Are Your Competitors Really Who You Think They Are?

Back in 2004 when I started with TGA, I had an Outlook folder titled “Competition” where I would put emails/information related to other junior golf programs.  I chuckle about it now as it demonstrates how little I initially understood the business I was about to spend the next 8+ years helping to build.

I’m asked daily about TGA’s competition.  Usually the question comes from a franchise candidate and goes something like this – “My city has a First Tee chapter and several local golf facilities have good junior programs.  How does TGA compare with these competitors?  Can the business be successful coexisting with them?”

As TGA grew in size and scope, it became clear that our market was not the same as The First Tee’s. They are a non-profit focused predominately on programs for under-resourced youth that emphasize life skills and take place at golf facilities.  TGA is a for-profit focused predominately on parent-funded programs for middle/upper income youth that emphasize "enrichment" and take place at elementary schools.  Both causes are important and needed, but besides having golf as the common denominator, they’re very different.  TGA franchisees overlap with First Tee chapters across the country and our paths almost never cross.

It also became clear that TGA’s market was not the same as a golf facility's.  When a golf course holds a junior program, almost all of the kids who register have played golf before and/or come from golfing families where mom or dad has taken an active interest in getting them into the game.   When TGA offers our enrichment program at a school, almost all of the kids who register have never played golf before and come from non-golfing families – meaning, they’re not the ones showing up at the local golf facility.

At TGA, we’re not focused on competing for the 2.4 million kids who play golf but rather on capturing the 74 million kids who don't.  As a result, our competition does not come from other golf organizations or programs.

We compete for kids’ limited time and parents’ limited budget.  When parents make their purchase decision with TGA, they’re comparing us to karate and chess club and art class and soccer and basketball and drama and the many other activities available to kids.  That's our competition.  They are not analyzing whether they should sign up for TGA or The First Tee or the program at the local golf club.

And that, to me, represents three important things:

1. It’s a great example of the entrepreneurial journey and how your “competition” folder can end up looking nothing like it did in the beginning.
2. We have made important strides at TGA to become more razor-focused on who we serve, why we matter and what we want to accomplish.
3.  There is a staggering number of kids in the U.S. not playing golf and we should all be obsessively focused on bringing the game to them as that is where the true opportunity exists.

Knowing your competition is a crucial element of understanding where you fit into the industry ecosystem.  A business professor once said something along the lines of – “if you can’t identify and describe your competition within 30 seconds of being asked, you don’t understand your business.” 

Eight years ago, I had no clue.  Most entrepreneurs don’t.  That’s what the entrepreneurial journey is all about.  Thankfully we have a great team at TGA that figured it out together and did so fast enough that I'm able to write this blog from TGA’s office as the COO. 

And with that, now I must get back to figuring out how to strengthen TGA’s value proposition against swim class, gymnastics, baseball, music lessons and cooking class.

Golf Participation is Soaring! Electronically, That Is.

The NGF recently released a study saying that 56 million people in the U.S. play video game golf, 45.5 million of whom are non-golfers.  That’s an amazing stat in my opinion.

First, I’m surprised that 39% of actual golfers (26.1mm) are also golf gamers (10.2mm).  Given the perception of the golf industry, I find that data interesting in a good way.

More importantly, the fact that 39mm people who have "never played golf" are hitting the links on their big screen shows that a lot of people are interested in playing the game.  Unfortunately it's just not in the way that we as an industry want or need.  Concepts like the Chicken Stick and games like Tiger Woods PGA Tour Golf are moving the needle by making the experience remarkebly real-life in the comfort and convenience of one's family room.

Visit a TGA Premier Junior Golf Class and you'll hear almost all of our elementary and middle school students say that they’ve played golf before – miniature or “putt putt” golf, that is.  Almost all of the hands go down when students are asked if they’ve ever been on a golf course or to a driving range.

Then consider that TV ratings have skyrocketed in the last 10 years.  Thursday's record-breaking Ryder Cup viewership is the latest example of this.  More people are watching the game now than ever before.  

For me, all of this adds up to an important message – people are interested in the game of golf.  A lot of people are interested.  And that interest is growing.  This makes me optimistic.

But that interest isn’t translating into rounds at the golf course where participation is down 13% over the last five years.  People say that time and cost are the hurdles keeping them away.

For golf entrepreneurs, I believe that figuring out this dilemma is the biggest opportunity in the industry.  It is also the most important conundrum facing the health of the game.  Perhaps we’ll simply follow the cycle of the economy.  But I think it requires a fundamental shift in how we think about the game. 

I believe that the 18 hole round will always be the backbone of golf.  But perhaps, as an industry, we need to look at an 18 hole round as one way, not the only way, to enjoy the game.  The 46 million non-golfing gamers are telling us we should.  We as an industry need to embrace this, innovate around it and find ways to monetize the opportunities.

