Disruptsports.com (Design Your Own Sports Equipment) was featured on Shark Tank where we turned down a $200k deal from Glen Richards. Since the show went to air last Sunday there have been lots of questions - what was the pivot? Why did we ‘throw away’ over half a million dollars? Mostly, why we were ‘crazy enough’ to turn down the investment?’
Saying no to short term in favor of long term.
DisruptSports.com has always had the vision to be the worlds largest platform for customised sport equipment because we believe sports equipment should be made for the customer/athlete not the other way around. However the way we get there constantly changes. When we first launched the business model consisted of:
- custom colours on 10 different sporting lines
- buy in containers from overseas
- sell for 50% of the price.
What we realized through customer discovery and feedback is that what people actually valued was:
- High Quality
- Locally made
- Faster-than-the-speed-of-light delivery
- Total creative control of design
So we pivoted to local outsourced manufacturing on no-minimum basis. This meant we covered all the above and it solved our challenge of scaling internationally as in the past model we would have to have someone in the US and Europe and ship container loads of equipment. Instead we now use well known quality shapers and manufacturers in each country. So we said no to a growing revenue. But we also said no to unhappy customers, no to dubious quality at times and NO to a business model that doesn’t scale internationally. We said YES to making customers ecstatic (NPS scores from -25 to +50), YES to helping local manufacturers and YES to sales in the USA and Europe.
Saying no to getting bitten by a Shark
We turned down a $200k deal from Glen Richards. I’m stoked that Glen saw the promise in the business and decided he’d offer to invest. Unfortunately the offer Glen made didn’t fit with what we believed was a fair valuation and after a quizzing (that wasn’t shown on TV) his expertise was not in a field that would have significantly impacted the channels we needed to access. So we said no. We said no because we valued the upside of growth at more than that. We said no because we valued the team and the work they had put in at more than that. We said no because start-ups are a 10 year journey (Uber is nearly 8 now) and we were looking for a long term relationship with someone that believed the vision not just someone that has money. As a side note, we have the most amazing board or advisors – CEOs of Global sports retail companies, CCO’s of customization companies and the CIO of one of the worlds largest tech companies, not because these guys are getting a ‘killer deal’ but because they believe in the same vision and I’m thankful for their support every day.
Saying NO in start-ups
Start-ups and small business in general are bloody hard. I have constant admiration for anyone that gets up and gives it a go, even more so for those that try, fail and dust themselves off and try again. I’ve met many people along the way and I hope DisruptSports.com has even a fragment of their resilience.
There are many things you say no to down that path to ‘overnight success’ - no to eating out, no to holidays, at times saying no to family and personal relationships. In doing so through you say yes to yourself and your vision to change the world. Were we ‘crazy’ to say no to the investment from Glen? Only time will tell, but we’re stronger and better for the experience and I believe you’re defined more by what you don’t do more than what you do.
And in the words of Steve Jobs, "I'm proud of the thing we haven’t done as much as the things we have. Innovation is saying no one thousand times."