Photo: ‘We actually didn’t want to bring on the bodybuilder…but the producer insisted,’ says Phil Jacobson (second from right), shown here with his PumpUp co-founder Garrett Gottlieb (second from left) and Dragon Bruce Croxon on the Dragons’ Den set.
Phil Jacobson is not a blank-stare, loss-for-words kind of guy.
So, it was a bit fishy when the young co-founder of PumpUp, developers of a popular mobile workout app, appeared to be caught flat-footed during a recent episode of CBC’s Dragons’ Den.
That’s the thing about reality TV – the reality is often massaged, if not outright manufactured.
Not that Jacobson and co-founder Garrett Gottlieb, who came through Communitech HYPERDRIVE’s second cohort earlier this year, are complaining. While their Dragons’ Den appearance might have looked like a failure to viewers at home, they saw it for what it was: a massive PR opportunity that raised the company’s profile.
I sat down with Jacobson this week to talk about the experience.
Q – The Dragons’ Den segment was very entertaining. Is entertainment the main point of the show, as opposed to deal-making?
A – What actually happened was not how it was portrayed. They clearly took the angle of the Dragons, which we expected, coming out of it knowing we didn’t take a deal.
There were a few things they missed. For example, we went to the back room and had a discussion there. We counter-offered them twice.
When valuation was brought up, we explained that we’d already taken some funds from HYPERDRIVE at a $625,000 valuation, and that was pre-traction, and that we’d been growing significantly for three straight months with no spend on marketing, which was where the bump in valuation came from.
They chose not to include that.
Another thing was, they would make a cut to my face having a blank stare. If you know me, I always have an answer to everything, and I did on the show, so they would use cuts from different scenes to frame the story how they wanted.
There were other aspects too, but that kind of sums up the angle the producers chose to take, versus how it actually happened in the Den.
And I believe had we taken a deal, they would have framed it obviously differently, but we have no problem with that at all.
Once you go on television, or into the media in general, there’s a story to be told, and that’s up to the people telling the story. You can only control as much as you can.
Q – Going into it, did you expect them to reconstruct it to the level that they did, or were you surprised to watch it on TV and say ‘that’s not what really happened’?
A – I wasn’t surprised. I thought they could have even framed it up worse if they’d wanted; more in the Dragons’ favour. It would have been nice if [what was shown] was actually how it happened, but I expected that not to be the case.
Q – How much of the rest of it was manufactured? Did they suggest, for example, that you bring that bodybuilder with you?
A – Again, that was their idea. We actually didn’t want to bring on the bodybuilder, because our product is meant for getting beginners started, so it was totally misaligned with what our product is all about.
But the producer insisted, and I came up with a variety of different ideas, but they were not of interest to them.
And then we were in the position where it was, ‘Do we just say OK with the hope of getting on TV, or do we say no and then not get on television?’
So we figured, if the producer thinks this is so necessary, it’s going to help us get the PR and marketing value out of going on the show.
Q – So you went in knowing this was basically an exercise in getting some exposure.
A – At the very least.
Q – Was it worth it in the end?
A – Absolutely. We got a tonne of great PR. We were on CBC Radio; tomorrow we’re going on the Global Morning Show; we were on 570 News; we were in the Record twice; we were in the Laurier newspaper and the Waterloo newspaper.
So, lots of great coverage, and a decent bump.
We’ve been Number 3 in the App Store for the last week almost now, so from a PR and marketing perspective, it was awesome. And it was a cool experience to have gotten on Dragons’ Den.
Q – So you’ve had more than 100,000 downloads?
A – When we were on the show (recorded in April) we had 12,000; now we have well over 100,000.
Q – How many have you gotten since the show was aired the other day?
A – We don’t disclose those exact numbers, but there was a decent lift. We expected about what we got.
Q – Some of the Dragons’ comments were pretty blunt; Arlene’s in particular. What did you make of what she said?
A – I think Arlene and the other Dragons, outside of Bruce, have a perspective more around traditional business models, which is understandable, because that’s where they’ve made their money and had their success.