Concepts like TopGolf, AlmostGolf and Off Course Network are already trying to do this.  There are others as well.  But the door is wide open for someone or something to come in and revolutionize the way golf is played and enjoyed.  Are you going to be the one breaking through that door?  If so, how?

Will TopGolf Revolutionize the Driving Range Experience?

The executive golf course a block from TGA HQ has had some controversy the last few weeks and it’s an interesting discussion about the future of golf.

The Lakes at El Segundo is a city-owned facility that sits on land donated by the nearby Chevron oil refinery.  The site boasts a fun and quick executive course (Par 29), good practice facilities including a two-tiered driving range and a decent 19^th Hole.  It’s developed such a family-friendly environment that it doesn’t make sense for my company TGA Premier Junior Golf to partner with them because their junior programs are always sold out.

A few weeks ago the Daily Breeze broke the story that city officials were strongly considering replacing the practice facilities, clubhouse and restaurant with a concept called TopGolf.  This is a brief description from TopGolf’s website:

TopGolf is the premier golf entertainment complex where the competition of sport meets your favorite neighborhood bar. The fun is in the innovative and addicting point-scoring golf games that anyone can play. Just picture a 240 yard outfield with dartboard like targets in the ground. The closer to the center and the further out you get, the more points you receive. Add in an awesome menu and refreshing cocktails, and TopGolf is far from your average bar or golf complex. It’s not golf – it’s TopGolf.

TopGolf's concept of a driving range with targets for points

Bringing in TopGolf would also require eliminating one hole and restructuring two others.  It would be a major overhaul of The Lakes and initial estimates put the cost at $15 million.

The city says that it is necessary because the facility is losing money.  According to sources, the range does $700,000 in annual sales which is almost certainly profitable.  I drive past the course every morning and evening (and often during lunch and other times of the day) and it is always packed – like, two groups waiting on each tee packed.  If The Lakes at El Segundo is losing money, I worry about the future of all executive courses – which is concerning as I believe these types of facilities are an important part of the game’s future.

I’ve heard great things about TopGolf.  It looks like a fun, social and cost-effective way to enjoy the game in a timely manner.  You don’t have to be a good player to enjoy hitting balls.  As their website says, it’s like bowling with your friends – throw a gutter ball and no one cares… have a good laugh and another sip of your drink.  These are the types of innovative approaches we need to make golf more inviting and enjoyable.  Whether or not TopGolf is successful will depend on a variety of factors, but conceptually I think it’s fantastic.

TopGolf's "About Us" page where pics sum up the philosophy

However, The Lakes is a bad fit for it. This is one of the short courses that gets it right with their focus on families, timely enjoyment of the game and integrating with the community.  The foot-traffic at the facility and the harsh response to the city’s decision is evidence that the community doesn’t want to see this change. Thankfully it seems as though the message has been said and heard.

Short courses have been the hardest hit by the downturn in the golf industry.  While I believe TopGolf would be a failure at The Lakes, there are many other facilities that could be great spots for them.  I hope TopGolf is successful growing their business and I applaud their innovative and much-needed approach to growing the game.

An Entrepreneur's Approach to Challenging Augusta

I’m a week late in joining the Augusta conversation thanks to travel but have read a decent amount of commentary and put a lot of thought into it.

I think it was a smart decision for Augusta to allow female members because it’s the one I would’ve made. If I were a member there, I’d welcome female members for the more social environment.  If I were running the place, I’d welcome them because it’s smart for business as it doubles the pool of potential members and it’s smart politically.

I do not, however, agree with the pressure put on them to do it.  There are many social clubs in America that “discriminate” based on gender, ethnicity and other things like income and prestige.  It’s right that they’re allowed to do so.  They’re private and don’t involve access to jobs/education, fair pay, political equity or any of the other areas where women and men should be equal as human beings. 

I can’t join the Belizean Grove.  So what?  I’ll very likely never be allowed to join Augusta even though I’m a white male because I’m not rich and powerful.  I’m okay with that.

If women want to join a spectacular golf club in Georgia, they’re welcomed to create one.  They can make it female-only if they want.  That’s the beauty of America.

The entrepreneur in me has listened to Martha Burke for all these years and thought – if I were her, I’d transfer all of this time and energy into creating an amazing women’s-only club that rivals Augusta and use THAT as an example of why women are equal to (and in many ways superior) to men.  That would’ve been a powerful entrepreneurial approach to this situation.  

This is how all successful entrepreneurs I know look at the situations they find unsatisfactory.  They identify the problem, create an innovative solution, determine if there are enough like-minded people to develop a market and then go for it.  They don't bang on the door of the incumbent and demand change.  And, on a tangentially relevant topic, one of the beautiful things about entrepreneurship is that it’s almost completely agnostic to gender, ethnicity, age and everything else besides brains, guts and luck.

I applaud Augusta because I agree with their decision.  But I also believe that other male-only clubs like Cypress Point and Pine Valley are not doing anything legally or ethically wrong.  If their membership wants it that way, they have the freedom to do so.  And if you disagree, you have the freedom to do something about it.

