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Dragons' Den (2006) Season 20 Episode 7
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FunTranscript
00:00Tonight on Dragon's Den.
00:05This is the biggest thing to come into New Brunswick in a while.
00:09Whoa!
00:10Oh!
00:11They call me Wreck-It Ralph!
00:13We can double our sales, absolutely no problem.
00:15Based on one fact, though, you don't have pre-orders.
00:18Just because you open something doesn't mean they all come right away.
00:22Kathy, why at this stage of your career
00:25have you decided to take the risk to be an entrepreneur?
00:28I've made a lot of people a lot of money.
00:30I want to make myself some money now.
00:32Good answer.
00:33Good answer.
00:34Good answer.
00:35Good answer.
00:36We want to make myself your way in the walk.
00:37I've made myself your way in the alley.
00:42Tell.
00:43Tell.
00:44Tell.
00:46Tell.
00:47Tell.
00:48Wow!
00:49Woo!
00:50Yeah!
00:52First up, New Brunswick builders, ready to prove they can turn trash into indestructible treasure.
01:09Hello, Dragons. My name is Dustin Bowers, and I'm the founder of PlayX Building Systems.
01:13I'm here today with our CFO, Matt Durnian, and our facility manager, Rish McGlynn.
01:18We're here from New Brunswick, seeking $1 million for 3.33% of the company.
01:22Wow.
01:23Hello.
01:24That's a bold deal.
01:25It's the biggest thing to come into New Brunswick in a while.
01:27Absolutely.
01:29Imagine turning mountains of this everyday construction and plastic waste into something productive.
01:36Sustainable, high-performance building materials.
01:40Canada also needs to build over 3 million homes by 2030.
01:43That's more than three times our current building rate.
01:45This is where PlayX comes in.
01:47With our core innovation, PlayX Crete, we take up to 100% recycled materials and combine it into this engineered, patented, composite material.
01:58And from that, we turn it into two unique product lines.
02:02Our Lynx landscaping system is our first-to-market product with DIY-friendly retail sets.
02:08And our flagship brick and panel system consists of a structural core interlocking block and a durable interlocking panel system, forming a fully finished wall.
02:19Cool.
02:21Construction of our first demo home begins this August with an offtake for an additional 50 units in 2026.
02:27With this system, we can build more homes in less time.
02:31Now, seeing is believing.
02:33So today, we brought the job site to you.
02:36Oh.
02:36Okay.
02:37Brian and Wes, would you please be our volunteers?
02:39Of course.
02:40Let's do it.
02:40Let's do it.
02:41All right.
02:41Today, we have our five-in-one flower bed set, which is now in Rona.
02:46And we have some traditional materials.
02:48Let's see who can build this faster.
02:50Okay.
02:50On your marks, get set, build.
02:54Go.
02:55Woo-hoo.
02:55Oh, Brian.
02:56You're going to want to flip them around each time.
02:58Go, Brian.
02:58Go.
02:59So flip it around this way.
03:00Go, Brian.
03:00Go, Wes.
03:01Brian, is it easy?
03:02It's like building Lego.
03:03Brian is crushing it here.
03:05That's really quite impressive.
03:07Oh, that's why I don't do this kind of stuff myself.
03:11There's a thing called money that can fix this problem.
03:14PlayX's systems are sets of interlocking bricks designed to work together for construction.
03:19With this flower bed kit being their first product in stores.
03:23All right.
03:23I think we're done.
03:24High five.
03:25Well done.
03:26All right.
03:26Awesome.
03:27How easy was that?
03:29This was a piece of cake.
03:30Seriously.
03:30Absolutely.
03:31A beautiful, easy structure is great.
03:33But how do they hold up in the real world?
03:34That's a good question.
03:35Oh.
03:36This is the best part.
03:38Once you get your safety gear on, I'm going to get the two of you to switch positions.
03:41Okay.
03:42And you can test your opponent's wall.
03:44Oh.
03:45Whoa.
03:45Oh.
03:46They call me Rick at Ralph.
03:48I feel it.
03:49Dustin says compared to typical cinder blocks, PlayX are more durable and costless, especially
03:55when you factor in the labor of cutting bricks and applying water.
03:58Wes, this is why you need to eat breakfast.
04:01I don't know, Wes.
04:02I don't know, Wes.
04:02I don't know, Wes.
04:02What do you think of this material?
04:05This is amazing.
04:06Beyond selling nine different DIY kits, PlayX is also working on licensing their technology
04:11for other builders to make homes and structures out of their interlocking blocks.
04:16Those are not nearly as heavy as I expected.
04:18No, not at all.
04:1916 and a half, 17 pounds.
04:21You know what I love about this?
04:24All the people that are coming here to solve this housing crisis that we're having in this
04:29country.
04:30What got you guys here?
04:31I grew up in a family of tradespeople.
04:33I've been building houses literally since I could walk.
04:35And as I got older, I started managing more projects.
04:38And I realized about 30% of our project costs were going directly to landfill costs between
04:43bin costs, wasted materials, labor to clean up between subtrades.
04:47It's a lot, for sure.
04:48But interlocking stone and brick is not new.
04:51Is what is new for you the recycling of the waste material into a brick?
04:57Into unique products that reduce the labor requirements.
05:00In the housing space, there are other block-based solutions, but there is nothing like our product.
05:05Which one of these products builds a house?
05:07The brick and panel system.
05:08This incorporates that core block, which is your structural component.
