From Coachella to Disinfecting Wheelchairs, a Startup's COVID Pivot

Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

From Coachella to Disinfecting Wheelchairs, a Startup's COVID Pivot

At the beginning of 2020, LNKBOX, a Los Angeles startup that had quickly established a niche helping major festivals such as Coachella and Bonnaroo with last-mile transportation, was poised for a breakthrough year.

The company had secured over $4 million in bookings for concerts across the country, inking deals with industry giants AEG and LiveNation that would quadruple revenue. It planned to expand from four to 20 full-time employees to handle the rush of contracts.


Then, in Mid-March as co-founder CEO Joseph Bradley was driving his Ford pickup across the country from a gig in Florida, when the pandemic hit. The concert business faced its worst possible nightmare. A company that took three years to build was decimated in days. Bookings vaporized and all Bradley could think about was trying to get recurring payments as close to zero as possible so his once-promising startup didn't run out of cash.

"The wheels fell off and a very full calendar ended up going to zero in 96 hours," Bradley remembers.

But this is not a story about how COVID decimated a promising young startup. LNBOX used the crisis to pivot towards something completely different: maintaining industrial-sized commercial decontamination units which use ultraviolet light to disinfect thousands of N95 masks an hour. The technology can also be used to sterilize medical equipment, professional sports gear, grocery carts — or anything that needs to be made germ free.

As it turns out, Bradley thinks the new company, MK Reactors, will be far more lucrative than LNKBOX and he has no plans to return to the concert business, even when live events resume.

"It was a forced pivot, but with that caveat considered when you do the math the marketplace is much bigger," he said.

Ultimately, a big part of LNKBOX's success depends on getting government approval to sterilize N95 masks, which Bradley hopes to receive in the next month under the FDA's Emergency Use Authorization process. The company won't share the names of any clients yet, but says it is in the process of securing its first large strategic partner to clean durable medical equipment.

"Pivoting from non-regulated space to a regulated space has been a journey in itself," he said.

From Coachella to Disinfecting Wheelchairs

The transition from concerts to decontamination is not as far fetched as it would first appear. Many of the vehicles LNKBOX used to ferry people and goods around concert venues and sporting events were powered by very large lithium ion batteries, which required their own unique way to be transported and stored. To do that, the company built an industrial-sized, climate-controlled lithium ion battery charging reactor inside a 20-foot-high shipping container.

In April, Bradley got the idea that those shipping containers could be repurposed into large decontamination units after he happened to read an article published by the University of Nebraska about how ultraviolet radiation could be used to decontaminate N95 masks. He called the authors of the report to see if his equipment might work and they quickly replied: "How many can you build and how fast?"

"Once we started looking into it we thought this was crazy because we've already built his thing," Bradley said. "What we knew how to do was basically design esoteric tech that was highly portable."

At this time last year, LNKBOX's five-person team was helping the Denver Broncos move people and equipment around and planning for a summer concert season that would see them attending upwards of 20 events. Now, the same group is trying to drum up business with hospitals and get FDA approval. It is an entirely different business in an entirely different market, but Bradley says being nimble is a requisite for any startup executive.

"As people who run businesses we have to constantly triangulate and look at how the market is reacting to your product," he said. "In a world where the marketplace blows up and you don't have any way to do that transition, we looked at what we could control."

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How To Startup: Part 5 - Minimum Viable Product

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Minimum Viable Product
Image by Master1305/ Shutterstock

When thinking about tech giants like Facebook, Amazon or Google, it’s hard to imagine their weak and humble beginnings. When going from nothing to something, the founders of these companies all had similar startup journeys - they started with a minimum viable product or MVP. In the same way you can’t build a house without laying the foundation, you can’t create a successful product without building an MVP.

The Purpose of MVP

One of the biggest reasons startups fail is because founders design their initial product based on assumptions. As an entrepreneur, you don’t want to put an enormous amount of time, effort and money into a product the market may not even want.

Quibi - yes, that Quibi - is an excellent example of this. After spending upwards of $63 million, Quibi never quite found its footing among TikTok, YouTube and its many streaming competitors. The company never ran an MVP or any experimental public beta to test what kind of content and features resonated well with audiences, and simply built a product that nobody wanted or needed. After raising $1.75 billion in venture capital, the company shut down less than a year after its initial launch. This is why starting with an MVP is so important.

