This might be the latest I have ever completed a quarterly update. It has been a rough quarter and I needed some time to recover, not to mention focusing on existential tasks.
2 years ago I started out hoping that I could prove the technology, get funded to build the full-scale vision and be off to the races. Over that time, we have bounced around a good bit, but have largely met the goal of proving it works. The problem is that other than our customers, no one cares.
It became evident last fall that unless I could secure funding, we would have to shut down. While we are still pursuing funding options, the end is predestined. Our lease runs out Apr 30, we will close for good on that date. While I still hold out hope for this technology in the future. It would not be prudent to continue.
Objectives
Pitching – I feel good about our latest version of the deck. I have several flavors and recorded videos. When we get responses, the message is consistently, ‘not our space’. But at least I know the business is pitched correctly, NO ONE wants anything physical and certainly nothing that isn’t enterprise SaaS.
Corporate Training – While I was able to create a generic template for the “Mission Statement” training mission and we used that for the Escapology holiday outing, we could not sell any more.
Organic Growth – Traditional advertising does not work. We have run several campaigns on different platforms/channels and none have produced an adequate return. I have ideas for other non-ad-based options and will try to experiment with these over our last 2 months
“Indoor Activities” campaign – With other priorities, this was not touched. Though probably a good strategy if we can find the best communication channel/medium.
Progress
This was an easy quarter to grade and my mood and disposition reflect it. I grade myself an “F”, the company is dying and it is my fault. I am not sure what I could have done to build a network in the VC community, but I am obviously too late to the game. I grade the company a B+ because we have consistent feedback that customers like the product and LOVE the vision. The PoC worked and we got exactly the feedback we needed. I am confident that if we had capital I would build that vision and we could grow exponentially. The business model is solid. The product is useful and valued by customers.
Failures
Financing – We are dying. We need cash. After 2 years of not paying myself, my finance degree has concluded this is no longer a good investment.
Advertising – Nothing has worked, including radio ads we started in Q1-20. I have come to the conclusion that partnerships and events are the best way to generate traffic. Groupon could work again in the future if we offer a very short mini-mission as a loss-leader.
Progress on Missions – I had really wanted to do more to create samples of Missions that could be offered to customers and set as templates for corporate training. It just didn’t get done. This probably hampered our growth in demonstrating these capabilities.
The Capital Network – Completely useless for getting me access to the Angel community in Boston. Some help in reworking my pitch deck, but not to the tune of $350+.
Successes
Offsite with Escapology – We were able to turn the “It’s Our Mission” experience into a template and clone it for our competitors in Tewksbury for their winter offsite. The model worked well and it was good to get some perspective from people in the escape room business. They had fun and it was a good night for me too.
Feedback – I have spent more time lately after Missions talking with customers about our vision and what they liked. Some will stay 20-30 minutes to talk about all sorts of aspects of the business. It is great commentary and I have learned a lot.
Jury Is Out
Patent – Once we have some income, we will continue this process. It is still possible that the patent could generate cash/interest in the company.
Techstars – We were invited to apply to the Techstars Allied Space program.
VC – Over the next few months we will continue to try new approaches and firms. All we need is one believer.
Limp Mode – Just because we will close the company’s physical presence doesn’t mean that it can’t continue to exist. We will certainly keep the site up and maybe even try to offer it as a service. I may try to build out the IoT capability. There are options here.
Q1 Outlook and Objectives
James Bond Night – We started exploring this partnership with Cask & Vine. I want to get this done before we close.
Corporate Training – Using the template from Escapology, I will try to sell one of our custom Missions to a local company.
Mini-Missions – Also before we close, we will explore a partnership with NH Unicorns to see how well we can co-brand an experience with that cohort as an example of its potential.
VC – I will continue to pursue funding until the very last minute.
Curtain Call – After we move out of Manning St and disassemble the unit, I will write a longer post mortem about the past 2 years.
Annual Review and Summary
The year started out with a major challenge as we lost our lease and had to move, reestablishing the business and all the permits. But things improved drastically over the summer with lots of Groupon business from families and kids out of school. Slowly this also transformed to the ‘Date-night’ crowd, confirming what I had always hoped would be a use-case for the experience. A round of enhancements to the app made both running the Zone, and the customer experience much better (Replay!!!). We also improved the onboarding experience with a new video and process. Through watching how the Agents approached the experience, we even got better at figuring out how to streamline their adventure for 2 people (Intel & Ops). We added several Missions to the platform and things looked like they were trending in the right direction. Customers told us they liked what we were doing. I hear so often, “I like this more than escape rooms.” We get very positive and favorable reviews.
Fall and Winter has not been good. Groupon was good for getting exposure and feedback, but financially was a disaster. Further, gathering emails has not worked for retargeting at all. The drop off when kids went back to school really hurt.
What I learned the most is that there needs to be critical mass to come back. The PoC experience was a nice taste, but no one would come back for another ‘taste’… they want the real thing. They want our vision. The space needs to be big enough to feel unique and new and exciting. Once we figured out how this would work, it seemed VC was the natural course. I have been genuinely shocked and disappointed at how little VCs respond. But further, the fact that none of them seem to really ‘get’ it, is painful. I can’t understand how an investment is not obvious.
As I move into the future I am convinced more than ever that this is the right approach. VR based solutions like Sandbox VR will lose their novelty, when customers start to recognize that VR isn’t real. Photons are not atoms.
There is a great scene in the movie Star Trek Generations where Kirk realizes that reality feels different than virtual. You see his face at the point of realization above. Kirk is in the “Nexus” a storm-ribbon that travels the universe. Inside the Nexus, there is no time. Everything you want is immediately satisfied. It’s like heaven. Kirk is reliving a great day from his past when he used to jump a horse over a ravine. He does it once and it feels funny. He does it again and looks back as Picard rides up. Kirk relates that he has jumped the ravine 50 times and each time it “scared the hell out of me. Each time. Except this time. Because it isn’t real.” Virtual reality seems to be the best simulation for experiences we can’t replicate. But just because we think something can’t be replicated, doesn’t mean it isn’t possible. Reality is better than virtual, and pretty soon, people will see how they can have experiences in the real-world. And they will excite and scare you in ways you never thought possible. They will want more. People will come.
Key 2019 Metrics
Paid Customer Visits - 850
Equity Investment -$30k
Total Revenue (net) - $5900
Operating Loss - $34,500
Missions on Platform- 7