By Max Huc and Sam Boochever, co-founders of 1Degree
Like most nights as new roommates at the University Virginia Darden School of Business, we were kicking back in our apartment, talking about potential business ideas in an effort to follow our passion for entrepreneurship and avoid joining the corporate rat race. As we discussed a wide array of problems and issues hindering our society, we stumbled upon a startling headline about a woman who paid $2,000 to take a selfie with rapper Meek Mill. It immediately dawned on us that people would go to great lengths to access and connect with their favorite Influencers (i.e., celebrities, athletes, musicians, and other public figures). We knew that with the proper execution, we could capitalize on this huge market opportunity, spur philanthropic giving in new ways, and create connections that people never imagined possible. After an hour of bear hugs and child-like exultations, we got to work.
A month of research, iteration, and ideation led to the basic structure of our business, 1Degree, that still exists today. 1Degree provides Users the opportunity to video chat live, directly, face-to-face with their favorite Influencers, anytime and anywhere. Here’s how it works:
1. Follow your favorite Influencers for the opportunity to video chat with them.
2. Receive a push notification when an Influencer you follow creates a live auction of back-to-back two-minute video chats.
3. Bid on each two-minute time slot to video chat directly with that Influencer.
4. Win a chat slot by being the highest bidder or the first person to reach the $200 bid cap.
5. Voila! Chat face-to-face with someone who influences your life!
6. After your chat, the Influencer can donate the proceeds to charity and message you if he/she would like to continue the conversation.
At the end of the first semester, we were confidently able to defend our business plan to the scrutiny of our business school classmates and each of us invested a significant portion of our savings to develop the beta product. In an ideal situation, we would have found a technical co-founder to avoid a lot of the upfront costs. However, with a tight window to develop an MVP (minimum viable product) and launch the product by the start of summer, we had to find an alternative route. Therefore, against the advice of many of our peers and professors, we decided to contract out the development. We hired Tim Wang (not his real name), a 19 year old development and UX prodigy, based in LA.
The pitfalls of remote development immediately became apparent. To collaborate and iterate effectively, we had to routinely stay up until 3am (knowing we had class at 8am) to work with Wang in LA, as if we didn’t have enough on our plates already with the demands of a top 10 business school. It was like having two full-time jobs. Moreover, as a result of our lack of proximity, we were unable to clearly establish boundaries and manage the framework of our working relationship. We had our hearts, souls, and summer internship prospects wrapped up in the success of our app development . . . and Wang was playing us. It was a constant battle to get him to routinely and reliably upload a sandbox version of the app, which would allow us to track progress and test new code. We flew to LA over our spring break in mid-March and, despite being way behind schedule, we remained optimistic that after two weeks of sitting side-by-side with Wang, our product would still be ready for our April 4th launch date.
On April 4th, Sam Dekker of the Houston Rockets was scheduled to conduct our first auction. He wanted to run a March Madness Final Four campaign (his former team, the Wisconsin Badgers, had made the Final Four the previous year) to promote his new basketball camp. He would use all the proceeds to provide scholarships for kids who couldn’t otherwise afford to attend his camp. We also onboarded a handful of other Influencers including NBA and NFL players, a Miss USA winner, and a winner of America’s Next Top Model, who were all scheduled to conduct auctions subsequently thereafter. In a few short months, not only had we onboarded a handful of Influencers without a product, but we had also received a verbal commitment for a $300,000 angel investment. Business was booming!
Our spring break in LA could not have been more productive as we met with additional Influencers, talent agents, industry gatekeepers, investors, and developers. We also made major strides with Wang. Whether this was the result of the synergies of proximity or the fact that we were both sporting Grizzly Adams beards, who knows? Yet, despite the progress with development, our product was still not finished as we left LA and returned to UVA for the final semester of our first year. Citing trouble in his personal life, Wang asked us to pay him in advance for the remainder of the project. In an effort to keep him happy and encourage an expedited delivery (we only had two weeks left before our scheduled launch date), we obliged.
As soon as we left LA, Wang absconded with our money and went M.I.A. Man, were we naïve to pay him in advance of delivery. Consequently, we lost business, our angel investment, our credibility, and our momentum. Nevertheless, despite the recent blows to the company, our confidence in the viability of our product and our ability to execute had not waivered. We cut ties with Wang and began the process of reclaiming our up-front investment from him. Then, with the help of our technical advisor, Narek Khachatryan, we quickly transitioned development to Earl Lacsamana, a seasoned enterprise software and mobile developer. We revised our expectations and set our new launch date for the beginning of the summer.
To focus our full attention on the app, we put a halt on business development and outreach. Our momentum started to return. We were selected as Silver Medalists and an “App to Watch” at the 2016 App Idea Awards Challenge and selected as finalists (the only Darden students) to pitch in the University of Virginia Entrepreneurship Cup (E-Cup). We were also the first-ever first-year Darden students to audit a second year class, Darden Venture Projects, a startup accelerator course taught by Village Capital. We audited this class to better prepare us for our summer in LA even though we were swamped with our required course load. As a result, after initially rejecting our application, the UVA iLab Incubator agreed to let us pilot LaunchPod, the first non-residential iLab program. Our hustle around campus was beginning to pay off. Acceptance into the iLab was pivotal because it provided funding that helped offset the opportunity cost of forgoing a summer corporate internship and fund ongoing development and other business expenses. As the summer approached, everything with 1Degree was looking up.
