Doctor Duo Pitch Gaitscan to the Dragons | Dragons' Den | @SharkTankGlobal

Summary

Dr. Dave Cosgrave and Dr. Travis McDonna pitch their business, Gat Scan, to the Dragons, offering a 15% stake for £75,000. Their product measures foot function to diagnose and treat foot-related issues with custom orthotics. Despite initial interest, the Dragons grow skeptical due to questionable profit claims, unclear financials, and a fragmented business structure, particularly excluding Northern Ireland from their UK operations. The Dragons ultimately decline, criticizing their sales approach and lack of a clear, scalable business model, leaving Dave and Travis empty-handed.

Takeaways

• 😀 Dr. Dave Cosgrave and Dr. Travis McD are seeking a £75,000 investment in exchange for 15% equity in their company, which distributes Gat Scan technology.
• 😀 Gat Scan is an orthopedic device that helps measure foot function and dysfunction, aiming to address issues in various body parts like the ankle, knee, hip, and lower back.
• 😀 The device consists of a mat with 4,000 sensors that collect data as patients walk across it, which is then used to design custom orthopedic inserts.
• 😀 The company has 114 units in operation across the UK and generates revenue by selling orthotic devices, with 11,000 sold in total so far, earning £1.3 million.
• 😀 They emphasize the importance of foot health in treating related conditions like knee and back pain.
• 😀 The initial pitch includes a demonstration where the dragons test the Gat Scan system, revealing issues like metatarsal head drops and heel pressure in one of the dragons.
• 😀 The system is sold at £7,000 per unit to professionals, with orthotic devices retailing for £225 to £300 each.
• 😀 The company reports zero profit over the past three years, despite substantial revenue, due to reinvesting all earnings into business development, marketing, and seminars.
• 😀 The founders explain that their focus shifted from selling more Gat Scans to increasing orthotic sales from existing clients, which they claim is a more profitable strategy.
• 😀 The company operates two separate entities, one for Northern Ireland and another for the UK, but reveals that the £75,000 investment is only for the UK operations, which leads to some confusion and mistrust among the dragons.
• 😀 The dragons express frustration over the lack of transparency, inconsistent business practices, and doubts about the scalability of the business, ultimately leading all five to drop out of the deal.

Q & A

What is the main product that Dr. Dave Cosgrave and Dr. Travis McDonna are pitching in the script?

The main product being pitched is Gat Scan, an orthopedic instrumentation device designed to measure foot function and diagnose foot dysfunction. It is used to create customized orthopedic inserts to help alleviate problems in the foot, which can impact other areas of the body such as the knees, hips, and lower back.

How does the Gat Scan system work?

The Gat Scan system involves a computer chip mat with 4,000 sensors. A patient walks across the mat, and the sensors send information to a computer. This data is then transmitted to a laboratory, where foot specialists create an orthopedic insert tailored to the patient’s foot problems.

How much of their company are Dr. Cosgrave and Dr. McDonna offering for investment?

They are offering 15% of their company in exchange for a £75,000 investment.

What are some of the potential foot problems identified during the demonstration with the dragon?

During the demonstration, one of the dragons showed signs of dropped metatarsal heads, which is a problem at the front of the foot, and excessive heel pressure. The foot also displayed asymmetry between the left and right sides, as well as early signs of a bunion (Hallux Valgus), which could benefit from using an orthotic insert.

What is the retail price of the orthotic devices sold by Gat Scan?

The orthotic devices are retailing at approximately £225 to £300, particularly in London.

How much does Gat Scan charge for each orthotic device, and what is their profit margin?

Gat Scan sells each orthotic device for about £225 to £300, and they make a 100% markup, meaning their cost price is around £110-120.

What issue did Richard Farley point out regarding the business structure of Gat Scan?

Richard Farley pointed out that Gat Scan has a separate business structure for Northern Ireland, which is not included in the investment opportunity. The company has fragmented Northern Ireland into a separate entity with different shareholders, which caused confusion as the investment offer was for the UK and Ireland but excluding Northern Ireland.

What did the dragons criticize about the Gat Scan team's lack of profit over the past three years?

The dragons criticized the Gat Scan team for not making any profit in the past three years, despite generating significant revenue. They had reinvested all their earnings into business operations, including marketing and seminars, but had not shown any profit or growth.

How did Dr. Travis McDonna explain the lack of profit despite the high turnover?

Dr. McDonna explained that while the company had a high turnover, they had focused more on customer service and increasing the volume of orthotics sales rather than selling more Gat Scans. As a result, they had reinvested all their revenue into growing the business, marketing, and expanding their customer base.

Why did the dragons ultimately decide not to invest in the Gat Scan business?

The dragons decided not to invest because they felt that the business lacked a sustainable profit model. They were skeptical about the company's structure, particularly the separation of Northern Ireland from the UK operation, and the fact that the Gat Scan team had failed to generate any profit over three years. Furthermore, they believed the business was primarily selling a simple shoe insert, which they did not find promising enough to warrant investment.