LyveSpace: A Failed Business Venture

In 2019, I started a business. Who has started a business before? It’s a noble thing, and also very exciting… It’s exciting because the prospect of doing really well is a possibility. And, if you’re an optimist like me, you feel fairly confident it will be successful!. I had dreams of building something from the ground up. I had dreams of pursuing a passion of mine and taking it from an idea to a legitimate business that made real money, lots of it! I wanted to build a team, provide jobs, and be in control of the vision and execution. I had dreams of owning my schedule... providing for my family while still getting ample time with them too. I had dreams of winning... plain and simple. And so I went for it, the best I could given my life circumstances of having a career, family, and other obligations. I took my idea and turned it into a legitimate business.  

Approximately 1 year later, my dream had ended. My motivation, excitement, and eagerness… gone, along with the company I had formed. I learned a lot along the way, and there were several small “wins” along the way that felt amazing! But in the end, the idea didn’t work and we decided to shut it down.   

This is a “wrap up” on my journey and learnings. There are some valuable nuggets that I, myself, don’t want to forget….perhaps if I decide to start another business later in life. And who knows, maybe someone else might also find value in my process! :)   

STORY OF LYVESPACE

IDEA: 

I love going to concerts. And when the concert ends, I usually stay in that euphoric state for a couple weeks after… reliving the song arrangements and remembering the fun moments. Oftentimes, I would make a setlist on Spotify to match the order of songs that I heard at the show...and if possible I would forage for live versions, so it sounded somewhat close to my experience. Put me right back into the moment! And I thought.. If there was a big banner on the jumbo-tron screen (at the concert) that said, “Go to this website to get a digital download of tonight’s show” --- I would buy it. I would definitely buy it, and I thought others would too. I actually couldn’t understand why it wasn’t already a thing.

For months I didn’t do anything with this. I wanted it as a consumer. Then, my job situation became more unstable with another acquisition on the horizon. That pushed me harder to want to take control of my future… build something, own something. So I started thinking about how it could actually be done. When, where, how, who, etc... ? Could it be done profitably, so it actually made sense to pursue? I forecasted some numbers and thought about expenses, and it seemed plausible. I started to get excited, and my idea began to pivot into something more. 

DEVELOP/EXPAND: 

I opened a blank PPT and started to document and organize my thoughts. The more I laid out, the more I got excited. 1, because it was all coming together and looking more real and 2, I saw a life on the other side that was excited to reach! So I kept going, perfecting it. I must have worked on that PPT for 80 hrs over about a month... for no one other than myself! I just wanted it to make sense to ME. I first had to convince myself that this thing will work, after looking at all angles. I needed to understand if it could plausibly be done while being a profitable business… and worth my time and energy to pursue. I mapped out the research stages and what to look for. Then the pilot/testing, small scale test. I predicted scalability and expenses to go with it… to make sure the net was worth it. I thought about logistics on distributions, marketing, and all other operations needed. The one area I struggled to estimate was the actual recording process. I didn’t know what equipment would be needed, how much that would cost, and how big that would be (could we hop on an airplane with the equipment easily). I didn’t know the setup process or involvement we would need with the venue either. There were many unknowns, so I had to leave these things blank or take a shot in the dark.  

PARTNERSHIP: 

As I continued to refine and add to my plans, I kept going back to those gaps that I had no idea about. To really understand if this was plausible, I needed to find out more information from someone with knowledge. I’ve played drums since I was 6 years old and I played in bands in Central IL for 15 years….hence my affinity to music & concerts. I knew a few people with industry experience, and one person stood out above them all. Erik Nelson owns and operates Eclipse Studios in Bloomington. I’ve recorded albums there with Erik many times and he’s an outstanding audio engineer. I had worked with other studios and the end result with Erik was always faster and higher quality in the end. Plus he’s a super cool and nice guy too.  

