Peter Jones’ reality check for overconfident tech entrepreneur! | Dragons’ Den – BBC


Next up is Holmfirth-based tech
entrepreneur Martyn Gould, who has a lot riding on his trip
to the Den. Today is huge for us and our company
because we’ve worked really hard for the last two years,
to build something that’s great but we’ve recognised that we need
some help. Martyn’s decided that to win the
Dragons over, honesty is the best policy. I’m going to be transparent,
I’m going to be friendly, and, hopefully, when I get back in that lift, I’ll have a big smile on my face! Hi, Dragons. My name’s Martyn Gould,
I’m the CEO of Yboo. I’m here today to ask for an
investment of £250,000 for a 2.5% equity share in our
business, Yboo Limited. Dragons, did you know that in the UK
every single year, consumers overpay for mobile phone
contracts? They don’t know what they use,
so they don’t know what to buy and the market is deliberately
complicated. We made Yboo to solve that
problem. One, download Yboo. Two, use your smartphone as
normal. Three, sit back and wait for Yboo to
match you to a deal that’s best for you. Not only do we match you on price,
but we also match you on signal strength and we’re ideally
placed to scale in the UK and internationally,
but we need you guys onboard to help us do that quicker. Look forward to receiving any
comments about the product. An app that tracks your call and
data usage to recommend the best mobile phone deals is the offering
from Yorkshireman Martyn Gould. He’s asking for a sizeable £250,000
for a 2.5% share in his business. Sara Davies is keen to know more
about Martyn’s experience in the mobile phone zone. Martyn. Hello. You are from the industry?
Absolutely. We’ve been in the telecommunications
industry for 20 years. I was one of the first employees at
Cellnet when it was analogue, and the networks know us. And do they love our team and our
people? Absolutely. You’ve just gone in, found a few of
the best people, put the super-duper, awesome team
together? We’ve built a team to solve a real
problem for consumers and mobile networks, and we’ve got
the foundation to grow. And I do believe in it because I’ve
spent 14 months with no salary, no income, spending my savings to
launch this service. That’s how much I believe in it. Martyn’s passion and his impressive
credentials seem to be going down well with Sara Davies. Peter Jones made his first millions
in mobiles. How will Martyn fare being quizzed
by an expert? Martyn, hi.
Hi, Peter. You said the selling point is the
fact that it will tell you the coverage where you live…
Yeah. ..and the best network for
you. Yeah. How do you get that information? So, we crowdsource it from users
and we know that people have their mobile phone with them
all the time. This is from our own systems and our
own algorithms. And how many users do you have? So, to date, we’ve had 40,000 people
that have downloaded our app. And how many people in the UK have a
mobile phone? So, there’s 60 million people that
have a consumer connection. 60 million people have a connection? Yes. And yet 40,000 people tell you where
the coverage is? So, I’m going to go on your site. I bet, and I put my postcode in,
you’re not going to know whether the coverage is good for me
or not. So, if we don’t know, we’ll tell you
that we don’t know. We’re completely transparent and
we’ll tell you… So, I get a message back to say,
“I’m sorry, I just don’t know it”? As we scale in the UK, we’ll have
more detailed crowdsourcing information and, hopefully… Well, you won’t get it –
that is my point. You’d be far better to utilise… ..an average network coverage map. I… I think we’ve made the right
decision in not using operator maps and being independent of every
single mobile network. The operator maps are static, they
take no account of population. I totally agree with you,
but you’ve got 40,000 people out of a population of 60 million. Martyn’s failure to embrace
all the data available to improve his service signals
trouble with Peter Jones. Will he get a better reception from
Deborah Meaden on the subject of the company’s
finances? How much money have you spent
so far? So, we’ve spent about… ..£1.1 million. And that’s across the whole of our
business. So, that’s on technology
development, patents, operations, sales, people, premises. OK, and marketing? £300,000. You see, I think £300,000… ..I’d have expected, possibly,
to have heard of you. OK. And £300,000 for 40,000 sign-ups. Does that sound like a good return
to you? No. The reason we’re here today is
because we need your experience to grow quicker. So, tell me what happens on day two. Here’s £250,000,
what are you going to do with it? So, we’re going to use that money
to launch internationally. What is the rush to go
internationally, when you haven’t even tested the
market fully here? I think there’s a huge desire to go
internationally because the product’s portable. One of our key target areas
is Australia. Because of the geographic landmass,
there’s a real problem with signal strength out there. So, Martyn… ..you know, sometimes people can’t
get right what’s in front of them. Yeah. They’ve got expectations to go
