Dear Mr. App, move to Cali or die

Why California is leading the app revolution.

Jim Mollica

Here’s the story of a year-long endeavor to build an earth shattering idea for online gaming. It’s not ours, but we certainly helped. This isn’t the startup story that people talk about, and it won’t read "{Name} raises $40 million in Series A funding".

Ok ok. Before I get too far, I came up with a handy little guide that Investment firms can borrow from. ©Rights-Free. I think this would be an excellent pre-qualifier. This would be a great way to weed out all of the noise from us silly dreamy Midwesterners.

Investor Intake Form. Please answer yes or no:

  1. Are you from the Bay Area?
  2. Did you attend Stanford or another IV school (1 semester still trumps an MBA from 99% of other schools)?
  3. Are you age 19 to 25?
  4. Have you ever had a job of any kind (must answer No)?
  5. Can dad subsidize you until age 30?
  6. Was your first job at Google, Apple, Skype, etc. (coffee making counts, we can dress it up)? *if yes, skip 7-9, proceed to checkout.
  7. Does it share videos (hint: must answer yes)?
  8. How many million users do you expect year 1,2,3?
  9. Will you collect tons of sellable, juicy, steamy, personal data?

If only someone would of told us about that list, we would of done it much differently. Instead, it went like so…

It was just another average grey-sky Ohio summer day when I received an email from a certifiable idea man named Mitch. He was referred to me by a mutual friend —my client/his attorney. He followed up with a cryptic email. To me it read like this:

"Can you build me a footballalalal, ewweee fantasticating, gambly, giddy yup stock market game?" - Enticingly Mitch.

I was SOLD. (Un)related backstory… Our eccentric attorney friend is strikingly similar to Better Call Saul (Breaking Bad).Please don’t profile me based on my associations. I enjoy colorful characters.

3 Days later, coffee and bagel time. Mitch proceeded to do his Rain-Man explanation of some muy grandioso dream app. That’s usually how these go. Great idea, foggiest iota of what’s involved to build and successfully launch an app. Mitch was extremely green behind the ears, but he had something big and his timing was spot on. My can-he-afford-us radar was running and all indications said NO. So I went into stealthy, schizo, silent-voice thinking mode:

LOGIC VOICE: Jim, you should bolt

DREAMER VOICE: Hang on, feel it out a little more.

LOGIC VOICE: He’s sharp, MBA, quick-witted and hard-working, but…

DREAMER VOICE: …Just ask about budget.

ME: Hey listen Mitch, I’m still not quite sure what this is, but here’s an idea, idea, idea, consult, consult, idea, how-to, insight, DevOps, process, etc..

2 hours later…

ME: So, do you have a budget in mind?

MITCH: I understand that building brands and apps are your wheelhouse, so I’d be interesting in hearing your thoughts on pricing.

MITCH: sensing my pause Jim, I can see you’re somewhat of a savant, so I want to be honest and tell you that I have a couple other firms bidding on this, but you’re by far the best fit.

LOGIC VOICE: Ughmbllshit [clearing silent cough throat]. Of course he doesn’t have a budget, he’s new to this world. Knowing that, he probably needs funding and partners."

DREAMER VOICE: He’s articulate, intelligent, already stared cancer in the eye and kicked its ass, and holds the keys to a brilliant concept.

CHORUS: let’s do this.

I won’t bore you with the details of the year long R&D. It was a lot of late nights and 7-day work weeks. In the end, my team and I had helped Mitch get to a point where he had an undeniably brilliant, interactive, multi-device social game experience that allowed you to trade pro-athletes on an open market real-time during and after games. It’s a crazy ridiculous idea. The target was online gamers, gamblers, sports fans and stock day-traders. It had/has tons of cross-market concepts, spinoffs and a rock solid model for monetization. Believe it or not, it makes perfect sense. Polls and early beta models were conducted by himself Mitch Truly and certain high level connects in the sports, gambling and trading circles. The responses were "Mikey he likes it, he really really likes it". He hired IP legal, registered for patents, had CEO board members and mentorship. Armed with all the research, our prototypes, and a bulletproof pitch deck, he shot it around to numerous Midwest investors and some national outfits. One was an early investor for Apple® with global branches and a roster of drop-name apps under their umbrella.

I will say this, after extensive brand development, user experience design, gameplay design, user interface design, beautifully thought out pitch decks and print supplements, we still somehow failed to meet a certain magical criteria. Funding at this stage is critical to pushing a full scale build-out, acquiring real-time sports stat feed licensing agreements and an initial marketing push. That’s not to say that Mitch didn’t raise capital. We also took some shares as trade for services. It’s a rarity for us, but if an idea is great, I have a hard time listening to ’Logic Voice’. Please note that it takes about a million smackeroos to get people to embrace a new platform application. Ever wonder why you hear of some video-sharing App, out of 1000 to the tenth power, that makes its way to stardom? It can’t be because they’re the first to devise clever ways to share videos of cats amongst virtual friends.

Mitch is relentless errr steadfast I believe is the right word. He continues to push the development along, but he’s only halfway up Everest. Here’s why:

After talking with numerous CEOs and Ohio based Angel investors, it became ’punch me in the mouth’ obvious that Midwest investors don’t fund ideas. At no fault to them, they are simply too pragmatic and need proof of concept before they go down the rabbit hole. Our entire Midwest economy is built around tried and tested brick-n-mortar industries like banking, insurance, construction, medical, automotive, transportation etc. I’m not saying nothing innovative is happening, but it’s primarily related to medical and or bio-tech. So how do you explain Fantasy Football, online gaming or "users are worth a lot of money" to Harvard PHD guys working off of Grants earmarked for curing diabetes? Answer: Ya can’t. It didn’t matter how articulate we made our pitch. Our market data, trends, industry insights, competitive analysis, and glorious charts were proven useless.

Now what? Plan B. Let’s talk to guys that do get it. Unfortunately, we didn’t make it past "Where are you guys from?" —VC. "Cleveland, Ohio" - Mitch/Me. "click". Yes I’m exaggerating. We met formerly and several of them shared insights and even pitched themselves to us. However, they explained that Cleveland simply isn’t the place for this idea to flourish. Silicon valley has a vast talent pool, experience and established resources with a historically successful track record. In light of this newfound knowledge, all we really needed was the prototype sans business plan/pitch deck, right pedigree and a Bay Area zip code. (to be continued…)