‘Dragon’s Den’ entrepreneurs take swipe at CBC following collapse of financial deal
A small Toronto company is taking issue with CBC Television’s editing decisions, following a dramatic episode where their University professor and mentor squandered a deal between the company’s founders and venture capitalists.
The entrepreneurs behind JobLoft.com appeared on Dragon’s Den and impressed the VCs enough to get a promise of $200,000 in seed money. However, at a follow-up meeting, the young partners brought in their mentor, a University business professor, who lobbed insults at the venture capitalists. The VCs, unimpressed with the professor and the entrepreneurs’ inaction during the heated exchange, took their offer off the table.
On its official blog, the company told their side of the story, saying “[CBC] producers have a magical way making things look and feel a certain way for television.”
”So what was our advisor trying to say that the CBC couldn’t (or wouldn’t?) show in a span of 3 minutes? Well, the dragons were talking about how to spend the $200,000 on marketing to employers ONLY. Dr. Norrie merely highlighted the fact that we should not focus only on employers but market to both job seekers and employers,” read the blog posting.
The owners also said they were disappointed by the lack of promised follow-through by one of the VCs: “The last thing Kevin said to us, ‘As soon as we finishing taping this show, I am in your face… Guaranteed!’ Trust us, no one was in our face.
”What ended up happening was that we spent a lot of time with lawyers and at the end of it all, left with a huge legal bill as a result.”
When contacted by InsideTheCBC.com for comment, JobLoft CEO Chris Nguyen first requested a list of interview questions in advance, then, when told this was contrary to CBC journalistic policy, declined to be interviewed.
View Dragon’s Den segment featuring JobLoft:
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Ya know… I watched that last night (I love the show BTW), and I was amazed at the testicular fortitude of that professor guy… I was pretty sure like any TV show it was shortened and edited in a way to build the sensationalism of it. But, I was pretty sure he said what I saw – it didn’t look “dubbed”
Like it or not, in regards to their griping about how slow and laboured the process was after the fact, I would advance them the idea, and they should know this, that is the speed of business. Lawyers and due diligence always throw the cycle for a loop.
As much as they want to complain about the editing and TV-ism of that show, I am sure there was as much coming back from their “mentor” stepping up to the plate for them. Sure they may have gotten duped by the Dragons getting less than they could have, but they also got duped by him for letting him fight that that fight. Think 200, 000 was hardly enough? How does zilch sound?
Nothing pleased me more than to see that cheque get ripped up. Was the highlight of the night for me.
you know what they say… no publicity is bad publicity. It never ceases to amaze me when I hear people cry fowl about their apperance on ‘reality shows’. Of course it was edited for effect but no matter how you spin it, Dr. Norrie is a liability… While he may be right (I’ll let the rest of the world vote on that), he was still a complete jerk. “The Dr” may not have liked the deal but there is a way to negotiate without having a cheque torn up at the end of it all. I read the JobLoft explaination on their blog (and the many comments that come after) and all i have to say is that their product is brilliant…their business skills are not. I wish them luck.
I don’t think the issue was that the Professor had different ideas and was sharing them as a way of trying to make the business a better one, the issue was the way in which the Professor presented himself and his ideas to the VC team. I felt that the editing reflected this very well. It showed the VCs listening intently to the Professor’s presentation and asking questions despite the initial shot about educational background, and then losing their patience when the Professor took one shot too many – a personal one at that.
I believe that JobLoft is smart by staying with their mentor since he is clearly committed to their success and will work more closely with them than the VC team. I also believe that JobLoft and the Professor need to sit down to properly map their vision and develop a strategy to communicate it effectively.
If you are willing to put your life in front of the public lens, you have to be able to accept the ways in which it is analysed.
Zilch sounds pretty good compared to giving complete jerks half your company for peanuts.
I tend to agree with pretty much everyone here. It was cool and heartrending at the same time to see that cheque get ripped not to mention the wide open mouth I had. And yes Mr. Professor was a first class jerk to say the least but then again so is one of the dragons, you know the one. I, on the other hand don’t agree that they should keep their mentor. No, you get a kick butt lawyer to negotiate the contract, or is this not possible in 2006? These geeks are cool in my book but the mentor’s gotta go! Greed will pretty much get people to make fools of themselves no matter what. Now go on geeks, go get your deal!
You know, it is funny – there seems to be the perception that this site is a multi-million dollar enterprise.
