Almost without a doubt, it’s the largest MVP in recorded history: more than 20 feet long, 10’ high and 10’ wide—2,000 cubic feet and 5,000 pounds in all. What’s more, the huge MVP has already recorded some $305,000 in sales from its first user and half of the seed round for a terrific startup team at “Block Party Suites.”
I first met co-founder Steve Gilman in my full-semester Lean LaunchPad class at Columbia Business School, where his passion for entrepreneurship stood out quickly. I was impressed with his clever work on his startup, his energy, his dedication to entrepreneurship, and a unique item on his resume: a former professional baseball player who, when injured, swapped his cap for an MBA seat. His co-founders, Adam Ward and Cody Slape, are also driven MBAs with a passion for building big products for big businesses.
But what was even more fun was an “office hours” discussion where we reviewed
a rough business plan he and co-founders had developed to provide unique services to the exploding tailgating market, and rough sketches of the MVP itself: a 20’ ocean shipping container converted into a portable open-air party center, complete with luxury furniture, a rooftop deck, big screen tv’s, team logos, and lots more.
Steve and his team, experienced tailgaters themselves, had tested their hypotheses about what end-users needed (end-users = college football tailgaters). Through surveys and talking to tailgaters, they found need for an enhanced experience in the form of a turnkey solution with amenities not commonly found at tailgating parties. Using a shipping container as temporary infrastructure, the founders converted the huge steel box into an outdoor living room—and tested it at a November ’14 launch party at AT&T Stadium during a Dallas Cowboys game.
I always admire founders who self-fund, and this team’s limited capital (30K among three co-founders) had to go towards a base tailgating suite model that could be easily produced and scaled. They partnered with local Dallas venues to put the MVP to work, soliciting end-users for feedback and iterating along the way—just as I’d taught Steve in class: hypothesis/test/learn/iterate, of course. (He got an A).
The MVP taught the team quite a bit:
- Sports properties needed upgraded accommodations outside of the stadium to grow with the popularity of pre-game tailgating
- Sponsors needed lots of room and electricity for signage to further engage consumers
- Stadiums weren’t the primary prospects at all; sports properties and event planners were, they control the “street to seat” experience on gameday
- Nobody wanted to buy the unit; leasing the unit for multiple events was the key
- And a huge incremental revenue opportunity: providing catering, beer, and staff
Sports properties and event promotors emerged as the clear client segment: their loyal high-end customersseek innovative platforms and they can deliver access to the tailgating venues through existing relationships with the school decision-makers providing access. The same businesses control the assets for sponsorships, which can help mitigate the cost of the luxury suites or drive revenue for the sponsor packages by delivering further brand exposure.
The team’s final challenge was self-funding a capital intensive product with zero upfront investment. They overcame this with a minimum purchase commitment (based on a leasing model) and multi-year contract to ensure break-even on the first transaction—leasing the first lot of Suites to a Dallas-based sports property for almost two dozen events at a pricetag in the low hundreds of thousands!
The rest, as they say, is history: a solid pipeline of prospects and contracts pending, and a seed round that’s half-filled in less than sixty days. The team is striving to go national, putting suites in several key cities to reduce transportation time and cost. And three talented guys with grad school loans to pay have passed on solid job offers to launch what could well be a success as big as the next block party suite!
For your own private tour in Dallas, TX, visit www.blockpartysuites.com or contact my star student @firstname.lastname@example.org.