These Bold Entrepreneurs Stick To Fair Pricing For Their Products | Dragons' Den

Summary

Lawrence Webb and Frank Druid, from Rugby, pitched their invention, the Lid Lifter, a pedal device to open wheelie bin lids, on a business investment show. Seeking £50,000 for a 20% stake, they faced skepticism from the investors. Despite low sales, they held firm on their pricing and patent. Deborah Meen and Theo Paphitis each offered £25,000 for a 25% stake, while Peter Jones offered the full amount for 50% of the patent. Ultimately, they chose Peter's offer, gaining investment and a business mentor.

Takeaways

• 😀 Lawrence Webb and Frank Druid are seeking £50,000 for a 20% stake in their business, Lid Lifters.
• 🔨 Their core product is a pedal device that opens wheelie bin lids, aiming to solve a common household problem.
• 🏙️ There are 22 million households in the UK, with a potential market of 21 million bins, which is expected to grow with recycling initiatives.
• 🤔 The Dragons are initially unimpressed, questioning the simplicity and value of the product, comparing it to a piece of plastic and string.
• 💼 Lawrence's background is in physical education, having been a teacher for 35 years, while Frank is a former director of PE.
• 💰 The unit cost of the Lid Lifter is £250, and they sell it for £530 to trade and £9.99 to retail customers.
• 📄 They have a granted patent from 1997, which covers the use of a flexible linkage between the pedal and the bin lid mechanism.
• 📊 Sales have been slow, with only 2,000 units sold between 1997 and 2012, averaging about 150 units per year.
• 💭 Deborah Meen offers £25,000 for a 25% stake, seeing potential in the product despite its slow sales and unattractive retail appeal.
• 🔄 Theo Paphitis and Peter Jones also offer £25,000 each for a 25% stake, recognizing the product's potential and the strength of the patent.
• 🔝 Peter Jones makes a bold offer of the full £50,000 for a 50% stake, positioning himself as the partner with the experience to leverage the patent and retail contacts.

Q & A

What is the name of the business run by Lawrence Webb and Frank Druid?

The name of the business is 'lid lifters'.

What is the core product of lid lifters?

The core product is a 'lid lifter', which is a pedal device that opens a wheelie bin lid.

How much investment are Lawrence Webb and Frank Druid seeking?

They are seeking an investment of £50,000.

What percentage of the business are they willing to give away for the investment?

They are willing to give away a 20% stake in their business.

How many wheelie bins are estimated to be in the UK according to the script?

There are approximately 21 million bins in the UK.

What is the unit price cost of the lid lifter according to the script?

The unit price cost is £250.

What is the selling price of the lid lifter?

The selling price is £530 for trade and £9.99 for retail.

When was the patent for the lid lifter granted?

The patent was granted in 1997.

How many lid lifters were sold in the 12-year period mentioned in the script?

Only 2000 lid lifters were sold in the 12-year period.

What is the main criticism Deborah Meen has about the product?

Deborah Meen criticizes the product for not being an attractive retail item and suggests a different market approach.

What offer does Deborah Meen make to Lawrence Webb and Frank Druid?

Deborah Meen offers half of the money (£25,000) for 25% of the business.

What is Peter Jones' final offer to Lawrence Webb and Frank Druid?

Peter Jones offers the full £50,000 for 50% of the patent.

Which dragon's offer do Lawrence Webb and Frank Druid accept?

They accept Peter Jones' offer.

Outlines

00:00

🚀 Pitching the Lid Lifter

Lawrence Webb and Frank Druid, both from rugby, present their invention, the Lid Lifter, to potential investors. They seek a £50,000 investment for a 20% stake in their business. The Lid Lifter is a pedal device that opens wheelie bin lids, addressing a problem faced by many households. With 22 million households in the UK and an increasing number of bins due to recycling, they believe their simple yet effective product could be a hit. Despite the Dragons' initial skepticism, they demonstrate the product's functionality and discuss their business model, which includes a unit cost of £250 and a selling price of £530 for trade and £9.99 retail. They also mention their granted patent from 1997, which covers the use of a flexible linkage between the pedal and the bin lid, potentially giving them an edge in the market.

