Martin here. Welcome to another edition of Founders’ Hustle!
I produce content about the “hustle” of entrepreneurship and building startups.
Today I’m sharing the truly remarkable story of how a founder in the hospitality industry lured and closed investors to back his vision.
He spent $400k and several years pursuing investment. 💸
His entire house became a “wild’ prototype for his business idea. 🙈
Investors told him he was crazy. 🤪
Raising money to explore an idea is tough. Particularly if you are a first time “unproven” entrepreneur in that market or industry.
Founders often have to “go the extra mile” to convince investors they have a business model worth pursuing and the talent to make it happen.
Common ways of demonstrating this are to hire “rockstar” co-founders who inject a ton of credibility into the venture, or, by building and shipping a basic product that “validates” a hypothesis. Preferably, both.
In other scenarios, putting together a “prototype” which conveys the business and product vision helps a ton.
One of my favorite stories in this regard is that of Steven Schussler. It’s “wild” in multiple senses of the word.
I read his book “It’s a Jungle in There” years ago and feel compelled to share his journey.
You probably don’t recognize him by name. But, as a hospitality entrepreneur, you may recognize some of the products and experiences he has created.
Most notably, he is the founder of Rainforest Cafe. 🦍
Also T-Rex Cafe, Yak & Yeti Restaurant, Betty & Joe’s, Hot Dog Hall of Fame, Galaxy Drive In, and Backfire Barbeque. These all came later, after Rainforest Cafe was already a “hit”.
Before all of this, Steven had experience running small businesses but was “unproven” in being able to build a venture-scale company.
Back then he had a burning passion to create a rainforest-themed restaurant, but not the capital to make it happen. It’d cost millions of dollars to pull off.
Investors didn’t care too much for his idea, either. They just didn’t “get it”.
Themed restaurants like Hard Rock Cafe and Planet Hollywood were already a “thing” but what Steven was proposing was unconventional and another level up in terms of atmospheric immersion.
“For years, I wanted to create a themed restaurant based on the tropical rainforest. It started back when I was a teenager.
The problem was getting investors interested in my idea. Just talking about the project was getting me nowhere.”
Stuck between a rock and a hard place, what did he do? 🤔
Steven came to the conclusion he needed to do something “dramatic” and “impactful” to convince investors to back him and his idea.
He figured the best way to convey the experience of dining at Rainforest Cafe was to build a prototype.
“I knew no venture capitalists were going to invest their money in my far-out concept without actually seeing it, so I transformed my house into my vision of what a rainforest restaurant would look like in order to make them believe my dream.”
— Steven Schussler
Makes sense, right?
If investors had a fun time enjoying the experience, maybe they’ll see a business case. Plus, it would demonstrate Steven was resourceful, committed, and capable.
There was just one problem.
Steven had nowhere to build the prototype. He didn’t exactly have an empty warehouse or restaurant just “lying around”.
But, he did own a house in the suburbs — that he lived in. 🏠
Incredibly, Steven used this to build his Rainforest Cafe prototype!
“I turned my suburban home into a tropical rainforest. I created a jungle home smack dab in the middle of my residential neighbourhood.”
— Steven Schussler
At this point you may be thinking he converted a greenhouse, garage, or conservatory into a rainforest-themed dining experience. You know, something isolated away from the main rooms used in the home.
Oh no. This was no half measure.
Over the course of three years he transformed his entire house into the “first” Rainforest Cafe — including the bedroom he slept in. 🙊
Jungle foliage, which consisted of various types of tropical vines and plants were hanging everywhere. A thirty-five-foot waterfall emptied into a “river” that snaked through the house.
This was accompanied by a 12-foot neon “Paradise” sign, rock outcroppings, mist that rose from the ground, a vine-covered thatched hut, tiki torches, and a mock-up of a gift shop with rainforest merchandise inside.
That’s just the foundation.
Amongst that Steven added a full-size replica of an elephant and fifty different animatronic creatures — alligators, gorillas, and monkeys. 🐊
Twenty sound systems and a plentiful collection of lights and fog pumps were used to recreate the noise and ambience of a rainforest.
Not convinced this was enough, Steven added real live animals as well.
This included 40 tropical birds, tortoises, a baboon, an iguana, and ten 300-gallon tanks filled with tropical fish. 🐟
His bed even had a waterfall behind it. Surrounded by mist and birds, it was constructed to give the impression it was suspended from a tree.
“Every room, every closet, every hallway of my house was a “scene”: an attempt to present my idea of what a rainforest restaurant would look like in actual operation.
My house became one huge theatrical set, a life-size stage to visually present my entrepreneurial vision.”
— Steven Schussler
Steven admits “it wasn’t easy” creating this life-sized prototype in his home.
Just over $400,000 was spent transforming his house to the point where he felt it was “ready” to present to investors.
