Death by Party 2013-2015

Part I. The fast rise

The basis of all my follies originated with the desire to merge my creative skills with business so that I wouldn’t have to play by traditional rules. I had started the FOS as an entrepreneurial endeavor, a solution to the collapsing creative industry and the popped dot com bubble. The initial plan for Swellco & Swellco was for a blog network meant to capitalize on the failing local free indie papers. The motivation was always business, not art.

The late pivot of Swellco & Swellco from what had basically become a creative arts cult, back towards the original legitimate business concept may have alienated me from my fringe family of artistic psychopaths, but I no longer cared. I wanted financial stability and needed some normality.

I came out of the other end of the Swellco & Swellco rabbit hole a changed person. I had spent over a year working closely with legitimate marketing consultants and hob knobbing with tech & venture capital people and that experience had sobered me up and sparked my ambition to be part of the real world again.

This time, working with Beth, I set out to meticulously map out a new startup project. Edgy, creative, decadent, yes- but insane and scary… not so much. I had spent a lot of time sitting through startup pitches. 99% of them were moronic and uninspired. The angel investment level tech scene is a sea of farfetched and dubious long shots- I was always appalled by who was getting funded. I started meditating on what would be a safe investment, a smart investment.

My solution was to distill people’s needs down to the basics. Food, Shelter, Clothing. These are the three things that technology can’t displace. But tech was displacing brick and mortar as a sales platform for apparel. E-commerce was the sweet spot between basic needs and the web. At the time, Amazon hadn’t quite crushed everyone out yet, Nastygal was a VC darling and Karmaloop was a longstanding street wear mainstay. I had my niche.

I rounded up some friends and family funding and everything moved like clockwork. I set up a retail clickbait SEO blog network with domains like moneygunsweed.com, hangovermakeout.com, drinkskatefuckfight.com, drinkdancefall.com and pornstarrockgod.com (yeah, I still own these domains so don’t even try.)

Our marketing strategy revolved around sponsoring preexisting event promoters and simply attaching our name to big dance parties around the country. This would function as direct marketing, but also gave us a huge amount of content and instant street cred. Our test run was with a Philly group called the Factory Girls and it was a big baller success.

The first nine months were a blur of tradeshows, photo shoots and long hours of packing orders and organizing SKU protocols. We schmoozed up a couple of angel investors who were on board with little convincing. We moved into our office, set up shop and…

We waited on the check… and waited… our calls were not returned.

Part II. Angel investor nightmares

Something I learned quickly, is that people who want to be perceived as successful, powerful or connected, never say, “I can’t, I won’t, I blew it, this won’t work out, or I failed.” Instead they hide. The first angels were lifestyle ego investors. They were throwing their money around into ridiculously ill advised businesses based purely on their own sense of being “cool people.” Those businesses had all begun to failed in a cascade of bankruptcy, right as we were moving into our office.

It was back to the drawing board, but things weren’t so easy this time around. As doors to VC funds started slamming in my face, I learned an important insight. I had set up Death by Party as a SAFE investment. But venture capitalists aren’t looking for safe, they’re playing long shot roulette, blowing through millions of dollars hoping for the big world changer like Facebook or Uber. I had cautiously devised an undisplaceable pitch, instead of an industry disruptor.

Our runway was running out.

While we were discussing our options, our photographer swaggered up to me and gave me peew peew finger-gun hand sign. “You guys just won the golden ticket,” he said.

Turns out Josh had just reconnected with his absentee deadbeat dad who happened to be a CEO of a billion dollar Hong Kong factory export operation. His father owed him, and he would cash in his one "daddy, if you really love me" ticket if we made him partners. Fuck it, yeah my kingdom for a horse. He insisted on making the pitch to his father himself. I was concerned; Josh didn’t know the business end and was dismissive and smug as I tried to prep him for the harsh CX of a VC pitch.

It took me two weeks of trying to finally get him on the phone, which was a real problem since we had product to shoot. Seems he had sauntered into the shark tank with his hand out, completely unprepared.

“So basically, a couple you just met, offered you part of a company they just started, that you don’t know anything about, if you guilt me into giving them half a million dollars?” He was crushed, broken and said he was reevaluating his career path and he was too embarrassed to continue as our photographer.

