Craft Gin Club: Success in the Dragons’ Den
John Burke and Jon Hulme’s pitch ended up being the first segment of the first episode of July 2016’s new series of the BBC’s flagship entrepreneurial programme – presumably because theirs was one of the most dramatic and successful the programme has seen, and a high-octane success story with which to kick off the latest run.
But as much as Dragons’ Den delights in entrepreneurial spirit, it revels equally in eviscerating woolly, half-baked ideas and those who ambitiously overvalue their fledgling companies. For a moment it seemed like the Jo(h)ns may fall into the latter category, as their request of £75,000 for a 3% stake in their company made baby-faced millionaire Peter Jones’ expression crumple in an apparent display of hurt feelings.
Jon and John were unassailable, however, quietly and assuredly revealing that they’d never said their stake wasn’t negotiable. A ripple of excitement among the Dragons. The Jo(h)ns exuded confidence, backed up by having walked into the Den with a proven business model and 3225 members already signed up to their club. And so a bidding war unfolded, with four of the five Dragons battling each other to win the pair’s affections – but what was it that made Craft Gin Club such an attractive proposition?
“They look for the same things as any other angel investor, and it’s a combination,” says Jon. “Are you playing in a growing market? Does your product have some kind of traction – whether that’s people subscribing to a club, or having sales and contracts in place? And who’s running the business – have they run a business before, and do they have the right experience or education?”
“Am I watching reality TV, or hardcore corporate negotiations?”
One question that is always at the forefront of any Dragons’ Den viewer’s mind is to what extent the studio pitch parallels a real-world pitch environment. Essentially: am I watching reality TV, or hardcore corporate negotiations?
“We actually filmed for an hour and 45 minutes,” says Jon. “The edit makes it look like they’re making a snap decision in ten minutes, but what you don’t see is the dry, due diligence-type questions.”
“It is an on-the-spot decision for TV, though,” adds John. “A lot of the deals fall through backstage once the books are opened up. They’re serious investors with serious money and serious portfolios, although the experienced Dragons do know when to lay in a little dramatic phrase or quip. “
“How do you think that makes me feel?!”
Perhaps this explains why Deborah Meaden threw a small tantrum when the Jo(h)ns asked their clear favourite Sarah Willingham if she could reduce her 12.5% bid to match Meaden and Jones’s 10%. “How do you think that makes me feel!?” cried Meaden, like a spurned lover, retracting her offer in a fit of pique. But the Jo(h)ns had excellent and premeditated reasons for pursuing Willingham.
“Her background was a good fit,” explains John. “She has experience in the booze industry and has invested in the London Cocktail Club, so we thought there was potential for her opening some doors and giving us expertise.”
“We also had the suspicion,” says Jon, “that as a newer member of the Dragon team we’d get much more of an active involvement and input from someone like Sarah than we would from someone like Peter Jones.”
“Sarah Willingham laid her cards on the table with an unexpected revelation…”
Their instincts were thoroughly vindicated when – in perhaps the most astonishing moment of the episode – Sarah Willingham laid her cards on the table and revealed completely unexpectedly that she was already a member of the Craft Gin Club.
“We’re very happy that the BBC edited that in,” says John, beaming.
“It justified our thought process,” says Jon. “We’d thought here’s someone who plays in the space, who will be a good ambassador for the brand. Little did we know that she already got the brand – she was a subscriber! As soon as that came out it was an easy decision for us.”
“Even though she came in at the highest cost to us it was a no-brainer,” says John. They accepted her offer, shook hands, and things took a more conventional turn after filming had ended.
“Backstage is more of a traditional investor discussion. They sit down with you and get to know you. Not only do you open the books, but you chat with them and make sure you have a rapport and that they’ll be able to trust you. It’s a personal thing as well.”
“Since then Sarah has been hands on and we’ve met with her several times. We’re regularly in touch, have had board meetings and gone out for drinks. We’re really happy that we got our first choice.”
— Sarah Willingham (@sarahwillers) 24 July 2016
They need that personally-invested expertise in their corner now more than ever, as the interest generated by their appearance on the show has presented the company with some unprecedentedly large challenges.
“We’re a bit surprised at the incredibly positive reception we’ve had since the broadcast,” says John. “We’d planned for it as much as we could – the BBC gives you about a week before the broadcast – but that meant we couldn’t import some of the gins we had lined up. We had to come up with a contingency box for the higher demand, and that ended up going into a second order because the demand was so much higher than we could ever have imagined. That’s really been the only partial shock. We expected an uptick but it totally blew our expectations.”
Of all the surprises that a business can face, this is undoubtedly one of the best.