What’s a fair deal for cash and expertise?
September 19, 2012 | Posted by Richard in Confessions of a serial entrepreneur |
These were the clear sentiments Andrew Slorance made to the BBC for its documentary, The Perfect Wheelchair, which aired last week.
He was explaining why he rejected Richard’s offer for expertise and investment in return for a 50% interest in his carbon fibre wheelchair invention.
In a heart-rending story, Andrew fell out of a tree at the age of 14 and lost the use of his legs. For the 24 years that he’s been wheelchair bound he’s wanted to design a better one, and so he did, inspired by Formula 1 racing cars.
Then, four years ago, convinced the design could be commercialised, he left his job as a film editor to pursue it as a business. As a Scot, he was given money by Scottish Enterprise, and by Highland and Island Enterprise, and when that ran out, he remortgaged the family home for £50,000.
The problem was finding a way to reduce the production cost of the wheelchairs. Indications were that it would need to retail at a staggering twenty thousand pounds, more than eight times competitors’ prices.
Andrew went through about six prototype manufacturers, always trying to get the cost lower. Getting his target weight of about 6 kilos was also a big challenge and he struggled to do even better than the normal, non-carbon fibre chairs. He argued with many of the suppliers before moving onto the next, blaming their inability to meet his specifications on them only being interested in doing their day job, no more. They responded that he kept changing the specifications and the design. Interestingly too, he never sought the opinion of any other wheelchair users, and at one point said “it doesn’t matter if I go to a user group and they don’t like it, I’ll go on regardless”.
So when Andrew tried to eventually demo it at a trade fair, it was perhaps no real surprise that a potential customer hesitated about the design, worried she’d fall out. She also shrieked when told the price. The Beeb interviewed Andrew’s family, who talked about the strain, emotionally and financially, on all of them.
So I would say to Andy, the value of expertise, experience and contacts is worth far more than inventors often think. And investor’s cash, like their own cash, represents a lot of hard work and sacrifice.
Sometimes the smaller piece of a successful pie is the best business strategy on the menu.