When it comes to consumer mobile, it’s a new world and it’s a different world. If you look at all the success stories, it’s about building massive scale by providing significant value to as many people as possible, and then turning on the monetization, whether that’s through a freemium model, whether that’s through an advertising play, whether it’s through a mix of both, whether it’s through leaving a free consumer product and taking your technology and licensing it, or going B2B with a vertical play.
The key in every successful consumer mobile app or consumer mobile company is scale, and adding a significant amount of value for as many people as possible, and that’s where our focus is at. And we seem to have been doing a good job of that, growing rapidly over the last seven months.
Q – So you get it to a scale where you have advertisers wanting to throw money at you?
A – If that’s the model, yes. Or alternatively, you have enough users who are extremely active, where you can find out the right features that you can sell at a value-add, whether it’s $5 a month or $30 a year. Whatever the model is, at scale, those numbers are simple.
If you have 15 million active users and you’re converting three per cent of them to pay for your $30-a-year pro version, that’s significant revenue. That’s how we look at the business, and that’s what we’re focused on right now as a young company.
We’re seeing a workout completed almost every three minutes right now. It might be five minutes; three to five minutes, which is exciting to see. We’re seeing that we have a product that people genuinely love and use.
Q – How old is the company?
A – We started in May of 2012, so a year and a half. We launched in beta in January of 2012, and we really didn’t even stabilize the product until it was out in beta in May, so from that perspective, it’s really been in its quality form for just six months.
Q – How did HYPERDRIVE help your company?
A – HYPERDRIVE was a great experience. HYPERDRIVE really was a combination of quality mentorship and helping us remain hyper-focused on the task at hand. With that Demo Day coming up, you’re really working as fast as possible.
We actually pitched Dragons’ Den on the same day HYPERDRIVE’s Demo Day was. That was a crazy day.
And as well, funding was extremely necessary at that point. We’d had one VeloCity Venture Fund prior to that, but outside of that we didn’t have funds in the company, and we were looking to expand the team, we were looking to afford food and rent, and HYPERDRIVE allowed us to be able to continue moving forward at a rapid pace [with $40,000 in investment].
We’ve done an angel round [since then] but we haven’t disclosed it.
Q – You alluded to your valuation post-HYPERDRIVE as $625,000.
A – HYPERDRIVE invested $40,000 for 6.4 per cent, I believe, so I think that nets out to $625,000. So we already had that valuation going in when we said that on the Den.
Q – So it was worth the time and aggravation to go through the Dragons’ Den experience?
A – It wasn’t too much time on our part. I mean, when you’re a startup, you’re always pitching, so for us this is just another pitch. It happened to be behind some cameras in a studio, but it was just another pitch.
Obviously our pitch has evolved significantly since then, but it was really just one morning of our time.
There was preparation for the airing of the episode, but that’s like preparing for any other PR opportunity.
Q – Would you advise other companies to chase the opportunity to go on Dragons’ Den? How much did you pursue this?
A – It’s an interesting story. We tried out when they came to Waterloo, and we didn’t get in. Then, a couple of weeks later, I got an e-mail in my spam inbox – I check it every couple of days – from a Dragons’ Den producer, saying they’d read an article about us and they think we’d be great on the show.
I told him that we’d already tried out and didn’t get in. He said he didn’t know that, but he thinks we’d be great, so we said OK. So it was kind of fluky, to be honest.
I think if you’re a consumer product, the marketing value you get out of it is worth it, at the very least.
If you do end up getting an offer and you think it’s a fair offer – some of the Dragons are great investors who would be positive to have on your team – absolutely.
I don’t really see a negative in doing this. If you’re the type of person who is afraid of how you’re going to be framed up once the control is out of your hands and in the producers’ hands, maybe it’s not right for you.
But really, when you’re an entrepreneur, you’ve got to be able to roll with the punches and you have t be able to not worry about those types of things.
Q – Anything else you’d like to say?
A – I think that Communitech, HYPERDRIVE and VeloCity, where we’ve spent the most time, have definitely been really beneficial, and it’s great to be part of the community.
We’ve benefited from being part of this ecosystem, and I think a lot of people can.
It’s great to see all the support here; all the resources and mentorship that are readily available here have been great for us, and we’re obviously very appreciative of that.
I think other companies should consider Waterloo, if that’s something they haven’t considered.
