Bike Polo Companies

Geez Magic.. you better get on this... Nothern Standard hits Dragons Den
http://www.cbc.ca/dragonsden/2012/10/northern-standard-bike-polo.html

edit: shit.. you can't watch the video.. but they obviously got a deal!

Yep, C$75k (about £50k) for 21% of their business.

Which means NS are now valued at about £¼ million. It's crazy to think that's come out of bike polo.

Could be a game changer, it's going to be tough to compete with that, depending what they do with the money.

Juste make better choices, they made some bad ones in my opinion.

Yes, hopefully the quality of our products will be more important than having loads of money behind you.

Interesting investment decision. Obviously I don't have access to all the figures but there's nothing in their business that can't be really easily copied and the figure is nowhere near enough for those guys to go full-time, engage in serious sports equipment R&D and create a truly unique product. Seems like the valuation is too high to me.

Only way I can make it add up is that they expect something like a return of 20% on $75k over 5 years from steady shaft demand and can use various contacts to get the units cheaper. Makes it a more attractive proposition than T-Notes I guess.

I'm pretty sure Max is already full time

Max is full time, maybe ken will be as well now....both the NS guys are very passionate about there products, I am sure they will do well...it is all about the next product though....

Like I said, I don't know all the details. Way too many factors to be sure it will end well, especially without knowing precise details of their contract. There are a lot of ways they could end up completely fucked and a small chance they get huge. For example, what happens if part of the deal is that their investor has distribution clauses? Should the investor decide they want a bigger piece of the pie, they tie up the distribution channels and destroy NS, buy the stock back with another company and BOOM they own 100%. They can do the same sort of thing with patents and developing new products.

From an investment standpoint, it doesn't make sense to value a new company with no USP that high. Hit ratio for most VCs is around 1 in 10, maybe the guys on tv are better but maybe not. Is NS gonna be worth around $4mil in the next few years? I doubt it (10% chance I guess), maybe the sport really blows up and they drive it.

Good luck to them but I remain cynical (and mostly uninformed).

Im not sure you can make so much money with such a small market too. I hope they don't gonna have trouble with this plan.
I hope they gonna use this money for doing good tests and experiences before launching products. That's what i would do, lot of prototypes (and some drugs, party and tourneys, mostly that by the way ).
They also have to keep things more simple than what they tried to do in the past.

Anyway that's a really good thing for them, and this give a good visibility of our sport.

I can't see the video in switzerland too...

p.s.
Can someone post the vid of jono breaking a Magic shaft with max voice in background to show the diversity in business approachs in polo.

Lol

But I have to agree with James.

I don't think there is anything they are offering so far, which is both successful, and can be patented.

And that's going to need to happen if the Dragons are ever going to see that money again.

I don't see the demand in standard polo products (balls, aluminium poles, capped uhmw heads) being high enough that you could make $375,000 profit off that any time soon (maybe 10-15 years, if you are really good).

And if the Dragons don't think they are going to see that money, they will take measures which maybe are not be in NS's (or Bike Polo's) interest.

So I hope they use the money to innovate, bring new products (which they can protect) to market, and make a metric fucktonne of money out of it.

I'd guess that the investor punt is built primarily on anticipated/projected growth of the sport (esp. in the USA) - less on current product range - it'd be interesting to see those projections and compare with the UK/Europe.

Hey guys,

I like the lively discussion. There are a few point made here that I'll speak to. I'll try to keep it brief but I can't guarantee that I will. First, the deal we got is only a deal... not cash in our hands. We are in the due diligence phase of the investment and there is zero guarantee that this deal will even come to fruition.

Yes I work on Northern Standard full time. I left my job at the end of July to focus 100% on this business. It was a huge gamble but I've already put considerable money and effort into it and want to see this thing through. Will bike polo be able to generate the revenues we are hoping for? Nobody knows, but If you look at sports like skateboading, snowboading & Ultimate frisbee and follow them from inception to current day, there is definitely a potential as long as we can generate a critical mass. Yes the market is too small now and we will likely operate at a loss for a couple years. However, at the rate its growing - we estimate a compounded annual growth of 50% per year (this was take mostly from LOBP registration & averaged out over 3 years of figures) which could result in a big enough market for several medium sized companies to comfortably play in. Plus we need to look beyond shafts and heads and see the potential for a slew of other products that are needed/wanted. I love bike polo. I see huge potential for this sport and I want to be part of it.