05:12And then the paneling systems, which clip onto that, allowing for a fully finished wall.
05:16So have you built one of them, actually?
05:19So we're a startup.
05:20We've got the commitments for the demo home and for licensing opportunities.
05:25But this is a pre-revenue company at a $30 million valuation.
05:28I'm interested in how much it costs you to make this, and is there even the economics
05:34here to make anyone want to buy this?
05:37Right now, we are making it for $9 a brick.
05:38And then how much do you think you can sell it for a brick?
05:41You have no idea.
05:42We are selling it currently.
05:45Also at $9 a brick?
05:46Above.
05:47Just above.
05:48$10 a brick.
05:49It's a bit...
05:50Our long term is really about a technology licensor.
05:53So we've developed a proprietary technology that mixes our blend and then turns it into
05:59finished products.
06:00So why wouldn't you build a company that sells bricks versus a company that sells machines
06:07to make the bricks?
06:08Because it can scale quicker.
06:09And how much are you charging for the license?
06:12So roughly about $2 million Canadian for the equipment cost.
06:15Have you delivered one system yet, even?
06:17We have our system in our own facility.
06:20No, but you haven't delivered it to somebody else yet.
06:22No, not to someone else.
06:23It's different when you make your first one for yourself.
06:25It seems to me like you started out as a brick-making company.
06:29And then you got these demands and you go, I'm going to pivot to that as well.
06:33I would say the vision to scale this solution with low capital intensity, we've chosen that
06:38licensing model.
06:39But that's capital intensive because you've got to come up with the money to build that
06:43factory.
06:44That's why they're asking for a million bucks.
06:47We started raising money last fall.
06:49How much have you raised so far?
06:51We've raised just over $1.1 million.
06:53And how much are you burning a month?
06:56We're putting out about $20,000, between $20,000 and $25,000.
06:59How much do you have left in the bank?
07:01We have about $50,000.
07:04You guys have put a lot in and you're running out of cash quickly.
07:07You are at the end of the rope here.
07:09The number one job of a CEO is never run out of money.
07:15Ever.
07:17Right now, I think your unit economics are negative.
07:21And until they're definitively positive, I would not be prepared to invest at a valuation
07:27that's this high.
07:28I'm going to be out.
07:29You have two business models that are a little bit complicated in my view.
07:34One, you're going to license the product out.
07:36And then two, you're going to actually make the product and sell it.
07:40You're running out of cash.
07:41You have two months runway.
07:42I'm going to be out.
07:44For me, guys, it's too theoretical at this point.
07:47You're going to burn through a lot of cash to figure out if this is viable and it's not
07:51going to be mine.
07:52I'm out.
07:52I'm in the junk collection business.
07:55I'm all for repurposing.
07:56You've got two models to choose from that I don't think is clear.
08:00And for that reason, I'm going to be out.
08:03There's a good lesson here for entrepreneurs because it is easy to get distracted by different
08:08opportunity, especially when you need capital.
08:10So this facility that we are running is the proof of concept for that licensing model.
08:18So it was never about making.
08:19It was never about.
08:20No, and we don't even plan to continue operating that facility as a sole production facility.
08:25We plan to transition that into an R&D facility to be able to roll out more products to our
08:30licensees.
08:31Interesting.
08:32What you've just said literally captured the business model, what you're hoping to do
08:37and where you're hoping to go.
08:39But what I know about this space, you could write on the top of a pin, I'm going to be out.
08:44Okay.
08:45Good luck.
08:45They got us all distracted with all the bricks and the cost of the bricks and all that.
08:51They really did.
08:51They don't care about that stuff.
08:52Or they let us distract them.
08:55Hey, I would have loved to have one of the dragons on today.
08:57But, you know, at the end of the day, that's their loss.
09:04Coming up.
09:05How many people do you have working with you?
09:07Oh, just me.
09:09Just you.
09:09So that's the issue, right?
09:24Whoa.
09:25Here we go.
09:26What's going to happen?
09:29Woo-hoo.
09:30Woo-hoo.
09:31Come on in.
09:33Espresso.
09:34Oh, party.
09:37Always on your route.
09:38It's got to be a burst of energy.
09:41Riding into the den, an entrepreneur hoping to impress the dragons with his daily grind.
09:50Barista on duty.
09:52Nice little shot of energy.
09:53Hey, dragons.
09:54My name is Vlad.
09:55I'm from Vancouver, BC.
09:57And my company is Coffee Bike World.
10:00I'm here today asking for $150,000 in exchange for 12% stake in my company.
10:06As a big coffee lover and aspiring entrepreneur, I always dreamt about owning a coffee shop.
10:12However, the initial investment and overhead costs just didn't make any sense.
10:17So I invented what I believe is the world's most mobile, self-sustainable, and environment-friendly coffee shop.
10:23Introducing Coffee Bike.
10:26We started back in 2019 and up to date have served over 1 million cups of coffee locally.
10:31Whoa.
10:321 million cups?
10:33That's a lot of coffee.
10:34Wow.
10:34So dragons, who is ready to join our Coffee Revolution 1 coffee bike at the time?
10:39I am.
10:40Well, I know a bit about the coffee business.
10:43Yes.
10:43And I was actually going to invite Arlene and Brian for a quick tour.
10:47Okay.
10:47Whoa.
10:48Okay.
10:49Come on, Brian.
10:49You're in the coffee business.
10:51I'm in the franchise business.
10:53You're in the franchise business.
10:54Look at this.
