Founder shares how he bypassed creating an MVP and invested $95K into a product with no market demand.
Hi Jonny! Who are you and what are you currently working on?
I'm Jonny Boyarsky. I've been into startups since a young age. I fell for their efficient and streamlined approach, not to mention the amazing possibilities tech offers. My academic journey has been a mix of engineering and law.
I worked for many years at a startup accelerator, which I'm still part of. It's been a great way to gain firsthand startup experience and interact with a bunch of founders. While at the accelerator, I played around with some personal startup ideas, but the real deal, full-on commitment, happened when I jumped into Star Sync.
Star Sync was essentially a marketplace where users could come and buy certain experiences from their favorite streamers. The idea was to create something similar to a digital version of backstage passes where people could pay to meet their favorite artists.
The business model revolved around taking a 20% cut of every transaction on the platform. For instance, if someone spent $100, we would retain $20 as our share.
What's your background and how did you come up with Star Sync’s idea?
After the big NFT and crypto wave hit in 2020, I was introduced to the idea of digital sports cards. I started to think about what would truly make them valuable and authentic. That's when this thought crossed my mind—what if owning a unique, one-of-a-kind LeBron James basketball card got you a 10-minute chat with him monthly? That card could be worth hundreds of thousands.
This concept made me realize that these NFT cards' true value is not just their digital rarity but rather in what ‘experiences’ they can offer the holder.
I mulled over the concept for quite a while and eventually landed on creating tokens that people could purchase that would be redeemable for experiences. However, I then decided not to build the platform on the blockchain. I decided that I didn't need the benefits of a distributed ledger for the type of transactions that would happen on the platform.
How did you go from idea to product?
I decided to focus Star Sync on emerging eSports and Twitch celebrities. For example, you could play Fortnite with your favorite streamer or get a guitar lesson from your favorite up-and-coming guitarist.
In 2021, I started building the platform as a solo founder. Being a solo founder without technical knowledge led me to hire a US-based dev shop to bring my vision to life. I spent around $95,000 on the dev shop, and, unfortunately, they didn't quite deliver what I had in mind.
Initially, they showcased some impressive design work, but things slowed down. There was a four-month period from November to February where little progress was made. They rushed to put things together at the last minute, and the final result barely worked.
This caused many problems and made the launch far more challenging than it needed to be. After a lot of back-and-forth, we finally launched the product in March 2022.
You may have already realized I committed a big mistake here, which was not creating an MVP.
On top of this, I also decided to hire a talent agency to help connect to streamers and other potential talent. Unfortunately, they made promises initially they couldn't fully deliver on.
Another lesson I got from the experiences with both agencies was managing expectations and being careful about whom to partner with.
What were the strategies to grow your business?
Part of the package of the talent agency was that new talent would publish promotional tweets. However, I soon realized that Twitter wasn’t a really used channel for streamers as Discord was. While they made an effort to tweet and talk about the platform, it unfortunately didn't gain as much traction and reach as I had hoped.
We also tried to pay for streamers to shout us out on their platforms. However, it ended up costing us more than expected.
Generally, streamers would show their average viewer count and would charge based on those numbers and ask for a dollar per hour per average viewer. So, if a streamer had 2,000 viewers, they'd charge $2,000, even for short interactions, which was super expensive.
We also experimented with giveaways across platforms like Instagram, YouTube, and Reddit. The last experiment I tried was events like offering one-hour coaching sessions with specific streamers, but unfortunately, that approach didn't yield positive results either.
In the end, Star Sync managed to get nearly 100 people to buy experiences. However, the retention rates weren’t great, and we struggled to convert these users into long-term customers.
When did things start to take a different direction?
After all the marketing attempts, I noticed one tweet that seemed to be gaining serious traction. I had asked people to like, share, and retweet, and it seemed like we were hitting the jackpot. I was super excited seeing it had around a hundred retweets.
But reality hit – as I dug deeper into the profiles of those who had liked, shared, and retweeted, it turned out they were all bots just in it for the giveaways. All that virality was essentially fake.
The audience we were targeting didn't have much disposable income either. Most viewers couldn’t drop $500 or $1,000 for interacting with their favorite streamer.
Moreover, another thing that frustrated me was the realization that many streamers I was dealing with didn't fully grasp the long-term value of the platform I was building.
Which were the causes of Star Sync's setback?
The streamers' lack of understanding about the platform's concept was a huge setback. I explained that our platform offered a more direct way for them to monetize their fan base compared to ads. But it seemed that this value proposition didn't fully resonate with some of the streamers.
Another setback was that I didn't choose the right market for our solution. The platform I had in mind was too general. I should have gone after a different demographic, like local celebrities in the 30 to 60 age group.
I also made the big mistake of assuming that bringing talent on board and introducing their communities to the platform would lead to a natural transition. This wasn’t the case at all. Getting them fully on board was more challenging than expected, and the conversion rate from their social media posts was very low.
When you put all these factors together, it was clear that our platform wasn't sticking.
I then decided to start winding down operations. The platform's decline was a slow process rather than a sudden downfall, as I was still actively searching for users to join us.
However, as time passed, I shifted my focus to another startup that I found more compelling and believed addressed a more significant problem. It became clear to me that despite the financial investments I made to market the platform, there was a lack of reaction from the market. So, I decided to cut further expenditures on the project and shut it down.
Which were your expenses? Did you achieve any revenue? In the end, how much capital did you lose?
As I mentioned earlier, the total expenses for the dev shop were about $95,000, which was entirely self-funded.
This spanned over a period of two years and eventually added up to around the $100,000 mark, including marketing and so on.
Regarding revenue, the business didn't achieve significant income. Maybe a couple of thousand dollars.
If you had a chance to start anew, what changes would you implement?
Here are some lessons I learned along the way:
1. Understand your market before launching any product or service. In my case, I selected a demographic with little disposable income, which created challenges when trying to sell experiences on the platform.
2. Having a technical co-founder is crucial. Not bringing a CTO on board from the outset was a significant setback. I should have been more open to using equity as an incentive to bring on co-founders who had a background in tech and were well-connected.
3. You can’t pay people to care. You cannot pay a streamer, influencer, or celebrity to care, they have to be genuinely invested and understand the product and the value it will give them.
4. Do not overspend on the initial product. Keeping costs as low as possible in the early stages is the most important thing. In hindsight, the outcome might have been quite different if I spent $15 to $20K on an initial product and $50K on marketing.
5. Lastly, focus on creating solutions that are easy to explain. When I tried to explain what I was doing to people, they would get confused. Finding problems where the solution can be quickly and clearly understood by people is a valuable indicator of a promising idea. Simplicity and clarity can make a world of difference when gaining user interest.
Which entrepreneurial resources do you find most valuable?
There are two key mentors that you need to have when you start anything.
- An industry mentor: Ideally you bring someone on for equity that actually dedicates 10+ hours a week to what you’re building. This person should know the space well and be well connected. You can’t replace 10+ years of relationship building, but you can coopt that trust that’s been built over the years.
- A startup mentor: Find someone who’s built a startup in an adjacent space somewhat recently (ideally the last 5 years). Pick someone who is a bit farther along in terms of stage. Ask them for advice and thoughts when you’re building and raising, they’ll be able to weigh in.
Where can we go to learn more about Star Sync?
Learn more about it here.