After a few tries, I eventually got Erik on the line, and he agreed to meet. I finally got to share my vision with someone, and this wasn’t just anyone. This was a sound engineer that could tell me if this was already being done or if it’s even plausible. So I knew my idea might get shot down right away, and I was mentally prepared for that. We met at his recording studio, in between his sessions. I had 1 hour. I went through my deck that I was so very proud of, talking through the structure, layout, marketing, scalability, etc... and I asked him several questions along the way. And get this...he was actually into it! I asked him right then and there if he wanted to partner with me and try this thing out. He said he would think about it. After a couple more calls to talk through it more, he was in! We were officially off to the races with an idea and an attitude that we could figure it out. 

Erik and I continued to push things forward, getting ready to launch a small scale test. He figured out sound equipment needed, and we mapped out a great distribution model to start with. I created a website which would serve as a centerpiece where customers would transact with card through the site. I also got social media off the ground to start getting the word out and educating about our company. The idea was transforming into something more, something real and tangible.  

 ACQUIRING SEED MONEY: 

Things were rolling now. We had our equipment list ready, we know our next steps, and we had a good idea of how to scale (assuming small scale testing went to plan). The great news about the equipment list is that it wasn’t all that expensive to trial this thing. Our plan was to get bare necessities, and work with a local artist we knew that could draw a crowd of 500+. There’s a venue in our town that holds 800 and it’s always busy, so it’s a great place to start. This would serve as a good proof of concept to line up a few shows there. But, to even achieve that goal, we needed to purchase those bare essentials. So I gave a family member a call and asked if they would meet with me to hear about a business idea. I drove to them, we had breakfast together, and I presented my PPT.... for a 2nd time now. Erik and I had determined costs for our proof of concept stage and scaled stage. We knew that the need now was $5000. When I got to the end of my presentation, I simply asked if they saw the vision that I did. They did! I explained that we’re now at the point where we want to “Go, Do”, but we need supplies to do so. To my surprise, they were on board! 2 for 2!! They wrote me a check for $5000 on the spot and wished me well. Nothing formal, just my word that I would pay them back with money made from the business. 

 My drive home, I was beaming! Sure that I would be able to turn this $5000 into much more! I was thinking that this “pitch” has essentially convinced other people that I highly respect and trust... it convinced them that there was something of value here, something worth pursuing. And that gave me even more motivation to persist! I was fired up and ready to create a great business!  

 POST-SEED MONEY:

With money in hand, it was time to execute the plan and get moving! Because I’m a meticulous planner, I had already mapped out how to spend most of our new money before it was even deposited into my account. I will elaborate on each item, because there are some definite things I would do differently, if I had the chance.  

Business Formation… I had just gotten my Will done with my wife, and while I was there, I asked about business formation. This was right around the same time. I knew this step would be needed before we could setup a bank account (which was needed since the transactions were only going to be with credit done online). Of course he advised that I do it “right” and go through a lawyer. I assumed that LyveSpace was going to be a massively successful company, so naturally I wanted to protect my imaginary millions. This lawyer advised for S-Corp vs LLC. In retrospect, I wish I would have done LLC. I wish I had never used a lawyer in the first place. I could have/should have gotten online and created a LLC on my own for small fraction of what we paid this law firm.  

Equipment… Erik knew exactly what we needed, and he shopped the items. We found a gently used Macbook that was also juiced up to handle the load we’d be putting on it. A few other small things, and we were set. This was a big expenadure, BUT these are hard assets that are tangible and could be resold if needed. No regrets here.

Signage… If I could have a do-over, this would be it. I used VistaPrint to make flyers, banners, business cards, t-shirts, etc… I had visions of how I could scale it. At small scale it didn’t make much sense to use all of my creations, but at scale it was exciting to think about how it would work! I thought we’d need all these things at a larger venue for the audience to know we were there, how to purchase, etc… Pair that delusional thought process with VistaPrint offering better pricing for buying more bulk… eeek. Bottom line, I am still sitting on a box of flyers, business cards, and signs that have no resale value and I never used. 

