Though seemingly counterintuitive to start at the finish, the end is important. The end gives us answers. The end gives us insight. And this end is actually the beginning – first chapter over, next chapter eagerly waiting to be drafted. These are the conclusions drawn from the experiences. The costs of those experiences totaled just over $14M; but more importantly were the collateral damage costs on relationships, health and sanity. My name is Ryan Hogan, and these are my stories…
I knew this moment was coming, it was only a matter of time. Reed Street Productions had grown from a simple idea of immersing people into a post-apocalyptic interactive experience, to bankruptcy in three short years. In business speak, our revenues surged from $733k in 2011 to $8.3M in 2012, then plateaued in 2013 to $5.5M (YTD Q3). Our run was over. Were we slow to pivot? Did we fail to acknowledge the changing landscape in the obstacle and adventure racing industry? Or was our event the type you only do once regardless of experience quality?
None of that mattered now.
I called my senior team in early on October 30, 2013. We met in the makeshift conference room (“makeshift” because we couldn’t afford our $30,000 per month office, so six weeks earlier we packed our belongings and made the warehouse home).
I made the decision the night prior – but the four others sitting in the room already knew what was coming. We had spent the past couple months optimistically stretching payment terms, pleading with our vendors, and essentially producing Run For Your Lives events on credit.
I didn’t start a company to be in this spot. We didn’t work our asses off for years to hurt good people. No wonder promoters get a bad rap. How did we get here?
There was no pre-planned strategy for winding down the company – we even had team members in Phoenix, AZ, preparing for the next event in three days. But too many vendors had pulled out for us to successfully execute the next event. The five of us got up from our chairs and knew exactly what needed to be done.
I typically prepare speeches days, sometimes weeks in advance. But this one was hastily thrown together on my iPad the night beforehand. I couldn’t hold the tears back as I addressed a majority of our team for the last time:
For almost three years now, I have woke up countless times throughout the night and checked company performance. Last night, I shut down registration for Run For Your Lives. And as of noon today, the doors will shut for the last time at RSP.
First off, I want to apologize – to everyone. Not some more than others, but to everyone equally. Some gave this company everything for the past three years, others gave up cushy jobs in hopes of building something great. And ultimately, we all risked a lot in hopes this day would never come. I am sorry I let you down.
Know that decisions made over the past twelve months did not lead us to today – it was three years in the making. My projections were grossly off, we budgeted like the U.S. government, the market flat-lined, and we are simply out of money. If anything, we made it this far because of discovered and led operational efficiencies, as well as inefficient marketing faucets turned off as quickly as possible. This wasn’t one or two people contributing, this was a culmination of everyone’s effort. I am extremely proud of you.
To address pay – I’m going to do everything in my power to get next week’s pay out. Health benefits were pre-paid up to next month so there is a little time. I am willing to write a personal recommendation for every individual in this room. I am also advising Red Frog Events, Human Movement Management and Tough Mudder of our situation as they may be interested in some or all of you. As you probably assumed, our email accounts will be disabled after today.
[Susan] is going to address some HR issues now, [Pat] will be working to tie up loose operational ends – such as misplaced staff – and [Chris] will be working on consumer messaging before we officially shut everything down.
I can’t thank you enough.