10:55Vlad says his electric bike carts can serve up to 100 cups of coffee per hour.
11:00Our barista will make your favorite drinks right now.
11:03That's very cool.
11:04The carts feature water systems and solar panels and can be custom built with pastry display units and even waffle makers.
11:12Oh, there you go.
11:13You know my drink.
11:14Thank you very much.
11:14Very cool, Vlad.
11:15Hey, Vlad.
11:16Thanks a latte.
11:17It's a very dad joke.
11:22Yeah, it's a very beautiful joke, right?
11:24What a brutal business.
11:27So, Vlad, have you done this type of business before?
11:29I opened my little restaurant in Yaletown, which was a franchise, and it was just a constant pay of the bills.
11:38Margins were non-existent.
11:39I realized I need an idea in my life which I can scale without my physical presence.
11:43So, basically, the idea goes, like, against the traditional model of franchising or licensing.
11:51What does that mean?
11:52So, we offer training.
11:54We offer optional supplies.
11:56We offer optional support in a digital service as well.
11:58But it's all non-obligatory.
12:00Once you purchase the bike.
12:01They can do whatever they want.
12:02Oh, but you can make it your own brand.
12:05So, Vlad, you're in the equipment business.
12:08You're building the bikes and the espresso machines.
12:10Arlene could go take Balzacs and say, let's have a Balzac bike.
12:13Yes, exactly.
12:14So, you're business in a box on a bike.
12:16Then we have the next threshold, which would be our own provision of supplies.
12:20Whether it's coffee beans, whether it's cups.
12:22Let's say you want a coffee cup with a logo.
12:25Locally, it's 75 cents.
12:26I can offer it to you for, like, 25 cents.
12:28So, you're, like, creating a group buying opportunity, right?
12:31I'm creating, like, my little country where we are, like, offering something.
12:37Vlad, why wouldn't you build a brand and have one brand of coffee bikes?
12:42People are already making a very big step in their life to commit to the business, to entrepreneurship.
12:48So, instead, I'm offering almost everything that franchises offer.
12:51Yet, I give people feel of freedom.
12:54Optionality.
12:55And because there is always constant trust.
12:58I actually think, in the long term, there is more people who are going to opt in.
13:01So, that's very interesting.
13:03But we're investors.
13:05And franchises make so much more money than manufacturers do.
13:09You have a really unique opportunity because you created a cool innovation.
13:12You actually understand what it takes to franchise.
13:14I'm just thinking from the scope of person who's been riding one bike every single day.
13:19I'm paying my cost of goods.
13:20I'm paying my fixed.
13:21And then I have to pay it to franchisor as well.
13:24It just makes me too obligated to be in such a small business practice.
13:29Yes, a small business.
13:30That's exactly the point.
13:32And what do they pay to get into this?
13:35$30,000 would be the average.
13:37But $30,000 isn't that cheap.
13:39I actually thought it would be like half the price.
13:41So, why is it so much?
13:43Just those two pieces alone would retail for around $16,000 Canadian dollars as a commercial-grade coffee equipment.
13:50So, how much money did you make last year?
13:52We generated $420,000.
13:54So, we now have 15 owners in Canada.
13:57We have one owner in the States.
13:58And we have one owner in Peru as well, which was very interesting lead to come into my inbox.
14:04This is why I'm here today.
14:07Marketing support is something that I haven't just figured yet.
14:10How many people do you have working with you?
14:13Oh, it's just me.
14:14Just you.
14:15So, that's the issue, right?
14:16You don't really have the bandwidth to do all the things that you're doing right now.
14:20I am here now because I'm finally accepting the fact that for my next level step, I need a mentor and support.
14:27The challenge for me as an investor is that you are a one-man band.
14:33And there's a thing in the corporate world called key person risk.
14:37That if something happens to you, it's going to impact the brand.
14:40So, for that reason, I'm going to be out.
14:42I mean, look, I actually really like the business.
14:46The fact that you saw you could do this without a brick-and-mortar space, that you are really focused on how to make margins for the people that buy your product.
14:54I think that's actually really cool.
14:56I would offer you $150,000, but for 25% of the business.
15:02Wow.
15:04All right.
15:05Vlad, I think you have a good business for you.
15:07I just don't see the scaling into a multimillion-dollar business where I can get a return on my investment as quick as I would like.
15:15I wish you the best, but I'm out.
15:19I want to find something here to say yes to.
15:22Where I'm getting stuck is on the franchise side where you came in saying, I'm going against franchising and I'm going to be out.
15:32But I do have a coffee brand and I love the coffee business.
15:36I think what you've kind of underplayed is the value of being able to help people who are in this with purchasing power.
15:44The purchasing power of a group is actually going to be very useful when you're buying all of the things that you need to run a coffee shop.
15:50I would give you $150,000 for 18%.
15:55So, Brian, you won't do this?
16:01I really want to see if there is an opportunity for Michelle and Arlene to merge together.
16:08So, I would like to offer 20% for the same $150,000, $10,000 and $10,000.
16:18You don't want to do this to me.
16:20Well, he's trying to get in there on the franchise side, but he's clear he doesn't want a franchise.
16:24If he was to franchise this.
16:27Vlad, I feel like I have all the things you need.
16:30Okay.
16:30Honestly, I would want to do it on my own.
16:34I would just like to counter this 15% to Arlene.
16:39And if 15% sounds fair, I'm ready to shake the hand.
16:43Sorry, what just happened there?