Artist Contract… I felt that this would be needed for any respected artist to take us seriously… which, by the way, is ridiculous because they didn’t get this in-hand until AFTER they agreed to do a show. At that point, they had already committed, so this contract didn’t help the artist to “take us seriously” --- that tipping point had already passed. Second, I wanted the terms and structure to be clear on what everyone was to do and how it would all work. Now, looking back, this was another expenditure that would have eventually been needed but was not needed as a first wave item. We DID use this artist contract for all the shows we recorded… but we would have been fine without it too.      

Ongoing Fees… Understandable and unavoidable. I had a monthly obligation for my website fee (Squarespace) and email host (Google). Around $60/mo total.

 TEST SHOW:

In order, we purchased the recording gear first. We needed to first test if we could produce exactly what we were setting out to. Would it go as we expected it would? If our final product sounded like crap, we may as well not even start. Erik knew of an artist playing at a local venue that would be a great place to try. Just so happened, Erik knew him well and reached out. He explained that we just wanted to record him, for free, and we’d give him the recording. No reason not to participate, and fortunately that’s how he saw it too. Fast forward to the completion of this recording, and it sounded excellent! This was a big mini-milestone reached! We now had equipment that functioned exactly as we predicted and a final product that we were proud to provide to paying customers.   

BOOK ACTS: 

Now that our test run was completed, it was time to do a show where we could test the site. To get our ecommerce working, I needed a bank account. To get a bank account, I needed a tax ID. To get a Tax ID I needed to form the business. Once the business was formed, I got everything else done. I had already been working on design ideas for signs, banners, cards, etc… for months. Now that the test show was successful, I made those purchases. I also moved forward with getting the artist contact made. This was custom to the terms I set, and I went back and forth with a lawyer to lock this down. After all of that, we were ready! Now, all we needed was real artists to allow us to record/sell their events.  

The Castle Theater, where we did our test run, was a great place to focus on. It’s a very nice venue that holds about 800 people, and they stay very busy… doing 3-4 shows every week. It’s local, we know the owners, and many local artists play there. So I knew we could get in on a few of them. We structured the program in a way that gives the artist half of the revenue generated. So I thought artists would love the opportunity to generate some extra cash for a show they were doing anyway. I got on Castle’s website and looked up all the upcoming shows, went to these artist’s websites and social media, and started to reach out. I sent out dozens of messages and made countless phone calls. I had a very low response rate, and those that did reply were not interested. Bummer. I knew it wouldn’t be easy, but I thought a few of them would at least discuss it with me. Nonetheless, I was still convinced that this would be a great thing for everyone, so I stayed the course. I still knew Castle would be a great place to start, but I had to get us our first show.

SOCIAL MEDIA: 

While trying to book us a gig, I was also focusing on building up our social media. I knew this would be a great way to explain what we do to artists, and might be a good way to generate leads. I also thought it would contribute to our credibility in terms of an artist deciding to work with us. 

The problem… I hate doing social media. I don’t even have accounts for myself. But I knew it was important to have for a business. I already had an account setup for LyveSpace and began posting daily. I didn’t know a ton about it, so I reached out to a great friend, Hans. Hans and I had worked together before, and he always impressed me with his ability to create content. I called him, explained what this was, and asked if he’d help me to build a brand. And he agreed! I gave over all creative control to Hans in terms of social media. He took over and steered the ship, and he did a much better job than I could have ever done.

I thought, after several posts we would get a handful of followers through hashtags and such. That didn’t happen. So I leveraged my LinkedIn connections to see who would be into what we were doing with LyveSpace. Afterall, LinkedIn is all about supporting one another, and it’s about business… so I asked for support by sending messages out to each of my connections at the time. While this WAS a copy/paste message, I still changed the name and first line and sent each message one at a time. This took many many hours, as I’m sure you can imagine! Several hundred people responded and began following our Instagram & Facebook. We had small following and daily (quality) posts happening. Hans and I even created a few videos together to explain the process, since we knew education would be a big hurdle to overcome as a start-up. Things were heading the right direction.

