Key Points:
- Investment: £50,000
- Investor: No deal was made
- Equity Offered: 10%
- Business: Smart Snout Limited, a high-tech solution to combat dog theft using unique nose prints
- Target Audience: Dog owners concerned about theft
- Challenges: User acquisition, network effects, competition, and monetization strategy
The Pitch
Bradley Watson and James Khan, accompanied by a dog named Oscar, entered the den seeking a £50,000 investment for 10% equity in their company, Smart Snout Limited. They presented their innovative app that scans and records the unique nose prints of dogs, similar to human fingerprints. This technology aims to address the rising issue of dog theft, offering a more secure identification method than traditional microchips, which can be easily removed or altered.
The live demonstration showcased the app's functionality, from creating a dog profile to marking a dog as missing and scanning a nose print to identify found dogs. Their vision was to make the app free to increase user adoption, with plans to introduce a premium package utilizing artificial intelligence for facial recognition of dogs.
Financials and Offer
Bradley and James explained their initial business model, where they charged £4.99 annually for the app, resulting in 600 paid subscribers. They recently shifted to a free model to build a larger user base, with aspirations to implement a paid AI feature in the future.
Challenges Highlighted by the Dragons
The dragons, while appreciating the innovative idea, raised several concerns:
- User Acquisition: Stephen Bartlett pointed out the difficulty of attracting and retaining millions of active users required for the app to be effective. Without a substantial user base, the app's utility diminishes, posing a significant "chicken and egg" problem.
- Monetization Strategy: Peter Jones and other dragons questioned the commercial viability and scalability of the app. The transition from a paid model to a free model with future AI integration added complexity and uncertainty about revenue streams.
- Market Saturation and Competition: Sarah Davies and others noted the crowded market of pet tracking and identification solutions, making it challenging for Smart Snout to stand out and protect its niche.
- Technical Understanding: The dragons were skeptical about the founders' grasp of artificial intelligence, crucial for their proposed premium features, further diminishing their confidence in the business plan.
Conclusion
Despite the passion and innovative approach, Bradley and James left the den without securing the desired investment. The dragons praised the concept but unanimously decided against investing due to the highlighted challenges and uncertainties regarding the app's market potential and financial returns. The duo remains optimistic, believing that the dragons underestimated the value of their technology and its impact on combating dog theft.