16:44So, 15%?
16:45You're saying 15% instead of 18%?
16:46Yeah, one million valuation, yes.
16:48I would be okay with that.
16:50I'm happy to take this deal.
16:51Thank you so much.
16:52Awesome.
16:52Okay.
16:53Well done.
16:54Congratulations.
16:54I'm excited to work with you, Vlad.
16:55Thank you so much.
16:56You're in a mobile coffee business.
16:57Thank you so much.
16:59Thank you, Vlad.
17:00I don't know.
17:01I try not to preach.
17:03He's going to...
17:03No, he squeaked you out of the deal before you even...
17:06I was like, okay.
17:06I really liked that Arlene pursued her intention to show me that she's the only one I need to
17:13scale this.
17:14You know, the sky is on the limit.
17:17Coming up...
17:19Seema, I want to understand the why.
17:20My parents grew up during the partition in India, and so I grew up knowing never to waste
17:25food, and that's just always stuck with me.
17:28I feel like you can't expect people to be contributing members of society when they don't have enough
17:33food to eat.
17:34Very true.
17:34Next up...
17:47I'm so excited to share my message with all of Canada and to really let people know what we're doing.
17:52I'm hoping that the Dragons will see how we're creating impact.
17:56It means a lot.
17:59A passionate entrepreneur is teaming up with celebrity chefs to tackle food insecurity,
18:05one apron at a time.
18:07Hello, Dragons.
18:08My name is Seema Sangri.
18:10I am from Welland, Ontario, and I'm here today seeking $75,000 for 10% of my company, Cooks Who Feed.
18:18It really breaks my heart to know that so many are food insecure and do not get to experience
18:23food the way that you and I do.
18:25And that is what inspired me to start Cooks Who Feed.
18:29We are a for-profit social enterprise.
18:32We ethically produce kitchen linens with a give-back, providing meals to alleviate hunger.
18:38To date, we've provided around 2 million meals to those in need.
18:41Wow.
18:42That's a lot.
18:42Good for you.
18:44Take a deep breath.
18:50It's okay.
18:51Yeah.
18:51You got this.
18:53We only use sustainable fabrics, and all of our linens are handmade in India, where we
18:58provide safe, fair work to marginalized women.
19:02So, Dragons, join us in creating a movement that will unite food lovers so that we can fight
19:07hunger together.
19:08That's awesome.
19:09Now, I have my esteemed colleagues who are going to come out and give you some samples,
19:13some gifts.
19:13Yes.
19:14Oh.
19:15Aw.
19:15Aw.
19:16Is this a fan?
19:17You guys have some cute, esteemed colleagues.
19:19All right.
19:20You guys know where to go.
19:22There you go, Nia.
19:23Hi.
19:24How are you?
19:26Oh, that's so sweet.
19:27Thank you so much.
19:28Neil, thank you.
19:29The apron that you have inside our flagship product.
19:32We collaborate with well-known chefs and food influencers to design products for our retail
19:37line.
19:37Whoa.
19:37And we create custom products for businesses.
19:40So, you'll notice that all the aprons have a little red label that say it's one apron
19:44equals 100 meals.
19:46Wow.
19:46So, how much money are you donating per apron to buy 100 meals?
19:50It's around $18.
19:52In Canada, we work with Second Harvest.
19:53In the U.S., we work with rescuing leftover cuisine.
19:56And we also support No Kid Hungry.
19:58Seema, I want to understand the why.
20:01My parents grew up during the partition in India.
20:03And so, I grew up knowing never to waste food.
20:07And that's just always stuck with me.
20:09I feel like you can't expect people to be contributing members of society when they don't
20:13have enough food to eat.
20:14Very true.
20:16So, how do you fit?
20:17Maybe you can tell me how you fit in.
20:18How do you fit into this picture?
20:19Oh, how do I fit in?
20:19Yeah.
20:20Well, I'm the husband number one.
20:21First of all.
20:22Okay.
20:22I'm the father of the kids.
20:23That's a good fit.
20:24You haven't introduced yourself.
20:25So, how do I fit in?
20:26So, I was a founder, CEO of a technology startup that sold last year.
20:31And so, I've been supporting her on the sidelines.
20:33And after we had the exit, we were able to secure ourselves financially.
20:37And now, the goal is for me to transition and join her.
20:40And my hope is we can do so much more.
20:43Tell me a little bit about the economics of the business.
20:46Our retail line have a margin anywhere from 55% to 70%.
20:50Wholesale or like custom products for businesses have anywhere from a 35% to 55% margin.
20:56So, how much is this apron then?
20:58The aprons are anywhere from 69% to 72%.
21:01Oh, wow.
21:02Okay.
21:02So, it's expensive.
21:04And then your product costs on that are what?
21:06Our product costs are about $29.
21:08That's the landed cost, including the give back.
21:11What are your sales?
21:12What are your sales currently?
21:13In the four years that we've been doing this, we've done our $1.5 million.
21:16In 2022, we did $360,000.
21:20And then we did $600,000.
21:22And what have you done last year?
21:24The last year, we did $250,000.
21:26Ooh.
21:27More than cut in half.
21:28Yeah.
21:28Yeah.
21:29What happened last year?
21:30Yeah.
21:30I actually decided to kind of take a step back.
21:34And the reason for that was I was seeing that companies were taking longer to make decisions.
21:38I was seeing that a lot of them, their budgets were smaller.
21:42Okay.