As for the actual deal itself and the value of the company, I spent considerable time on this... but at the end it simply amounts to an educated guess. For those of you who have written a business plan, you know what i'm talking about. We looked at the current numbers, projected growth, amount of the market we could get, $ value of product we could sell to that market, projected that out over a period of time and voila.

To speak to clement's point, yes we have made some big & very expensive mistakes in the past. However, we are committed to making top quality projects and are focusing all our $ and time into R&D. Most of the money from this deal (if we get it) will go to new product development and testing. We have some great stuff lined up for early 2013 and could do even more with a healthy investment. The rest will be used for cash flow and sponsorship. AKA, we're not fucking around anymore.

To Mr. Kawasaki's point... the numbers were taken from a global perspective. However, much of the information currently available is USA-centric so it's tough to pull UK/Euro out of it. However, anecdotally, I think UK/Euro is growing faster and stronger than N.America. I personally believe that you guys will be the true innovators and leaders of the sport in the coming years (just dont tell NAH I said that)... 2 brand new companies have started in the UK alone in the past few months if that is any sign.

Aufbruch, I'm happy to talk frankly about the numbers in more detail but I'll spare the rest of the forum the boring details. You can email me at max(at)nsbikepolo.com with any specifics and I'll get back at you asap.

Also, a treat for those of you who actually read my entire rant... a buddy of mine has posted the video on youtube. Ta da:

http://www.youtube.com/watch?v=GHxc6u9enmQ

You'll definitely get an email - I fucking love numbers!

Watched the video - 3 of them at $25k a pop as a speculative/fun investment makes a lot more sense.

Good to see the video, thanks Max.

I'm really pleased for you guys that you've been given the opportunity, I know if Magic had that sort of money we'd be looking at innovative products that just aren't on the market right now.

Obviously as a competitor I hope you don't get so big that there's nothing left for us, but I think from your comments that you agree with me, that it's not about shafts and heads, that's the small stuff that will keep polo companies in business, but it's never going to make the large amounts of money that other products might.

So good luck, and I hope you make the right decisions, I look forward to seeing these new products.

wow, they actually got an investment, what are they gonna spend that on? also 50% a year? that can't be true

Exciting news! good luck to you. Whats cool is that you need the scene to grow to make your buisness works meaning money will go into increasing the number of players which can only be a good thing. I look forward to seeing the new stuff but i will under no circumstances be buying any of it as you beat us at the LO (pricks)

Cool, calm and collected... I think they bought into you two rather than bike polo! Good job.

To Mr. Kawasaki's point... the numbers were taken from a global perspective. However, much of the information currently available is USA-centric so it's tough to pull UK/Euro out of it. However, anecdotally, I think UK/Euro is growing faster and stronger than N.America. I personally believe that you guys will be the true innovators and leaders of the sport in the coming years (just dont tell NAH I said that)... 2 brand new companies have started in the UK alone in the past few months if that is any sign. <

What say the Directors of Magic on the subject of growth?

The ongoing problem with growth is that scenes only seem to be able to reach a certain size (typically 15 to 30 players).

Whilst it's true that the number of cities playing is becoming more and more impressive (over 400 now), the key will be how many cities make the jump to a London-sized polo scene as time goes on.

For more cities to become London-sized it perhaps requires more courts to be available (public funding?), more organisation within communities and the proper encouragement/support of newer players. Bike polo in schools is the most exciting thing to happen to the sport since it's conception in my opinion (in terms of growth), but few people have a passion for it. Some scenes actively discourage newer players from ruining the level of their throw-ins which seems particularly short-sighted/selfish..!

Also, many cities/scenes have now died but the stats do not change as you cannot unregister your scene on LOBP. The new number-of-tournaments skewed map is a truer reflection of bike polo activity (Kev's "number of tournaments" over time stats are arguably better than simply counting the "number of cities/players" until we have less redundant data for the latter).

I think bike polo's still growing but it will never be a global phenomenon (more of a fringe cycle-sport), the projections expressed to the dragons were incredibly optimistic, but stranger things have happened.

(I'd be interested to hear how many tournaments were organised in 2012 compared to 2011 and the number of competitors that played in them, etc.)

The ongoing problem with growth is that scenes only seem to be able to reach a certain size (typically 15 to 30 players).

Ain't that the truth.

I think growing beyond where we're at now is going to be really tough. Bigger scenes can support beginners sessions, but smaller scenes get infrequent and limited interest from new players who get shoe-horned into regular throw-in sessions, often unsuccessfully unless they're already confident on a bike.

I'm totally happy to stay a niche within a niche within a niche, but we need new players coming in to replace players quitting/moving/getting injured.

Off topic, apologies.