Entrepreneurial Lessons from a Book on Toddlers

I've been reading up on toddler discipline (my little one recently entered the stage of reckless abandon and “no daddy!”) and am finding numerous theories/lessons that seem to apply as much to business as parenting.

One particular story resonated with me and I’ve found myself referencing it on several occasions this week within TGA’s walls.

The story is this – in an effort to study the impact of boundaries, a behaviorist removed the fence surrounding a preschool yard to see how the kids would react.  Instead of running wild with their newfound freedom, the kids huddled near the center and seemed paralyzed.  Why?  “There is security in defined limits.”  No different than if you removed the sidewalls on a bridge – everyone would drive slowlyyy down the middle.

As an entrepreneur, there are few to no proverbial “fences” surrounding what you do.  You need to be that child that bravely, almost defiantly, steps out into the danger of the unknown.  The best entrepreneurs I know are the ones who embrace uncertainty and manage change the best. 

But then an interesting thing happens.  You have some success.  You start hiring employees.  You have a C-level title by very nature of being the founder (or part of the founding team).   And then you realize that the exact traits that got you to that point are in many ways contradictory to the skills you need to be a good leader of the team you’re building.

Basic HR responsibilities like a vacation policy, staff handbook, consistent review structure, etc. are more of a nuisance to you than anything.  It’s all about results, not processes.  And when you give someone an assignment, you expect them to figure out how to get it done (and done well) with little need for hand-holding or guidance.  Because that’s the environment you, the entrepreneur, excel in.

But most employees need clarity and structure with these things.  They want (rightfully) to understand the expectations, have clear objectives and know how and when they’ll be evaluated.  They need a leader, a manager.  But often their boss (you, the entrepreneur) can’t relate to these needs.  Especially if you’re a first-time entrepreneur.  So while you did a great job of getting the company from A to B, you now need to adapt your approach quite significantly to get the company from B to C.  Fred Wilson wrote an article called “Becoming A Boss” that is a must-read if this topic is interesting to you.

From my experience there are two main stages to entrepreneurship.  The first is taking an idea and turning it into an actual product with a viable business model – i.e. being the kid that steps away from the pack and heads into unchartered territory where there are no fences.  The second stage is taking your viable business model and turning it into a long-term sustainable company – i.e. getting the pack you just stepped away from to now follow you thanks in large part to the fences you’ve built along the way of your trailblazing journey.  

Being successful with one stage is difficult enough, much less both.  It takes a unique individual who not only has the aforementioned personality traits and skill set, but also possesses a high level of self-awareness, eagerness to learn and willingness to adapt.  Entrepreneurship is not for most, and the personal experience I'm speaking from comes mostly from failure which is not fun.  But if you think you've got what it takes and can handle the ride, the successes and highs can be the thrill of a lifetime.

Good luck and happy entrepreneuring...

Customers Determine Great Ideas, Not You

One of my favorite business bloggers, Fred Wilson, recently introduced me and his readers to another blogger named Benedict Evans.  Evans recently wrote a thoughtful piece titled Glass, Home and Solipsism that starts with:

One of the things you're supposed to work out some time in your adolescence is that though you're the star of your own life, you're not the star of anyone else's.  Some companies never work this out.

The key paragraph is:

In other words, your customers' relationships with you are the only relationships you have as a business and you think a lot about them. But you're one of a thousand things your customer thinks about in a week, and one of dozens of businesses. And they probably have their own ideas about how they want to engage with you (though they wouldn't put it in those words) - assuming they think about you at all. 

One of the readers nicely summarizes the point in the Comments section when he says:

"...a business has to remember that it's never about the product itself. It's about what the product DOES for your customers."

In looking at the golf industry on a macro level, I think we could do a better job of this.  Many consumers find golf expensive, time-consuming, difficult and daunting, and our challenge as an industry is that these issues are complex, fundamental and unrelated.

From a player development standpoint, if we're to stand out against the dozens of other ways people can spend their time and money, we need to make golf as easy, palatable and inexpensive to try as possible.  We need to market programs to the non-playing population.  Bring golf to where they already are instead of asking them to come to us.  Provide equipment and everything else needed.  Socialize the experience.  Create a nurturing environment.  Set people up to experience immediate success with the game.  All these things, a driving range with no rental clubs predominately occupied by men/husbands with golf pros charging $75+/lesson is not.

So for all the innovators, entrepreneurs and industry members out there working to grow the game, let's prioritize our focus first and foremost on the experience our consumers want/need to have, and then apply our great ideas to the manifestation of that experience.  Seems simple and obvious, but it bears repetition and I appreciate Evans' frank comments about the reality of the one-sided relationship we often have with our customers.

Best wishes and happy entrepreneuring...

Not Feeling the Love? You're Probably on to Something Good

There was an article in the Harvard Business Review last weekend that caught my attention.  It was called "If You're Not Pissing Someone Off, You're Probably Not Innovating."  I found myself agreeing with much of it and finding it especially relevant to the golf industry.

The premise of the article is that industries are controlled by incumbents who do not look kindly on new ways of doing things.  As a result, a "fundamental obstacle to innovation that all would-be disruptors must be prepared to face is the potentially hostile response of incumbents who don't want to see their market advantages threatened."

This is very true in the golf industry where "tradition" is the cornerstone of a powerful culture.  "Innovation" to many is seen as a direct threat to the sanctity of the game they love and this causes emotions, both positive and negative, to run especially high.

Additionally, the industry is controlled, like most industries, by an exclusive "inner circle" that is difficult to penetrate. 

Fred Wilson talks about this concept in a blog titled "Insurgents vs. Incumbents."  In it he says: "The startup world is about insurgents. A person or a few people with an idea. And they drop everything and go for it. They are going up against the incumbents and that doesn't just mean the big companies that occupy the market position they want. That means all the people, institutions, and organizations that are in cahoots with the big companies."

In golf, this would be the PGA of America, PGA Tour, The First Tee, USGA, LPGA and a few others.

If you're a current or aspiring golf entrepreneur, be prepared to feel the opposite of loved by these groups.  And that's okay.  The golf industry has been contracting for a decade so these folks have reason to be defensive, and the data clearly shows that the current way of doing things is not working.  It's also a $76 billion industry in a volatile environment, making it a great time/place for disruption.

Being an "insurgent" is awesome.  It's thrilling, purposeful, educational, humbling and an opportunity to do something significant and meaningful.  But be prepared to face people every day - every hour, even - who don't share your vision.  Who will try to derail you.  Who will be dismissive.  Who will react negatively to the very premise of your concept.

But if you're getting this type of response from incumbents, know that you're on to something good.  Be resilient.  Because if what you were doing wasn't a threat to them, they either wouldn't care or would try to help.

We've faced this for years at TGA with success so it's definitely possible to overcome.  And now that we've reached a point where our footprint is too large to ignore - two franchise systems, 67 franchisees, >150k students, strong growth and huge opportunities on the horizon for 2012 - the "inner circle" is starting to open up their arms. 

I'm okay with having to prove ourselves to the incumbents and you should be too.  The goal is to be one of them, soon.  We just need to make sure that if/when that happens, we continue to be innovators.  It goes back to something I wrote about in the past - it's the pace of innovation that determines the winners, not the original idea.

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.

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.