What I Learned From Selling My First Company

New York. March 2017. The outside temperature was about 20F.  Taking into account the wind chill factor, it felt around 15F. I couldn’t feel my face! There were mountains of snow on the edge of the sidewalks that hadn’t thawed from the blizzard the week before. Even though I’m originally from England, I hate the cold but on this winter day, my heart was warm. After almost a year of trying, and after running it for five years, I had sold my first company.

In 2012, I took one of the biggest risks of my life. I moved from London, England to Austin, Texas. I had no job, a small amount of savings and a dream: I wanted to change the face of a sport. The sport in question was table tennis (or ping pong as it is more commonly know in the US). I had seen the rise of wellness in corporations and how a lot of offices had introduced ping pong as a way for employees to bond at work. But the sport had remained the same for a large part of its history. There was no aesthetic appeal and no way for players to customize and personalize their experience. And so Uberpong was born. I would allow people to use photos on their phone or social media to create custom ping pong paddles.

I needed cash fast so I launched a Kickstarter campaign. I had stayed up late learning about effective strategies, target amounts to raise and time periods to run the campaign for. So I settled on a $10,000 goal and set the clock ticking down from thirty days. I started with my Facebook friends and family members and in addition to this early support, I got some additional funding from the Kickstarter community. I then hustled hard with the local Austin media and got picked up by a few blogs and one magazine. The numbers were looking good after the first week but then they plateaued. Two other big blogs covered us and it seemed that we were home but then another lull. I organized a ping pong night at a local bar and convinced them to show our Kickstarter video on a giant projector screen outside. This attracted a ping pong fanatic to pledge $500. My heart was racing as our deadline approached. We were still short. After speaking to an entrepreneurial friend of mine who ran a coworking space, he took us over the finish line with barely thirty minutes to spare. I was literally ecstatic. Here I was in a new country and a new city and I had the seed capital to make my dream a reality!
Lesson Learned: If you set a deadline and focus, anything is possible.

I had no experience in e-commerce but I was obsessed with the idea of making money while I slept. I told a British friend I had met at Austin Startup Week what I was working on and he offered to help. He helped to build a basic version of the site and cleverly used free tools to create a storefront. I was ready to launch Uberpong.com. I will never forget the moment the first sale came through. I was on my phone and I got an email saying a transaction had occurred. It showed the amount and the customer and this was followed with a second purchase on the first day. It wasn’t the money, it was the feeling that I had created something that the world wanted. It was validation. It gave me a natural high I had never experienced before.
Lesson Learned: Bootstrapping and using the lean startup methodology is an effective way to launch a new business. Hack, scrape, beg, borrow and steal (well maybe not steal!) to get your creation out to the world then stay close to your customers to learn what they need.

Out of the blue in January 2013, I got a call. It was ExtraTV. They wanted some paddles quickly for a segment of a show with Mario Lopez and Maria Menounos. I tried to act cool but probably sounded like a gibbering wreck! Here was my first major client and we had a tight deadline. We got them to Extra just in time and they appeared on national television. I was gobsmacked. I had been in the US for under a year and the brand I had launched was on national TV being broadcast into millions of homes. Soon after, more major clients heard about us and came shopping. We were still using my closet to store the rubber sheets, the kitchen table to print labels and pack the orders and a local printer to print onto our rubber sheets.
Lesson Learned: The garage startup is not a myth. To keep overheads down, it is a good idea to start at home.

It quickly became apparent that we needed more space so I bugged the owner of a t-shirt company to sub-lease us some office and production space. I also hired my first employee to handle operations and customer service and help on the events front. Within two years of launching, we were on the field at Dodger Stadium partnering with MLB team The Los Angeles Dodgers. We were running a celebrity ping pong tournament with Jimmy Kimmel as the host. A few years before in England, I had a dream that one of my brands would be on the jumbotron at a basketball game. As I walked up from the locker room at Dodger Stadium, I saw Clayton Kershaw getting interviewed in the stands but what really caught my eye was a bright orange color on the digital advertising board. A giant “Uberpong” was displayed there and around the entire stadium. I stopped in my tracks, pinched myself and then took a photo.
Lesson Learned: Be present, appreciate the highs and celebrate moments like this.

Back in Austin about a year later, the t-shirt company we were sub-letting from suddenly went bust and as the floor was filled with things they were trying to sell, we were the only lights still on in the building. Panic set in as we had no plan B for a production space. After talking to the landlord, we managed to move into a temporary space in the building but the heat was unbearable in the Austin summer. I eventually found an entrepreneur who ran an electric vehicle company and he let me use some of his warehouse space.
Lesson Learned: Always have a plan B. You never know when you will need it.

