Hard-to-get concert tickets. Skydiving experiences. Exclusive dinner dates.
Go Moment used to create unforgettable experiences on demand.
We don’t anymore. We retained the idea of creating unforgettable experiences (it is central to who we are as a company!) and walked away from everything else.
Entrepreneurs need to pause, examine, re-examine constantly.
I’ve talked about this idea before – and how I find myself repeating this in conversations with my peers and mentees.
The ongoing pandemic and the consequent pace of acceleration demands that we introspect and re-assess the direction, framework and overall strategy.
I challenge MBA students creating businesses at the UCLA Anderson School of Management to tell me how they are adapting their idea to meet current expectations.
It isn’t easy.
I don’t have to imagine the dread.
I’ve lived it.
Entrepreneurs embrace curves
Nearly two years after launch, we changed direction at Go Moment. We went from being a B2C business to being a B2B business.
Our concept of “unforgettable experiences on demand” was very different. There were no similar offerings on the market.
A consumer had to learn about our offering, weigh it against indirect alternatives, and then decide to spend money on it – resulting in a high Customer Acquisition Cost (CAC).
When we created a financial model around how our CAC metrics would scale, we knew that our B2C model would be expensive to achieve critical mass with. As it turned out, the VC investment process worked exactly as it should.
Was it a clean switch for us? No.
We had some overlap between the two business models.
Was it an easy decision for us? Absolutely not.
Deciding to abandon a business model that had driven millions of dollars in revenue can’t be .
I came to think that building a successful B2C business could potentially be attributed to luck. I’ve a lot of respect for entrepreneurs who build multiple B2C businesses successfully.
We looked for alternatives.
B2B SaaS seemed like the obvious answer after reasoning from first principles.
We have our opportunities, our challenges. Recurring revenue is appealing, of course. Winning customers and growing to millions of dollars in revenue is however more difficult.
Think about these
If you are an entrepreneur who’s examining and re-assessing your company direction, here is my list of 4 things for you to think about:
- Start with first principles.
Reverse-engineering problems will show you opportunities that others are likely to miss. No wonder, Elon Musk and Charlie Munger now use this Aristotelian thinking.
- Build a business that is antifragile where possible.
Try to variabilize your cost structure – avoiding fixed costs, expensive long-term leases where possible.
- Understand the end of history illusion.
The ongoing pandemic won’t last forever. But it has given us several valuable lessons – dealing with volatile scenarios is my favorite lesson of all. Consider future volatility scenarios. The next shock to our systems is unlikely to resemble what we’ve seen in modern times.
- Read the water before you jump in.
Learn to distinguish trends from fads. And then align yourself with the biggest trends that you can see. For what it’s worth, this is what I’m seeing now – ecommerce, telemedicine, contactless customer engagement.
If you need to talk a decision or two out with someone, I am offering up a few half hour slots in early September.
Fill this out and I’ll be in touch.