21:43If you look ahead for 2025, what are you projecting?
21:45This year, we're projecting to get back to at least half a million this year.
21:49Got it.
21:50I hope I'm getting the stat right, but I believe it's one in six Canadians suffer from food insecurity.
21:55And I really appreciate that you're trying to solve that.
21:58I'm trying to get in my head whether this is a business that can actually be scalable to the extent
22:03where you can be in the tens of millions of dollars or whether this is more a lifestyle business for you
22:08and for both of you.
22:10I think it's a huge market.
22:12If you think about aprons as a market.
22:14Yeah, there's a huge market.
22:15But also, Nishant, it's a $70 apron.
22:18It's not a $20 apron.
22:20You have to be also bought in as the buyer to support the mission.
22:29For me, I really do think your mission is commendable.
22:32I look forward to using the aprons, gifting the aprons, but the numbers today just don't add up for me.
22:38I'm out.
22:39I don't think this is a business that's going to get to the scale that is going to matter
22:46in terms of my time to be able to support you.
22:49So I'll help you however I can.
22:51But full-time as an investor, I'm going to be out.
22:56I'm worried about the sliding numbers.
22:58I think the two of you are fantastic.
23:00I don't think it's right for me, but thank you very much.
23:03And for that reason, I'm out.
23:05As I hear you speak, Seema, I'm thinking about Hilton
23:09because my hotel is a part of the Hilton family.
23:12We're all tons of restaurants.
23:14What I can say is this.
23:16What I love about it is the mission.
23:18I'm going to come in as a partner to join your mission because I'm thinking Africa.
23:23How can we add Africa to, you know, making products and helping that community out a lot?
23:28I'm going to go in at $75,000 for 20% of the company.
23:33Got it.
23:34I think you need to figure out a few more moving parts here before you're ready for an investor.
23:40So I'm out for now.
23:41But you have a great offer on the table.
23:43Wes, I think first and foremost, you understand impact.
23:49And number two, you understand hospitality.
23:50So I think really the fit is great.
23:52Would you meet us halfway at 15%?
23:56You've got to keep in mind there's only one offer on the table, right?
23:59Yeah, understood that.
23:59And if I say yes to what you're proposing, that means I'm negotiating against myself,
24:04which is like a no-no in business.
24:06The reason why I'm investing is because of the impact.
24:10What would you like to do?
24:11You said the most ghost one.
24:16What do you think?
24:17Yeah.
24:20We'd like to take your offer.
24:22All right.
24:22Well done.
24:23Congratulations.
24:23Well, congratulations.
24:25Bring it in.
24:25You've got a great partner.
24:27Yeah.
24:28Thank you, sir.
24:28Good job, man.
24:29Good job.
24:29Yeah.
24:30Yeah.
24:31Well done.
24:31Thank you so much, guys.
24:32Congrats.
24:33Yeah, congrats.
24:35Wes, they got you, which is a great partner.
24:37It is a great partner.
24:39You'll help them a lot.
24:39I love the cause.
24:40I just love the cause.
24:41Now's X1s, we want a discount.
24:44Arlene, you're doing it for a good cause.
24:46A good cause.
24:47They're way too expensive.
24:54I'm Davin.
24:55I'm Derek.
24:56And we're two of the co-founders of Tentree, along with my brother, Kalen.
25:00Tentree's a Canadian lifestyle apparel brand that plants 10 trees for every item purchased.
25:05We were season seven of Dragon's Den.
25:07Hello, dragons.
25:08At the time, it was really a three- or four-month-old business.
25:11Our revenues have been doubling ever since the first month.
25:14In sales?
25:15In sales.
25:16Beautiful.
25:16It was an amazing opportunity to get in front of people that really challenged us.
25:21The business model is this, that people care enough about planting 10 trees that they're
25:25willing to pay more for their clothing.
25:27Yes.
25:27Yes.
25:27How long is that going to last?
25:29And actually push us to think differently and be better.
25:32I think the shirts have got to come offshore.
25:34That's the problem.
25:35You guys go offshore, though, and then you've got all the environmental issues around all
25:38those things.
25:39You want to have the highest cost of goods money can buy.
25:41No, not the highest cost.
25:42No, not the highest.
25:43I want to balance.
25:44I want to balance cost with the right brand image here.
25:47We took the Dragon's advice to balance cost with the right brand image.
25:50And we built what I believe is really a world-class supply chain and really delivering high-quality
25:57product.
25:57That's awesome.
25:59I'm looking forward to this a lot.
26:00I'm looking forward to it a lot.
26:01When Dragon's Den aired, we were still a relatively small business.
26:05We'd only done 150,000 in sales, and we planted 15,000 trees.
26:11Yeah, that's it right there.
26:12We got it there.
26:13Today, we've done over half a billion in sales.
26:16We have now planted over 115 million trees.
26:21And we have a partner network of over 1,000 retailers here in Canada and abroad.
26:26I don't think either of us had any idea what Tentree could become.
26:35Yeah!
26:36It started with us in Saskatchewan.
26:38Yeah, buddy!
26:39Woo!
26:40Printing some t-shirts, selling them out of our parents' basement.
26:43And today, we've had an incredible impact.
26:47And that wouldn't be possible without Dragon's Den.
26:51Coming up.
26:52You're asking us to pay for the value of what you're going to grow the business into today.
26:58Yeah, it's two times revenue.
27:02So it's very fair for a manufacturing company.
27:05One that's not making money?
27:19Oh, wow.
