Wow. Didn’t see that coming…

Just finished watching the Season finale of the first season of Canada’s edition of Dragon’s Den. Generally a ho-hum, “Where are they now?” kind of episode – except for a couple of minutes right near the end that still have me picking my jaw up off the ground.

Jobloft.com
Well first off lets get to the big WTF? moment of the night which ended with the Dragons tearing up their $200,000 check and taking the Jobloft.com deal off the table.

Essentially in addition to the founders, the dragons, a camera crew and a handful of lawyers there was a guy in the room during the final “deal” that came out of nowhere and single handedly tanked the deal for the Jobloft guys. We learn partway through the piece that he was one of the founders’ instructors at Ryerson, named Dr. James Norrie.

For those who missed the segment, someone has uploaded it to YouTube:

From what we were shown in the edited program he basically jumped down the Dragon’s throats and immediately drew a pretty thick and broad battle line in the ground over company strategy. One of his first questions to the four, multi-hundred millionaires in the room was “Do any of you have business degrees?” – this was only the first of several thinly veiled insults he tossed towards the four new investors. Needless to say things went downhill pretty quick and the Jobloft guys were given the ultimatum by the Dragon’s of “It’s him or us”. They chose Dr. Norrie.

In their defense the Jobloft guys have put up a post on their blog with their side of the story. They obviously respect and admire this guy a lot, which I think is unfortunate.

I don’t care how smart, educated or brilliantly business minded you are (or think you are), and even with editing designed to play up the confrontation, there was so much wrong with the way he handled himself in that meeting. Personal attacks on potential investors, ranting and carrying on just isn’t the way to do it. Even based on the Jobloft guy’s take on what went down I can’t see any justification for him becoming so heated in the initial “So what are we going to do with this money” meeting. At the end of the day it’s just plain unprofessional.

I got the distinct impression that he felt the guys were getting screwed on the deal and that might explain why he was so “passionate”. Certainly the price-point was aggressive but when you’ve got the chance to have two moguls from your primary target market be financially interested in your success I think you can give up a bit of a premium. My advice guys, ditch Dr. Norrie – or at the very least reevaluate having “Director” attached to his name (consider an advisory role). I don’t know if it’s sunk in yet the potential damage he’s done to your business.

At the end of the day I think the Dragon’s were right – you need to sell heavily to the people who have the jobs to be filled. Getting thirsty people to your site won’t be nearly as difficult when you own the water source. Without job listings Jobloft isn’t anything – it doesn’t matter how many job seekers you have. An effective word of mouth strategy can find your job seekers but it’s going to cost some serious coin to get in front of all the corporate customers.

As for the rest of the Season…
I should go back and follow-up on the post I made after the first episode. Having watched most of the first season (missed one episode due to a PVR “error”) I have to say the show certainly continued to improve as the episodes progressed. Sean Wise gave the heads up in a comment here that CBC had swapped episode 3 for episode 2 at the last minute and I wonder if that was to make some quick tweaks to the format as I noticed an improvement even in the second episode to air (Originally episode 3).

In the end it still never became a “must see” for me but having ripped on it a little hard at the outset I felt like the least I could do was stick it out and give my honest feedback at the end. Generally very few of my impressions changed. I was glad to see the format got mixed up a bit so it wasn’t always the last pitch of the episode that got funding. The host still left me flat but Kevin O’Leary had his moments where I actually started to like him a bit (he usually managed to stomp those feelings down by the end of the episode).

At the end of the day though I think they largely made the right calls on the products that got made offers but in the end the standard issue deal of “We’ll give you your asking number, for 50%” grew pretty dull. If I heard “I want control” one more time I was going to throw my TV out the window.

Maybe it’s the entrepreneur in me but in the end I was left pretty sour by the show. For me it completely lost the notion of helping entrepreneurs succeed and more a feeling of some bizarre private hunting reserve for investors where all the animals are fenced in and they can pick of whatever they want.

