My purpose here isn't to revisit dirty laundry, but our differences in business approaches. Sometimes personalities can clash but business goes on anyway and perhaps even thrives due to the heightened tension; other times a personality mismatch is enough to sink even a glorious ship.
Part 3: Never Partner, or "What if DSG had never included the earlier business partners?"
I would not have started this thing solo, so I can dispose of that question up front.
I also won't spend any time on the earlier minor partners in this article because they were basically purely supportive of the business, and just wanted us to move forward prudently. They each cashed out in their own time and for their own reasons. I am grateful that I was able to work with each of them and I am glad we had them in the fold during that tentative early time period.
Girard's vision for DSG was almost entirely that of a TCG store, and later a hybridization into comics. He had some prior employment connections with publishers of deckbuilding games, and there was considerable overlap between those types of games and Magic players. But beyond that, he was indifferent to the rest of tabletop, and indifferent to video games entirely. Before you read that as purely critical, observe that I've discussed on this very blog that for all the best practice preaching of diversity, if we had committed to Magic and only Magic from the moment we imagined DSG, due to the way the industry played out, we probably would have been better off. Board games are a category I loved that largely did not love me back until we got to Chandler, and still to this day are not the meat and potatoes of our revenue mix.
Hug's vision for DSG had broader take on tabletop, and a broader take on pop culture overall, and in fact I'm not even sure where his limit really is, because later on down the line he dove into art prints, cosplay workshops, and on and on. You know I like me some perpendicular thinking but in the end I don't think we had the shared infrastructure to push into some of those areas. What I mean is, to use a contrasting example, if we wanted to sell sports cards, a bunch of work is already done. We already source through the biggest sports card distributor, and we already carry card supplies and storage merch. Knowing the sports card market is a bridge much farther, but given some discretionary capital to seed things up, we could do it. Until the day I liquidated the old art prints from DSG, I don't think we ever really had a professional presentation and solution for the product, nor were we anywhere near a sustainable volume.
Hug and Girard shared an affinity for convention booth vending, which I wanted nothing to do with, and of course I was more than happy to just leave that to them. You would think our Comicon booth in 2013 would have been outta sight. For reasons I can't even remember, neither of them ran it. They had DC, our assistant manager at the time, run it. From 2014 to 2016, Hug ran the booth, crossing over two years with the 2015 to 2017 that I had Dustin, my comic manager, available also to do so. DSG no longer vends conventions or festivals, and won't do so in the future for as long as I am required to do anything to make it happen.
We held an Investor Dinner in March 2012. A great assortment of our friends and loved ones showed up and listened to Girard and I pitch the business. The two of us brought cash, materials, and open credit card balances, but that wasn't going to be enough. We needed additional cash positions to be able to launch with some real momentum. That was what we sought at the dinner.
(Cue the wormhole, approach in the runabout, don't cause any paradoxes!)
At the Investor Dinner, Patrick Hug listened with interest, but ultimately said, "Thanks, but no thanks." Game store retail is a high-risk investment, and he figured that was risk he didn't need. He never bought in.
We did enroll a few other cash-only investors, but with a substantially smaller resource base, DSG started in a suite around the corner from its original Gilbert location. Same plaza, but 1500 square feet instead of 2400, and cheaper rent. Not nearly as visible from the street.
Given the framework, Girard got a lot of what he wanted, for the simple reason that we didn't have the resources to do it any other way. The vintage arcade never occurred, but the console game approach was reasonably easy to get underway, despite Girard's lack of interest in it. By the time he became conversant with the pricing tools out there, though, it was just wheeling and dealing another thing for him, which he liked.
Security was rote; there was no product that customers could touch. Everything was displayed behind the counter or under it, and the singles inventory started off in gem cases with the innovation we brought from our traveling survey of stores, and eventually moved to a fully electronic filing. It was trivially easy to run the store with a single staff member on most days.
A small space with room for about 50 tournament players... sound familiar? In fact, that suite happened to have a second restroom in it, so our fire capacity was higher, more than we could physically seat. We made Advanced in a weekend, same as with the store's original opening, and when Advanced Plus came around, we already qualified. And this was during the years when it really meant something in terms of product access. Magic, Pokemon, and even Yugioh tournaments happened on the regular. I'm not a fan of the latter, but handling those players was Girard's problem.
Initially, the store was not open Sundays, in recognition of the preferences of the Latter-Day Saint community of Gilbert. Back in the original timeline, we ended that in year two as business demanded all seven days. But in this timeline? Sundays just weren't important. And with the crucial dark day and the small footprint, we were able to keep payroll costs at a bare minimum for years without burning out ownership. Year in and year out, there isn't that much Magic business that a store can get on Sundays that it can't get on other days, prerelease weekends excepted.
