"Ready Fire Aim" & Fight On

I graduate from USC tomorrow with an MBA and it has me in a reflective mood.

One of the things I enjoyed most about the education was a dichotomy that emerged between my entrepreneur classes (of which I took a lot) and the rest of the classes. 

I’d sit in finance/operations/etc. on one night and focus on academic analysis.  I learned about Jack Welch’s philosophy on leadership, valuation based on DCF, supply chain management and so forth.

Then, I’d sit in an entrepreneur class the next night and focus on real-life execution.  Much of the academic analysis discussed in the other classes flew out the door.  Leadership?  “Build a team of people smarter than you.”  Valuation?  “What’s it worth to you?  That’s its value.”  Business analysis?  “What you think doesn’t matter – go talk to your customers and see what they think.”  I took many lessons out of these classes but they all surrounded a central theme – “stop talking and start doing.”

This dichotomy recently played out in a real-life setting.  I was meeting with a potential strategic partner for TGA Premier Junior Golf who is well-inundated in both the golf and education fields.  He said multiple times:

“How do you know your program is good?  Have you put your curriculum in front of the academic community on a university level for analysis and verification?  If not, you can’t tell me it’s good.  For all you know, you could be turning kids off to golf through a crappy program … it’s just that no one knows it yet because there’s nothing to compare you against.”

My response was: “We know it’s good because we’ve had 100,000 customers, of which approximately 40% are repeat.  We don’t need academic verification when we already have it from our customers.”

The reality is that we’d love to get our curriculum certified on many levels, but TGA wouldn’t exist today if we invested, at any point in the company’s eight year history, the hundreds of thousands of dollars required to do it.  Our philosophy, instead, has always been to bootstrap the business and get after it.  Start.  Get customers.  Test.  Make mistakes.  Learn.  Pivot.  Grow.

One of the best quotes I heard in a USC classroom came from Mark Suster, the well-known LA venture capitalist.  He said: “You have to create barriers that make it harder for people to come in after you, but it rarely comes from technology.  It almost always comes from the PACE of innovation ... the relentless pace that freaks your competitors out.” 

TGA has always been excellent at innovation.  That’s a large reason why, as our colleague pointed out, there is no one to compare us to even though we’ve been proving for eight years that a market exists for school-based youth golf programs.

I recently came up with an off-the-top-of-my-head analogy on this topic that I think would make my entrepreneur professors proud.  I was helping a friend with her business plan for a non-profit called Autism Assistance and I said:

 “You don’t need to create a blueprint for your entire castle right now.  Start by designing a simple and inexpensive dirt road that leads to a front door.  Then get it out into the real world and see if/how people use this road.  And then follow them.  They’ll design your castle for you.  You’ll just need to pay attention and put in the sweat needed to build it.”

“Ready Fire Aim.”  That’s the entrepreneurial spirit.  Academic analysis is good and important, but walking the path of happy entrepreneuring ultimately requires that you: a) get started; and b) Fight On.

Kickstarter - Sponsorships & Moore

After a weeks-long hiatus on everything except work and school, I thought it appropriate to re-energize this blog with some thoughts on Kickstarter.

According to their website: “Kickstarter is the largest funding platform for creative projects in the world.  Every month, tens of thousands of amazing people pledge millions of dollars to projects from the worlds of music, film, art, technology, design, food, publishing and other creative fields.”

According to a recent TechCrunch headline, it’s working – “Kickstarter, Two Years and 20,000 Projects Later: $53 Million Pledged, $40 Million Collected.”

I’ve received funding requests from friends/colleagues for projects that fit within this description, but what really got my attention about this company was a recent Fred Wilson blog post. 

Wilson told the story of how a professional golfer named Mike D is using Kickstarter to fund his journey on the mini-tours and create a documentary about it.  Wilson summed it up best by saying: “Mike is taking the classic big brand sponsorship model and crowdsourcing it with Kickstarter.  Awesome.”  He has raised over $13,000 thus far, which is almost double his minimum goal.

I think this is a great example of: 1) a golfer applying innovative thinking to the pursuit of his dreams; 2) a product being applied in a way that the company had no clue it could/would be used.  Great lessons for both golfers and entrepreneurs.

