In late February 2020, we got the first call from a client: they were so sorry, but they had to cancel their event.
Over the next three days, the same calls and emails kept coming in. In less than 72 hours, we went from a scrappy, bootstrapped startup with $250,000 per month in hard-earned revenue, to effectively zero income—and no new leads coming in.
I'm writing this post to share what we learned from losing all our revenue—and also talk about how we've rebuilt. Because in less than 24 hours, we repositioned our entire business, and we're on track to recover. We are leaner, more focused, and fighting harder than ever before.
Specifically, I'm going to share:
How we identified a new revenue source and repositioned in 24 hours
Where we cut spending to extend our cash position
The key investments we made to restart the growth machine
Management insights for leading through a crisis
How we identified $250,000+ in new revenue
Our business, Museum Hack, leads unconventional tours of the world's best museums. Our first museum was the Metropolitan Museum of Art in New York City, and we've grown to include museums in Chicago, Los Angeles, Philadelphia, and Washington DC.
Museum Hack runs public museum tours for between $39 and $99 per ticket, depending on the museum and tour type. We also do private tours for families, bachelor/bachelorette parties, and corporate groups as team-building events.
Our business model acted as an early warning system for the current economic and health crisis. First, our enterprise clients were quick to implement internal travel bans and cancel group events, prompting the sweep of cancellations I mentioned in the intro. A few days later, museums announced they were closing to the public, which made our need for change even more clear: we had to go into an indefinite hibernation or find a new source of revenue.
We started planning and taking action.
The Google "hack" for quickly finding new revenue
Google built a tool for identifying new revenue sources for your business. It is entirely free, easy to use, and you don't even need a Gmail account to access it. It's called Google Trends, and it was the first place we looked for ideas to save our business.
On Google Trends, you can input any keyword search and see 16+ years of data on search trends for those keywords. You can sort this data by country, time period, and other filters, which may help give you a more nuanced understanding of the numbers.
For example, in the past, we searched for data related to our industry and found that the end of December and July 4th weekend are consistently slow periods. This insight wasn't a surprise; it matched our assumptions based on what we saw in our business, but it was helpful for codifying these assumptions and making decisions going forward.
Google Trends also has a feature called Related queries, which, during a crisis, may be the best way for you to mine for opportunities. We saw that searches related to team building in our operating cities were going down at the same time that searches related to virtual team building were going up.
Museum Hack's experience with this new area was limited: we had done some online training in the past, and had one blog post with ideas for virtual team-building activities for remote teams. Still, with our experience leading team-building activities locally and over six years as a 100 percent remote company, the insight into virtual seemed like our best opportunity to pivot.
We didn't know, and frankly still don't know, what the long-term potential for this market is, and expect it will likely continue to fluctuate. But for now, this is work that our people are skilled at, and reasonably close to our existing processes for marketing, sales, and operations.
Our 24-hour pivot to teambuilding.com
Last year, we quietly purchased and started developing a new domain: teambuilding.com. Our intention was to extend our corporate offerings beyond museum tours, and we started running guacamole-making competitions, gingerbread house showdowns, and other similar things as part of the Team Building parent brand.
Up until the COVID-19 crisis hit, Team Building was a side project in SEO and brand development, and otherwise not a priority for operations. With the realization that we needed to reposition quickly, we brought Team Building to the front of our operations and strategy:
We created concepts for a number of activities that we can facilitate virtually.
We built a landing page for virtual and remote team-building services.
We set up microsites for the brands and activities we thought had the most potential.
We started running internal beta events to work out the mechanics.
We simplified our pricing model and started building out PDFs, proposals, and other collateral.
Examples of virtual team-building activities we now offer include Online Office Games, a 90-minute series of fun games and challenges run over a secure Zoom line; and Tiny Campfire, an event where we mail out s'more kits and then invite attendees to play games and listen to historic ghost stories around a virtual campfire.
In order to execute on this strategy, we made some large shifts to how we manage our money.
Where we are spending money now, and where we aren't
When we took the $2.8 million hit to revenue, one of our first steps was to look critically at all of our spending. We had money in the bank and calculated out how long we could last on zero revenue and our current spend. Answer: not long.
One of the first changes we made was in software tools. For example, we finally left a hosted email newsletter service that we paid ~$5,000 per year for. We had previously transitioned a portion of our email marketing to a self-hosted solution that sends via Amazon Web Services, but had stayed on the other provider for a few helpful but non-essential features they provide. With the loss of revenue, it was an easy decision to fully transition to the self-hosted version, which is faster, more user-friendly, and costs about $4 per month.
The most substantial action we took was a short-term layoff of our facilitator staff. We are a labor-intensive business and could not sustain payroll or give our team work without revenue coming in. Layoffs are not an easy decision to make; losing your job is financially and emotionally destabilizing. We made the decision to do layoffs so that our people could access unemployment benefits. We also created an emergency fund for our staff to offer some financial support until we can hire them back.
Not all of the financial changes we've made have been in reducing costs. For example, we upgraded our website hosting package to accommodate the additional work we are doing. We also increased spend on Google Adwords for relevant keywords, and we're investing more in Zapier to build out automated processes that support our pivot.
Before the crisis, we were in the final stages of hiring a Director of Sales, which we put on pause because of the uncertainty. As we started to see promise in new revenue coming in, we made an offer to our top candidate, and she quickly joined the battle.
Throughout the transition, our plan for full-time staff was to keep them working on long-term projects like SEO, internal team building, and training so that we would eventually come out of this period stronger. With the pivot, our team is now busy with new initiatives.
I've shared this glimpse into our spending because, for me, it was a major reframe on how to think about investing in your business during a crisis. If you rapidly lose all revenue, like we did, then you will likely need to tighten up spending. Consider the other side too: where can you invest that supports your recovery, gets your people back to work, and may even lead to growth?
How to lead your team through the fiery pits of economic doom
Someone has likely written extensive literature on how to manage and lead during a crisis, which during an actual crisis, you probably won't have time to read.
I'm still learning what it means to lead well through a pandemic, massive economic fluctuations, and everything else that comes along with it. I want to share some of what I've learned.
First, commit to patience, listening, and understanding. Even on the best days, you don't have the entire picture of what your staff is feeling, or what is affecting their performance and decision-making. During a period of rapid transition, assume best intentions and support your people as people.
Next, take action on your gratitude. Your people choose to work with you, and you are fortunate for every minute of attention and effort. In addition to being grateful, find ways to show your gratitude. We have a #you-are-awesome channel in Slack to shower team members with praise, and we also give surprise bonuses, raise pay as we can, and tell the team we appreciate them often.
Next, be willing to do the work. Leading from the front lines is one of the strongest ways to show your people the work they do matters. Get involved with marketing, sales, operations, and every other department where you can make a meaningful contribution. Work absurd hours if you have to, and definitely do it before you ask anyone else to.
Finally, operate at level 10 integrity. If the market shift is large enough, then your team, your suppliers, your competitors, and their families and communities are all working through it too. Continue to operate with integrity, put in the time to do things right, and don't cut corners. Your legacy goes beyond the weeks, months, or years of a crisis: it lasts forever.
Entrepreneurs solve problems. We fill gaps. We create jobs.
At Museum Hack and Team Building, we were fortunate to spot a trend early on, and even more fortunate to have a team that could quickly shift and act together to build something new. If you want to learn more about our journey, Andrew Warned of Mixergy called it "the best recession story." And I've written more about our plans on our blog.
The impact of a crisis on your business and projects may be more or less than it was on ours. Continue solving problems, continue filling gaps, and continue working to create jobs.
The world needs you to fight like hell.