Yboo CEO Martyn Gould is experiencing the aftereffects of appearing on popular business entertainment programme, Dragons’ Den.
“My phone has been ringing all night so I’ve not had a lot of sleep,” he says. “We’ve had massive growth on downloads – we’re still trying to get our head around the stats.”
Broadcast on BBC2 on Sunday evening (and now showing on iPlayer), it was a tough gig for the Huddersfield-based founder. He came away empty-handed after pitching for £250,000 in exchange for a 2.5% stake in yboo (an acronym for “you’re better off on”), which helps consumers switch to a more suitable mobile deal based on factors such as price, signal strength and location.
Despite not managing to secure a dragon’s services, the entrepreneur is adamant that entering the den was worthwhile.
“Advertisers say that it’s basically a million quid’s worth of advertising on the back of more than 10 million viewers,” he says. “We’ve had terrific traction so far, so it was everything we wanted.”
If the appearance does generate such value, it will be more than three times the £300k that yboo has spent on marketing to date.
Gould says that the “tiny” budget is responsible for yboo’s relatively low amount of users, which total 40,000 and were mostly attracted through word of mouth recommendations. Dragon Peter Jones was critical of the figure, pointing out that it’s a drop in the ocean compared to the 60m consumers who own a mobile phone in the UK.
“Peter’s absolutely right – but we’ve spent our money putting it into product, as the best growth hack is to have a ‘dog’s bollocks’ product,” says Gould, who was in the den pitching for a total of 93 minutes. “The fact is that we spent little on marketing because we knew we were going to be on TV.””
“I didn’t want to get into a boxing match with the dragons.”
He explains that the heavily edited segment, which lasted just 11 minutes, missed out a conversation between him and the Data Select owner discussing his company’s efforts to scale.
“Peter asked me if yboo has a scaling problem, and my response was that every scaleup has a scaling problem,” he says. “If one has mass consumer adoption then it usually can’t backfill the tech quick enough, and if it’s got great tech then it generally means that it can’t market itself effectively.
“The reality is that you can’t spend £2m three times – on your product, people and team. You have to choose.”
Gould believes that the outcome would have been different if the episode, which was filmed back in February, was shot today. Since then, he says that users and revenue are up, and the company has secured investment to launch in Australia.
Plus, yboo has signed up new mobile operators to Insights, its SaaS platform that lets telcos filter anonymised user data to directly message users who would benefit from their offerings.
“Sometimes the dragons don’t realise and really understand how quickly a good tech company can get stuff done,” Gould says. “They’re big fans of retail businesses that generally move quite slowly, so maybe they’re more used to that.”
One-by-one the dragons declared themselves ‘out’ after discovering that Gould’s company valuation of £10m was well wide of the mark, and the founder has no complaints.
“I think they made a really fair point, because if you invest in anything at £10m, unless you get a very quick exit or put a lot of money in, your upside is tiny,” he says. “However, with their experience they know that they could have turbo charged our growth and sped up an exit to make themselves money. But at the end of the day that’s up to them, isn’t it?”
Gould, who says he would buy the dragons a drink if he bumped into them in the future, is happy with his appearance on the show.
“Overall the BBC were fair, to be honest, so I can’t complain,” he says. “It was an underdog story – after filming the show, the producer said that the public would genuinely love the way the product and how I came across.
“I kept calm and didn’t get into a boxing match with the dragons because I didn’t want to – and I even got a few compliments from Tej and Sarah, along with a few more said off-camera.”
Gould’s level-headedness in the den comes from his previous pitching experiences (in successfully raising money from Angelfish and Manchester’s Business Growth Fund), and time spent posting unscripted yboo video updates on LinkedIn. He encourages entrepreneurs looking to hone their pitching skills and become more comfortable in the public eye to do the same.
“Entrepreneurs are the new video stars – people want to be entertained and LinkedIn is TV for business.”
“Entrepreneurs are the new video stars – people want to be entertained and LinkedIn is TV for business,” he says. “It’s the future of building your customer base, being real, getting engagement, followers, product reviews and raising money.”
He also advises founders thinking of braving the den to practise their pitch to a former contestant who is familiar with the process of appearing on the show.
“When you walk into the den, not only must your pitch be great, but you have to educate the dragons on your product as they will never have come across it before,” he says. “You need to remember your numbers, key dates, strategic intention and also how to phrase things and overcome objections. You may have to deal with three of them speaking at once, which is difficult for any entrepreneur.
“I disregarded my own advice and did not do that as I wanted to keep it secret as we were raising other money concerned with international expansion at the time.”
Gould has now begun executing a strategy designed to capitalise on yboo’s appearance. He agrees with dragon Tej Lalvani, who commented on Sunday’s episode that yboo would need around 5 million users to gather accurate signal strength data.
“Breaking that figure down into a calendar year, it’s around 500,000 new users a month, so he’s absolutely right,” says Gould. “It’s one of the reasons we’re talking to price comparison sites about plugging our service into them. The marriage of volume they bring to our tech would be really good for us.”
And that wasn’t the only point where Gould and the Vitabiotics CEO saw eye-to-eye.
“He called me an optimist in the den which was nice – and he was right,” he says. “If I wasn’t, I wouldn’t have gone 14 months with no salary and spent all my savings. I would’ve given up and we would be just another failed startup that didn’t go anywhere.
“And that’s not what the world needs, is it?”
Dragons’ Den Series 17 Episode 2 is available on iPlayer
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