Monthly Archives: Feb 2013

Entrepreneurship

What We Learned from Tony Hsieh, Downtown Project, and VegasTechFund

I remember the day we stopped trying to move to Las Vegas. It feels strange to say that, because never in a million years would I have thought I’d ever want to move to Vegas in the first place. Tony Hsieh’s Vegas is a different beast altogether, however, than the glitz of casino lights on the strip. This was news to me as recently as 10 months ago, so I assume it is still news to a lot of people.

The Best Airbnb Hosts Ever

Let’s rewind to September of 2012. We were Airbnb hosting Justin from Airborne, the coolest dude from South Africa. It was his first time in the Bay Area so we wanted to show him some stuff he wouldn’t get a chance to see otherwise, namely, an Oakland Raiders game and Las Vegas (did I mention we are the best Airbnb hosts ever?)

After 3 days of the usual Vegas shenanigans, I sent a text on a whim to someone I’d met at Burning Man through one of our investors. He was apparently quite involved in the Las Vegas arts scene, and I was curious. I got a text back asking to meet at a place called The Beat at 9 AM the following morning, which came a lot quicker than I expected. Vegas.

At our 9 AM coffee meeting, I learned about Downtown Project and all the crazy projects that were happening in Vegas, including VegasTechFund, a new investment fund with a condition that you needed to relocate. My mind was pretty blown, because some of the initiatives sounded straight out of big cosmopolitan cities, and some were even pretty progressive by New York standards. I was implored to come back for First Friday, so we made plans to return in a month.

Our car Justice beside the Dusty Rabbit

The Email Intro

My Burning Man friend did an email intro to Andy White, a partner at VegasTechFund. VTF’s portfolio has some really great companies in it. And, interestingly, some of their investments are very “me-too,” that is, “I see a pretty thing in SF and want it here in Las Vegas.” I am a fan of this strategy.

Andy and I chatted a bit via e-mail, and he and hooked us up with Krissee Danger, our super-amazing tour guide/most enthusiastic person on earth. We read Delivering Happiness and got to brainstorming. My background is in publicity stunts, so this is often the lens through which I view things. This one was pretty epiphanic: “What if we built a speakeasy in a box truck?”

The team was jazzed and we made plans to build a speakeasy in a box truck as our First Friday contribution.

Let’s Meet Everybody 

Before you arrive in Vegas, you are emailed an itinerary. We were very strongly advised to go to every single event – we did. There are dinners, cocktail hours, happy hours, and tours, all with a vaguely North Korean vibe. If you are invited to visit Downtwon Vegas, I recommend meeting everybody. Everybody from DTP, everybody from VTF, everybody from Zappos, every funded startup, everybody from VFA, everybody.

Tony Hsieh Drinks Fernet Like a Boss

Tony Hsieh is universally described as being quiet and reserved. This is not true when he is drinking fernet, something we all tried for the first time in Vegas. It is often described as jägermeister mixed with Listerine. This is completely accurate.

 

The mockup

The Dusty Rabbit

Since Dustin had just joined the team, we nicknamed the box truck speakeasy, “The Dusty Rabbit.” Using some intel from our highly-placed friends, we determined that everybody whose attention we wanted was going to be at a SpaceX talk in some portables. We parked the truck immediately at the end of the ramp. Within minutes of the event’s end, Tony Hsieh, Will Young and Zach Ware were ordering cocktails in our box truck. That was pretty cool. We decided we had to bring it out for round 2 after First Friday. Here’s what happened:

Behind the Scenes of The Dusty Rabbit from Speakeasy.is on Vimeo.

The video was viewed 500 times, almost entirely by people in Las Vegas according to the analytics. It was a huge hit, and we thought we left a pretty good impression.

Our cease and desist from the NV DOH

(Except with the department of health, hah!)

The Third Trip

Our third trip to Vegas coincided with Halloween. No box truck this time, just a lot of meetings, strengthening connections, and generally trying to stay top-of mind. I gave a talk at The Jelly, the local downtown tech meetup. We also got to stay in the Ogden, which was pretty pimp. We were very pleased to hear we were advancing to “VegasTechFund Phase 3.” We recorded yet another video for this segment, and we were feeling like this was it, we’re in.

What Happened

Nothing.

We had another call with them and they said they were excited to see us after we launched.

So a couple months later, we launched.

Launch was amazing – 45 events in 3 cities simultaneously. Here’s a video:

Speakeasy Launch Weekend from Speakeasy.is on Vimeo.

We had a call scheduled with VegasTechFund 6 hours immediately after our last launch party (of 45) ended. I had picked up my rental car from a tow lot in Coney Island in the pouring rain and drove next to a Starbucks so I’d have wifi for the call. I reported our metrics and everything seemed on the right track. About a week later, we gave up.

Don’t Give Up

We did not give up because VegasTechFund said no. The last thing they said, actually, was “Come back with some more traction.” At that point, though, after thousands of dollars and huge amounts of time sunk into this mission, we decided we should cut our losses and focus our energy somewhere else. If we had kept at it, do I think we would have gotten in? Absolutely. But as an early-stage startup we have limited time and money, a couple more Vegas trips might have killed us.

We definitely drank the Kool-Aid (an expression that is used with alarming regularity in downtown Vegas), and we evangelize about Las Vegas to anybody who will listen. I can’t wait until the next time we get to check it out – I hear they have a bunch of shiny new toys. If you are looking to be part of an awesome community in the middle of the desert, downtown Vegas may be right for you.

