If you are working on or thinking on working on your first startup, read this. It should help you avoid a messy situation.
In the journey of entrepreneurship, ups and downs are expected. So when BlackTop Hoops had an entire month of everything going right, it was to be assumed that the perfect storm was waiting right around the corner. Here is a quick story of how the perfect storm hit my first big scale entrepreneurial project, BlackTop Hoops, how I handled it and how you can do better.
I tried to forge the river and my wagon got flooded (everyone likes nostalgic analogies right?).
For those of you not familiar with me or BlackTop Hoops, I have been working on “BTH” for a little over a year trying to figure how to help recreational basketball connect and organize. I set forth to create social platform which would allow online communities of basketball players to highlight their basketball skill set, find courts to play on and organize game to play in (this was BTH’s core). Our (I’ll tell you the reason for the “our” usage later) grandiose plan was to help basketball organizations (leagues, tournaments and trainers) promote their companies and organize their members. We believe that rec. basketball is far too segmented to the detriment of basketball players …so we would build the community, bring in the organizations and create a meaningful/ profitable company Yayayy!! Easier written then executed. It turns out that when I started I knew absolutely nothing, but was ballsy enough to take the leap of faith and get going on the project. I guess I knew so little that a year later, I still didn’t have a finished product to push public.
In September I worked with my CMO on bringing on a developer who would be a partner of the project and work for sweat equity. It sounded perfect! A month earlier I spent too much time and money on a development team who could not execute. I was desperate, I did not want to spend any significant amount of money yet at the same time, I didn’t have many options. That was until my CMO came to me with what seemed to be a great option. He was a good programmer, a better business man, a cool guy and best of all, he believed in BlackTop Hoops. This was going to work out perfectly.
Fast forward a month later. It’s early October and we’re about a month away from launching our Beta version to the public. I was rushing to solidify our marketing plan, incorporate our business, and make sure the development process was running smoothly. Being in the web development sector, I should have known that development never goes smoothly. So in the first week of October, right before me and my developer got our meeting rolling, he uttered the unequivocally painful words, “I am going to have to pull out of this project”. I remember this so crystal clear, everything stopped; I listened and did not respond. I felt a slight sense of shock mixed in with the emotion you would feel if your baby was kidnapped (no adjective for that). His reasoning was he did not see the benefit outweighing the cost at that point and the benefit in his mind was money. After reflecting on this, the real reason it fell through wasn’t the money potential or compensation. It was because we didn’t take enough time to fully understand each other’s expectations. Since I am the president of the company…I deserve all the blame.
I remember just sitting at the desk after the phone was hung up. My mind stopped and I was immediately comforted by the feeling that ran through me. It was the feeling of opportunity. Idea after idea came to my head. Some having to do with how to move forward with BTH and others suggesting that I buy a ticket to Peru; the good thing was that they were all ideas of hope instead of self loathing. After babying it at the expense of my girlfriend I love, I decided to put BTH on the back burner for an indefinite amount of time and focus on my next move.
So here I am today, almost a month later and have one temporarily stalled project on my hands. Hindsight is always 20/20, so I thought I’d cast my eagle eye vision on this blog post and tell what I would have done differently to prevent this mini catastrophe.
Here is what I would have done differently
- Defined each partner’s expectations right from the beginning- I am not that dumb. I made sure we all define our expectations. However, not to the extent that we all were completely on the same page. We were fine with the undefined gray area (in this case it was partnership terms, rev share, etc.) hoping that we can work on good faith until we were ready to solidify the partnership fully. That turned out to be a big mistake as I was working with a developer who owned a dev firm so needed to see immediate ROI. He wanted revenue streams from the start while I wanted to build a community first and monetize second. No wonder it didn’t work.
- Created less of a Partnership and more of a Team– We were working to better basketball, we should have known the concept of team. Each person in the group worked together but seemed to have their own agenda. The camaraderie wasn’t there and it really needed to be to make it work. Make sure to not commit to a team before you need to. Get help from friends, VAs, mentors, etc…but when you get your first partner you best make sure they are a true team member.
- Do a little more market research- You MUST test your assumptions. If you feel like your market wants X…ask if your market wants X. I got held up with thinking my concept was full proof. Of course I met with some amazing people who had some amazing input and made sure to include my friends in on the process, but for the most part I failed to ask the people that mattered…the basketball players. Do not make the same mistake. On the other side of the coin, don’t get caught up doing too much market research. Too much research can be more of a hindrance then anything else and doom a promising project right from the start.
- Created a budget for almost everything- I jumped in not understanding competitive pricing of web development. Boy was that a mistake…actually…I’ll call it an expensive education. Next time I will make sure to find a development team that will work at a fixed project rate, that has a development shop big enough to deliver a finished product on time and give the project the attention it deserves. Disclaimer: many large development shops do not work under the guiding principle of transparency. You must make sure to find one that does.
- Gave it that extra percentage point- It’s hard for me to admit this but, I could have put more into this project. Don’t get me wrong I shed sweat, blood and tears for BTH but I could have hustled a bit more. You can always hustle a bit more, ask Gary V. As a young entrepreneur you most likely have fewer resources, less knowledge, a smaller network then your competitors. What you do have is an unlimited amount of energy, passion and the naivety that could possibility work in your favor. Embrace being the underdog and hustle like crazy!
Please let me know what you would do differently if you were in my situation. Better yet, please let me know what tips you have for BlackTop Hoops…I would love to hear from you and this time my ears are fully open.
Thanks for listening…I hope you can learn from my mistakes!