Excluding the obvious impracticalities of living like this, rooms were knocked out, maintaining the equipment was a chore, and co-habiting with so many live animals was problematic. The humidity destroyed his wallpaper.
That’s just the start.
His “neighbours weren't exactly thrilled to be living near a jungle habitat”.
The situation got tense. 😬
They formed a watch group and purchased walkie-talkies to update each other on Steven’s latest activities.
One day, the Drug Enforcement Administration showed up in force to raid his house. Due to the high electricity bill, they thought he was growing marijuana — a common indicator.
What they discovered, a tropical rainforest, astonished them even more. 😮
This was topped by quarrels with his gas company.
For some time, Steven hadn’t been paying his bill since every penny was going into theming his house.
Eventually they shut off his supply. But, he found a way to reconnect it.
This happened several times.
It reached a point where the gas company had had enough.
They sent out a team to dig a deep hole in his road. By doing this they could access the main valve supplying gas to his house and put it out commission, cutting the supply for good.
At that point it was early winter. Without gas Steven’s animals could die. He was in a bind and out of cash.
After all of the money, time, energy, and emotion put into pursuing his vision it was starting to come undone at the most basic level — an unpaid gas bill.
He nearly cracked. 💔
But, he pushed on.
Through will power and passion, Steven raised the funds needed to pay his debt and begged the gas company to reconnect him.
They agreed and the moment of crisis was resolved.
But, it did not come without internal struggle.
“I remember looking in the mirror and wondering if I was really crazy. I told myself I was neurotic. It was an emotional time.
What got me through was passion, pure and simple.”
— Steven Schussler
When Steven finally got his house to the point where he was happy to demonstrate his vision to investors, closing investment did not come quickly or easily.
Quite the opposite.
One investor he courted was Lyle Berman — a professional poker player and gaming executive.
After establishing contact he invited Lyle over for a tour of his house. It happened early one morning.
Steven met Lyle at the front door dressed as though he was on safari — head to toe in khakis — with a parrot mounted on his shoulder. Inside a baby baboon, named Charlie and wearing a dress, greeted him.
After a brief encounter the tour concluded and Steven asked Lyle what he thought.
He said Steven needed a “psychiatric examination” and there’s “no way” he’d invest in the idea.
But, Lyle asked if he could bring his kids over to see the house.
This set in place a chain of events that eventually led to an investment.
Lyle kept coming back with his kids, parents, friends, and business partners.
Ultimately, it was a fun experience and the visit was noteworthy enough to share with others via word-of-mouth. These are of course fantastic attributes for a restaurant concept.
Acknowledging this, Lyle eventually bought into the idea and raised the capital needed to launch Rainforest Cafe commercially.
But, it took a while to get to this point. 📆
Enough time to make many give up.
“There were times when I truly wondered if my rainforest dream would ever become a reality.
After Lyle visited my house twenty times in two years without committing himself, you can be damn sure I was frustrated.”
— Steven Schussler
Steven Schussler’s fundraising journey is inspiring in many ways. Most of all his commitment and passion.
There are a few lessons here.
The first is creative drive. 🎨
The barriers between where we are and where we want to be can be overcome by creativity and resolve.
We’re cognitively biased to copy conventional routes to success, which are overcrowded. This places artificial constraints on execution methodology.
There’s a lot of value to be unlocked in embracing the unconventional and testing alternative strategies.
What might seem “crazy” to many could turn out to be a useful mechanism to achieve a difficult objective. Turning one’s house into a rainforest certainly qualifies in this regard.
Founders should routinely question what strategies they are utilizing to achieve their goals through a lense that embraces the unconventional.
Is there a more effective or deterministic approach? Creativity is key. This gets attention.
The second lesson is investor persistency. 🤑
It took two years from first showing Lyle Berman the Rainforest Cafe prototype to eventually closing the investment sought.
Many would have given up after a few months. He either likes it or he doesn’t, right? Not quite.
Building a relationship with investors can be critical to securing funding. Sometimes, it takes time for them to gain conviction and a comfortable level of familiarity with the founder(s).
The third lesson is cautionary. ⚠️
Steven risked all of his money and turned his life upside down for several years in an attempt raise money from investors. There was not even a functioning business at the end of the process or a means to grow organically.
That’s fine if it works out, but if it hadn’t he’d have been left with an expensively and exotically decorated house and zero customers for his business idea.
These events happened three decades ago, so the now popular “lean startup” framework and customer development-led methodology wasn’t exactly a “thing” back then. Nor was early-stage capital so abundant.
Today, founders in Steven Schussler’s position can utilize other approaches to test similar concepts much faster and cheaper.
This will generate paying customers prior to closing a financing round, which will also come much sooner.
For example, by utilizing “light-version” pop up experiences, engaging with customers online, and building CGI representations of the product vision.
See you next time,
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