With Magic as the primary focus and no board game boutique aspirations, we never signed on with Light Speed Retail, instead starting with Crystal Commerce and staying with it. It would be four years before Red October of 2016, and though it's hard to imagine now, up until then the system mostly worked pretty well. With TCGPlayer, Amazon, and eBay integration functioning about the way they were supposed to, the singles business dependably brought in money. There was a lot of moving sand from one pile to another, and Girard had his hands full with semi-reliable part-timers sorting and grading, but it got done well enough to make rent, and a little better than that.
We added comics in late 2013, just like in the main timeline. For lack of any other sources of comics in the area, it paid for itself well enough, and used up a bunch of wall opposite the counter nearer the front entryway. Girard pressed to have comics replace video games because it was something that interested him more. By this time I was showing up one or two days a week to do the admin, and barely working on any other projects, so I didn't put up much of a fight.
Unfortunately, that was the exception and not the norm. Just like in the real timeline, there are differences of approach and philosophy and business purpose that cause conflicts. Mike Girard is good with people and has a proven willingness to grind long hours when necessary. That goes a long way. However, he has near-zero tolerance for administration and finance. There was perpetually a doubt in his mind every time I reported on some cost we encountered, especially if he was sure we could duck that cost for a while and never pay it. Any time I took a hard line on some regulatory matter, he brushed it off. It went on that way. He preferred to ask forgiveness, whereas I insisted upon asking permission. I began to worry that my investment could be lost by means of enforcement from some entity. But I also knew Girard didn't have the scratch to buy me out.
When I said Girard was good with people, I perhaps understated the matter. He was really good with people. Girard reached into his long history of game design friends and contacts with the likes of Decipher, Upper Deck, and Cryptozoic, and before I knew it he had a cash offer from some inbound investors to buy my stake in DSG and divide it amongst themselves, as well as the stakes of a few of our silent partners who had only bought in to support my side of the business. I would have to paper the deal and make one final filing for the existing LLC, and they'd replace it with their own LLC and I could walk away. They offered me $70k, which I knew was less than the value of my DSG equity. We had Alpha power in the safe worth a chunk of that number by themselves. But I also knew this represented a substantial "profit" on my initial investment, and I had been paid my part-time modicum for working up to that point. It was a clear +EV exit.
I took the money, conveyed my share, and that was the end of my ownership of DSG. I had been bought out.
I didn't have the same itch for the tabletop business after that, but I did enjoy me some video game collecting, for good and sure. After killing off a bunch of debt and leaving state employment for unrelated reasons, I decided it was time to try something I could hang my hat on. I opened my own 1200-square-foot video game store in a suite only a few doors down from DSG. With no product crossover, both business enjoyed the overlap of customer traffic.
I brought in some vintage arcade games for flavor and a local coin-op collector named Mike found my video game store and liked what he saw so much that he bought into my company.
The DSG lease ended in August 2017, and they left. Girard said they had found a place in Tempe on Apache Boulevard that was more than double the space for almost the same rent. I wished them well and saw them on their way, but I wasn't going anywhere, with three years still left of my lease in Gilbert... and various lengths remaining on my leases in Ahwatukee, south Chandler, north Mesa, and Queen Creek.
After DSG departed I let a local player named Mike Griffin talk me into adding Magic to our product offerings. Just as an experiment, of course. Griffin offered to bankroll the Magic stock as his buy-in as a business partner, and so it was done.
(♫ Let's do the ♫ time warp ♫ again! ♫)
After the Investor Dinner, we met as principals and were stunned to learn that one of our founders was already jumping ship. "This isn't what I wanted," Girard said, addressing me and Hug. "You two aren't talking about a focus on cards. You're not talking about a focus on the secondary market. You've got this vision of a high-end board game lounge, and I don't think it's going to happen." Thus, Mike Girard withdrew from the DSG formation and Patrick Hug stayed the course.
Of course, the big difference in this timeline is that we didn't have an owner to run the store. The early days ran as a patchwork of owners and hired staff. For lack of anyone other than me knowing the slightest thing about video games, and me being present only intermittently, the category never sustained. Without emerging as competitors with a Magic focus in the area, we never had the traction to fend off Manawerx East in Tempe. Nope, if DSG was going to succeed, it was going to be as a board game lounge, sticking with the original plan and putting all our focus behind it.
Well, Girard was right, it didn't work, and we closed the store in February 2015, executing the kick-out clause in our lease. And that was that. The investment ended in loss.
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