Small Talk: Dragons' Den is giving out all the wrong messages to SMEs

Television isn't doing small business any favours. While the Government tries ever harder to encourage small and medium-sized enterprises (SMEs), in the hope that they can drag the economy out of recession, our most popular TV programmes continue to perpetuate some of the myths that have grown up around the British entrepreneurial spirit (or lack of it). They tell us that most would-be small business founders are crackpots with no financial acumen. And they insist that business success is all about aggression and naked ambition.

The Apprentice, with its sharp-suited double-glazing salesmen masquerading as the tycoons of the future, is bad enough. But it is obviously a gameshow. Dragons' Den, however, at least pretends to take itself seriously. It is giving a completely misleading – and potentially dangerous – impression of what it is like to start a business in this country today.

Take last night's episode, which featured the dragons dishing out their customary tongue-lashings to a string of business wannabes portrayed as hopeless dreamers.

One of those who got it in the neck was a small British company named Captive Media. It has invented a computer game that blokes can play in the lavatories of pubs, restaurants and hotels. Screens are installed above the urinals which have built-in control buttons and players participate by aiming at them.

This was perfect fodder for the dragons, who took it in turns to ridicule Gordon MacSween, one of the co-founders of the business, before telling him he wouldn't be getting a penny of the £250,000 he was after for a 10 per cent stake in the company.

Guess what's happened to Captive Media since the programme was filmed months ago? One development has been a major increase in sales – £100,000 worth of business this year alone, plus orders from 50 different countries to come. Another has been interest from investors, who have offered to put in double what the company asked the dragons for – £500,000 – in return for the same stake.

Mr MacSween tells me he holds no grudges against the dragons, but warns the programme is a million miles away from what it's normally like to raise money as an entrepreneur.

"The whole set-up is designed to bring about those cringeworthy moments that viewers love and that bear no relation to what it's like in real life to pitch to potential investors."

Captive Media's subsequent success with customers and investors alike rather suggests the dragons made a mistake in their haste to put Mr MacSween down with pithy one-liners. And it's hardly the first time they've passed up on the opportunity to back businesses that have subsequently become hugely successful.

Trunki, the children's suitcase manufacturer, got turned down – these days you can't move in an airport without tripping over their products. Other examples include BarbeSkew, Wine Innovations, Road Refresher and Destination London.

All investors make mistakes, of course, missing good opportunities or backing bad ones. But the bigger issue with Dragons' Den is that it so often humiliates people whose only mistake has been to seek to be entrepreneurial. In the rush to make entertaining television, even good businesses are publicly embarrassed.

Is this really the message we want to send to all those entrepreneurs whom the Government hopes will turn the country's economic fortunes around?

The lesson from Dragons' Den is that, far from being the bedrock of the recovery, would-be SME founders are invariably social misfits who need a painfully speedy wake-up call.

Globo pushes 'own-phone' system in US

Alternative Investment Market-listed Globo, due to release interim results later this week, has been busy – it is on the verge of a launch into the US for its GO!Enterprise Server. The technology company, which is on Friday expected to unveil pre-tax profits of €16.5m (£13.3m) on turnover of €55m, will announce the move at next month's MobileCON conference in San Diego.

The service enables companies to provide staff with access to corporate data and files on their mobile devices, whatever their make. It taps into the growing trend in many countries – including Europe, where Globo is already successful – for "bring your own device". Employees increasingly want to use their own mobile phones and tablets for work, rather than having to carry a company device too.

Assuming estimates of Friday's numbers are correct, the company's stock, at 24p, is trading at around five times this year's earnings. Mike Jeremy, an equity analyst at Daniel Stewart, until recently Globo's house broker, thinks that is too low. He has a buy rating on the stock with a target price of 133p.

ACR eyes sixfold increase at gold seam

Good news from African Consolidated Resources, which has just massively upgraded estimates of gold in the ground at its Zimbabwe project. The Alternative Investment Market-listed company reckons the Pickstone-Peerless resource could hold 3.2 million ounces of gold, six times more than its previous estimate of 513,000 ounces.

Assuming such estimates prove accurate, the upgrade represents a step change in the miner's business. Mike Kellow, ACR's exploration director, says target production of 100,000 ounces a year "will more than double" the output of Zimbabwe's current largest gold mine.

Small businessman of the week: Nish Kukadia, CEO, SecretSales

I founded the business in July 2007 with my brother, Sach. We grew up in a family that was involved in the fashion business – our father was a director of Pepe Jeans – but on leaving university it was really the last thing we intended to do. I went into digital advertising and Sach worked with several trading companies.

We came across an online concept that was working really well in France. It had the idea of holding one or two-day sales of designer brands to which consumers had to be invited onto the internet. The concept really played to the strengths and experience we both had.

SecretSales is a way for top brands to sell their excess stock in a quiet and discreet way that protects their pricing integrity – but it also works as a channel for new brands looking for wider exposure, particularly now we have more than a million members. It also excites consumers – we play to that mentality of queuing up for the Boxing Day sales by launching new offers on the site at 7am every day.

We are completely focused on growing the business – turnover had risen from £2m in 2008 to £20m this year and the economic climate is definitely boosting sales as customers who want to carry on buying luxury brands look for affordable ways to do so.

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