An Epic Tale of Failure

 

From Entertainment CEO to Aruban Fugitive in 16 Days 

No human being that is concerned about their public image would ever share some of these things.

My first major entrepreneurial venture Showtime Aruba was a failure of epic proportions. I may need to find some evidence of this failure to convince you all that this story actually happened. Maybe the Showtime Aruba t-shirts that the homeless in Aruba are possibly still wearing, or my inclusion on the Aruban fugitive list would do the trick?

So here’s the story…

While working at my father's American Express travel agency after college, there was a weekly oldies music event in Boston that we sponsored to reach white-haired people who wanted to spend their hard-earned money on cruise ships eating 10 meals per day until they could no longer fit in their 100 square foot cabins.   

At one of the events we met a slick Italian from East Boston who was probably a good friend of the Italian mafia. His mafia connections aside, he also possessed a range of amazing connections to oldies musical talent. At the show an idea surfaced…

People in Boston (especially older people) love to travel to Aruba - it’s like Hawaii for west coast people. The problem was there was no entertainment for older people on the island, which in hindsight, made perfect sense. Read on...

The idea came to fruition to bring classic oldies artists to Aruba each week, and guess who was going to be the President? Me of course. The guy who started his first successful entrepreneurial venture in college and heroically supported his father and uncle to turn around their travel agency from $380K in losses the previous year.   

At this point, I had a chip on my shoulder. I felt invincible, like whatever challenge was in front of me, I shall overcome. 

We started by creating strategic partnerships with:

  1. A major tourism authority

  2. A major brand hotel in Aruba with a beautiful theater that was going unused (that should have been our first clue)

  3. A major casino on the east coast that regularly booked musical talent

We learned that for talent to perform each day in Aruba would cost approximately $100K per week. We needed to raise capital…

I can still remember the day that I met Max (not his real name), and English gentleman who founded an office crate company and later sold the company for $30 million. I submitted my business plan and assumptions to him, and his response was “bullocks!” This is all “bullocks!” He ripped me a new one and to this day I cannot remember ever feeling so humbled.

What I appreciated about that experience was the way I bounced back from his crucifying feedback. He appreciated me also, and made it clear that he had no intention of investing, but he saw something in me and wanted to stay in touch. 

From there, I met another gentleman who had experience in the travel industry running a student tour company. Let’s call him Larry (not his name either).

Larry appreciated my charisma, charm and business plan, and let me know that he was willing to invest $200,000 dollars and provide his attorney to the venture. I was exhilarated, but he also required that some other money come to the table.

We had no other accredited investors, so my father, uncle, best friend, mother, and I all put up some “friends, family, and fools money” to give us another $100K and fulfill my dream of being a CEO. To be clear, I did not have this cash. This was during the George Bush years when credit was being given out like candy on Halloween. I took out $30K of credit from my AMEX credit card with no APR under the assumption that I would pay it back in 1-year. I am actually experiencing physical pain writing that last sentence.

We were off, about to be entertainment moguls on the island of Aruba. Of course, the closer we got to the launch, my health started deteriorating, but I convinced myself that the sunny island of Aruba and my upcoming financial fortune were the cure.

Our grand opening was the beautiful and super talented Mary Wilson of the Supremes (from the movie Golden Girls). Mary is a legend, and a group of reasonably competent people would surely execute a grand opening that filled the seats. You know how many tickets we sold? 20 tickets.

Ten of the tickets were VIP tickets to hard-core fans who were utterly shocked when they arrived to find another 380 empty seats in the theater. They could have laid across the chairs and ran laps up and down the theater aisles if they wanted to, and here they paid triple the price to have seats in the first five rows.

Mary was appalled. Never in her illustrious music career had she ever sang to an audience of 20. We managed to humiliate one of the greatest music artists of our time, but hey, we had a great logo.

The next night we sold 30 tickets, and the night after that 40 tickets. Finally, Mary came up to us and said she was leaving unless we did something to properly market the show.

We ended up giving away free tickets to tourists and Aruban locals to fill the house. And the last night, that is exactly what we did. The house was full, and Mary put on a performance for the ages. I’m not sure if I was crying backstage in embarrassment for all that was occurring, or if I was being moved to tears by seeing 400 Arubans jumping up and down as Mary belted out her finale. Regardless, I was sobbing.  

At this point we had burned through $200K for Mary’s contract and our startup costs. We had one shot to turn the ship around, and the next act was “Charlie Thomas and the Drifters,” another group of music legends. For those of you far too young to know who they are, they released the great oldie “Under the Boardwalk.” You know…

(Under the boardwalk) Out of the sun

(Under the boardwalk) We'll be havin' some fun

(Under the boardwalk) People walking above

(Under the boardwalk) We'll be falling in love

Under the boardwalk, boardwalk   

You might be reading this going “Oh know, they didn’t embarrass Charlie Thomas and the Drifters, the sweetest men you could ever meet? Please tell me that did not happen!”