ACT 1:

There was a show coming up at The Castle called the Black Dirt Music Festival. It was outdoors, in their parking lot. Expecting 1000+ people, 5 acts playing short sets. We knew most of the acts personally, so this one felt like a great one to pursue. Erik and I began to reach out, and we got a few of the acts to agree. The headliner seemed positive about it but was not committing yet. We continued to lock everyone else in, using our artist contract. Leading up to the event, the headliner expressed his concern of playing flawless enough to capture it on recording. This was a hurdle we thought might come up… this is the only reason we could foresee the artist not wanting to do it… So he was going to wait until the day of the show to tell us if we could resell it. I was staying super flexible, letting they do whatever they were comfortable with. So we decided to record the whole show (all acts) no matter what, and then we’d decide later if we could sell it or not. Despite some rain and a few technical challenges, we captured the whole show, and it ended up sounding great. While Erik was busy making sure that the recording process was going smooth, I was at the entrance handing out business cards to every person that entered, telling them that the show was being recorded and to visit our site to get their copy. I felt good that I touched so many of the concert-goers using this strategy. On the flipside though, this being outdoors… the space was bigger, there was wind to deal with too. We couldn’t set up a couple of our big banners, and our other signs seemed small in the scope of the space. So I didn’t feel good about that. Lastly, we encourage the artist to share on social media and give a shout out on stage to endorse LyveSpace… promote the resale of the show. Most did the online shout out after the show, but we lacked any on-stage mentions. I don’t know if it was the shorter sets, the resistance because we were new, or the fact that the headliner wasn’t on board, etc… I don’t know, but this hurt the test validity.  

Sales results were not good. Because the sets were so much shorter than normal, we lowered the prices down to only $10/each, but even at that price, we sold very few. We captured a really great recording, fully mixed/mastered for each artist, and we were very happy with it. For those that did buy, the distribution model was a bit clunky (we knew it would be), but it worked! So, for that purpose, this was a good step in the right direction. But again, very disheartened that the sales were low. With all the variables of outside, signage, artist resistance, festival setting, etc… I thought the test wasn’t conclusive enough to know that demand wouldn’t be there. So we forged forward.  

**Interesting point with this event. I got in contact with someone that did videography. We always knew that there would be demand for video (not just audio). I thought he could partner with us, assuming he did good work. I saw a few other projects he did and invited him to this event to take pictures and video. I planned to test his video experience and editing abilities, so we were going to make a little summary video of the festival and/or short videos for each artist. He knew we weren’t making anything for resale yet, and he agreed to do it for free. He came with a partner, they threw on some LyveSpace shirts, and they captured a ton of footage. I was excited to watch it back. We knew it would take a little time to edit and get the product put together, so we touched base a few times after the event on progress. Then, he stopped communicating with me! No explantation. I never saw any footage or was told why I got ghosted all the sudden. Since this product was never sold, it didn’t impact anything other than a potential partner that would never become. Again, while I was bummed about it not working out, I could still see the prospect of it working, and we learned from that too. People are sketchy sometimes, and that’s just something you have to roll with.

ACT 2:

Remember that test-show we did? Well, he had another show coming up at The Castle a few months after the festival that we did. We reached out and offered to record it, but sell it this time. He agreed. So this would be a much better test to measure consumer demand. Everything went smoothly with the recording, the room was packed, and we made another great product. Sales were much better than the festival, but still not anywhere near the level needed to sustain this as a business. Conditions were pretty ideal for this one, so it was very disheartening to start to believe that there simply wasn’t there demand that I forecasted.  

