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What happens when you approach the end of your runway? It’s a scenario no start-up founder wants to find themselves in.
Ben “FishStix” Goldhaber and Chris “ChanManV” Chan started Juked in 2019 with the goal of building an inclusive community platform for esports fans. Juked originally launched as a web-based platform. However, it truly gained traction in early 2022 when its app launched on iOS and Android. By July, nearly 16,000 esports fans were using the app.
Juked knew it would need additional capital to fund further development and began pitching investors on a multi-million dollar seed round.
And then the world destabilized. Stock and crypto markets fell. The war in Ukraine continued. The Fed hiked interest rates. With uncertainty growing, investors changed how they were evaluating early stage prospects.
“Ultimately, our metrics were only ‘good’ and not ‘great’ in a fundraising environment where only the very best companies were getting funded. The end result is that we unfortunately weren’t able to convince VCs to support Juked,” Goldhaber explained.
In an investment environment trending towards fewer, higher value M&A transactions, more start-up founders will find themselves in the same position as Goldhaber and Chan.
While the team could have remained quiet about their predicament, Juked’s community management strategy has focused on transparency. On September 24, Goldhaber posted a now viral blog detailing Juked’s situation to its community and investors. If the company could not find a buyer before October 7, the app would have to shut down.
The blog post itself invited interested buyers to make a pitch. To Goldhaber, Juked has obvious appeal to a buyer that wants to engage with the esports audience and take direct ownership of those relationships. Most esports companies rely on social media platforms — Twitter, Twitch, YouTube, Reddit, Discord and more — to reach fans which comes with downsides.
“You’re really beholden to a third party middleman when it comes to understanding and reaching your users. You don’t own the data, and you have to appease the almighty algorithms to get your message across. Juked fixes that,” Goldhaber said.
Juked is also eyeing legacy media companies that are struggling to connect with Gen Z.
So did Juked’s pitch work? Since their announcement, the team confirmed it was overwhelmed with the number of inbound leads. “I’m struggling to stay on top of it all!” Goldhaber joked.
Ultimately, Juked bet that their vibrant community and their product would galvanize support from fans and industry professionals. It’s a bet they likely won.
Other start up founders should take note. While not every product will be as community oriented as Juked – this case shows that not sugar-coating the truth can be the best option. The audience Juked cultivated through their transparency probably saved the company.
For now, Juked’s plan is to continue to collect as many offers between now and October 7 to find the best prospect for their community.