27:21Season 20.
27:21Oh, wow.
27:25Oh, hello.
27:27Good morning.
27:29Hello.
27:32Next up, a Vancouver entrepreneur with a lightweight idea and heavyweight ambitions.
27:39Good morning, bonjour.
27:40My name is Pascal.
27:41Hi, Pascal.
27:42I'm from Vancouver.
27:43From Vancouver?
27:44The name of my company is Droplets.
27:46Today, I'm seeking for $300,000 for 20% of my company.
27:50Camping is booming, but let's face it, tenting is uncomfortable.
27:55And the ground gets lower and lower every single day.
27:59Especially for your height.
28:01RVs are expensive and intimidating.
28:03And rental cabins, well, they just don't move.
28:06Droplet is a line of lightweight teardrop camping trailer that are designed to transform the way people experience the outdoors.
28:12They have all the features that you can find in a regular camper, but it can be towed by any small vehicle and fit in any parking space.
28:20And best of all, it takes absolutely no set of time.
28:24You open the doors and go right to bed.
28:26So simple.
28:27We're already very well established in British Columbia and the West Coast.
28:31Now, with your help, I want to take it across the country and abroad.
28:35Arlene and Brian, if you want to join me.
28:37Yes, please.
28:38Yeah.
28:39There's room for two?
28:40Absolutely.
28:40It's a queen-size bed.
28:42After you, please.
28:43Ladies first.
28:44Okay, ladies first.
28:45Come on in, Brian.
28:46Okay, scooch over.
28:48Oh my gosh, this is spacious.
28:49There's actually a lot of room.
28:50Shut the door for a second.
28:52Just some privacy.
28:53Yeah.
28:54This is like glamping.
28:55This is nice.
28:56Oh.
28:57Okay, here we go.
29:00If the camper is rocking, don't come knocking.
29:02The Droplet Camper features an insulated camper shell, queen-size bed, outdoor kitchen, and solar panels.
29:11When did you start this business?
29:132017.
29:14I built the first prototype in 2016.
29:16I couldn't find anything that was working for me.
29:18You know, I live in a one-bedroom apartment, and every weekend it was like packing the car with all the gear, and I had enough of this.
29:27But there's a lot of campers out in the market that have been on for a long time that are about this size.
29:31So tell me, how is yours different from what's on the market right now?
29:36You don't need to pop anything.
29:37You just open the doors and go right to bed.
29:40£950 for this.
29:41That's extremely lightweight.
29:43That's the main difference.
29:44And also in terms of style, there's absolutely nobody that does that.
29:47Pascal, you designed this yourself?
29:49Yes, I did.
29:50And how does this price compare to what else is on the market?
29:53So, this is on the low end of everything, anything you could buy.
29:59Our starting price is $20,000.
30:00So, I noticed you have the maple leaf on it.
30:02Is it made here in Canada?
30:03Yes, we have a factory in Burnaby.
30:05We make our own campers.
30:07How many can you pump out?
30:08With the size of the facility we have right now, we can make four per month.
30:12Four per month?
30:13Yeah.
30:13Four?
30:14Four.
30:14That's it.
30:17Ooh.
30:17If you're only doing per factory maximum capacity without hiccups, without supply chain issues,
30:26without...
30:26Listen, I own seven manufacturing plants.
30:28Things go wrong.
30:30If all things go right, you can only still make 48.
30:33But we can just increase the size of the shop.
30:36It's extremely simple.
30:37My background is manufacturing and production.
30:40How much does it cost to put up one manufacturing plant?
30:43It's going to cost $50,000.
30:45Oh, that's cheap.
30:46How much?
30:46For one?
30:4750.
30:47Wow.
30:48$50,000.
30:49Yeah, that's very expensive.
30:53So, in eight years, what are your sales?
30:56$4.2 million.
30:57What were your sales this year?
30:58Last year was $850,000.
31:00And what do you anticipate this year?
31:01And the year before was $1 million.
31:02So, why did it go down?
31:03The outdoor industry went down quite dramatically over the last two years.
31:10Yeah.
31:10But we managed to stay pretty steady.
31:13But how many orders do you have waiting to...
31:15We've got five more to make now.
31:17How many?
31:18Five.
31:18Five.
31:19That's it in the backlog?
31:20Yes.
31:20Yeah.
31:23I know a lot about the RV space because of RVZ, a company called Pebble, which I'm sure you're familiar with.
31:29Their wait list is like tens of thousands of people.
31:32Because they've found a very different niche.
31:35And so, maybe the product isn't quite right.
31:38Have you considered that?
31:40I don't agree with you.
31:43Can we talk about a possibility for a second?
31:45Because I would rent this in a heartbeat.
31:47How fun to take kids away for a weekend and have a little adventure.
31:51What my question is, what's the rental market like?
31:54The rental market is pretty much the same as the business right now in the outdoor.
31:58It's slowing down a little bit.
32:00How many do you have for rent?
32:01So, we have our own fleet in Vancouver.
32:04How many?
32:05Four.
32:07Pascal, how did you come up with your valuation at $1.5 million?
32:12If we install a factory on the East Coast, we can double our sales absolutely no problem.
32:17Based on what facts though?
32:19You don't have pre-orders.
32:20You don't have deals with others to get it rented or sold in their place.
32:24Like, just because you open something doesn't mean they all come right away.
32:28You're asking us to pay for the value of what you're going to grow the business into today.
32:33Yeah, it's two times revenue.