ACT 3:

A month later, we had another gig lined up, also at Castle Theater. This time, the artist requested video be recorded also. And that’s something we always envisioned doing anyway… but we needed the equipment and expertise to execute the video portion. I reached out to a local live-events company. I already knew the owner, and I had asked him months ago about helping us the video on this one event, to test the market. He agreed back then and added it to his calendar. Then about 2 weeks before the event, he called me… It was really close to Xmas, and he had no staff to work the event because of the holiday. He was still okay with loaning us the equipment, but no one from his team would be present at the event. We had to roll with the punches, so we agreed to do what we could. Erik and I went to their office to learn how to operate the equipment. Erik brought his son who knew a little more about it than us. Then, the day before the event, I picked up all the cameras, cables, switcher box, etc… 

We learned that doing video is a pretty deep add-on! Erik and I got to the venue at 12pm, finished setup at 6pm, doors opened at 7pm, show started at 8pm, show ended at 11pm, after tear down it was 1am. 13 hour-day… most of that investment because of the video.  

As soon as the doors opened at 7pm, I was standing at the front door again plugging LyveSpace so the fans knew we were there. I handed out cards to nearly everyone that walked in and pointed to our big banner right at the front door. Everything went smoothly from start to finish, and this was a big accomplishment! We had a few technical glitches with the video and challenges leading up to the show, but we worked through it and made a really great final product. We had 3 camera angles that were constantly moving and a switcher that pasted it all together. The audio was mixed/mastered and sounded outstanding… I mean the final product was really top notch! And I know the artist was really happy with it too.

How were sales?! This time we offered audio only, or audio & video. Only 1 person bought the audio-only, everyone else got the video bundle. I know this is only one sample, but this confirmed our suspicions that people would want video, and they’d pay more for it. Despite that “win”, unfortunately like the last show, sales totals were not great. I even did some social media marketing (FB/Insta) and the artist plugged it with their 10K fans. But still sales volume wasn’t where we hoped it would be. We made a few hundred dollars net, and so did the artist. But, if you look at the man-power and time invested, it was very unbalanced. 

FINAL STAGES:

We had no other shows lined up to record. We were now convinced that for it to work, we needed video… but we didn’t have the capital to invest in equipment or the know-how to execute. We didn’t want to seek out other shows to do audio-only… So I started to pursue the idea of merging or partnering with that same local live-events company that loaned us the video equipment. They have the equipment, staff, knowledge, and relationships to execute this thing really well. Erik had a big contribution with the final audio… I mean no one does it better. My concern, if I’m being honest, was where I fit. But, I put that fear aside knowing that this was the right play for LyveSpace to have the best chance of survival.  

I met with the owner and he basically told me that they didn’t have the bandwidth to take on this new venture. But he had one guy that was appointed to the live events section of their business… I just so happened to know him too, so I scheduled a meeting with him. I wanted to see if he wanted to do something on the side with me. He and I had coffee and I shared my vision to setup a residency with The Castle. I was no longer thinking about LyveSpace at scale...instead I was thinking about next steps. Doing something exclusive with The Castle would mean no travel, and we could work with them to endorse us when the artist booked. This was a different approach but one I thought could work quite well assuming we got Castle on board. We agreed to pursue this plan together, but there was no huge rush. I touched base with him a couple times via email/text, and no real updates. About a month went by, and then I saw an Instagram ad for a new recording company that was going to stream an event at The Castle. This was being promoted by The Castle and by this new page. I called my guy (the one I was hoping to partner with) to bring his attention to it. He called me back right away to tell me that this new company was him… 

Wow… right? Bombshell... It’s a different model --- they are streaming it live, then selling the recording too. We were not streaming live, and we were mixing/mastering the final recording. BUT --- Very similar approach. He setup a residency at The Castle, like we discussed, but did it on his own. I always knew I ran that risk, especially when I recognized that my distinct competence didn’t have much to contribute. In that call with him, I was taken back. I could have cussed him out and had bad blood. But instead I wished him well. I think at that moment I realized it was over. This local relationship with The Castle was my last ditch effort to do something with LyveSpace, and that opportunity was seized by someone else. Could I still seek out other channels for LyveSpace before bailing? Sure! But, if I look at everything we’ve learned and went through cumulatively, this was the nail in the coffin.