Yes, we did. We actually sent them home mid-week as the company was out of cash. We were toast, and I began looking for the nearest boardwalk to hide.

(Under the Boardwalk) Curled up in shame  

I quickly became aware that we could also no longer pay for the year lease to that epic house we rented to host the entertainers. The real estate agent was a crazy Dutchman who would no doubt take me to court and try to hold me personally liable for the large lease.

My fear arose sharply as I could only imagine how the Aruban laws treated such cases. Two weeks before I was sitting in an Aruban courtroom fighting a law that required our entertainers to pay hefty immigration fees even though they were only in town for one week. A local lawyer had been fighting this law for 10 years, so we hired him to represent us in a case called “Murphy vs. DIMAS.” At the time, my last name was Murphy (name change story saved for a future post), and the great news is we successfully won the case by promising the judge Mary Wilson of the Supremes tickets. He was one of the 20 people at our first show.

If we could bribe a judge with Mary Wilson of the Supreme's tickets, then what could the Dutch real estate agent do to me? I suddenly felt like a gazelle that was about to be eaten by a lion. So what did I do?

I fled. I called up the operations manager of the theater and asked for a ride to the airport to go home. I still remember the day vividly. It was pouring rain, my local cell phone going off as the Dutchman no doubt sniffed that Showtime Aruba had cemented its spot on the “top 10 startup failures of all-time list.”

The van we were in began hydroplaning in the rain, and I was holding on for life as I did my best Harrison Ford impression. Only in this case, instead of leaping 1,000 feet into a river with the threat of Tommy Lee Jones shooting me, I was jumping on a JetBlue flight being quickly pursued by a crazy Dutch real estate agent.

I arrived at the airport and quickly made my way through immigration before my name showed up on the Aruba’s Most Wanted list and I became the next Natalee Holloway story (yes, that public charade was going on at this exact time, the one of the missing girl that occupied the news for years). Fortunately, I got on the flight and arrived safely back in Boston to clean up the mess.  

When it was all said and done, I had successfully accomplished the following:

  1. Embarrassed two different rock and roll legends

  2. Burned a total of $300K in capital 16 days into our formal launch. When I need a good laugh, I call Larry, who unbelievably is still a dear friend, and ask “how long did we stay in business Larry?” He replies with the funniest of agitated voices “16 days.”

  3. Paved the way for other short-term workers and musical artists to come to Aruba by bribing the judge in an immigration case, which was the life-long dream of a local attorney.

  4. Became an Aruban Fugitive - I still have not returned

  5. Put myself $30K in debt that took me eight years to pay back

  6. Did my best Harrison Ford Fugitive impression. Man, I love that movie. “When I came home there was a man in my house.”

  7. Donated thousands of Showtime Aruba t-shirts to the Aruban homeless shelters.

  8. Created one hell of a logo

When I say in my introduction that no person who cares about their public image would ever share these things, I was not kidding. As I write all this, I am experiencing a deep healing while at the same time pinching myself to ensure I have a pulse. Am I really going to post this on the internet?

Yes, I am, because my promise is radical transparency.

So with that, let’s get to the key nuggets of wisdom from this post:

  1. Be mindful of your cockiness and general feeling of invincibility. Entrepreneurship has a way of humbling people, even successful entrepreneurs (e.g. Border’s founder lost $365M on his second venture WebVan).

  2. Having three major strategic partners does not mean success.

  3. Do your market research, especially when you are starting a business in a foreign country where laws may exist to make your company a non-starter. Not all of us have Mary Wilson tickets to bribe judges.

  4. Listen to people like Max who have successfully navigated a startup to success. When they say “bullocks,” listen.

  5. Under the Boardwalk is a true classic that I had the pleasure of seeing in an intimate atmosphere of 20 people.

  6. Do not sign long-term leases where you are unaware of the full consequences of breaking that lease, especially with crazy Dutchman.

  7. Do not fund your company with your AMEX line of credit.

  8. When in trauma from losing $300K in 16 days and being a fugitive chased by a real estate agent, exercise self compassion and upgrade to JetBlue Extra Legroom seats to enjoy the 5-hour flight home.

  9. An amazing logo does not equal success, but it will create the satisfaction that you have enhanced the fashion of homeless people on an island 10 miles off the coast of Venezuela.

  10. If all this happened to you, it is probably not a good idea to write about it and post it online for other people to see.

What I do love about this post is the inspiration to create a free "startup failure recovery program." If 90% of startups fail, sounds like a nice form of service. Coming soon y'all. 

Justin Milano helps mindful entrepreneurs build exceptional companies. As a serial entrepreneur and certified leadership coach, Justin uses a unique blend of business and leadership coaching to help entrepreneurs create breakthroughs and fulfill their maximum potential.

To explore integrating Good Startups coaching into your startup, click here to learn about our signature program Breakthrough.