As the title of the post hints at, my co-founder and I recently decided to put Funday on an indefinite hiatus. I’m not writing this post as part of a pity party – rather, I’d like to share learnings and some of my beliefs that were strengthened due to my experience in case they help out any current/future entrepreneurs.
Bur first, a bit of background: Funday’s vision was to democratize the level of service historically reserved for guests at pricey resorts, and to make them available to the masses on public beaches (and eventually parks, marinas, and tailgates) at an affordable price point. By relieving the age-old pain points of prepping, packing, and schlepping heavy coolers, we aimed to make outdoor experiences more accessible (especially those who cannot physically carry heavy coolers such the elderly, handicap, or parents with small children) and enjoyable for all, by providing delivery of food, beverage, and outdoor essentials directly to a consumer’s beach chair. We partnered with local small businesses to seamlessly offer their products and expand their distribution – in essence acting as a bridge between beachgoers and local businesses. Our route to defensibility hinged on regulation – becoming the sole ‘public concierge’ provider for as many beaches as possible and piggybacking on the regulatory precedent set by chair and umbrella rental companies, who receive permits to be the sole-operator in a city (municipalities favor monopolies on public land settings in order to limit commercial activity).
Below are some of my takeaways as a first-time founder:
“The Pick” is paramount
Josh Kopelman once said ‘the pick’ (ie. the idea a founder chooses to build) accounts for >50% of startup success or failure. After my experience with Funday, I could not agree more. While we were passionate about our mission and we knew we were addressing a deep pain point, our TAM was on the low side for a venture scale startups. Additionally, our operation was on public land, which left us exposed to the whims of local governments, the effects of pandemics, and mother nature. Unfortunately for us, our business model did not lend itself particularly well to pivoting into another opportunity with venture scale potential if one of our existential risks became reality so we didn’t really have that luxury. All of this stacked together, made the margin of error very slim to execute this vision at scale. Lastly, if I were to pick an idea to build again, I would make sure it’s riding a trend that’s about to hit an inflection point, be it technological, regulatory, or behavioral.
Regulatory matters can be a major time suck
Since we were operating on public land, we needed permission from each municipality to operate. Initially, we thought this would be a straightforward process, but we began with many fits and starts in our operation since our business model fell into somewhat of a grey area when compared to a city’s ordinances, which were written well before the advent of tech-enabled services. Although by early March we received our first verbal permission to launch a city-sponsored pilot, we squandered precious time up to that point trying to work through various city council’s mazes and dealing with their incredibly slow pace. If I were to build a business again that had a major regulatory component, I would enlist the help of local consultants and lobbyists from the get-go since regulatory progress primarily comes about due to pre-existing relationships (which really bugs me, but my thoughts on that are for a different post).
Black Swan events require swift action
This is not news – depending on your business model, these types of events have the potential to turn your world upside down. What I want you all to take away is this: if these happen, worry about what you can control and react swiftly and decisively. Unfortunately for Funday, our business model was 100% susceptible to a pandemic. Beaches started shutting down in mid-March, making it impossible for us to operate. While we ideated furiously on other tangential activities that we could pursue to keep the business going, none of our options seemed attractive enough to operate indefinitely while we waited to continue our original business model when society eventually returned to normal. Such is the risk that one takes when building an ‘atoms’- oriented company, especially one in the hospitality space.
Don’t be ashamed of failure
There is no shame in failing at building a startup, as long as you gave it your all. While it’s good to take some time to regroup and reflect, don’t mope on what could have been. Get back up and realize you are stronger than before you began this journey. I have no regrets and learned a ton through the experience which I’m sure will serve me well moving forward. Being a founder tested me in many ways I’ve never experienced before, and these have helped me to grow as a person. I’m fortunate to have had the chance to help build it.
Calling it quits is a personal decision
There are varying opinions on this, but my take is that if the best case scenario for the business is dubious due to factors you cannot control, you should seriously evaluate your options. Many founders have been glorified for never quitting and making the impossible possible. I admire founders who demonstrate this, but that does not mean founders who decide to shut their venture down are necessarily bad founders. For us, we had no control over how long the pandemic will continue nor if there will be a recession as a result of it (which would severely impact discretionary spend). That, combined with the fact that we were had close to $0 made us really ponder Funday’s future and whether we should instead prioritize taking care of ourselves. Personally, I had racked up thousands on my credit card and was on the edge of financial recklessness. At the end of the day, we weren’t so sure anymore the timing was right to continue building Funday, but we are 100% certain there are plenty of new market opportunities opening up given how fast the world is changing.
My Next Chapter
I will always love the beach and helping people have a great time, but the timing was not right for Funday. I have no doubt a service like it will be built in my lifetime, but the world has more serious issues to figure out before that time comes.
As for my next steps, I’m very excited about the future of Fintech & Crypto specifically and am looking for opportunities where I can join an early stage team. I’ve found that I love the operating side and I’d like to get back to my financial services roots. Stay tuned!