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It was supposed to be so different.

Our startup had everything going for it. We were in a space seeing massive growth. A company with a similar model had just sold for $1.5B. We had our investors lined up.

And then, the Boss Fight happened.

In nearly every video game, there is a final level known as the Boss Fight. The “boss” is usually a fast-moving, multiple-tentacled monster with unlimited ammo. It’s terrifying to go up against and you rarely win on your first try.

We met our Boss. It was Google. And it killed our startup.

But let me back up.

The Idea

My wife and I are avid video gamers. First hooked on the Elder Scroll series, now our spare time has us killing zombies with cactus needles, hacking Chicago’s power grid, and closing rifts all over Skyhold.

Today’s video games aren’t what you remember them to be. They’re incredibly detailed and complicated. You want a potion to improve your health? You’ll need to search Tamriel for reagents with specific traits, get to an alchemy station, make sure you have a solvent ready, and enough skill points in alchemy to make your potion effective.

None of which the game really tells you how to do. You’ve got to figure it out for yourself. That can take dozens of hours to get it right.

Sure, there are YouTube videos, but most are hours-long “walkthroughs” where you just watch someone play. Tutorials, taught by people who are actual experts in the game, are few and far between.

We wanted to fill that gap with GameSchool.tv: “Learn your favourite video games from the best players in the world. For one low monthly price.”

It was to be the lynda.com of video games.

And it was well underway.

We were talking to major game publishers. We had hired some course authors. My wife had quit her full-time job and I had scaled back work at my digital marketing agency to 50%.

Our forecasts had us profitable as of Summer 2016 and closing year 2 out with nearly $1.2M in revenue. We were days away from closing a six-figure seed round from three investor groups.

Cue the Boss

And then, enter the fast-moving, multiple-tentacled monster with unlimited ammo, stage left.

Out of nowhere, Google announced it had been quietly working on a special site called YouTube Gaming. It would feature live streams and categorized gameplay videos.

At first, we thought this was good news. In an email to our investors the day we learned about YouTube Gaming, I wrote:

This massively validates the growing interest in gaming.

Since our videos will stand out from the crowd of the usual “let’s play” and walkthrough styles, combined with an engagement strategy we’re already working on, our videos will come up even higher in searches than before. Plus, it will be much easier to find and recruit Game Pros since they’ll be grouped into game hubs.

But then, as more information leaked out about YouTube’s secret project, and our employee Sylvia starting digging around, it became obvious that YouTube Gaming was a much bigger threat than opportunity.

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One evening, she came over to our place and showed us a leaked video she’d uncovered of the new app they’re planning.

Our hearts sunk. They were pretty much already working on what we had been planning — and they are going to give it away for free. It was clear they’d been working on it for months and had tens of thousands of gamers already secretly testing it.

Fuck.

We stared at the wall for a couple of hours. Decided to sleep on it. Then, the next morning, we emailed our investors and advisory committee.

After all, one solid axiom of business: It’s hard for your better, paid service to compete against a “good-enough” free offering.

It’s hard for your better, paid service to compete against a “good-enough” free offering. Click To Tweet

It’s Probably a Good Thing

In a way, we’re fortunate that Google announced their project when they did. Another week or two and we’d have brought investor money on board, incurred thousands in legal fees, and started significant spending on the platform and launch plan.

As for us personally, we are out about $8,000. We didn’t go into debt, mortgage our home, or live off our credit cards.

Along the way, we learned an enormous amount about building a startup, pitching potential investors… cap tables, term sheets, Series A rounds, company valuation… it felt like a real-world MBA crash course.

As for what’s next, the three of us will continue to play video games. We will continue to go up against fast-moving, multiple-tentacled monsters. And, occasionally, we will come out on top.

As far as we’re concerned, we earned 1000 XP in this whole run.

We’re pretty damned proud of that.

GG, Google.

Read the Full Story
Want to read the full backstory behind the startup? You can download a free PDF ebook at http://todmaffin.com/startupdiaries.

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Tod Maffin is president of engageQ digital, a digital marketing agency in Vancouver and Toronto. or watch him play video games live at http://twitch.tv/todmaffin