How To Build An MVP

By definition, a minimum viable product is a product with enough features to attract early-adopter customers and validate a product idea early in the development cycle. It allows founders to collect the maximum amount of user feedback with the least amount of effort. When building an MVP, you’ll want to keep the following things in mind:

- Answer the right question. It’s important to determine what your central hypothesis is. When Airbnb’s founders wanted to see if they had a viable idea, they didn’t rent out space or buy new beds. They simply tested the question “Will strangers pay to stay in my apartment?” by providing a free lodging experience in their living room with the promise of networking with like-minded people.

- Decide which metrics matter. Identify what will define the success of your product. Common MVP metrics include churn rate, customer acquisition cost, average revenue per user and lifetime value of a customer. However, the data collected should include both qualitative and quantitative insights about how your product is used and what customers actually think about it.

- Actively measure what you are testing. It is important to continuously test, measure and learn until the product is finalized.

- Build internally if possible. It’s easier to meet internal needs and challenges first. For example, the original Twitter prototype was designed for internal users at (the now closed) Odeo as a way to send messages to other employees and view them on a group level. After initial internal testing and positive feedback, Twitter launched publicly in 2006.

- Do things that don’t scale. In this early stage, you have nothing to lose. Create a great experience for initial users and cater to their needs. Put in the extra amount of effort while you continue to build confidence. Talk with every user and every customer, and do things that would never scale once the company gets bigger. For example, Yelp’s founder Jeremy Stoppelman famously went to every bar in San Francisco to pitch them on Yelp in the early days.

Not Great But Good Enough

When launching Zillow in 2006, we had to decide how good is good enough to launch. The first version of the product had Zestimates on 40 million homes with about a 12% margin of error. When launching, we knew that the Zestimates weren’t going to be entirely accurate and mainly just wanted to see how Americans would react to being able to publicly view valuations and information about homes.

We actually held up the Zillow launch by about two months to avoid angry and upset consumers. We spent this time building out an extra feature called My Estimate that allowed users to modify the estimates of their home with information Zillow didn’t have, such as for things like remodeling or significant changes to square footage. We were worried people might not be happy if the estimate was incorrect and they couldn’t do anything about it, which is why we held off. It was a difficult decision to push back the launch, but worth it in the long run. When striking this balance between our MVP and V1, we knew it didn’t have to be great but just good enough to entice users. Now, 15 years later, Zillow has upwards of 100 million homes with about a 3% margin of error, and the product is much more fully evolved.

Key Takeaway

The key takeaway here is that MVP allows organizations to start small, and slowly build up to the best version of their product. When starting Hotwire, we started by just selling airline tickets from a few carriers. Later we expanded to include more airlines, additional flight options, and eventually hotels, rental cars and cruises. But the early MVP was as stripped down as possible. See below for Hotwire’s beta site in 2000. About as bare-bones as it gets.

Image from HotwireAn MVP of Hotwire sold airline tickets from just a few carriers.Image from Hotwire

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admin@dot.la

'It's Almost Winter-Agnostic': At This Annual Gathering of Creators, Recession is on No One's Mind

Kristin Snyder

Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.

Vidcon 2022
Photo by Kristin Snyder

The creator economy is the bedrock of this week’s VidCon convention, which is drawing creators, companies, investors and fans alike to Anaheim to discuss the rapidly growing realm of digital content and entertainment.

To discuss how investors, in particular, are viewing the booming creator landscape, Thursday’s “Betting Big on the Creator Economy” panel featured the likes of MaC Venture Capital partner Zhenni Liu, Investcorp managing director Anand Radhakrishnan, Team8 Fintech managing partner Yuval Tal and Paladin co-founder and CEO James Creech.

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Netflix Lays Off Another 300 People

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Netflix Lays Off Another 300 People
Photo by DCL "650" on Unsplash

Netflix has imposed its second round of layoffs in less than a month, cutting another 300 people from its staff.

“Today we sadly let go of around 300 employees,” a Netflix spokesperson confirmed to dot.LA. “While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth.”

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