This story reminded me of Ryan Moore, the young PGA Tour player and 2004 U.S. Amateur Champ.  Moore parted with his club sponsors in 2008 and then signed a deal with a start-up equipment company called Scratch Golf in 2009.  The deal – Moore would play Scratch Golf’s irons/wedges in exchange for becoming a part-owner of the company.  Compensation was not cash, but equity.  Again, genius. 

The arrangement ultimately fell apart last year with Moore signing a deal with Adams Golf and losing his equity in Scratch, but I believe (and hope) he was a pioneer for more golfers to think in a similar way.  Certainly it’s a great opportunity for players to build equity in something other than their golf game.  It also injects an innovative spirit into the golf industry and provides a path for start-ups to penetrate and pivot around the “good ole boys network.”

I think these two innovative approaches to sponsorships are steps in the right direction and will hopefully pave more paths for golf entrepreneurs.

Augusta National vs. Technology

Masters week is finally upon us (!!!) and Augusta National has me a little confused.

We all know that Augusta is as private as private gets in the golf world.

Which is why I was surprised when I first learned that they had agreed to open their course to EA Sports this year.  Anyone can now see and learn every nook and cranny of the course from their living room couch. 

This is the place that doesn’t like showing their front nine on television during the tournament, after all.

I was further surprised that Augusta would attach their highly-protected name/brand to Tiger Woods in the form of the game’s title: “Tiger Woods PGA Tour 12: The Masters.” 

It seems, almost, risky.

And, it’s not like they’re doing this for money.  This is the club, after all, that dismissed its tournament sponsors (and thus commercials) to de-leverage attacks from women’s advocacy groups.

On top of providing this virtual experience, Augusta announced that they would provide comprehensive tournament coverage this year that includes an iPad app (which I’m buying) and a 3-D channel.  Whoa!

"Looks like they're joining the 21st Century," I thought.  I'm impressed, I think.  Golf fans now have an opportunity to thoroughly experience and enjoy one of their beloved game's most sacred places. 

Then, a couple of weeks after the game’s release, Ian Pouler and Graeme McDowell used their Twitter skills to post videos of the drive up Magnolia Lane and the view from the clubhouse.  Augusta was not amused and firmly reminded everyone of its “no phone” policy for players. 

Wait – what?  I can understand their no-phone policy for spectators, and to a degree for members too, but PGA Tour players?  What if they need to call their wife/kid or check an important email from their swing coach?  They’re on the job, after all, unlike everyone else who is trying to escape the job.

I found the dichotomy of these events interesting.  Confusing. 

Then, yesterday, it came to a head.  I saw a headline on ESPN about Anthony Kim being told that he couldn’t listen to his iPod on the range.  I thought – “Wow, the club that is embracing technology themselves is still enforcing anti-technology rules that mess with players’ practice routines.  How hypocritical – this is their livelihood!”

Then, Anthony Kim smacked clarity directly in my face.  

He concluded his iPod story by saying – “it’s those little things that make it a lot more special than other tournaments.”

Bam!  Confusion gone. 

Augusta may be open to giving those of us at home cool ways of experiencing their club through video games, 3-D TV and so on.  But, if you’re ever fortunate enough to walk through their gates, you are their guests and you follow their rules.

THIS is what makes the Masters “a tradition unlike any other.”  Thank you for the reminder, Mr. Kim.  Suddenly, all of the pics that are still showing up on Twitter seem almost tainted … disrespectful.

Augusta may have rules/policies that are strict and old-school, but that’s why it’s great.  For four days every year, it uses technology to transport golf fans like me back in time to a pre-tech world that doesn’t much exist anymore … when privacy was treasured, respect was assumed and tradition was valued.

In that context, Augusta’s strategy and execution seem, well, brilliant.

With that, I hope everyone has a wonderful Masters week.  My pick, as always, is Davis Love III.

Your Sources of Information & Inspiration

Ben Horowitz, co-founder of the awesome VC firm Andressen Horowitz (investments include Twitter, Facebook, FourSquare and Zynga), often has thought-provoking comments on his blog and Twitter page.  Today, he got my mind working with two separate ones…

The first, from Twitter – “@bhorowitz: I definitely listen to other genres, but hip hop is the only popular music that is pro business and deals with business as a topic."

I enjoyed that comment because I love many types of music and had never thought of it in that context before.  If you follow Mr. Horowitz, you’ll note that he starts all posts with a quote from a song.  I used to do the same thing when I was an editorial writer for my college newspaper, albeit I never pulled from hip hop.