The final semester of school, however, was a whirlwind. Juggling class, business and whatever bit of a social life we had became a circus act. The late nights returned as we worked with Earl to clean up the faulty code and build out the remaining feature sets. Earl’s talent was evident, but it was again clear that we were losing efficiencies by not working side-by-side. We needed to get back to LA as soon as possible. With this in mind, we finished our exams early and literally left Charlottesville in the middle of our final presentation, without even saying goodbye to our friends. As our classmates were taking finals, enjoying the last few days of the semester, and gearing up to travel the world before their internships started, we were already in LA working our asses off to make 1Degree a reality.
We drove from Charlottesville to LA in two-days flat with an air mattress in the back of our CRV so we could trade shifts driving throughout the night. Believe us, the CRV air mattress is just a comfy as any Motel 6. When we arrived in LA wearing the same clothes as when we left Charlottesville, our accommodations didn’t improve much; we both were sleeping on the couch in a friend’s living room/kitchen and, for the next two months, we worked 15 hour days with Earl, seven days a week, at the famous Swork Coffee Shop (thanks for taking us in this summer — we won’t forget it!). Pulling all-nighters was commonplace. We were working so hard that most days we even forgot to eat. It was pure insanity, but not a single second felt like work. On June 15th, after five weeks of working around-the-clock, we submitted our beta product to Apple’s App Store.
Apple rejected us. Two of the most central features of our app, the charitable donations and the live auction bidding mechanism did not meet Apple’s requirements. First, Apple doesn’t allow in-app charity donations. This was a relatively easy fix as we could auto direct the user to an external website. Second, any in-app service (our video chat is an in-app service, whereas Uber, for example, is an out-of-app service) needs to use Apple’s proprietary iTunes payment system. This posed three major problems.
- Apple takes an automatic 30% cut of all proceeds.
- Payment is not automatic as a User needs to input their iTunes password after winning an auction (this means that purchase is not guaranteed upon winning an auction).
- Apple has preset payment tiers, which reduced our dynamic custom bidding process.
Despite months of research, extensive planning, and a thousand conversations, there were still major undiscovered flaws in our product. We thought we were dead in the water. How did we overlook this? In our minds, the 1Degree journey was over, as the essence of our concept wouldn’t work given these constraints. For 24 hours, all was lost.
However, the value of surrounding ourselves with a strong team became dramatically apparent in this moment. Earl saved the day. His bidding/payment solution creatively navigated Apple’s draconian rules while maintaining the integrity of the concept. Redesigning the auction process and bidding mechanism took another two weeks of round-the-clock development, but, on July 1st, we submitted to Apple again. And . . . we were approved! Hallelujah! Now, not only are we the first app conducting live Influencer video chats, but we are also the first app conducting live auctions within Apple’s ecosystem. The silver lining in all of this is that the barriers to entry are dramatically increased.
As is typical in the life of an entrepreneur, our excitement didn’t last very long. In the test environment, payments were working flawlessly. However, even though we had been approved by the App Store, payments in the live environment were not working using Apple’s payment system. We discovered that the problem was occurring due to a delay in the time that it took Apple to generate a receipt token signifying a successful payment when moving from the test to the live environment.
Fixing the payment mechanism proved to be a game of trial and error, which could only be tested in the live environment. It would take us 15 minutes to tweak the code and then, to test our solution, we would have to wait two days for Apple to approve the newest build. We were in Apple purgatory. Despair set in. Progress halted. We felt helpless. These were some dark days. We tried to stay positive and stay productive, but a lot of the leg work had already been done in preparation for the June 15th launch date. We couldn’t even enjoy other activities as a form of distraction because our lives and happiness were intertwined with the success of 1Degree. Despite being single men in LA, nothing else mattered. We tried going to the beach one day, but even that felt empty, stale and listless. Notwithstanding the growing list of interested Influencers, it was looking like we would still have zero auctions completed at the end of the summer when we returned to school.
It took twenty days of tweaking, submitting, waiting, and hoping to get it right, but, at the end of July we solved the payment issue! All the struggles to get to this point were instantly forgotten. Our entrepreneurial high was back. The app worked! We were back in the game and firing on all cylinders.
Marketing the app never posed a challenge even though there were many ups and downs throughout the development process. With the help of our CMO, Givon Crump, and our friends on the West Coast, LA was our playground. We attended the ESPYs, the Maxim’s Hot 100 party, 1Oak’s Official Roc Nation Party, Drake’s house for Memorial Day, Future’s ‘Wicked’ music video shoot, etc., and the response was amazing! Being in LA, the epicenter of the intersection of media culture and technology, 1Degree’s value propositions were easily understood. More often than not, Influencers were pitching us to join the app before we even finished explaining the concept. As soon as our technology was in place, it was off to the races.
On July 29th, we hosted an exclusive launch event with ten hand-selected Influencers, with a combined social media following of over five million. All aspects of the event were planned meticulously, down to which Influencer was going to conduct a demo auction and which team member was going to win the auction. During the live demo auction, there was a buzz of excitement around the room as everyone was bidding feverishly to outbid the person sitting next to them. Everything was running according to plan, but, as the auction came to a close, we were absolutely terrified that the app had crashed because no one on our team nor anyone else in the room had won the auction as planned. We nervously held our collective breaths as the timer for the first chat continued to countdown. This was live with real Influencers. Our reputations were on the line . . . 5 . . . 4 . . . 3 . . . 2 . . . 1 . . . BOOM! Our buddy from Chicago surprisingly appeared on the other side of the video chat! He had unknowingly outbid us all. The room erupted and the power, excitement, and spontaneity of 1Degree was illustrated in way that we couldn’t have scripted. It was official, 1Degree was born! Now, GO DOWNLOAD THE APP!