05:01

💭 Dragon's Dilemma: The Lid Lifter Debate

The Dragons express doubt about the Lid Lifter's potential as a retail product, questioning its attractiveness to consumers and the low sales volume over the years. Deborah Meen suggests targeting specific markets, like care homes, where the product could solve a real problem. She offers half the requested investment for a 25% stake, while other Dragons, like James and Duncan, remain unconvinced of the business's viability. Theo Paphitis and Peter Jones, however, see potential and offer the full £50,000 for a 25% stake each, recognizing the value of the patented invention and the opportunity it presents. Peter Jones, in particular, emphasizes the importance of leveraging the patent and having the right contacts in the retail and public sectors to maximize the product's potential.

10:03

🏆 Decision Time: Choosing a Dragon

After considering the offers, Lawrence and Frank decide to accept Peter Jones's offer of the full £50,000 for a 50% stake in the patent. They appreciate his recognition of the product's potential and his experience in leveraging patents and contacts in the industry. The decision is met with applause, and the duo leaves the den with the funding they sought and a strategic partner to help them navigate the market. The episode ends on a positive note, with the Lid Lifter inventors looking forward to a successful partnership and the potential growth of their business.

Keywords

💡Investment

Investment refers to the act of putting money into a business or project with the expectation of generating profits or achieving other financial benefits. In the video, Lawrence Webb and Frank Druid are seeking an investment of £50,000 for their invention, which they hope will help them grow their business. The term is central to the theme as it drives the negotiation and decision-making process among the business owners and potential investors.

💡Lid Lifters

Lid Lifters is the name of the business run by Lawrence Webb and Frank Druid. It represents a company that has developed a specific product aimed at solving a common problem. The term is used to identify the business entity and its core product, which is a device that opens wheelie bin lids. The product is central to the pitch they are making to potential investors.

💡Wheelie Bin

A wheelie bin, also known as a trash can or garbage bin on wheels, is a large, movable container used for storing waste before it is collected. In the context of the video, the wheelie bin is the focus of the invention by Lid Lifters, as their product is designed to make it easier to open the bin's lid. The wheelie bin is a relatable item for many viewers, as it is a common household item.

💡Patent

A patent is a form of intellectual property protection granted by the government that gives the inventor exclusive rights to an invention for a certain period. In the video, the business partners mention that they have a patent for their lid lifter, which is a significant point as it provides legal protection for their idea and can be a valuable asset in securing investment.

💡Retail

Retail refers to the sale of goods to the public in relatively small quantities for use or consumption rather than for resale. In the script, the discussion about retail involves the potential for selling the lid lifter in supermarkets or other retail outlets. The term is important as it relates to the commercial viability of the product and the business strategy for reaching consumers.

💡Public Awareness

Public awareness refers to the level of knowledge or recognition among the general public about a particular issue, product, or service. In the video, the entrepreneurs mention that public awareness is a key factor in the success of their product, as many people are not yet aware of the lid lifter's existence. This concept is crucial for understanding the marketing challenges and opportunities for the product.

💡Product Demonstration

A product demonstration is a live or virtual presentation that showcases how a product works and its benefits. In the video, Lawrence and Frank provide a practical demonstration of their lid lifter to the potential investors. This is a common practice in pitching products, as it allows investors to see the product in action and assess its functionality and value.

💡Market Potential

Market potential refers to the estimated size and growth prospects of a market for a particular product or service. In the script, the entrepreneurs highlight the market potential by mentioning the number of households in the UK and the increasing need for recycling bins. Understanding market potential is essential for investors to evaluate the potential return on their investment.

💡Business Model

A business model outlines how a company creates, delivers, and captures value. In the video, the business model of Lid Lifters is discussed in terms of their product, its manufacturing cost, and the selling price. The business model is a critical aspect for investors to consider, as it determines the company's ability to generate revenue and profit.

💡Return on Investment (ROI)

Return on Investment (ROI) is a financial metric used to evaluate the efficiency of an investment. In the context of the video, potential investors are considering the ROI of their potential investment in Lid Lifters. The entrepreneurs' pitch must convince investors that the product has the potential to yield a positive ROI, which is a key factor in investment decisions.

💡Invention

An invention is a novel device, method, composition, or process. In the video, the lid lifter is described as an invention, emphasizing its innovative nature. The term is important as it sets the product apart from existing solutions and highlights its potential for disruption in the market.

