entrepreneurs I liked:-

• Clive Sinclair’s mass manufacturing (but not much else)
• James Dyson’s design (but building in the UK from the start was obviously a bad move)
• Robin Saxby’s collaboration (how ARM can supply so many bitter rivals is frankly quite amazing)
• Steve Jobs’ design aesthetic & marketing (coming soon, the iToilet, the iOven, the iMoped, etc)

However, one problem with this is the whole concept of success, because when you put successful businesses under the microscope, what you tend to find is just how arbitrary their success actually was, how perilously close they came to abject failure. And as for the entrepreneurs driving those companies – well, every time I see a list of character attributes entrepreneurs ought to have (such as this list from the Startup Professionals Musings blog – confidence/leadership, uniqueness, openness, respectfulness, roundedness, humility, charity), I have to say that they correspond only glancingly with the ones that successful entrepreneurs do present. Please correct me if I’m wrong!

In fact, if experience was any guide, you ought to see endless Internet lists describing an ideal entrepreneur as:-

• pig-headed, arrogant, ruthless, unpleasant, driven
• emotionally shallow, feigning humanity only to achieve their short-term ends
• overconfident, relying too strongly on their own limited expertise
• greedy, ambitious to the point of megalomania
• etc

But then again, we all have a little bit of an angel and a demon in us, so I don’t think any of this helps much. The key characteristic shared by big stories about startups is that the people involved are on an emotional and financial rollercoaster, and such an extreme experience will naturally tend to bring out both the best and the worst in them – whichever side gets foregrounded will depend on who’s telling the story (and why).

Ultimately, I think the reason that there are so few “role model entrepreneurs” is that it is not their characters that make them rich, it is their customers. Maybe the trick is not so much good character, but good market rapport, good technical knowledge and an excellent sense of timing.