After having to quit my Y Combinator funded company at right after getting traction and raising a couple million dollars I jumped into making my own company.
I had been traveling around so much for the last one and trying to sort out different gym memberships, realizing the price of the membership was extremely negotiable when my cofounder and I wanted short term ones.
So I made an app that just pre-negotiated day passes at different gyms around the country.
This is a terrible idea for many reasons. The market is small, the profit would be low. But the biggest issue of all is gyms hate this. Gym’s want lots of members who never go to the gym, not lots of members who only pay when they use it.
Regardless I was determined to see it through as a success. I went door to door to gyms and got deals in place. I brought a camera Airbnb style to take nice photos to display on my app.
I found out my idea wasn’t particularly original. It had been tried and failed 5 or so times before me. I reached out and met with all of them in person offering to buy their contracts or contacts with the gyms. The largest one which had been acquired and shut down was so nice he sent me their entire gym contact list for free.
I asked our first employee from the last company who left me with me to join. He declined.
I then recruited a college friend to code the frontend so it looked pretty. As I started to program the app I realized how much work this would be and set out looking for marketplace apps already built in iOS and Android I could just buy and repurpose.
As luck would have it, I found a failed one with a couple hundred more pre-negotiated gym contracts on a fire sale online. It was run by two kids in Florida. I found an acquisition template contract online (to prevent me from acquiring any hidden debts) and used my friend’s free lawyer consultation provided by their college to check it over. All in all I acquired their company for $9,000.
Everyone loves an acquisition. The thing is nobody knows if your acquisition is a million dollars or $1. But they assume it’s a million. The 2 kids were happy.
I fixed it up and launched. We got pretty high up on Product for the day and some people on reddit found it interesting. It all amounted to a total sales revenue of $0.
I could sense my co-founder was losing interest. Neither of us were being paid after all. My own savings were approaching $0 yet again.
I sent a cold email to the CEO of Airbnb saying this could help them compete with hotels and how their properties lack gyms. Luckily, the CEO is a competitive body builder and he linked me to someone internal to work out a deal. But it was going slow and unlikely to go anywhere other than have my gyms listed on their new “Experiences” tab.
In a last ditch effort, I put up ads on Facebook asking if someone wanted to acquire a full-fledged gym app. I spent $100 a day for 5 days deciding I would have to try something else if that didn’t work.
A couple people expressed interest but none for very much money. My only demand was to make a total profit on this startup even if it was only $1.
A couple found me and asked me to interview at their random startups impressed with what we had built so quickly. They said they would acquire it on the condition I work for them. My friend had done this successfully in the past so I was hopeful.
I never got any jobs offers from them.
Finally a guy with the fakest name ever reached out willing to buy it for the price I wanted. Think a name like John Johnson. He had no internet presence and I followed up with him sharing info and things assuming it was a scammer.
We got to the escrow portion and to my surprise he actually wired in the full amount. No tricks at all. I split the leftover profit in half with my cofounder. It wasn’t much and kept me out of debt once again.
It turned out he and his cofounders were Air Force guys and purposely kept a low profile online. I met up with them in person a few times after it went through and tried to help them grow it. They still run it.
I was an acquired founder now.