What can we learn about innovation from Dragon's Den?

Recently I was one of the judges in a competition for universtity students to come up with a business idea. It was rather like being a 'Dragon' investor on the television programme 'Dragon's Den'. The programme allows entrepreneurs to pitch their ideas to a panel of investors.

In many ways the students did a better job than some of those on the programme where only around eight of the hundreds of ideas got the investment they were looking for. The show featured multi-media teddy bears, gloves to tell you which side of the road to drive on, a shoe steriliser and a chilli sauce amongst many others. So why did so many of the ideas fail to impress the dragons?

Some of the ideas used new technology or applied technology in a new way. This can often give a great idea for a fantastic new business. A word of warning though: if you're a technophile you're likely to be more in love with the technology than in solving real people's problems. The task of a business is always to solve people's problems, not just find a use for wonderful technology.

The real competition for your business, and one that is so often overlooked, is the simple fact of your customers taking no action and not buying from anyone, or in the case of a technology based solution, preferring the low-tech method. If you've got an idea that you think is perhaps the one, put it on hold and try thinking again for the next use of the technology - it's likely that the second or third idea is actually the real innovative money spinner.

So many of the entrepreneurs failed because they had no grasp of the basics of finance. They couldn't tell the dragons the difference between turnover (how much money passed through the company) and profit (what was left when costs were subtracted). Any investor wants to see an idea that has proof that it will generate a profit. But they also want to see if the people running the business understand this or they just won't want to work with them. Often there has been an idea on the programme that the dragons like but they just don't want to work with the people in the company presenting it because they're either ignorant of have the wrong attitude.

It's interesting that the best business ideas that got the investment they were looking for were not necessarily always the most innovative or different. All that is needed is to discover a need in the market and satisfy that need. Find a problem and fix it. It's vital to do research to find out who's already in the field. You may find there are already similar offerings out there, but with a unique selling point, the right expertise and the ability to get to market quickly and efficiently, you will still be able to make a success of it.

The key to business success in the 21st century is creativity. Creativity can be defined as doing something in a better way or doing something better. Someone somewhere will be able to do it cheaper or quicker and it's a crowded marketplace. Businesses who use their collective creativity to overcome these challenges won't have anything to worry about.