This transcript was generated from the episode audio and may contain minor errors.
[Music]
Have you ever been to an escape room? I have had the good fortune of taking my WDS team, the team I work with on the World Domination Summit. I've taken them to an escape room, I think three or four times now. And just in case you aren't familiar with escape rooms, it's kind of a fun group activity or a team building activity where you and some of your friends are placed into a room that has all these puzzles and clues and you have to find your way out, basically. You have to solve a mystery of some kind.
You usually have an hour and the goal is to solve it as quickly as possible. And the company running the escape room maintains a leaderboard of, you know, how quickly people have been able to solve the puzzles in the past. And it's a lot of fun to do with people you know. I don't think I'd wanna do it with strangers myself, but that could just be me because I'm super introverted. And I'm talking about escape rooms right here at the top because today's Failure Friday segment comes to us from the founder of America's original escape room.
But first, Failure Friday, what's that about? Well, glad you asked. It is a collection of short stories about mistakes, missteps, disasters, and of course, failure. So we're sharing these stories of something that went really, really wrong. And what did the person learn from it?
I really appreciate and applaud the courage of all these side hustlers, small business owners, entrepreneurs sharing stories. And today's short story, as mentioned, features a guy named Nate Martin. He's the founder of Puzzle Break. We told the successful story of his escape room empire on episode 927. Video game maker creates real life puzzle rooms.
But as you'll hear, while he was fortunate to have a great success with his first location, he then thought the sky is the limit. And that's actually not at all what happened with location number two. Well, maybe the sky was the limit, but he ran into some real constraints. So let's let him tell the story. Let's hear from Nate.
I'll come back at the end to wrap us up. [Music]
My name is Nate Martin, and I am the co-founder and CEO of Puzzle Break, America's first escape room company. You don't know what escape rooms are. Well, in the year 2013, when we started, they were fairly simple and straightforward. You'd have a physical room someplace, team of participants buy tickets, they get locked in the room and have to work together to find clues, solve puzzles, and escape the room before time runs out.
And when we started Puzzle Break in 2013, there was nothing like this in America. And we built our first location in Seattle with not much in the way of forecasting or planning or strategizing or really anything. We just sort of built it and hoped that they would come. And we did, and they did. In just a few short weeks after we opened our doors, we saw a massive word of mouth and tons of growth, and things went really, really well.
And so we turned our eyes to, what's next? Well, at the time, I was living in California, and there was no American-based escape room company there. So we made a fairly large investment in time and energy at a precious inflection point into building our second location in San Francisco. And I spent a ton of time and energy finding the perfect space and securing a lease, which is no small task in San Francisco. And we finally got everything in order and spent tens of thousands of dollars on hardware, equipment, technology, tons of trips back and forth between Seattle and San Francisco.
And just a few short months after we opened our first location in Seattle, we had our second location up and running in San Francisco. And it didn't go as well. It turns out that you can't just get by with word of mouth automatically if it worked once before. And so for really a year, we really struggled in the San Francisco market to gain a foothold to reach that critical mass of growth. And things didn't go super well.
I mean, things were okay, but while San Francisco was flat, Seattle was really exploding. And we made some nominal efforts into doing some marketing and research into how to make San Francisco see the same level of success as Seattle. But it just, we weren't seeing a return on the investment. We did not have a ton of resources at this time where we could try everything that we wanted to do. And so we had a really hard decision to make where do we just keep throwing good money after bad in the San Francisco situation?
Or do we double down where we're seeing success? And we made the enormously hard decision to close our second location. We had made a ton of investment, both monetarily and effort-wise, to allow us to really focus our efforts and energy on our flagship situation. And it turned out to be the right decision. And now Puzzle Break has locations across the planet.
We do tons of corporate work. We have games on half the Royal Caribbean fleet and growing, and now a massive virtual business. And we are a brilliant eight-figure company. And you can trace that success right back to the decision that was very hard to close that second location. So the lessons that we learned, I guess, is twofold.
One, past performance is not indicative of future results by any stretch of the imagination. And the cost fallacy is real. Even if you do a little bit of an investment or a medium investment or a large investment, and just things are not working out, cutting your losses is often the right decision. [Music]
Never confuse a single defeat with a final defeat. That is the theme of Failure Friday.
I like what Nate said. You can trace that success, the success of his escape room empire, back to the decision to let go and close that second location. Super important to be able to let go of something that's not working, but it's also super hard. So I always respect when someone's able to say, this was my vision. I really wanted this thing to work, but it didn't.
And I'm not gonna let that limit my other options. Also, as Nate mentioned, past performance is not indicative of future performance. So just because it worked before, it doesn't mean it will work again, but perhaps something else will. I wanna encourage you to check out Nate's website at puzzlebreak.com or visit one of their many locations, just not in San Francisco. If you've got a question, if you have an update for us about your side hustle, come to sidehustleschool.com/questions.
And today's show notes are at sidehustleschool.com/1693. Thank you for tuning in today. I hope it's helpful and interesting to you. I hope you'll take action on something important to you. And I hope you'll come back tomorrow.
My name is Chris Guillebeau. You're listening to Side Hustle School. [Music]
From the Onward Project.
