“All men dream: but not equally. Those who dream by night in the dusty recesses of their minds wake in the day to find that it was vanity: but the dreamers of the day are dangerous men, for they may act their dream with open eyes, to make it possible.” -T. E. Lawrence

Roughly 2 months ago we put a temporary, yet tight lid on nearly everything financing related.  It was following an epiphany we had regarding a new strategic focus, that we reevaluated the allocation of our resources.  As opposed to using up valuable resources on financing activities, we decided to instead direct them towards attracting reputable customers, generating revenue, and revamping the entire product.  By focusing solely on building tangible value for paying customers, we anticipated our financing story would also improve.

A week ago I received a request for our executive overview; for the first time I could barely recall when the last time was that I updated (or even thought) about that document.  This request was a nice reminder for me to look back and see what type of progress we actually made during the last 2 months.

How did this experiment work out?  Put mildly, these have been the most productive couple of months we’ve had so far at LockerDome.

The results:

• Revenue: We went from zero revenue to sealing paid licensing deals with more than a handful of decent sized, reputable customers (elite sports organizations).
• Useful Product: We took customer feedback and revamped the entire product, bringing it into good enough shape to satisfy the product requirements for our first launch with paying customers; the feedback from this new release has been overwhelmingly positive.
• Traction: Influential customers are now paying for and finding unique value in our product; not just liking the idea of what it could be.  With that, a proven business model is emerging.

What we also noticed:

• We’re more productive: Fundraising is usually a necessary evil in startups–and is something that we’ll probably approach again soon–but it’s ridiculously time consuming to be effective with it.  During financing activities, a team with limited resources can come to a near halt in many areas of the product and business.  By strategically redirecting our limited resources, we were able to focus on building value for the customer as our top priority.
• We’re more valuable: Because of the results above, our own story is vastly improving.  We are significantly better positioned not only to raise additional capital (when the timing makes sense), but to attract top tier employees as we begin to scale the company.
• Team morale is up: As we say in sports, it’s fun to win.  In the technology world, it’s fun to build something that customers find valuable enough to not only use, but to pay for.  Building for the sake of building is pointless; our customers are why we get out of bed each morning.

Back when I played competitive baseball, I received the following piece of advice:

“Do whatever you can to influence outcomes the way you’d like, but absolutely let go of anything that’s outside of your control.  How you practice, do your homework, and live your life are all things under your control.  What others think of you, where Coach plays you, and of course, when Coach plays you are all outside of your control.”

Our success over these last couple of months boils down to a similar philosophy.  Instead of worrying our team with stuff that we can’t control, such as the economy– and more specifically, how the economy affects potential investors–we are intensely focused on the facets of our business that we can control.  As a software company, within our control is our product and team, including how we use both the product and team to solve real customer problems.

As far as financing, it’s still too early to measure the exact impact because we have yet to restart these activities.  Nevertheless, between tangible improvements in revenue, the product, and traction, it’s clear that this time around, the story is going to be much more fun to tell.

“Stress is the fertilizer of creativity.”

When we first began concepting LockerDome we constructed an ad-based model which was fully dependent on large chunks of financing, as well as significant scale.  And after some moonlighting, off we went.  We:

• raised a planned micro round of dough last summer;
• built a tremendous core software system in-house;
• began testing the product with niche markets;
• received sponsorship interest from some big brands;
• and sealed some quality partnerships

Yes, things were moving along quite nicely, then somewhat slower, and then…boom, the market changed too much to ignore it.  In fact, it was a phone conversation not too long ago with a fellow entrepreneur that got me thinking really hard about our next steps.  He said, “Raising money right now is obviously tough and the problem you are trying to solve will take some time.  Find a way to create some staying power.”  He was right.  It is time to get back to the drawing board to define an adapted model that is better suited to take on this economic storm.

We began re-concepting, but the only problem is that nothing seemed to fit.  We discussed everything from premium accounts, to selling sporting goods, to creating to donation pages, to well you get the point-a bunch of ideas that don’t help us today.  The common flaw in 90% of our suggestions: they need significant scale to succeed.  We were thinking too much like a tech bubble startup and not enough like practical entrepreneurs.

So we wiped the board and started over.  We actually listed requirements this time (probably should have done it the first time!).  Requirements are:

• Can generate immediate and significant cash; enough to sustain a small team
• Can leverage value we have already built as a company; i.e. our technology
• Can open up quality distribution channels
• Will allow us to operate like a bootstrapped company until the right opportunity occurs for us to scale up resources (true staying power!)

Again, nothing.  So we walked away from the problem and cleared our heads.  While shooting some hoops, it hit.  Yes, one of those extreme moments of clarity.  When we brought this new concept to the board the possibilities now felt limitless (and actually met our requirements above).  Even better, we decided this approach was both technically possible and a fun technical challenge!  Lastly, we bounced the idea off close advisors, investors, potential customers, and others.  The response was tremendous.

Now this is one of those moments that I love being a young startup (especially one with an agile development methodology) because 1 week later we’ve successfully and seamlessly been able to apply a complete 180 to our business and development efforts.  No red tape.  Beautiful.

You’re wondering what this new direction is; sorry, I’m saving the details for another day.  That’s not because I value ‘stealth mode’ because I don’t (in fact I hate that term), but it’s simply because I’m tired and I need to knock out a few emails before getting some food and grabbing a nightly nap.

So now we enter a new phase for LockerDome.  We have much to learn from these new potential customers.  In fact, we undoubtedly have much refining to apply to our offering (price points, product, & perhaps even target), but we’ll get there.  It’s fun when you can taste the market.  Ok, it’s also fun when you can taste money in the market .

And most importantly, we’ll continue to adapt.  That’s how we survive.