Highlights

Lawrence Webb and Frank Druid pitch for £50,000 investment for their invention, the lid lifter, which opens wheelie bin lids.

Lid lifters target a UK market with 22 million households and 21 million bins, with potential for growth due to recycling.

The lid lifter is a simple device that uses a pedal to open bin lids, aiming to solve a common problem.

The duo demonstrate the product, showing its practical use and ease of operation.

Investors express skepticism about the product's market potential and the simplicity of the invention.

The unit cost of the lid lifter is £250, with a selling price of £530 for trade and £9.99 for retail.

A patent for the lid lifter was granted in 1997, protecting the invention for 20 years.

Despite the patent, only 2,000 units have been sold in 12 years, raising concerns about the business model.

Frank Druid's background as a physical education teacher and director is revealed, highlighting a non-traditional career shift.

The product's potential market is discussed, with a focus on care homes and individuals with difficulty opening bin lids.

Deborah Meen offers £25,000 for 25% of the business, showing belief in the product's potential despite the risks.

Theopilus offers the other half of the investment, matching Deborah Meen's offer, for a combined total of £50,000 for 50%.

Peter Jones offers the full £50,000 but for a 50% stake in the patent, recognizing the value of the intellectual property.

The investors acknowledge the high risk of the investment but express commitment to the product's potential.

Webb and Druid decide to accept Peter Jones' offer, valuing his experience and contacts in leveraging the patent.

The duo walks away with the full investment and a strategic partner, indicating a successful pitch.

Transcripts

next up the stairs are Lawrence Webb and

his father's friend Frank Druid both

from rugby now they're hoping to secure

an investment of 50,000 for their

invention

[Music]

