Building a Startup in an Uncertain Market
How do you prepare when the rules are still being written?
The process of building a startup company is always fraught with trials, tribulations, and risks. But when the rules are still being written for how you will actually be able to conduct your business, the issues can multiply quickly. Add in a global pandemic and the task can seem gargantuan.
Despite the challenges, this is exactly what Dreamfield has done over the past 12 months, preparing to be first-to-market in the emerging Name, Image, and Likeness (NIL) marketing field for college athletes. As they prepare their offering, which aims to let athletes build their brand by connecting with fans and businesses for opportunities like personal appearances and autograph sessions, they do so in murky waters.
They know that the practice of athletes being allowed to profit from their NIL rights will be legal in their home state of Florida, thanks to legislation signed this year. Beyond that, few details are yet to be made concrete.
Recently, I interviewed company co-founders Luis Pardillo and Andrew Bledsoe about their experience getting Dreamfield off the ground amid the pandemic and uncertain regulations, how it has differed from their previous entrepreneurial experiences, and what lessons they have learned in the process.
The Idea Stage
Every startup begins with an idea, whether it’s to disrupt an established market, recognize and serve an underserved population, or get in at the beginning of an emerging market. Dreamfield was no different, and their experience shows the value of always paying attention to industries that interest you with an eye toward finding opportunities as soon as they appear.
“In 2018 I began to see an article or two pop up about a concept later dubbed NIL,” says Bledsoe, “that, as I saw it, could completely transform the collegiate athletics landscape.” Thus the seed of an idea was born, one that would start to grow when California passed their NIL bill in September 2019. As other states began to follow California’s lead, the idea moved into the realm of reality.
Pardillo tells us he saw an opportunity to help the 480,000 student-athletes across the country, as an underserved community, to make use of the rights they were about to earn. “These collegiate athletes risk so much to pursue their passion for their sport, we want to be able to assist them on their journey”.
The men had worked together in their previous startup, so it only made sense to join forces once more. With the idea and the basis of the team decided, it was time to start putting the pieces in place. But very little has been accomplished throughout history without obstacles in the way, and the year 2020 would be no different.
Lessons From Uncertainty
Startup founders face many types of uncertainty when building their companies, but it’s not often that the uncertainty is so profound and widespread.
The NCAA’s version of amateur athletics has always been built upon the foundational idea that athletes must not receive any compensation outside of the scholarship and related costs provided to them by a university. This was done to limit people taking advantage of easily-manipulated kids, to be sure, but most of the rules jumped the shark long ago.
A fundamental change to such a massive bureaucracy like the NCAA is akin to changing course on an ocean liner: it doesn’t happen quickly or easily. The only “rules” that currently exist for the administration of NIL rights are guidelines adopted by an NCAA working group last year.
Federal legislation has been proposed that could set rules for all NCAA member institutions, potentially rendering the governing body’s guidelines, and the existing state-level laws, moot. So what does a company preparing to open its doors in such an uncertain environment do to mitigate the risk?
“We’ve networked in with some of the most successful professionals in the State of Florida who have their finger on the pulse when it comes to NIL legislation changes,” says Bledsoe. “We’ve hired some of them to assist us in building our knowledge base and when it comes to designing our product in a compliant way.”
Pardillo highlighted another irreplaceable tenet of the entrepreneurial mindset, keeping yourself informed: “Staying up to date on state, federal and association (NCAA, NAIA) changes is something that needs to be researched constantly… doing our own daily reading on the world of college athletics”.
The lessons here are clear: when faced with uncertainty, hire experts whose job it is to know and alert you to potential landmines in your path; and in a rapidly changing environment, always be studying so you have the ability to adjust to meet new challenges and opportunities.
It’s easy to say you can’t afford to hire help, but the cost of not doing so can be much higher. And the everyday minutiae of running your company can overwhelm your chances to keep in tune with the goings-on in your industry, but nothing will sink you faster than burying your head in the sand.
Dealing With the Pandemic
2020 has been a year unlike any other, to put it mildly. With a global pandemic, the associated economic downturn, and lockdowns of varying severities, starting a business seems like a bridge too far. So what obstacles did the pandemic put in their way, and how did they deal with them?
Interestingly, the pandemic has created both issues and opportunities for these entrepreneurs. “The inability to meet in person is definitely a challenge,” Pardillo tells us. “Having resources like Zoom or Go to Meeting is very helpful but can never replace the ability to conduct business in-person”.
Indeed, so much of fundraising for a new business is predicated on the ability to look people in the eye and make them believe in your vision for the company and dedication to its successful launch. While Zoom allows for visual communication, the key elements of a handshake and body language can certainly hamper an entrepreneur when giving their pitch.
As Bledsoe pointed out, however, the requisite moves away from face-to-face work helped to inspire an additional product line for the company. “We added virtual greetings as sort of an MVP+ feature to our offering, as sort of a hedge, not knowing how long COVID could delay the ability of our athletes to do in-person bookings.”
What may initially look like a devastating obstacle for a startup can in fact lead to a new viewpoint on how to conduct the business. And while difficult circumstances can hamper activities as vital as fundraising and generating interest in your idea, there are always going to be avenues with which to adapt and recover. Though it may sound trite, thinking of obstacles as opportunities is never a bad mindset to have.
Lessons Learned
Finally, we asked the partners to expound on what lessons they have employed with Dreamfield that have come from previous entrepreneurial ventures. We wanted to see how those have helped steer them through the current rough political and economic seas. And to cap it all off, we asked how they would define success for their company.
“My previous startups focused on a brick and mortar location to bring people together,” Pardillo said. “For Dreamfield, the focus is more on technology connecting people throughout the country…I feel we can help more people than ever before.” Though the world is becoming more digital every day, the goal and the hopeful end result is the same, finding ways to connect people to solve a need on both sides of the ledger.
Bledsoe has been starting companies since he was 16, ranging from an essay-reviewing internet company to the co-living startup Ollie in New York City. Even with years of experience, he espouses many of the tried and true lessons of starting a business, proving their worth and staying power.
“First, start with a concept that has wide appeal. Second, solve a problem, and even better if you can align your business with newly created rules that allow one to pursue an area never pursued before. And finally, pick a business idea that has the potential for exponential growth over a short period of time.”
So in this day and age, with the world in upheaval from the COVID virus and the rules of the market in which they work far from certain, how will they define success?
“Short term success for Dreamfield will be determined off of our Florida based pilot,” says Bledsoe. “If we are able to sign up every college athlete in the State of Florida that wishes to join the NIL wave, and successfully pair businesses and fans with athletes by providing that marketplace, then we will have achieved short-term success.”
For Pardillo, success is about helping those he sees as being underserved in this market. “Success both short term and long term is determined by collegiate athletes being able to play their respective sport without having to worry about monetary issues. The more we can assist in helping them generate revenue for themselves, by growing their marketability beyond college and beyond even their athlete status, that is what we aim to do every day.”
Wherever the NIL market ultimately ends up in terms of regulations and opportunities, it’s clear that it will attract much attention from established companies and startups alike. Those that have been paying attention will have a leg up on the competition, but their fundamentals will need to be sound. Dreamfield appears to be poised for success due to the experience of its founders, and Florida being first out of the gate.
What comes next remains to be seen.