somewhere else. We think that our app has the
potential to scale internationally, and, you know, that’s the return
for investors. I mean, it’s like saying, you know,
you can’t get UK right, maybe there’s a softer target
elsewhere. I think you’re delusional. OK. Martyn’s plans for world domination
haven’t gone down well with a wound-up Touker Suleyman. And it looks like he’s not off the
hook yet, as Peter Jones wants more
information on the company coffers. What has been your last year’s
turnover? I’m assuming this is going to be a
very, very big number because you valued your business
today at ten million. It’s not as big as we want it to be
but we’re well-placed to scale. In the millions,
what’s your turnover been? So, for the financial year ’18-19,
we’re going to post revenue of around £50-60,000. £50-60,000? Absolutely. ..sitting on my chair.
OK… OK, well, that’s… I wasn’t sort of
expecting that. Wow, how do you go from there? Do you want to know why we’ve
arrived at the valuation, would that help? No, I don’t think you could put
any level of common sense to that valuation. Martyn? Peter might not want to know,
but I do… ..because I’m fascinated! I think the other thing, Deborah,
that supports our valuation – less than 12 months ago, one of the
major price comparison sites tried to buy us. The valuation that they gave us at
that time was £5 million. Is it possible to see that offer? Yeah, I’ve got it here. Oh, right.
Would you like to see it? All right. Yeah, please, love to see
that. Thank you. You said that you received an offer
for £5 million for the company. Yep. Here’s the reality. You raised… ..£2.1 million… ..1.5 million of debt,
650 of equity, only to receive an offer from this
company… Yep. ..of two million, and they would
have invested two million on the basis of the fact that the
company’s already got £650,000 of cash. So, the offer that you really
had was not five million. To be clear, sorry, I probably
misrepresented what happened, by accident.
Well, I’m not sure… The debt facility was after that
offer arrived. We did not have that £1.5 million
debt facility on the table when that offer arrived. But you can’t use that as a
suggestion that your company, a year ago, was worth five million. Your company was worth significantly
less than that, and the offer shows that in writing. OK. So sadly, I’m not going to invest
today, and say that I’m out. Tech tycoon Peter Jones dismisses
Martyn’s valuation of his company and is the first to exit
proceedings. And the flaws in Martyn’s finances
haven’t gone down well with Deborah Meaden either. I’m not happy about somebody
standing in the Den, who is misrepresenting an offer to
the level at which this offer has been misrepresented. So, to get that letter, I presented
to their board, their complete UK operating board. There’s things and conversations
behind that letter which makes me believe it’s
completely genuine. That makes it worse. This is clearly just an indicative
proposal. You’re either very naive or you
think I’m very naive. Well, it must be me. It’s me. Well, either of those scenarios
are not one that I particularly want
to be part of. So, I won’t be investing. I’m out. Martyn, I think you’re in a very
difficult position but you’re an optimist. What would be even better is if
you’re a realist. OK. And I think it’s a good piece
of technology, actually. But really, the value of this
technology only comes in when you’ve got about five million
users and you can get the accurate data that you need. For me, it’s not an investment
today. Good luck. I’m out. So, Martyn, you’re not a big
company. You’re doing £50,000 a year
turnover. A little market stall that does
more than that. So, you’ve got a valuation,
£10 million, which is probably worth no more
than a million. As it stands today, you think
a Dragon will come along and save you. One thing’s for sure – I’m not! I’m out. That thorny issue of Martyn’s
valuation just won’t go away, as Touker Suleyman becomes the
fourth Dragon to hang up on the investment proposition. But does Sara Davies think she’s
spotted a kindred spirit in the entrepreneur? Do you know what’s funny, Martyn,
is I’m a salesperson. That’s what I do all day, every day,
day in, day out. I sell. And I’m watching you and I’m trying
to read your body language as you’re going because it takes
one to know one. OK. I think you’re a great sales guy.
Thank you. But I actually think you are
believing a lot of what’s in that letter. And that for me is what’s
worrying me. And that’s why I’m out. Thank you. Good luck. Cheers, Martyn.
Thank you, thank you. So, that’s it for Martyn. The confident entrepreneur remained
cool under pressure, but in the end,
his company price tag proved a hot spot he just couldn’t
get away from. Thank goodness you asked for that! So, that letter,
in black and white, says… ..we’ll buy your company for a lot
of money, and after two years after we’ve put
more of our money into your company, we’ll give you more money. He’s a good salesman. I think the Dragons have missed a
trick. I hope I bump into them all in a
couple of years, and I can buy them a drink.