hello my name is Lawrence Webb and this

is my business partner Frank druitt and

together we run a business called lid

lifters we are here today to ask you for

an investment of £50,000

in return for 20% stake in our

business lid lifters has one core

product a lid lifter which is a painted

pedal device which opens a wheelie bin

lid there are 22 million households in

the UK this makes a combined total of 21

million bins and with the Advent of

recycling this figure is sure to

increase they say the simplest ideas are

the best and we' now like to give you a

practical demonstration of how the

product

works as you would be going to a wheelie

bin

job done thanks for

listening the dragons aren't looking too

impressed by the pitch from rugby based

Frank druitt and Lawrence Webb you

couldn't have came on here with a piece

of string and a piece of plastic could

you I mean that's a piece of plastic and

a piece of string isn't it and that's

held on a piece of black tip the friends

need a £50,000 investment and are

willing to give away a 20% share in

their wheelie in

attachment hello Lawrence hello Frank

good day to so tell me a bit about your

background who are you I was a teacher

for 35 years what were you teaching

physical education I was a director of

PE wow okay what's the correlation

between director of PE and a wheelie bin

none okay so what are you doing here

Frank I decided to try to see if I could

do things in other ways not just teach

good answer simple as that and how much

does it cost you to make the unit price

is

£250 okay and you sell it for £530 is

the trade and 9.99 would be a retail

okay did you say patent applied for

patent granted granted when did you have

it granted it was granted in

1997 okay in that 12E period how many of

you sold just on 2000

okay

2012 years my math isn't great but that

sounds like what 150 a year not a lot

that's

right the duo are struggling to make the

multi-millionaire investors take their

product seriously will retail Guru

theopus spot any investment potential in

the

lifter Frank on Theo so where how do you

think we're going to make money from

this Frank by public

awareness people just don't know it

exists I went to one or two of the big

people in in retailing what have they

said to you they said yes fine fine fine

we like that look and then they started

talking about prices oh good and I found

that the prices they were talking about

was up at 20 and so on and so forth they

PID 20 for them they they thought that

they would sell for 20 I I'm sorry I

can't see that think you should try to

get value for money and a 20 for a thing

like that isn't on so what happened

Frank tell us what happened I didn't I

didn't follow it up I went to three big

companies and they all said the same

what you thought I'm not going to do

this cuz they're going to sell it for

too much money if in effect

wow Frank has surprised the Dragons by

taking an unusually principal stand

against the retail Giants now Deborah

Meen wants more detail about the product

itself can you be specific on the patent

what exactly have you got a patent for

the patent dictates for the use of a

flexible linkage

between the pedal and the tumbler H the

patent is for a flexible linkage between

the and it covers a solid linkage

between the two so any bin that is

currently got a solid rigid Link at the

back which you've just described one is

actually infringing your pattern

technically infring our UK pay as we

know there isn't any such

thing I think that your reason the

reason that you haven't sold many of

them the moment is I think you've gone

down completely the wrong route this is

not an attractive retail product people

are not going to walk into a supermarket

and think oh that looks nice cuz it

Doesn't what it does do is for a portion

of people it solves a

problem and I think that if you tackled

it from the other end of the market

which is go to the people who are

providing these bins to Care Homes to

people who have difficulties actually

opening their bin Lids then I think

there could

be an opportunity here so I I do you

know I accept this as a complete punt

but there's something in me that is

saying that there could well be it's

worth the punt for me so I'm going to

offer you half of the money for 25% of

the business

it's a daring move by Deborah Meen but

Den rues State the duo need an offer of

the full £50,000 or they'll leave with

nothing will any of her Rivals share her

enthusiasm and make a

bid I just can't believe how obsessed

you are that this is a viable business

proposition it can't be you know you've

V this at £250,000 it's a bit of plastic

and a bit of string I mean even if gave

you £50,000

for 100% of the business I could never

make a return it's not a business so I

can't invest so I'm out thank you okay

Lawrence let me tell you where I am um

I'm not really in the the lid lifting

business and I have no desire to be in

that business um so unfortunately I

won't be investing today so I'm

out with two dragons now out the Duo's

hopes of success in the den rest with

theop petus and Peter Jones

Frank I'm not a million miles away from

making you an offer I've been thinking

would Mrs P use it well you know after

dragging those bins all the way down to

the bottom of the drive and back putting

that on is no hardship so I'm sure she

would do

it so

um I too will give you the other half of

the money for 25% it is a Nutter utter

piece of Madness and punter on my part

something about you something about the

product okay that's very

kind the full £50,000 is on the table

but for half the company but Peter Jones

has been unusually

quiet that leaves just me then

um C I think you got a very good offer

from from Theo and Deborah there but I I

totally endorse what actually um James

and Duncan said you know this is not a

business

um but what it

is

is a opportunity to acquire a

patent and what you need is somebody

that can actually leverage and take that

patent and not just open doors but has

the direct relationships with the major

players to give this the best chance

possible you need somebody that's

licensed products before into retail you

need of somebody that actually has a

good experience potentially with

contacts in the public sector well I

think it's your lucky day because I

think I'm that person right okay I think

you have got a little gem of a potential

product and for me I'm not even going to

make you an offer on the basis of seeing

this as a punt from the minute you

demonstrated the product I actually

think that you have something and you

don't have a business you have an

invention in the purest sense that is

backed

up in the best way

possible with a very solid patent and on

that basis I would like to offer you the

entire 50,000 for 50% of the

patent it's an intriguing offer and one

that has irritated his rival Deborah

Meen can I be clear on the word punt

because sometimes it can sound like

people are not going to take a business

seriously when I say a punt I mean high

high risk what you mustn't glean from

the word punt is that it's just a bit of

fun or just a bit of something that we

do on the sideline because it's not in

my nature and I've worked with Theo

before I know it's certainly not in his

nature to do anything that we wouldn't

absolutely commit to yeah and guys I

just want to say marbit here I mean

Peter gave a really eloquent um uh

Speech there begging you to choose him

because he needs to at the end of the

day not need contacts contacts in this

market we all have you've got to decide

who you best feel you can work with

that's I think the most important thing

about this

product definitely yeah if we could have

just a couple of moments just to you can

absolutely do you want to go

cheers the duo now have a clear choice

will they go for two dragons one dragon

or no dragons at all over here it's okay

then whatever happens it's it's you know

we made the decision knowing me yeah you

you okay yep right okay great right

on right um Frank and I have have come

to a decision thanks very much for both

of the offers I mean they really truly

are fantastic but we thought we'd like

to go with Peter's offer and would

graciously ex accept fantastic well done

very thank you very much

thanks Fant good luck cheers than Frank

and Lawrence have done it they walk away

with the money they wanted and a dragon

on

board I'm sure Mrs P would love that if

you wrapped up and give it as a little

present on our

birthday what'd you get the lady who's

got everything a lid lifter

[Music]

[Applause]