Horowitz’s second comment is much more relevant to this blog and came from his guest-appearance on TechCrunch.  The assertion is that the most difficult CEO skill is “managing your own psychology” and the post offers techniques for doing so.  I found it insightful and you can read it here.

I share Horowitz’s comments partly because I found them interesting and partly to make a bigger point: 

As an entrepreneur, my encouragement is to have vast horizons for where you search for and find your information (and inspiration).

Followers of this blog know that I often draw from TechCrunch, VC blogs and so forth.  I’ve been asked about it.  On the surface, the world of tech entrepreneurship has little relevance to being a golf entrepreneur.  However, the qualities that make a great entrepreneur are not industry specific – and venture capitalists are THE experts on entrepreneurship.  Thus, I read and learn from them.  They give me gems like this Horowitz post on a daily basis, whereas you’ll be hard pressed to find this type of information in a Golf Digest.

In my opinion, the road to happy entrepreneuring includes daily detours from our industry tunnel.  I wish you the best of luck finding your information and inspiration down these unpaved paths.

Anatomy of an Entrepreneur

My two favorite VC bloggers wrote on the topic of management teams today.   Both are worth reading.  Fred Wilson’s “AVC” post is linked here and Mark Suster’s “Both Sides of the Table” post is linked here.

I talk to aspiring entrepreneurs on a daily basis as the person responsible for selling franchises for TGA.  I also talk to existing entrepreneurs daily as the person responsible for then training and supporting these franchisees.  Thus, I work with folks before they start their business and I work with them afterwards.

Seeing the entrepreneurial process from this wide of a spectrum has given me a good idea of what indicators in the “before” stage lead to success/failure in the “afterwards.”  Astute franchise candidates often ask me about these indicators and my conclusion is the same as Wilson’s, Suster’s and most others who live within the entrepreneurial world:

Great businesses are made by great people, not great products. 

From my perspective, past business experience – especially in sales, project management or business development – is invaluable.  Industry experience doesn’t matter much at TGA due to our franchise model, but it is very important for businesses starting from scratch.

Ultimately, though, personality and tenacity sit atop the importance list.  Entrepreneurs who are smart, personable and hungry usually figure it out.  If you read Fred Wilson’s blog, note the story about Airbnb and Obama-O’s.

The reality is that “experience” can’t serve as an entrepreneur’s alarm clock.  It can’t work past 5pm for them.  It can’t keep them from throwing in the towel when things get tough. It doesn't put up road signs when the business requires a new direction.  It can’t pick up the phone and call their potential customers.  It doesn’t build their relationships.  It can’t keep them motivated long after the initial adrenaline of starting a business wears off and the grind sets in.

Before I had any entrepreneurial experience, I thought about start-ups almost entirely within the context of the “product.”  I’ve since learned that almost all start-ups are forced to modify, pivot and overhaul their product multiple times.  Thus, in my opinion, the question of “will the business be successful?” is really about whether the management team is the one capable of navigating these choppy waters.

Your Company’s Public Relationship

TGA Premier Junior Golf has gotten some decent press recently – first in the LA Business Journal and then in Entrepreneur Magazine (article here and 2011 franchise rankings here).  These articles have been picked-up by many other media outlets.  This led to our best 1^st Quarter in history (with 3 weeks left) and allowed us to reallocate a large percentage of our budgeted advertising dollars. 

All of this cost TGA solely what we pay our PR firm, which is less than what a monthly 1/3 page advertisement in Entrepreneur Magazine runs for.

As a result, I’m a big believer in the power of PR.  We’ve been effectively leveraging it at TGA since the beginning.  We’ve also been blessed with a heart-warming story to tell – youth development through golf.

In my entrepreneurial endeavors, I’ve found it challenging and daunting to figure out how to grow beyond the initial early-adopter customer base.  You can hire sales people to hit the pavement.  You can try to navigate the dizzying waters of the advertising world.  You can look for strategic partners who will promote you.

Every company has different sales channels so there is no “right” or “wrong” promotional method.  However, if you’re in start-up land, my encouragement is that you consider investing in PR because it can be a cost-effective way to acquire new customers.

When I started at TGA, I knew nothing about PR.  I’ve learned some tidbits along the way, so this is my version of PR 101 for new/aspiring entrepreneurs:

Step 1 – Is PR a Good Fit?