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Post navigation

100 thoughts on “Peter Jones’ reality check for overconfident tech entrepreneur! | Dragons’ Den – BBC

  1. It's weird watching this and then shark tank.. Sharks here in the US must be much much more wealthier than these guys… People come in asking for $600k and get fought over, here, they want 50k pounds which is almost $61k US… Hmm…

  2. Jeebus.

    These things are so horribly scripted/edited, I'm surprised these types of "reality" shows stay on the air.

  3. His plans for the business is cringey. It is implemented poorly, and he wasted a lot of money for it. and this is coming from me, just a software developer, who doesn't know much about marketing and business strategy.

  4. Hate to say it. But i think this chump was using this for free advertising. No way did he want any dragon to be involved after first asking for 250k for 2.5% and then suggesting a company wanted to buy it for 5mill…

  5. there is nothing proprietary , I could take a few thousand pounds, get some guys in India, and write the same app

  6. Peter was off on this one. The problem is not 40K on a base of 60M people. The question really should have been around how well geographically distributed those 40K are – and if they represent a statistically significant sample of the target market (possible).

  7. What I don't understand is that some of these punters are offering only 2.5%. Surely the Dragons could get the same rate on a term deposit without the risk that comes with a business investment?

  8. I am not a scientist, but if you go to the mobile network section of your mobile phone it shows the mobile networks available (eg. roaming) whenever you are. So I am sure you can create an app that measure the signal strength of these networks. Why using a database of users who using the app to measure their Network signal. Anyway… I am out

  9. All these 'Jenny jokes' are getting so boring, non are original……..

    And no there isn't a Jenny related pun down here either!!!

  10. Peters business wil clash if he invested so better off him taking d piss remember guys d ones peter don’t invest he knows they can fuk his business

  11. Tuker is very insecure. When he makes a big statement, he always looks down the line of Dragons for some sort of validation or kinship from them.

  12. Dragon's den canada had the same idea pitched to them years and years ago. I don't think the business went anywhere. It was called mycellmyterms. Google it.

  13. Wow unfortunately he hasn't got a clue what he is on about. It is a business that I bet every dragon would have jumped on if the money was reasonable because in 5 years it has the possibility to be huge. Just if they are going to commit 250K they want to make sure he wont screw it up and he didn't do himself any favors.

  14. WHY in the name of all thats insane would you want to go in there with a shite idea and try to kid the likes of Peter and Deborah? Are these people for real???????????????????

  15. I think utilizing average network coverage maps is wise.

    Surely, trying to break into the market, with something widely acknowledged as being reliable in the industry, is a good spring board?

    If he wanted to refine it later and develop something a bit more novel that's fine.

    I think you have to understand how a wheel works, before you reinvent it.

  16. What an idiot this guy is, you can look coverage up on the internet in seconds, you just had five of the richest business people that you are a numpty and still you don’t get it.

  17. Peter is wrong. There is such a thing as statistical significance. 40,000 users is statistically significant to 60 million – especially since the userbase will grow.

  18. Anyone who thinks this guy is an idiot: hes not.
    Chances are he went in knowing his valuation was ridiculous and he woukd never make investments , the only thing this app needs is downloads and advertising and my guess is in a few weeks he will have over 100k users. Basically free publicity

Leave a Reply

Your email address will not be published. Required fields are marked *