32:36So, it's very fair for a manufacturing company.
32:40One that's not making money?
32:41Well, right now we're not making profit.
32:42We're not making profit right now.
32:44Right.
32:44So, that's not what I would call fair.
32:48Yeah.
32:48I think we're being too hard on Pascal.
32:50I hear that you've done almost $5 million in sales lifetime.
32:53Lifetime.
32:541-800-GOT-JUNK.
32:56It took me eight years to get to a million dollars in revenue.
32:58We do a million in a morning today.
33:00Like, it takes time.
33:01So, Pascal, listen, I am ready to make a decision on this one here.
33:08So, I see this as a good lifestyle business for you, but as an investor, I'm going to be out.
33:14And for me, I think it's a cute product.
33:16I'm still not convinced on the differentiation and that there's a big enough market for it.
33:22I wish you all the best, but I'm out.
33:24I'm not going to be the guy to douse your campfire flame.
33:27I honestly believe you're on to something.
33:30I didn't hear a compelling story or a differentiator that was innovative enough in your product.
33:35So, for that reason, I'm out.
33:38To me, this isn't unique enough compared to the other options out there.
33:40And I think if it was more unique, you'd be seeing a larger wait list.
33:43So, I can't hitch my ride to this.
33:45I'm out.
33:47I think you've been very capital efficient.
33:50To build a manufacturing facility for $50,000, to have the market you created.
33:55I wish I could add value to this story, but I don't think I can.
33:59I'm out.
34:00I don't know.
34:03This is too early, guys.
34:06Come on.
34:06Way too early.
34:07He's looking.
34:08Way too.
34:08He didn't say exactly what help he needed.
34:11Every business in here is early.
34:14Coming up.
34:16So, the IP is actually this waterproof pouch.
34:19Completely leak proof.
34:20No way.
34:22Wow.
34:22Wow.
34:22That's crazy.
34:23No way.
34:23Wow.
34:24No way.
34:24Wow.
34:24I've done a lot of big things, but this is a huge moment.
34:38This could change the trajectory of my business.
34:42This next picture hopes the Dragons will think her product is number one.
34:47Oh, no.
34:49Oh, no.
34:50That's pretty messy.
34:52Those diapers?
34:53That's a lot of diapers.
34:55Hi, Dragons.
34:56My name is Kathy Veraneris, and I'm the founder, CEO, and inventor of Sleeks.
35:01Sleeks is patented washable bladder leak underwear.
35:05I'm here today to ask for $375,000 for 15% of my business.
35:11I started this business for my 88-year-old mom, who refused to wear disposable adult diapers.
35:19Current bladder leak products are bulky and expensive.
35:21I set out to design washable bladder leak underwear that look great and feel normal,
35:28but have the absorbency and protection of disposables.
35:31You each have a pair of waterproof briefs.
35:34One pair of Sleeks can be washed up to 100 times, diverting almost 20 kilograms of waste from landfill.
35:42The underwear can work with or without Kathy's patented pad insert.
35:46So it has two levels of absorption.
35:48Right.
35:49So without the pad, it absorbs 75 milliliters, and with the pad, 145.
35:54So both parts are washable, though?
35:57Fully washable, yes.
35:58So the IP is actually this waterproof pouch, and whoops, I missed.
36:05It's actually three times, more than three times, what the average period underwear absorbs.
36:10Three times the competitive product.
36:13Yeah, I mean, 145 mils is like half a can of Coke.
36:16It's actually a lot of liquid.
36:17It's a lot of liquid.
36:19Completely leak-proof.
36:20No way.
36:22Wow.
36:22Let's see.
36:22That's crazy.
36:24Sorry, I missed.
36:25Kathy, how big is this market?
36:27This is net never being done.
36:29This is brand new.
36:31So, Kathy, do I understand that this is pre-launch,
36:34like, you haven't put this on the market yet?
36:36I'm in production right now.
36:37I've bought 1,000 units in two different colors.
36:40And how much do they cost you?
36:41$4.85, and they're retailing for $49.
36:44Average gross profit in Canada is 53.4%.
36:48That's your margin?
36:49Yeah.
36:49What do you think you'll do in first-year revenue once you're launched?
36:52In the first 18 months, my plan is to do 2.2%.
36:56What's your background, Kathy?
37:00I actually, at Joe Fresh, I was responsible for all non-apparel.
37:04So, underwear, socks, cosmetics, personal care.
37:09You know how to source.
37:11You're a very talented merchant.
37:13Kathy, why at this stage of your career,
37:16have you decided to take the risk to be an entrepreneur?
37:18Honestly, I've made a lot of people a lot of money.
37:21I want to make myself some money.
37:23Because I actually, I'm not ready to retire.
37:30And, you know, honestly, I aged out of work.
37:33Nobody wanted to hire me.
37:35I would guess that that's because ageism is real.
37:38Totally.
37:38And you know what?
37:39Entrepreneurialism doesn't know an age.
37:41Actually, you know, one of the reasons why I'm doing this, too,
37:44is, you know, I really want people to have freedom, confidence, and dignity.
37:48Because disposables don't do that.
37:50I mean, have you looked at these?
37:52They're horrible.
37:56So then tell me, why do you think it's worth $2.5 million?
38:00Based on other exits in the washable underwear space.
38:06But those were proven companies, though.
38:08I've built a lot of big businesses.
38:10Like, my business at Joe Fresh was $290 million.
38:14Kathy, the problem is that you haven't made a single dollar.
