Six Months in Limbo (a Good People update)
Hey everyone. We're back. Sorry for the prolonged silence. It wasn't really by choice. It's a tale of ups and downs, fear and uncertainty, hope and despair. In the end, there was soul crushing disappointment...but also a silver lining that has redefined our path forward. So, what the heck happened?
Let us return to November 2018. That was the last blog update we managed. Things were challenging. We were running on vapor, but we also had a number of things in process that we thought would at least give us some runway and get the slow climb to a recurring sales model moving.
Good news, bad news, and potentially awesome news
First, our (former) licensor, the source of our whiz bang technology, was in talks with a serious investor and things had progressed to the point where they were putting everything else on hold to get the deal done. That's good. It's Ethan's father's company. A big part of why we do what we do is our wish to see Art and his amazing technology succeed in a big way. The investor, a mega-successful entrepreneur and company (who we can't disclose). was interested in dumping in serious seed cash with plans to raise more and go big.
But, for the deal to work, the investor seemed interested in a clean slate for their new venture. That could mean the cancellation of our license. That would be bad (for us). But if it was necessary for the deal to go and give the technology the rocket fuel it needs to change the world, then we would have to accept it. I will say it is really difficult to work on a venture with that possibility hanging over your head though.
But wait, there's more. Good People was very much aligned with the values of the mystery investor and could play a valuable role supporting the new venture. Essentially, there was an opportunity to pitch Good People as part of the deal and perhaps get funding and more secure access to the IP we need. Funding plus a stronger IP position plus access to a billionaire's mentorship and network sounded really, really good.
We agreed to help out as much as we could, mostly Ethan. It was a harrowing bunch of months with Ethan wading in to support his father through negotiations and diligence. By the beginning of April, it looked like it was going to go, though Good People's role was still undefined.
Then, suddenly, it stopped. One phone call (and not even from the investor himself), and it was over. A week before we had been talking about the transition and responsibilities for setting up the new venture. Now they were walking away. It is still a mystery to us what actually happened and why the sudden change. But it was certainly a reminder that a deal isn't done until it's done (and then the real work begins).
It would be difficult to overstate how awful this felt for everyone involved, including families and other supporters. The build-up of hope was immense and the breakage it left when removed is very, very real.
So, what's the silver lining?
Following on the collapse of the transaction, we took a hard look at Good People and whether we even wanted to continue. It seemed like an easy place to take the exit ramp. Cancel the license, close up shop, and figure out how we would make it up to our friends & family investors and supporters, not to mention our wives.
But it also clarified one of our challenges and something that one of our advisors had been pushing on for a while (thanks Kyle). Until we secured ownership of the IP, we were going to be hard pressed to convince investors to take a chance on us and our strategic flexibility would be hamstrung by our license terms. We saw an opportunity in the wake of the collapse to address this and move forward.
So, we came up with a new deal, put in a little money and leveraged a lot of sweat, and now own the patents for the Phoenix fan controller.
I'll write again soon to fill you in on what this means for us going forward. Did someone say "pivot"?