I don’t know if I’ll watch the next season or not – I think right now it just hits a little too close to home.

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  • James M Woods

    IMO one of the downsides of JL walking away from the dragons is the access to companies who poteintially list their positions on Job loft. The dragons are heavies with a lot of pull I think their strategy of going to f500 companies to use jobloft was the correct approach. Job seekers will do to where the jobs are.

    The Dragons know other “dragons” with big companies with jobs to fill. Seems kinda sound to me. Fish in a Barrel so to speak. But going retail, you’re competing in a bigger pond and spending a lot of marketing dollars reaching people who will seldom if ever use your service. There’s loads of opportunity to armchair this sucker, it’ll make good chatter for the TorCamp xmas mixer ;-)

    Ah business strategy! Live it! Love it!

  • Ryan

    Agreed James… when the show first aired the only thing that made it a remotely good deal in my head was the two retail dragons who were in on it.

    I’d love to see the tape of that whole boardroom session. Maybe we can convince the JL crew to do a “What happened?” session at the next BarCamp.

  • James M Woods

    I forgot to mention that we are in violent agreement regarding the Dragon’s proposed strategy ;-)

  • Kempton

    Hi Ryan,

    Thanks for the YouTube link and interesting post. I agree with some of your points but I am also in violent disagreement with some other points. (big smile) For example, the 50%/control thing is a tool to reduce risk and create a safety margin buffer for weaker but still potentially good deal.

    Anyway good stuff.

    Cheers,
    Kempton

    P.S. And I love your blog name “Found in Translation”! (Love that movie and her new one.)
    P.P.S. Is the “Multilingual” part in the “creation, management and translation of Multilingual websites & applications” out sourced to language specialists in those countries? Note to self: Check this stuff out. (smile)

  • Anonymous

    50% was waaayy too much for a pretty solid startup like this. Those young guys are better off working their butts off on part-time consulting for a year to put together the 200k. What is the expertise of the dragons worth? Not a heck of a lot—they didn’t spend time with the startup. The prof should be cut some slack. He is not a slick TV personality, with all the on-screen experience of O’Leary, etc. He simply lost it over an unfair valuation, and to criticize him for that is missing the big picture. I’m still amazed at 200k for half that startup!!!

  • Ryan

    Thanks Kempton, Anon.,

    @Kempton:

    “For example, the 50%/control thing is a tool to reduce risk and create a safety margin buffer for weaker but still potentially good deal.”

    The reality though is none of them actually would have owned 50%. And besides 50% is no good if the other guys own 50% too – all you get then is a deadlock. So then, again, it all comes down to the rules in place in the partnership agreement and ultimately the structure of the board.

    “Is the “Multilingual” part in the “creation, management and translation of Multilingual websites & applications” out sourced to language specialists in those countries?”

    Yes – with our technology we connect the content management systems directly to translation service providers who use a mix of local and in-country translators depending on the content.

    @Anon.
    “What is the expertise of the dragons worth? Not a heck of a lot—they didn’t spend time with the startup. The prof should be cut some slack. He is not a slick TV personality, with all the on-screen experience of O’Leary, etc.”

    Actually their experience is worth quite a bit – but it’s also not expertise you want (or need) in the office with you 24/7. All I’d want out of that deal is an email address, a cell phone number (with agreement to returning a call/message in a reasonable amount of time) and a board meeting every 4 weeks (with face time at least every other one). Their guidance, and Rolodex would be priceless in this case).

    Like I said 50% was steep for $200K but I wouldn’t say it was an “unfair deal”.

  • Anonymous

    Jobloft wanted the deal or it wouldn’t have got that far.

    Norrie knew that.

    Norrie couldn’t accept anyone else being in control, took over the meeting, lectured the investors, insulted them, and turned a modest little marketing success into a disaster for his former students.

    Norrie changed the show from being about Jobloft and Venture funding into a side show on the arrogance of a Ryerson professor and the hold he has on those poor dumb kids.