38:17Really?
38:18You know, when you spend so much time working for somebody else.
38:21Right.
38:21And now it's for you.
38:22Everything is on your shoulders.
38:24Well, let's listen.
38:26Right?
38:26And the valuation is $2.5 million.
38:29It's pre-sale.
38:30Like, you've got to put some value to it.
38:32I know, but not $2.5 million.
38:33Well, that's up to you or her to decide.
38:37Do you think that's a fair valuation?
38:38Just because of my background, honestly, I do think it is there.
38:43You're thinking about what the future will hold for this business, and you want us to pay for it now.
38:48Well, we'd be investing.
38:50We'd be investing.
38:51Oh, so there's going to be offers coming.
38:53Okay, I'm sorry.
38:53So here's the thing that I, the other thing, I don't know how to think small.
38:58I feel like I'm giving up a fair chunk of the business.
39:01And I'm willing to do that because I believe so strongly in it.
39:06Yeah, but you-
39:06And I really want a partner who believes in it as much as I do.
39:11What do you need $375,000 for?
39:13A lot of it is for marketing because this is going to be direct-to-consumer.
39:18That is where I need help.
39:20So speed to market is going to be really critical.
39:22You have a very deep relationship with Joe Fresh, Shop Fresh, Drug Mart, blah, blah.
39:27Can you get this on their shelves?
39:28Have you tried?
39:29Have you pitched them?
39:30So actually, my, I don't want to go there first.
39:33Okay.
39:33Because I've sat on that side of the table.
39:36Yeah.
39:36They're really expensive.
39:38And they can put you out of business as quickly as they can put you in business.
39:41Okay.
39:41They're going to want a 60% sell-through in 60 days.
39:44That's tough on a sized business.
39:47So actually, I've been talking to independent pharmacies.
39:51There's 11,000 in Canada.
39:53Yeah.
39:53There's only 1,200 shoppers.
39:57You're impressive.
39:58You know what you're doing.
40:00It sounds like speed is what you need right now and moving fast.
40:04And I think you've got better dragons to help you and for that reason, I'm out.
40:08Okay.
40:10I can give you the cash because I think you're going to do a good job with it.
40:14But you need a little bit more than that.
40:16And that's the only reason I'm going to be out.
40:19I think I know a lot about the space, the product, and then the marketing behind it.
40:24I think this is unique because you're marketing to a group that understands the internet very differently.
40:30But a lot of times, it's our generation that are buying this for our parents.
40:34Correct.
40:34So what I would do is I would do the $375,000 for 20%.
40:40And I would also want a royalty just until my money is paid back.
40:46Kathy, you're impressive.
40:47Kathy, you're impressive.
40:47You have all the answers.
40:49You've done all the hard work to get you here today.
40:52Now it's about going and getting this in people's hands, getting them on their bums, getting this out there.
41:00Kathy, I'd offer you $400,000 for 25%.
41:03Kathy, I would go to battle with you because of you.
41:12Like you are, I don't know if I'm just relating to you or what it is, but I do relate to you.
41:18And I just, you know, I experienced with my mother the lack of dignity, the inability to really support seniors in particular with, you know, something that really shouldn't be difficult.
41:33So I would offer you $500,000 for 22% of the business.
41:40Wow.
41:41Wow.
41:43Wow.
41:44The offers are rolling in.
41:45Wow.
41:45Can you all repeat your offers to me, please?
41:49My offer is $400,000 for 25%.
41:52So I'm going to give you $500,000 for 22%, which is like a $2.2 million valuation.
42:00And I'm going to give you $450,000 for 20%.
42:08And I want a 5% royalty until my money is paid back.
42:12That's your offer.
42:15I'm actually going to go with Michelle because I think she's connected to this business.
42:27Oh, wow.
42:27Okay.
42:28All right.
42:29Go get them.
42:30Well done.
42:32Can I hug you?
42:33Yeah, of course.
42:35Congratulations, Kathy.
42:36Thank you so much.
42:38Good luck.
42:39Good luck.
42:39Bye, Kathy.
42:40Thanks, everybody.
42:41Yeah.
42:44Michelle.
42:44Michelle.
42:45You're a killer.
42:45That was a dirty trick.
42:46You're a killer, Michelle.
42:47That was a dirty fool, Michelle.
42:49Michelle, you're a killer girl.
42:50To change your offer like that?
42:52We were just repeating our offers.
42:54We weren't.
42:55Yeah, but we all get to revise the offer.
42:56We could have done that after what they asked us in our ears.
42:59It was a little bit up there.
43:00It's a great business.
43:02I feel I'm so excited and relieved, and yeah, it's amazing.
43:08Next time on Dragon's Den, how much have you invested this far?
43:13$1.5 million.
43:15And you think that's not much money?
43:18I own the domain don'tstartabusiness.com because my advice to new entrepreneurs is don't do it.
43:24It's terrible advice.
43:25That is.
43:26We're from Vancouver, B.C., and we're here today to sell 6.25% of our mineralized water filtration business, Santavia, in exchange for $1 million.
43:35Oh, wow.
43:36Oh, yeah.
43:36Whoa.
43:37Was that the wrong number?
43:43Put your money on your mouth, cause your mama said that you know it's real.
43:50Put your money in your mouth, and your hands ride upon the wheel.
43:56Put your money in your mouth, and your hands ride upon the wheel.
44:11$5 million.
44:16$5 million.
44:21Welcome back.
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