Is anyone else bemused by what happened on Dragons’ Den on Wednesday night? Carole Savage went on looking for £100k for her “online community for people who love food and cooking and want to share recipes with their friends and family”.
Deborah Meaden ended up giving her the dosh for a 15% stake in the business, MyDish.co.uk. The whole thing had me shaking my head. The first two questions I had were – 1) how did Carole Savage convince a load of friends and business people to pump £600k into the business already and 2) what in under God, has she spent the money on? I know on her blog she says she was actually questioned for two hours so maybe that was covered but we didn’t see it in the 10 minute segment in the show.
I’d rather invest in a free dose of leprosy. Having only £150k of the money left, she has already spent half a million pounds. What on? I hope to hell it’s not the website for two reasons, the first being that they knew Dragons’ Den was on last night and they’d feature on it. One plus one equals…how many? Yeah, that’s two. Of course there’d be a huge influx of people wanting to look at the site to see what it was all about. And what happened when I tried to log on to MyDish this morning? I couldn’t get in. After five attempts I kept getting “504 Gateway Time-out”, which in a nutshell basically means they haven’t thought of making sure they had enough bandwidth to cope with the demand after the show went out. Poor.
The second reason I hope she hasn’t spent the money on the website is that throughout the show, and specifically when questioned by Theo, when he asked if their site could be replicated, she said that they had created their own software which took a while to develop. That would ring alarm bells with me immediately. No one needs create their own software these days. It’s like a new corner shop opening up and the owners deciding to build their own till in a shed with what’s available from some garden waste, alongside Mr T, Face, Murdoch and Hannibal Smith.
I’m surprised the more technically minded in the Den didn’t give her a harder time. Her claims that she could charge £80k a year in advertising to companies for a website that currently has 100,000 visitors a month is ludicrous. I hate to get on my Internet hobby horse on a food site, but there’s too much waffling when it comes to online advertising.
Here’s the simple facts – when talking about Internet advertising, anyone talking in anything other than unique users and page impressions is bullshitting. James Khan at one point called her answer “wooly” and he’s right. 100,000 visitors equates to roughly 60,000 unique users. And if she seriously thinks she can charge each advertiser nearly £7k a month for those figures, she’s living in cloud cuckoo land.
I’m still astonished that Deborah Meaden put up the money. But then I’m no entrepreneur. I was able to get on the site from my phone whilst Dragons’ Den was on TV, and I didn’t see anything special. I’m not saying it’s an awful site, it’s not, it’s reasonable enough. Will anyone really use it because they can click on a recipe and immediately get the ingredients ordered via online shopping? No. It’s too complicated. Most recipes involve bits of ingredients that you already have – flour or butter or whatever. So then it becomes fiddly. And who’s going to bother when that happens? Then there’s the fact that most online food ordering systems charge a few quid for delivery. So are you really going to order just those items when the delivery could cost the same?
The site is easy to replicate, and whilst it wouldn’t be an overnight job to be as technically advanced as MyDish, I’m not sure it would be altogether that much of a huge deal. Neither am I sure that it’ll be able to grow at the rate that she thinks. Fair play to her if it does, but for me I’m out (not that I’ve any money to put in anyway).
Deborah Meaden said on Friday, August 14, 2009, 9:34
HI John
Could you call me please. A recent acquisition seems to be going the shape of the pear.
Debs
John Ferris said on Friday, August 14, 2009, 9:43
Ha ha Deborah. I’m always willing to help. I suggest asking for a refund. Or if you’ve still got time, cancel the very big cheque you handed over.
koffee man said on Friday, August 14, 2009, 11:00
why dont you do trymydish.co.uk and link it to a comparison website for the cheepest place to buy the ingredience?
2BiT said on Wednesday, August 19, 2009, 13:48
I also watched in amazement as the normally quite astute DM forked out for what seems like yet another dot-com car crash waiting to happen. With a large part of the internet socio-economic structure moving to free distribution/content models, paid for services (such as vanity cookbook printing) seem kind of anachronistic. And as you note MyDish seems to have a disproportionately high burn rate with regards to cash. As for the ’software development’…well the site appears to be a pretty standard WordPress install and I can’t imagine that the cookbook printing aspect will ever see a return on what she claims to have spent on software!
However I suspect that DM has something in mind for MyDish…and possibly not what Ms. Savage has in mind at the moment. A high-profile internet brand can have the potential to generate significant revenue (long tail sales or, more likely in this case, targeted advertising with a good understanding of the sites users) and the hardest part is set-up and building a user base, in this case already done. Expenditure on development and bandwidth can almost certainly be slashed by up to 50% so I suspect what DM has bought is an off-the-shelf vehicle for some other venture she has in mind, possibly in partnership with one of her other investments.
Anyway if it doesn’t work out there’s always that job with Duncan
John Ferris said on Wednesday, August 19, 2009, 13:55
Very true 2BiT. I’d love to know what DM has in mind because the figures at the minute are way under what they’d need to make significant revenue from targeted advertising, though you could probably slash development costs to feck all. How hard is it to install another free Wordpress plugin? If she wants to pay me for a month’s work I’ll install as many as she wants.