One of my goals for 2020 was to wrap up some entrepreneurial side projects so that MarketBeat is the only company that I have an operating role in. There were a couple of little websites that I got rid of and a real-estate investment club that I was part of that disbanded, but GoGo Photo Contest was my only side business that generated a meaningful amount of revenue. GoGo Photo Contest helps animal shelters raise money through an online fundraising platform. It is a great business doing great things for animal welfare groups across the country, but it just did not make sense for me to continue to be part of the company given my limited involvement and my continued focus on MarketBeat.
I sold my ownership stake in the company to the other two co-founders, Jason Shea and Stevie Shea, at the end of the last year. They had been running the company for several years without operational help from me. They were not taking a salary outside of their ownership distributions. I did not feel it was fair for me to get paid the same as they did when they were doing all the work, so I sold my stake to them for less than market value as a way to compensate them for their work over the years and set them up for future success. Here’s the story of the business.
A Brief History of GoGo Photo Contest
In 2005, the Sioux Falls Area Humane Society approached Jason and Stevie about taking their photo contest online. Their contest had a donate-to-vote concept, where anyone that donated $1.00 to the humane society, would get one vote in their photo contest. The idea is that people would submit pictures of their pets to the photo contest and encourage their friends and family members to make a donation in honor of their pet. At the end of the contest, whoever’s pet received the most votes (or the most donations), would get a donated prize. These contests were often tied to calendars, with the top vote-getting animals featured in the humane society’s annual calendar.
Jason, Stevie and I all worked at a marketing firm in South Dakota. Jason joined the company before I did and brought the photo contest concept with him to the firm. The story I was told was that the company we worked for was supposed to buy the photo contest business and associated intellectual property, but there was never any payment made or contract signed. The company we worked for just kind of subsumed the photo contest business and did it quite well. Fast forward a few years, I left the company to build MarketBeat. Jason left to go work at another marketing agency. Stevie eventually came to work for me at MarketBeat.
We all had lunch once day in 2013 and decided to start up the photo contest business again under a new name. Our former employer did not like that idea, which ultimately led to the one and only time I have ever been sued over a business dispute. The lawsuit went nowhere, and we ultimately settled it for a nominal amount of money. Then, we got to work building GoGo Photo Contest out as a business.
My involvement in GoGo Photo Contest was helping Jason build out the software platform, accounting, and marketing. The marketing strategy I developed was simply cold-emailing animal welfare groups and asking them if we could help them raise money for their non-profit. After we had ran a few dozen successful contests, word of mouth took over and the platform started to take off. There wasn’t a lot of ongoing development work needed, and the marketing strategy was set in motion, so my involvement in the company waned after the first couple of years.
Jason and Stevie continued to execute on the business, nailing contest after contest. Not every contest was a success, but they have run more than 2,400 contests over the last seven years. GoGo Photo Contest helped animal shelters across the country raise more than $18.5 million during my time with the company, mostly thanks to the innovative ideas and consistent execution that Jason and Stevie brought to the table. GoGo Photo Contest had its best year ever in 2020, and I wish them nothing but continued growth and success.
As with every business, you learn lessons that stick with you as you go. Here are a few lessons I learned during my time as an owner of GoGo Photo Contest:
- Be careful about agreements you sign with your employer. We could have avoided a lawsuit over the photo contest business if there was a better agreement in place between Jason and our former employer and if Jason and I had not signed questionably legal non-compete agreements. Of course, when you are starting your first full-time job you do not always think about how any agreements you sign may impact you later. Ultimately the lawsuit was a small bump in the road for our business, but it is a great reminder for others.
- Write-up your partnership agreement in advance. Before we started the business, we hammered out a 3-page partnership agreement outlining who would do what in the business, what money each person was contributing, how decisions would be made, how the company would be structured, and what would happen in the instance of death, divorce, or business disputes. Since all of our expectations were written out in that document, none of us were ever disappointed in each other for not doing something we said we were going to do up front.
- Business partnerships are long-term personal relationships. You would never marry someone you met 90 days ago (or would you?), and I do not think you should get into business with someone you just met either. By the time Jason and Stevie and I partnered, we had known each other for five years. We knew exactly what we would get and would not get out of each other in the business. There were not any surprises because we had been around each other for so long. I highly recommend that you know someone for at least a year before starting a business partnership with them.
- Software platforms will not grow without marketing. One of the main reasons GoGo Photo Contest worked initially is because I compiled a massive directory of animal welfare groups and emailed them about our platform once every other month using language that sounded a lot like personal outreach. The platform we built was solid, but nobody knew about it until we started virtually pounding the pavement and letting every potential customer know how we could help them.
- Partnerships require equal commitment among partners. Jason and Stevie were all in on the photo contest business, and I was all in on MarketBeat. I helped where I could, but they put in way more work than I did. In hindsight, they should have taken a salary in addition to their owner draw to make the payouts of the company’s income more equitable. Communicating with them more often about how everyone felt about the ongoing business relationship would have been wise too.
- Business regulations are a real thing. A couple of years into the business, someone that worked for the state of Utah decided that we needed to register as a professional fundraising organization in their state. We are not based in the state of Utah, but that didn’t matter to them. It became a bit of an ordeal, and we had to get our attorney involved. Eventually, though, we worked it out. If you are going to operate your business nationally, it’s good to spend some time seeing how your industry is regulated in the major states you will be operating in.
- You should always start a business with the end in mind. Every business is going to come to an end at some point, whether it be through a sale, a death, or even simple business failure. When starting a business, ask yourself “How long do I want to run this thing for?” and “What happens when I don’t want to run it anymore?” For this business, the exit strategy was always making Jason and Stevie the full owners so that the business could be their full-time jobs. It was their baby, and I think we all knew that. When it was time to make a change in ownership, we all knew how it was going to go, it was just a matter of working out the details.
My time with GoGo Photo Contest has come to an end, but it was a powerful and formative journey. Hopefully, these lessons will help you with any business partnership you are considering. And, I wish Jason and Stevie great success with their business.