I called Erik and we decided to hang it up and walk away before we invested more time and money.  

KEY LEARNINGS AND TAKEAWAYS

Hindsight is 20/20, right? As I look back on my journey, there are a few things that I realize now.

1. I didn’t have enough personal experience/knowledge about this space. I don’t know why I thought I could do it. I have only experienced success in every career role I’ve ever held… So I thought I could handle this and turn it into a successful business. But I didn’t have connections to venue owners or artist managers, I didn’t have knowledge of how the industry works, and I didn’t have a background in live event production or recording. Truth is, there are many others more capable of doing what wanted to do, and nothing proprietary about my idea. IF I had the equipment, knowledge, and connections, this business would have maybe stood a chance. I was naive to think I could figure it out to the level that would be needed for the business to really take off.
2. No pre-orders or clients lined up prior to starting business. I was incredibly focused on scaling the company before I had a company. For example, I was creating systems, forms, & processes to streamline execution before we even had events to work! I was way ahead of myself… Before I even created the business, I should have had 5 shows lined up, talked to The Castle ownership, etc… So I knew I had work lined up once things were in place. I had this silly idea that “if you build it, they will come”. I thought if I had the company, then I could get artists and venues to participate. I was wrong on this, and the end result was a company structure built but no customers to serve.
3. Poor spending of seed money. This wouldn’t have changed the outcome, but it’s a regret I have. I shouldn’t have setup an S-Corp, should have done an LLC on my own. I shouldn’t have purchased so much signage in bulk. I shouldn’t have focused on the artist contact until we needed it. All this would have added up to saving some of this seed money… To either A. Return a portion back to the people that gave it had it ended the same as it did. Or B. I could have invested back into marketing. Either way, that money wasn’t spent as well as it should have been. Now, I owe my family back for these funds and will end up coming out of my own pocket.
4. My wife didn’t support this endeavor. I love my wife a ton, but she’s just very risk averse. She wants stability and, as an entrepreneur, that’s a tall ask. I thought it wouldn’t matter… I was focused. I had an “I’ll show you” attitude, and I forged forward without her support. I figured that when (not if) this succeeded, she would ultimately be grateful at my persistence. However, all it did was cause conflict with every twist and turn. When I had small wins, I couldn’t enjoy those moments with her. When I had challenges, I couldn’t bounce it off her. For me, it made it easy to walk away when things weren’t working, since it would ease the stress at home. If you’re in the midst of diving into something that’s going to consume you, you better have your partner on board. It makes a big difference.  

In the end, this new idea didn’t materialize into the vision I thought it would. I owe a ton of gratitude to Erik & Hans for doing countless hours of work to push LyveSpace forward without any compensation. I too spent countless hours working never to receive any compensation… it just didn’t make money like I predicted.    

When I launched LyveSpace, I was not like other entrepreneurs you hear about in these epic stories. I didn’t quit my job, downsize my life, sell everything, and go all in. Perhaps it would have done better if I had! Risks I just couldn’t take with having a family. As I look back, I would do several things differently. BUT, truth be told, I’m not convinced it would have changed the outcome. The small scale tests showed us that demand wasn’t what I hoped or expected. We made sales, but not enough to justify continued pursuit of this business… at least as this model was set up. 

In the end, I am still happy that I pursued it. Because if I didn’t, I would have always wondered, “What if…?” Now I know, and I can be at peace with knowing that it didn’t work. Ironically, some of the skills I learned with LyveSpace, I’ve already used again in my current role as VP of Sales. I have revamped my company’s website, used marketing strategies that worked, applied social media best practices, etc… Everything happens for a reason, and my positive, optimistic attitude is choosing to believe that this business failure is simply the next step in my evolution as a person and business professional. Keep learning, keep trying, keep pushing forward! Hey, if you try, and it fails --- at least you can write a 5600 word wrap up all about it! :)