Most importantly though, I learned that jumping through a bunch of hoops to prove you’re a good “community fit” is still not as important as what founders should really be focusing on – getting traction.

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Entrepreneurship

Do Things That Don’t Scale

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Of all of the indispensable essays penned by Paul Graham, the one we are feeling the most is the latest one, Do Things That Don’t Scale. This is one of the things Y Combinator often tells their startups, and a piece of wisdom we have heard before:

In The First 1000 Days of Airbnb by Brian Chesky, Chesky tells the rollercoaster story of the company, from losing cofounders to sleeping on couches, to briefly becoming a cereal company around the time of the 2008 election. However, the most important part of the story is when Paul Graham asks the Airbnb founders where most of their customers are. They replied that they are mainly in New York and DC, and Paul Graham says, “Then what the hell are you still doing in Mountain View?!” and they booked a flight for the next morning. 

At that point, the founders went to New York and started selling their product literally door-to-door. They went to people’s houses and asked, “Do you know how much you could be making off this extra room?” 

That level of hands-on attention is not possible when you are a big company, but the point of “Do Things That Don’t Scale” is that as an early-stage startup, this is perhaps the best thing you could be doing, especially as a company building a marketplace product. 

This sometimes flies in the face of what engineers are naturally trained to do – they are often looking for some kind of technical solution for a human problem, and have a sort of built-in disdain for doing things like calling customers on the phone, or attentive hand-holding. However, these are possibly some of the most important things you could be doing as a young company, and it’s important to break the habit of email-and-text-only communication that has come to define our generation.

The best takeaway of the whole piece is this eternal quote: “Go out and manually recruit your early users, even if it seems tedious and inefficient.

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Events

How to Throw a Party: Raw and DIY Venues

The reason most bars, nightclubs and banquet halls have the same basic features is a confluence of the law, tradition and expertise. This machinery is in place because it is necessary and proper. If your crowd demands something fresh and unique, or you are looking to create a one-of-a-kind experience for a client, you might decide to throw a party in a loft or other raw space. Events like these vary in level of difficulty, depending on how much the owner includes and how much you need to do yourself. 

This is a list of the basics you’ll need before you endeavor to hold an event in a non-bar, non-nightclub space.

The Space

Finding a great venue is part art, part science. Speakeasy is the easiest way to find and book venues online 😉 You can also check Craigslist or word of mouth. 

Sound and DJ Gear

It ain’t a party without music, and you may need to provide your own. If you don’t know somebody who will rent you their gear for a fee, rent it from a store. In Canada, you can’t beat Long and McQuade, and in the US, many Guitar Center locations will have rental sections (call first.) You will at least need: 1 subwoofer, 2 powered tops, 1-2 booth monitors, and 1 mixer on a table. You may also need CDJs, turntables, or a Serato control box. Find somebody who can hook these up. 

Cash Box

One of those things people never remember until the last minute is the cash box. You’ll actually want two of these: one for the bar and one for the door.

imageAurora Gallery in Astoria on Speakeasy

The Bar

If you have the fortune of being able to run your own bar, you’ll be faced with several problems: 

  • Cups: How big a cup should you use? There is considerable debate about whether 6oz cups or 9oz cups are superior – I say 7oz, the shorter the better. They only hold a little more, but look much bigger. 
  • Beer and liquor shopping: buy more than you need, and make sure you can return any extra. This is much better than running out. People expect less drink selection at a DIY venue, so stick to a few liquors that are popular (sorry, gin) if you can’t provide a full bar.
  • Mixers. See above: stick to a few kinds. Nobody wants diet tonic.  
  • Ice. Buy a lot, and have a way to keep it cool. 
  • Cash box. Don’t forget this.
  • Tip jar. If your bartenders are working for tips, this is important. 
  • Liquor license. Hang this in a very conspicuous place, and have multiple copies.   

Coat Check

If you’re doing an event in coat weather for more than 50 people, you should have a coat check. Coat racks can be rented or purchased for cheap, hangers are pretty cheap too, but the most uniquely specific item is coat check tags – you can find them at Party City. A nifty alternative is writing people’s coat number on their hand, and writing that number on a piece of duct tape on their coat hanger. 

Hand Stamps or Wrist Bands

Drawing an X on people’s hands is boring. Get decent stamps, and always stamp the inside of the wrist so the mark doesn’t wash off. Wrist bands are more expensive but make it easy to verify that people have paid/can access certain areas, and they can be branded. 

The Float

“The float” is an amount of money you put in the cash boxes to make it easier to break 20 dollar bills. The most common bill to run out of is 5s, so you should seed each of your cash boxes with about $200 in 5 dollar bills. Write this down so you can subtract it from your revenue at the end of the night. 

The Cash Drop

Every few hours, you should do a cash drop. This means briefly halting sales at the door or bar, taking the large bills from the cash box, counting them with the bartender or door person, and removing the money. Write down the amount of each drop, and keep it in a safe place (like a safe.) This is all in the name of closely controlling your money. 

Toilet Paper and Paper Towels

There is no such thing as too much toilet paper or paper towels. Having extra raises you to a new level of expertise.  

The End

I have a rule about not stopping the music and turning the lights on at the same time; that’s just rude. Choose one or the other, thank everybody on the microphone, and try to get some applause. All’s well that ends well – leave people with a great impression of the night – they’ll come back for more next time. 

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