So long, 2019!

Once again, it’s the time of year for reflection. 2019 has been a big one for Crux, and over the last few weeks since our inaugural UnConference I’ve been wondering whether our emerging model holds the beginning of a blueprint for other founders. I’m especially interested in whether our structure and streams of revenue are relevant to those entrepreneurs dedicated to creating wealth in Black and Brown communities.

This time last year, Crux was 100% bootstrapped by myself and my co-founder. We were reasonably certain that we’d secured our first investor, the Surdna Foundation, but our ingrained paranoia made us afraid to dream too deeply before cash was in hand. We’d spent the previous two years traveling the US, cold-calling random strangers and talking to anyone who knew anything about virtual and augmented reality, artificial intelligence, machine learning, and spatial computing. There were two common threads from these conversations that everyone seemed to agree on: 1. We were crazy to think that Black artists would take the leap and begin experimenting with XR storytelling; and 2. No traditional investor would be interested in funding us as long as we were prioritizing bringing Black organizations and creators into a high risk, high tech industry.

Fast forward one year, and we’ve held three successful events with nearly 150 attendees, raised $300k with more funds in the pipeline, and are poised to launch not one, but two online platforms in the next 8 weeks. Here are our takeaways so far:

1. Don’t follow the leader on how you incorporate. LLCs seem to be dominating the incorporation conversation for many creative entrepreneurs alongside questions of whether to seek tax-exempt (501c3) nonprofit status. Because we wanted to form a company that was aligned with our mission of shared ownership and social change, we spent at least a hundred hours exploring all of these options. It was a lot of work, but now we have two flexible organizations (a co-op and a public benefit corporation) and a fiscal sponsor, all of which match and allow us to maximize our multiple revenue streams.
2. There is no one-size-fits-all for a company. When we first started talking about XR, everyone suggested that we talk to VCs because the VR/AR industry was so hot. Luckily, we were much less interested in a large capital raise than we were in finding collaborators and advisors who were able to pass our “Marie Kondo” test (“does the idea of working with this person spark joy?”) when we thought about bringing them into our company. As investors have realized that mass consumer adoption of XR is definitely going to be more of an ultra-marathon than a quick sprint to unicorn status, their interest has waned and the XR companies who took VC dollars are stressed.
3. Nurture multiple revenue streams for your business. Conventional wisdom tells founders to behave like elite athletes: start early, pursue your best talent with singular focus, and pray that you don’t get injured. However, the most successful businesses eventually grow to have multiple products and services, so why not chart that path from the beginning? By the end of our second year of existence, Crux will have four streams of revenue, each designed to add energy to the others.

A piggy bank with four revenue streams: co-op dues and member investments, distribution platform, consulting services, and a talent/shared services marketplace.

4. Hire when it hurts. With Crux, a full-time job at Fractured Atlas, teaching a short course at NYU, and trying to stay connected with my family, being a solopreneur definitely hurts. But, I agree with the founders of Basecamp that having a full-time team of one means that things can move more quickly and efficiently than if Crux were a larger team. And, there’s something valuable about learning every aspect of running a business now rather than outsourcing work to folx who are already experts. For right now I’m content to be my own manager, employee, bookkeeper, head of digital marketing, editor, IT dude, and merch designer.

5. Create your own market. Starting an immersive storytelling company isn’t like opening a car wash. Your average consumer is barely aware that XR exists. Because it’s such a nascent industry and the cost to acquire a headset is relatively high, the interest just isn’t there yet. In the interim, and with large companies like HTC, Facebook/Oculus, Amazon, and (reportedly) Apple betting big on XR tech, how can a small business like Crux carve out our niche in the space? Well, we’ve decided to build our own market by investing our time, talent, and treasure in building a deeply engaged community where there currently is none.

So, what’s next?

We understand that no business gets it entirely “right” on the first try. While we wait for hardware to improve, we’ll be focusing on the work that’s within our locus of control, namely:

1. Working 1:1 with Black artists and arts organization interested in incorporating XR into their work;

2. Knowledge sharing and education about XR, intellectual property, circular economies, and other topics that seem to keep rising to the forefront of our conversations; and

3. Positioning Crux as the brand where the #BlackCodes reign supreme.

Thanks for joining us for this wild ride — we hope you enjoyed it!