The PGA Tees it Back While Telling Us to Tee it Forward

Adam Schupak had an interesting tweet recently that I’ve been thinking about.  It said:

Adam Schupak ‏‪@GolfSchupak

‪@JoshuaJTGA True but a mixed msg to say avg golfer should play fwd while pushing the pros back. If pros at 7700, whose going to play 6500?

There was intriguing dialogue back and forth about this concept between industry vets I know well and good points were made on both sides.  But the more I thought about it, the more I agreed with Schupak’s stance.

When you’re a kid shooting hoops in the backyard, what does everyone dream about?  Scoring 60 and hitting the game-winning shot in Game 7 of the NBA Finals, of course.  Or, at least that’s the scenario that played out in my mind almost every afternoon for years.

Fast-forward to adulthood and the same concept applies.  When you’re on the putting green lining up 8 footers, what do you imagine?  Is this the putt to win the U.S. Open or to shoot 88 instead of 89 on the local muni?

Kiawah's 9th Hole, a 494 Par 4

Tee It Forward is a great program and one that I want to succeed.  I bet we’ve all had too many bad experiences being behind a player or group that was playing inappropriate tees and holding everyone up.  A recent NGF study determined that the average round of golf takes 4 hours 17 minutes and 30% of golfers think that this is too long.  This is important considering most golfers cite golf’s time commitment as one of the two main limiting factors in how much they play (the other being cost).  Therefore, speeding up and maintaining a healthy pace of play is critical to the industry.

People want to play the courses the pros play.  The want to play under the same circumstances as the pros to gauge how far away they are from being as good as them.  It’s the kid in us that still likes to dream and play make-believe every once in awhile.  And telling folks to tee it forward while the pros are teeing it back eliminates the opportunity to do so.  Which is why people don’t play from their appropriate tees as it is.

Of course, the PGA of America has an obligation to the players and fans to provide a tough and fair test of golf, as does the PGA Tour and USGA.  However, I agree with Schupak that they’re sending a mixed message by using a 7,676 yard course for their national championship while promoting Tee It Forward during commercial breaks.

Next year the PGA Championship is at Oak Hill in NY.  Wouldn’t it be neat if they kept it at the length currently listed on the PGA’s website of 7,134 yards, or even shortened it to under 7,000, to align with their campaign?  That would send a powerful message, especially if they used other means besides length to challenge the players.  Otherwise, as long as the pros keep teeing it back, I believe the PGA will have a hard time convincing the weekend warrior to tee it forward.

What Kind of Entrepreneur Are You Going to Be?

I was talking to a serial tech entrepreneur and venture capitalist in the Bay Area recently and he had an interesting take on entrepreneurship.  This was his comment:

There are three types of successful entrepreneurs:

1. The young and dumb kind who work tirelessly and fearlessly until they find something that sticks
2. The technical experts who solve a specific problem that only a handful of people know exists and how to fix
3. The authentic kind who have domain expertise, industry experience and the infrastructure needed (relationships, etc.) within a market to exploit its inefficiencies

Barring you being a technical expert, what kind of entrepreneur are you going to be?

When I look at my career, we were definitely in the “young and dumb” category when launching and building TGA Premier Junior Golf.  But, thankfully, we succeeded due to a great concept and a decent amount of luck.

When we launched GLinks in 2010, we were sort-of authentic entrepreneurs.  We knew through our experience in the golf industry that there’s a real pain point for young professionals to learn golf in a fun, convenient and cost-effective way.  However, we came to realize that GLinks is mostly a marketing company and this is not where our expertise lies.  With TGA, the marketing is easy because our partnerships with the schools give us direct and open communication channels with our customers.  With GLinks, we had to get word out to the broader community…. A task that requires a greater investment in time, resources and capital.  We ultimately decided that it wasn’t worth it (right now) when our main focus is on building TGA.

Last year, we launched TGA Premier Youth Tennis again as sort-of authentic entrepreneurs.  Through TGA, we knew the youth sports market and franchising industries well, but we lacked experience in the tennis industry.  This concerned us.  So, we formed a founding partnership with the governing body of the tennis industry, the USTA.  The combination of our expertise with the USTA’s gives us all of the tools we should need to be successful.  If we could go back and redo GLinks, we would’ve used the same strategy and added a promotions guru to the founding team or partnered with a marketing/promotions group before launching.

The lesson in my friend's comment is that most entrepreneurs are either the young and dumb kind or the authentic kind, and you definitely have a better chance at success if you're in the authentic camp.  As my MBA professors used to say, always entrench yourself in an industry before trying to start a company in it.

This advice provided me with clarity and I hope it gives you food for thought as you put your ideas through the feasibility funnel.  And, for those of you aspiring entrepreneurs who don’t want to worry about such matters, the franchise industry has thousands of proven business models for you to explore.