Jobloft can not grow without:
1. Capital
2. Business Contacts
No, $200K is not a lot of money, but the Dragons can talk to retail giants because the Dragons are retail giants. Who would make more of an impact – the owner of Boston Pizza asking the board of Tim Hortons to use JobLoft or 4 geeky kids in orange ties trying to get an appointment with an HR manager?
IF they were currently generating $millions/month, then ok, giving up 50% for a low number is ridiculous, but there is nothing there right now.
Workopolis and Monster can implement the same functionality that differentiates JobLoft from the others.PLUS, Workopolis and Monster have Number 1 and Number 2 from above.
My prediction: Dead in the water in 6 months…JobLost
Curtis, they wouldn’t be giving up 50% of the site’s current value (arguably zero). 50% is a proportion, not a sum. Half of any eventual riches would go to the jerks. This *is not* a good deal. Try Googling Courtney Love’s analysis of the financials of the record industry and take my word for it that venture-capital funding is the next worse thing.
It was obvious that the professor cared deeply about the students. The Dragons were taking the students for a royal ride. What happened, happened for the best. These jobloft guys have won bigtime!! Kudos to their prof.
Also there is no doubt in my mind that the show was edited by the cbc to make the dragons look good.
It’s almost too painful to read these opinions.
This was best moment in television this year.
The Dragon’s, each of them, make me proud to be one of their fellow citizens. Their honour and integrity are obvious and just plain inspiring. We’re very, very lucky to have this show and these people as our own.
The Jobloft group misled the Dragons by not revealing upfront who was really in charge here.
Outrageous misrepresentation.
He’s not only their former prof – he’s still their boss!
No thanks.
Bravo to men and women of principles. Let’s be thankful we still have some.
Hi Joe –
Yes. ‘eventual’ riches – or staggering losses, it goes both ways. The point I was trying to make was the jobloft boys are thinking they already own something of value. They need a cash injection to get them to a level where their idea can actually be worth something.
They may be jerks, but they are going to fight for their investment to ensure the company turns a healthy profit. IMHO, a direct line into 5 business leaders’ network is worth way more than $200K. Wouldn’t it be amazing to call the owner of Boston Pizza and say “Hey Jim, I have a great idea for a bigger online business”.
It is exciting to read the debates and discussions about Dragons’ Den here. I agree with some comments here while I totally disagree with others (e.g. those by Joe). I have commented on JobLoft entrepreneurs’ handling of the matter here in this post,
http://kempton.ideasRevolution.com/2006/11/23/dragons-den-s1-e7-the-deal-that-got-away/
Now, what interested me most is the fact that JobLoft CEO Chris Nguyen’s insistance of having a list of interview questions in advance before agreeing to an interview. And then declined the interview because CBC wouldn’t provide a list ahead of time because of journalist reason. That said a lot to me. The way Chris acted implied he simply didn’t care about telling their side of the story by an independent journalist. What they want, seems to me, is total control of the messages coming out. Have a list of questions will allow necessary filtering of “negative” questions.
By the way, I beg to differ from Sunshine’s view. I think in the new YouTube and blog age, the concept of “no publicity is bad publicity” has been completely obliterated. Witness Michael Richards, aka “Kramer” from “Seinfeld”, on stage 3 minutes racist rant. That rant has created a world of publicity onto him, and I am afraid this bad publicity may have been sufficient to finish his career off.
As a fellow human being, it was sad to see Michael Richards self-destruct the way he did. At the same time, in the YouTube and blog age, IMHO, career can be destroyed with just 3 minutes of on-stage racist rant.
Kempton
[...] To my complete dismay and shock, I read from insideCBC blog that JobLoft CEO Chris Nguyen had refused to be interviewed by an independent CBC journalist. Nguyen “first requested a list of interview questions in advance, then, when told this was contrary to CBC journalistic policy, declined to be interviewed.” I just can’t believe my eyes when their claim of wanting to tell their side of the story to the press was “selective” and questions need to be screened and vetted first. [...]
Last night I read all the comments posted on JobLoft and only a minority think it`s a good thing that the geeks did not get the deal. Wrong you are my friends! Not getting the deal is bad. Even if 50% is only a figure as opposed to a dollar amount, you know what…I would rather hand over 50% of my company to the dragons `cause that “figure” will translate into millions once they go public and heck 50% of $$$$ is always good in my book!
“Zilch sounds pretty good compared to giving complete jerks half your company for peanuts.”