As I got to the point where I had been running the company for about 4 years, I had another venture which I wanted to launch but I had to make sure that Uberpong would be in safe hands if I sold it. I researched brokers and settled on one and learned about common deal structures associated with acquisitions. What was clear from early conversations was that a partnership had to be secured with someone who could produce the paddles so we could focus on marketing and distributing the paddles. I had been talking to a company in New York on and off for almost two years and thought they would be buyers. I suddenly thought that they could be partners. The hunch was correct and I managed to do a deal which would be massively beneficial for the people who bought us. At this time a few things made this a tricky time in my life: myself and my wife had just had our first child, we were moving from Austin to San Diego for health reasons and I had to move business operation to New York. Everything somehow came together and it all worked out. Now in San Diego and after talking to potential buyers and going pretty far, no obvious buyer had identified themselves. Just when I thought no-one was going to buy the company, a couple of guys from Austin came in and we got to the due diligence stage. We went back and forth and settled on agreed on a price. The closing date was right in the middle of a trip to see my sister-in-law in New York. I will never forget some of those phone calls and the tension. In the end however, everything went through and I knew I had chosen the right buyers who would take the brand to the next level. Now I was clear to work on my second startup: Qwerky.
Lesson Learned: Most people hit a stage where they give up. They let the deal die. They assume it will never happen. That is when you have to stay strong and see it through. Persistence is everything.

[I am working on turning this adventure into my 1st book so please subscribe to The D Lowe Playbook to be the first to hear when it launches].

David Lowe is the Founder of Qwerky, a coliving community for like minded people. Find him on Twitter @davidjlowe and email him here: hi@qwerkycoliving.com

Jake Gyllenhaal Nightcrawler video camera

What Nightcrawler Teaches You About Starting A Business

I’m not sure if you’ve seen Jake Gyllenhaal in the gritty thriller Nightcrawler, but you need to see this movie. Shot almost entirely at night on the streets of LA, the film features Gyllenhaal as Louis Bloom, a guy desperate to make it in any industry he can get into. He stumbles into a new career as a cameraman and begins filming increasingly shocking accidents throughout the City of Angels. But what I found really interesting is the way that Nightcrawler is a parallel for entrepreneurship. Here’s how, and a quick “Spoiler Alert” warning in case you haven’t seen it yet:

1). Lou observes the scene of an accident and learns about film crews who use police scanners to get to the location before the LAPD.
Startup parallel: You observe the business landscape and look for opportunities. This is the research phase where you hear about tools that your eventual competitors are using that can give you the edge.

2). Lou invests in a basic camera to film on location and drives there in his beat up car.
Startup parallel: this is the bootstrapping phase. No frills. Just using what you have and making minimal investments to make things happen.

3). Lou gets his first footage and blags his way into a TV network studio. He eventually meets Nina (played by Rene Russo) who agrees to air his film in the evening news.
Startup parallel: An enterprising approach together with a lot of luck gets you in positions you need to be in. Don’t take no for an answer.

4). Nina pays him a small amount for his film as the quality is low.
Startup parallel: Believe what you have is worth something then sell it hard to your target market. Remember that early on, you might not be able to command a premium for your product or service but work to increase the value after getting feedback from your customer or client.

5). Lou upgrades his camera and car.
Startup parallel: Initially you have to ride the break even line and invest back into the business to get it off the ground.

6). Lou negotiates with Nina for his subsequent footage and gets a higher payout. Startup parallel: Get a reputation in your industry and then command the price you deserve using the leverage you have earned.

7). Lou hires an assistant allowing him to cover two angles at the scenes and invests in a laptop to quickly edit and submit his footage to the network.
Startup parallel: in order to grow and beat your competitors, you have to bring people in and delegate responsibilities.

8). Lou negotiates with Nina to make him the exclusive cameraman for the network for a top fee.
Startup parallel: Make yourself indispensable to your clients and partners. If you can become the best in your industry, you can command the highest fees.

9). Lou shoots a groundbreaking pieces of footage that is aired. He agrees that the film can be used on this condition that his company name (his personal brand) can be mentioned as the source.
Startup parallel: Whether you are building a company or personal brand, there comes a moment when the hard work pays off and your name will be seen. This may be in the local newspaper or on the national TV news but make sure you capture this and use it on your Press page on your site. It will add credibility which will attract future clients.

10). Lou eventually hires a team, buys two vans and dominates his field.
Startup parallel: you build a team that can work in the business and give them the tools to succeed so you can work on the business.

Listen to the podcast here.
Jake Gyllenhaal Nightcrawler video camera