Our funding runway was ending at a cliff just ahead.

Then Beth had a random street bump with a VIP regular at a Rittenhouse restaurant she used to manage. He was a legitimate kingmaker tech-world big shot that could and would fund companies on a whim. For a hot second we were back on track, then we fell into a horrible limbo. Chris half-heartedly initiated a ruse that his financial advisor was going to be our investor and he was just helping out. I was ok with that, sure, yeah, whatever bullshit tests he felt like vetting us with, sure, great. But this investor was traveling in Asia and would get back around… sometime.

We waited months for our pitch meeting. This leads us to my second big lesson learned. I had operated under the misassumption that the quality of our work and the strength of our concept would be the key to getting our next round of funding, but a wide network and the strength of those relationships is far, far more important. I’m a hermit misanthrope. I should have been attending networking events, schmoozing and kissing rings, but I didn’t and our investment leads were far and few. So we waited on Chris, and waited.

We had to cut back operations more and more, which only made us look less appealing as sales dropped through the floor and new merchandise stopped replacing old.

We played along with Chris’ ruse and pitched to his “investor” at his office even though it was hi-lariously obvious who was in charge. We knocked it out of the park and as we chatted with them on the way out of his office, I started talking about our party sponsorship marketing strategy. Chris’ face dropped and he became visibly agitated. “Wait, wait, if you are throwing parties, how do you make money? You didn’t say this was a nightlife site.” I was completely confused and basically had to elevator pitch him again, at the elevator.

It took us another four weeks to get an answer. Chris brought us back into his office and this time there was no pretend investor. The year before he had spent $1.5 million on a nightlife scene website. The founders pissed all of it away in a matter of months on bottle service, limos and a “promo girl entourage.” The second Chris heard “promote events,” he was out.

And we were out of money.

III. Calamity, death, doom and Indonesian hackers

Right at the inception of Death by Party, Beth’s mother was diagnosed with cancer. By the time we finally got Chris’ answer, Lois had already entered a protracted, brutal home hospice. We had shut down pretty much everything and were spending most of our time in Central Pa as we watched her decompose in front of us. Could things get any worse?

Then suddenly, out of the blue, we were handed a lifeline to cling to. Bob, one of my contacts from Vegas said he had a West Texas oil family lined up as angels. He wanted a finders fee, and to handle all the investor relations. Dealing with Beth’s mother was becoming a full time job. I welcomed the help.

But we were in a tough spot. The next Agenda tradeshow was only a few weeks away and our term sheets wouldn’t be ready to buy in time for the release of the new lines for the next season. Based on the strength of Bob’s reassurances, we flew to Vegas and ordered over $200,000 dollars in merchandise. As we were leaving, a large order came in from Indonesia. We didn’t do international orders so I canceled it.

When we got back, the Indonesian had wrote me, pleading to fill the order. He said that it was impossible to get dope shit over there, no one would ship internationally. We filled one order, and another big order immediately came in. Another Indonesian, who wrote and said he was friends with the first guy and was excited we would ship there.

I was suspicious, but some cursory research showed that it was a super conservative country where music festivals were regularly raided by the police who would shave the kid’s heads and burn their offensive clothes. We knew someone who was worked as a professional shopper in Brazil, flying to the states to load up his suitcases with designer jeans and cosmetics for wealthy Rio shoppers. It wasn’t hard to accept what was happening, in our darkest hours we needed a miracle and we had it.

The term sheets still hadn’t been ratified when the new merchandise began to arrive, but I didn’t care because we had done $15,000 in international sales in one month. Everyone was convinced we had stumbled across a niche market. We were putting up merchandise and within a week it was coming down.

Then, I got two orders in one day, each for over $2500. They were multiples of the same size, whole inventories of single items and it all seemed indiscriminate. My heart sank as I realized the store was being strip-mined. The first credit card chargeback dispute came that same day.

The credit card fraud filters weren’t set properly on our third party credit card processor. If I wasn’t insanely distracted by my mother in law’s hospice and desperately willing to engage in magical thinking, I would have found out easily that Indonesia is to credit card fraud as Nigeria is to banking scams. Within three weeks, we would get hit for all $15k in charge-backs, which caused the investors to immediately pull, and Beth’s mother would pass away along with Death by Party.