PR is all about telling interesting stories.  Some companies have them and others don’t.  A good barometer for whether PR is a good fit for your venture is whether you have stories to tell that you’d be interested in reading if you weren’t the CEO.

Step 2 – Find a PR Person

Find someone in your network who is in the PR business with a robust distribution list in your industry.  Get them to work on a cheap monthly retainer and commit a few hours a week to your business.  Negotiate the rate by touting the potential future upside and pointing out the value your company can bring to their resume.  I've found people for as little as $500/month

Step 3 – Create Compelling Stories

Develop press releases that discuss meaningful and interesting things.  Think about your topic as an article in the paper – will people want to read it?  A good PR person will guide you through this.

Step 4 – Shop Your Story

Once you have the press release, your PR person should send it to your industry’s press wires (you’ll need to subscribe), any applicable media outlets, all relevant parties on their distribution list and anyone else who may be interested.  Make follow-up phone calls to strategically important outlets.  In the beginning, focus on the local media to get traction - tell them about the new, hot start-up in their community that just (insert newsworthy item here).  Avoid pay-for-play offers – they’re expensive and the easy way out.

Step 5 – Take it to the Next Level

Put every PR piece, whether it’s a press release or an article, onto your website and social media graph.  Ask your PR person to merchandise the media and provide a value for everything they have given you.  Get reprints from them for future distribution at conferences, etc.

Step 6 – Be Persistent

You’re an entrepreneur … persistence is in your blood! 

With that said, good luck building your relationship with the public.  I hope it provides a cost-effective shortcut on your path to happy entrepreneuring.

What Does All the Angel/VC Noise Mean?

AngelList has been all the rage in the venture capital / angel investor world over the last week.  It started when well-known VC Bryce Roberts publicly deleted his AngelList account.  The "kerfuffle" that followed was described well by Mark Suster (another well known VC) in this blog.

AngelList is a website where entrepreneurs can connect with angel investors who are looking to provide seed money for start-up companies.

This is just the latest chapter in a growing trend within the angel/VC world.

First, we heard about the huge valuations for social media companies – Facebook at $67 billion (33x revenue), Groupon at $15 billion, Twitter at $10 billion, LinkedIn at $3 billion.

Then, Yuri Milner and Ron Conway, two prominent Silicon Valley angel investors, announced that they would provide every Y Combinator company with $150,000 of seed capital.

Now, AngelList.  The result is that most experts agree we’re in the midst of a bubble in the start-up investment world.  The result is too much money chasing too few good investments, with higher valuations, shorter due diligence periods and riskier investments.  Fred Wilson described this environment really well a few months ago.

All of this can have a dizzying effect on entrepreneurs.  What does it mean?  Whether you're in the golf industry or any other, my view is that there are a few universal lessons.

The first is a reality check.  We're still seeing maybe 1% of the applications getting funded at the angel investment group I help.  Thus, don't get the idea that you can start up any old company and get funded.  For every success story you read on Tech Crunch there are 100 non-success stories.

Secondly, I don’t think angels can or will ever replace VC’s, which has been a main discussion point in the post-AngelList vs. Bryce Roberts break-up.  There are several reasons for this:

• Generally speaking, angels have far less personal money to invest than pension/hedge/etc. funds do, and the latter need VC firms. 
• Even at my well-respected angel group, most angels do this part-time.  Thus, it's nearly impossible for them to have extensive knowledge of all the industries, ecosystems and companies they encounter.  Thus, their reach cannot be as wide or deep as VC's who live and breathe this stuff 24/7. 
• In my experience, it's been very difficult for angels to raise more than $500k for any one company, so they have to go to their syndicate VC partners when the raise is higher.  Angels are good for seed money but not the $2-$5MM expansionary capital that almost all fast-rising hotshot companies need.

Thus, if you’re an entrepreneur, my belief is that you need to view most of the news coming out of the VC/angel world as noise. 

What does it mean?  In my opinion, absolutely nothing.  Focus on your company like always and the rest will work out.

Why?  Because if you build a business that has a disruptive product in a growing market with strong IP, distinct competitive advantages, a scalable revenue model and a strong management team … you’ll be farther than most down the road to happy entrepreneuring.  And I promise, angels and VC’s will be standing on the sidewalk with their checkbooks hoping to take that journey with you, regardless of the investment environment.