It was supposed to be so different.
Our startup had everything going for it. We were in a space seeing massive growth. A company with a similar model had just sold for $1.5-billion. We had our investors lined up.
And then, the Boss Fight happened.
In nearly every video game, there is a final level known as the Boss Fight. The "boss" is usually a fast-moving, multiple-tentacled monster with unlimited ammo. It's terrifying to go up against and you rarely win on your first try.
We met our Boss. It was Google. And it killed our startup.
But let me back up. My wife and I are avid video gamers. First hooked on the Elder Scrolls series, now our spare time has us killing zombies with cactus needles, hacking Chicago's power grid, and closing rifts all over Skyhold.
Today's video games aren't what you remember them to be. They're incredibly detailed and complicated. You want a potion to improve your health? You'll need to search Tamriel for reagents with specific traits, get to an alchemy station, make sure you have a solvent ready and enough skill points in alchemy to make your potion effective – none of which the game really tells you how to do. You've got to figure it out for yourself. That can take dozens of hours to get it right. Sure, there are YouTube videos, but most are hours-long "walk-throughs" where you just watch someone play. Tutorials, taught by people who are actual experts in the game, are few and far between.
We wanted to fill that gap with GameSchool.tv: "Learn your favourite video games from the best players in the world. For one low monthly price."
It was to be the lynda.com (an online educator of video courses in software, technology, and business skills) of video games. And it was well under way.
We were talking to major game publishers. We had hired some course authors. My wife had quit her full-time job and I had cut work at my digital marketing agency by half.
Our forecasts had us profitable as of summer, 2016, and closing our second year with nearly $1.2-million in revenue. We were days away from closing a six-figure seed round from three investor groups.
And then, enter the fast-moving, multiple-tentacled monster with unlimited ammo: Google announced it had been quietly working on a special site called YouTube Gaming. It would feature live streams and categorized game-play videos.
At first, we thought this was good news. In an e-mail to our investors the day we learned about YouTube Gaming, I wrote: "This massively validates the growing interest in gaming.
"Since our videos will stand out from the crowd of the usual "let's play" and walk-through styles, combined with an engagement strategy we're already working on, our videos will come up even higher in searches than before. Plus, it will be much easier to find and recruit Game Pros since they'll be grouped into game hubs."
But then, as more information leaked out about YouTube's secret project, and our employee Sylvia starting digging around, it became obvious that YouTube Gaming was a much bigger threat than opportunity.
One evening, she came over to our place and showed us a leaked video she'd uncovered of the new app they're planning. Our hearts sunk. They were pretty much already working on what we had been planning – and they are going to give it away for free. It was clear they'd been working on it for months and had tens of thousands of gamers already secretly testing it.
We stared at the wall for a couple of hours. Decided to sleep on it. Then, the next morning, we e-mailed our investors and advisory committee: We were killing our plans.
After all, one solid axiom of business: It's hard for your better, paid service to compete against a "good-enough" free offering.
In a way, we're fortunate that Google announced their project when they did. Another week or two and we'd have brought investor money on board, incurred thousands in legal fees, and started significant spending on the platform and launch plan. Although we are out about $8,000, we didn't go into debt, mortgage our home, or live off our credit cards.
Along the way, we learned an enormous amount about building a startup, pitching potential investors, and things such as cap tables, term sheets, Series A rounds, company valuation. It felt like a real-world MBA crash course.
So what happens now? The three of us will continue to play video games. We will continue to go up against fast-moving, multiple-tentacled monsters. And, occasionally, we will come out on top.
As far as we're concerned, we earned 1000 XP ("experience points") in this whole run. We're pretty damned proud of that.
GG (good game), Google.
Tod Maffin is president of engageQ digital, a digital marketing agency in Vancouver and Toronto. You can read the full backstory of his startup at http://ourstartupblog.tumblr.com/ or watch him play video games live at http://twitch.tv/todmaffin.
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