It seemed like a good idea at the time: A husband-and-wife team launching an antiques e-commerce startup after spending years in the vintage furniture world.
But as The HighBoy cofounder Douglas Scott learned, once you set off scaling your business nationally, you start dealing with broader market forces that can quickly swamp your best intentions.
“It wasn’t even like getting the keys to a Ferrari,” Scott said. “It was more like getting an airplane as a gift, and trying to learn to fly it.”
The Highboy won the Herald’s annual business plan challenge in 2015, when the company was in its second year. Judges agreed that the online antiques marketplace represented a huge opportunity, with more than 15,000 antiques dealers and art galleries in the country, representing a $25 billion industry and growing.
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Now, TheHighBoy is shutting down.
“Fifty percent of businesses fail,” Scott said. “You don’t think it’ll happen to you, but that statistic isn’t wrong.”
A host of factors combined to sink the business: Failure to attract new investors, better-funded competition entering the marketplace, and not having good early mentorship.
“It was multi-faceted — I can’t really pinpoint one thing,” Scott said. “So many things changed so rapidly, and we didn’t have the experience or the ability to foresee them and head them off.”
But there are lessons Scott wants to hand down to future entrepreneurs.
Knowing your market, he learned, doesn’t mean you know how to properly run the type of business you’re starting. Scott says they didn’t do enough to find experienced individuals familiar with running an online marketplace in the 21st century.
“If I could go back again, I would have hired a professional, more experienced CEO, and would have scaled back [our] own roles,” he said.
He also admits the company skimped on hiring a proper developer. Scott now says he wishes they’d hired a full-time chief technology officer to whom they could have offered equity.
The company’s ownership structure also became an obstacle. The HighBoy’s initial investment group insisted on taking a 51 percent stake. For that vote of confidence in their business, it appeared a harmless choice to make. But not having the final say over their own business proved costly, Scott said, because new investors only wanted to deal with the founders — not a consortium of individuals uninvolved in the day-to-day.
As the stress of keeping the company afloat grew, cofounder Olga C. Granda, left The HighBoy to pursue her own professional venture in 2015. She is now executive director of Miami New Drama, a theater group. Scott and Granda ultimately ended their relationship as well.
Finally, at least five new players entered the online antiques market — all of them seemingly better positioned than TheHighboy.
“It was too many people chasing the same stuff,” Scott says. “Some had very deep pockets, and we just got outspent.”
The experience has been chastening for Scott, who’s not sure if he has the energy to start another company.
But he is not abandoning Miami.
“I’ve gotten to know so many people on the startup scene — I’m invested here,” he said. “I think the startup scene is growing and getting better.”
2015: Challenge winner
Best advice received
“You need to know your ‘why.’ The Catch 22 with advice is that no one will see things the same way. One person might suggest this direction, another might suggest going the opposite way. At the end of the day, you have to be able to process the different viewpoints and make tough calls frequently. If you start chasing someone else’s suggested targets, those outcomes may not be in line with your goals or vision. Keep coming back to your ‘why.’... Why is your product the best? Why will your customers buy from you? Why will they trust you? Why will you succeed, or why will you fail? That’s your roadmap.”