Joe,
Just so you know, business, and more importantly, big business is populated with jerks. Densely, at that. They’re going to have to get used to dealing with “complete jerks” if they plan on running in that world. Especially if they’re being ‘advised’ by one…
Of course, JobLoft is probably living on borrowed time now. Even if the CBC was not in the room when this meeting happened, word will get around quickly in the VC community about how the Professor thinks quite highly of himself and lowly of people who lack what he feels are necessary credentials. His arrogance and attitude will likley cost JobLoft substantial, or possibly any, financial backing.
I’m guessing that the reason JobLoft is smarting about the coverage is that the truth is out there now and their demise will be in the public eye.
I think that money’s got in the way somehow. Which is depressing really.
The professor’s got his own dignity up to his neck… no matter how much money it is, people offer more than just the superficiality of having deep pockets. He blew it.
And his students? Loyal as they are, the orange ties and everything… I’ve seen their site, I’ve tried it… and it looks awfully similar to Workopolis or Monster.ca … without the actual functionality of applying for the job (most of the pages I looked said to “go to the store and drop off an application”).
So yeah. Dead in the dust is a likely destiny.
And Ryerson?!? My god, these guys are from Ryerson? My best friend’s attending Ryerson right now.
If Dr. Chuck Norris was such an integral influence on the boys, or on the Board of Directors, then why wasn’t he at the taping of the show?
The taping process may have given the JL boys an impression that they had to follow a specific format on the show, but as the pitcher for the belt dispensed hand sanitizer showed, you can bring in your business advisor in front of the Dragons to discuss the “financial side” of the question if you’d like. It’s imperative that the pitchers do their due diligence on how they chose to pitch.
If they thought outside of the box in regards to how they were to pitch properly, the would have realised that regardless of the format of the show, they could have done anything with their time while they were in front of the dragons. Some pitchers brought prototypes, some dressed in costume, others brought displays and charts.
The JL boys should have stood Dr. Norris in front of the dragons as it seemed like the good Dr. is more than just a mentor, but a Director on the Board, and more than a director, but a Master PhD who sees a company moving in a direction out of his influence, and when I say a Master PhD who sees a company moving in a direction out of his influence, I mean a six year old who sulks when you tell him that he’s not going to get his ice cream.
My opinion of course doesn’t really matter, as the good Dr. can obliterate the worth of any of my statements by pointing out the simple fact that I didn’t get a business degree (no offence taken)
But a couple of unobvious simple facts that I would wish to point out to Dr. Norris is that when one attends a meeting in which the future of company is being discussed and where $200,000 is being thrown around:
DON’T be the only person wearing an unbuttoned short sleeve shirt when everyone else is wearing suits and ties. Also, if you insult a suit in the room, BE SURE not to do it wearing a necklace that looked like it was made of leather and string. (Hip-hop rappers are of course exempt because they wear necklaces made of platinum hanging diamond-encrusted pendants. Gold teeth help too!)
It was NOT casual Friday that day. A big deal was going down. Everyone was an equal in that room, so be respectful and dress your best. Suits for men are a great equaliser in the business sector. Why NOT wear one? It’s the easiest no brainer thing to do.
DON’T give a lecture where you teach Kevin Leary, or anyone else for that matter, (although the short sleeved shirt in close proximity to a whiteboard was a dead give-away,) on the complexities of a business strategy then NOT provide an answer. It comes off as smug, pompous, and rude. Again let me point to my example of a six-year-old but with the substitution of the principle of [music] “I-know-something-you-don’t-know”
DO sit when everyone else is sitting, and stand when everyone else is standing. Camera people aside, it shows a basic level of respect, but if you do stand when everyone else is sitting, FOR GODS SAKE DO NOT LEAN!!!!!! Especially with your arms crossed. It looks smug and pompous, and I feel it is just plain rude.
DON’T grumble after cheque is in your hands, but if you really have to, do it in a different room, but as the Dr. proved, you can back out of a deal any time before actually signing on the dotted legal document.
DO put your money where your mouth is. Conflict of Interest is all relative. In the Dr’s case, if he gave the JL boys $200k for a 5% stake in the company, that would be considered an investment. If the Dr gave the boys $200k for 95% of the company…. That is a conflict of interest.
You can always change your mind, but don’t insult investors on something you both agreed upon. Just politely end the negotiations. Parties can wash their hands of a deal and move on to the next, forgetting what happened, but insults resonate for a long time.
