Page 356 - James Caan - The Real Deal

The Real Deal

key part of any presentation is explaining the most fundamental
thing: why someone would pay money for it. And of course, saying
‘My mum thinks it’s great’ is not enough! We want to see sales
figures, or proof that customers have placed orders. If you’ve gone
out to your target customers and got them to agree to buy your
product, then the chances are much greater that you’ll get our
money to go into production with it. When it comes to risk, I’m
the kind of guy who’s pretty comfortable turning right when the
road signs tell me I’m not supposed to, but I’m never going to be
Evel Knievel. Business isn’t about taking risks, it’s about minimis-
ing them, and by showing us orders or sales figures you reduce our
risk and maximise your chances of investment.
The next thing I would advise people coming into the Den to do
is to make their business plausible: if you oversell something then
it’s difficult for us to make the leap. The business you show us has
to be logical. Let’s say you’ve invented a gadget that’s a phone
with a built-in satellite TV receiver. It would clearly be the best
phone in the world, but if you come in and tell us that you’re going
to make it a mass-market product with a retail price of £2500 we
probably won’t believe you. Either you’ve got to find a way of
retailing it for £199, or you’ve got to recognise you’ve got a luxury
business with customers who would probably pay £10,000 for
one. If your pricing is wrong, your product won’t sell, and we
won’t be able to believe in your business.
I also want you to give me an overview of your market. The
chances are that I’m not familiar with your industry, so you need
to explain why you’re different, how you fit into the marketplace
and who your nearest competitors are. If you tell me your product
sells at £199, one of my first thoughts is I wonder what else is
available in that price range? First-time entrepreneurs – especially
inventors, I’ve noticed – can be so focused on their product that
they somehow forget about the market. Products don’t sell
themselves, markets do, and you’ve got to know – and we’ve got

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