I’d bet that the JL boys could have pulled out of the deal (it’s still only TV isn’t it?) with little to no legal expenses if the Dr. didn’t insult people, but maybe that’s a lesson that needs to be learned the hard way.
DO sit down with your team to properly assess your value and what you need and how much you need and who is an asset and who is a detriment. Don’t do that and you end up looking like the popcorn bag lady who backed out of a $$$ deal with Cineplex.
DO sit down with your board and advisors once you’ve signed your initial MOU (Memoriam of Understanding) and work out the benefits and details before you have the final signing and check writing meeting and DON’T sabotage the meeting at the very last possible second by ranting that you hated the deal from the very beginning. To do so demonstrates that you are not a person that is easy to work in a team with. To rant at the very end is very selfish, egotistical, and counter productive.
And in my humble opinion…..
I believe that the Dragon’s direction at the board meeting was correct. It is better to spend efforts on recruiting employers than employees. Let’s face it, if the jobs have a high turn over rate, the majority of the people applying for those jobs aren’t the type of people that are easy to market to.
How are you going to advertise to them? Print? …..Media? …..Banner Ads? Absolutely not! What a waste of $200,000 you don’t have. Realistically the only way people are going to know that they can apply for jobs at Jobloft is from the partner Employers putting stickers on their windows saying “apply here by going to jobloft.com”, or by putting ads in the classifieds. Does being associated to Jobloft drive more applicants to your company? That is the $200,000 question.
This is unfortunately a fatal flaw. People who look for high turn over jobs typically do so while they are pounding the pavement. If I want a job seeker to apply at my store, why would I want a Jobloft sticker in my front window recruiting people away from me? I want them to come into my store and apply face to face, which is where the real applying begins anyways. Having a job close to me is not important. A good paying job is.
And that, I believe, is what takes the Jobloft’s competitive advantage away. Location based employment. People will commute an extra hour a day if it means that they will make an extra $1/hr. (In this example the extra money made is still offset by the extra hour lost in commuting, but most people don’t understand that.) Now Jobloft is reduced to just a small startup Monster.com or Craigslist. Companies of which can easily incorporate into their websites.
“Winston”…you read my mind. I also agree its not a good idea to wear a short sleeve shirt with a necklace with a leather strap in a crucial meeting. Its kinda 80′s anyway.
Also, I might add, when you decide to angrily storm out of the meeting, don’t start putting on your leather jacket, AS you are arguing with 3 multimillionaires who have wasted a day to come in to close a deal, and do this on National TV.
Honestly, I think “Chuck” Norris is still living in the internet bubble, where you can sell vaporware to suckers. Its over.
If they would have closed the deal with the Dragon’s, then in a few weeks you get these Big Wigs to call up their golf buddy at another big corp, and sign a huge deal. Maybe you build up another Monster.com type of deal, and go public, or sell out, and they all walk away with some serious money.
Sure, the Dragons were trying to screw them a bit, that’s their job.
But each Dragon would have had about 10%, and that’s the same as each other principal at Jobloft. And that would motivate the Dragons to get the company moving.
I don’t know, something is fishy. “Chuck” Norris might have some other agenda, that no one knows about yet. His insults about the private jet, were really bizarre. Very dumb, that’s a great way to make a lifelong enemy, who will go out of their way to screw you in the future.
Dr. “Chuck” Norris…Dealkiller…
Only time will tell who was right, it will be interesting to watch.
[...] Dragons’ Den entrepreneurs take swipe at CBC following collapse of financial deal [...]
I agree with the CEO’s request for a list of interview questions. Already having been shown in a less than favourable light on television, I can understand wanting to control the message from his business partners and other shareholders and not end up as an incomplete sound byte taken out of context. Candidates running for public office insist on a list of interview questions during election time. And a reporter, independent of the CBC or not, still must edit their story for air or print.
I don’t think this request is any indication that JobLoft has anything to hide or are being difficult. I doubt very much they would “filter out” negative questions, but rather formulate an appropriate response. It’s one thing to write a blog and sound intelligent; it’s another thing completely to have someone ask questions and expect concise, articulate, and accurate responses worthy of broadcast. Especially from a CEO who is new to the game.
Mr. Nguyen spoke on his blog of the show being “an excellent learning experience” and of the harsh lesson learned. It appears that his professor helped him learn something had to wait until after graduation to learn.
Excellent PR strategy.