2004: Business - Start-ups brave risks, hope for rewards
Wednesday, September 28, 2011
By Martin Kaufmann
John Breaker recalls watching Tiger Woods bomb drives at The Masters a few years ago and having this odd thought: That’s an inefficient use of space. Breaker reasoned that if golf courses continued to be lengthened to accommodate ever-longer drives, the revenue generated by each acre of land would decline.
“They’re going the wrong way with the golf ball,” thought Breaker, who, not surprisingly, maintains a consulting business that teaches corporations how to operate more efficiently.
That led Breaker, a Lakewood, Colo., businessman, to experiment with limited-flight practice balls, and ultimately to develop the Birdieball, a super polymer that, Breaker acknowledges, “looks like a napkin ring” but spins and sounds like a golf ball – except that it only travels between 25 and 65 yards, depending on the club used.
Breaker, 47, was one of the many entrepreneurs to exhibit at the PGA Merchandise Show for the first time last month. Like the birds to Capistrano and the immigrants to Ellis Island, they arrive at the show by the hundreds each year (see box). They have new golf clubs or training aids or apparel lines or accessories. They’re independent, entrepreneurial. They perceive a void or a niche in the market. They have an idea and energy – but usually not much money. They take risks while others play it safe.
All of that and more is true of Breaker. He considered staying in the corporate world, but recalls being “haunted” by the Birdieball idea. He knew of the economic problems plaguing the golf industry, and “I kind of came into it kicking and screaming.” His friend and business partner, Paul Olson, “thought I was out of my mind” when he pitched the Birdieball idea. Now, they have committed more than $600,000 of their own money to making it work.
Still, Breaker says, “This is the most fun thing I’ve ever done.”
Rounds played have declined in recent years, equipment sales and participation have been flat, and golf is burdened by systemic problems. No matter. There is no shortage of people who want in. If they don’t have a product to sell, they’ll open a golf store.
Rick Benson, vice president of franchise sales and operations for the Golf USA retail chain, says he annually receives 3,000 to 5,000 queries from interested franchisees, and he says the number of applicants who fill out paperwork and actively pursue a franchise is well into triple figures, though he declines to be more specific. Only a handful of those applicants are awarded a franchise each year.
“With the vast majority, when we ask them why they are considering a golf franchise, either the No. 1 or 2 reason is that they want to control their own destiny,” Benson says.
That certainly applies to Keith Foley, a 40-year-old Australian and self-described “rag-ass electrician” who spent six years working on a 242-foot yacht owned by the late Emilio Azcarraga, then president of Mexican TV conglomerate Televisa.
When Foley finally came ashore for good, he began fishing for business opportunities. “I wanted to be my own captain for a while,” he says. He liked golf, and considered starting a bag company or marketing a thread-locking compound for golf cleats. Finally he hit upon the idea for the Line-M-Up, a device that snaps onto a golf ball so that a straight line can be drawn to aid in alignment. He says “retailers would laugh at me” when he showed the product, but Greenkeepers, a cleat and accessory company, picked up the product and still markets it.
This year Foley went to the PGA Show for the first time as an exhibitor, peddling the G Clip, a device that attaches to the belt and can be used to repair divots, mark the ball and carry tees and gloves. He says the early prototypes “looked like bird droppings,” but now he believes he has hit upon an attractive item that makes sense for retailers and the corporate logo market.
George Smith believes he has a product that makes sense for thousands of golfers: clubs guaranteed not to hit shanks. Smith, a 73-year-old retired dairy farmer from Knoxville, Tenn., took up golf 40 years ago, and “for the past 20 years I have been searching for my golf balls twice a week.”
His dual fascination and frustration with crooked shots led him to create Laser One Golf. He reasoned that if balls struck on the hosel flew sideways, it only made sense to attach the hosel to the back of the clubface, creating an unobstructed hitting area.
“I decided that the conventional club was to blame, not me,” Smith says.
If there is a common theme uniting many of golf’s new entrepreneurs, it is their belief that the market for fashionable women’s golf apparel and accessories is underserved. This is the classic start-up story: You can’t find the product, so you create it.
When she was working in pharmaceutical sales, Karen Lee says she “closed a lot of deals on the golf course,” but she had trouble finding clothing she could wear on and off the course. That dilemma – shared by her 30-ish Los Angeles-area friends Liza Boquiren, Lulu Faddis and Jocylyn Juan – led the group to quit their jobs and start Trigelle, a fashion line they hope to start shipping in June.
“Women want stuff that is more form-fitting, not boxy or a miniature version of what their husband is wearing,” Lee says.
Similarly, Keri Murschell says she used to look for golf bags that reflected her personality, which she describes as “energetic and fun. But everything out there was brown or gray.”
That definitely could not be said of Murschell’s designs, which aren’t likely to be mistaken amid
a sea of standard-issue golf bags at the valet stand. A technology saleswoman from Haddonfield, N.J., with no background in fashion, Murschell says she often pitched business ideas to her husband, Wayne, who finally agreed she was onto something with the idea for Keri Golf.
“It really was more of a gut feeling to say, ‘This is a brand-new, untapped market,’ ” Murschell says. “I just felt this was the time in my life to take
Suzanne Smetana (aka Lulu), a principal in the Boston venture-capital firm Dover Medical Ventures, knows about assessing and taking risks. Smetana has helped high-tech and health-care businesses grow, but she never had started her own business before co-founding Ame & Lulu.
Like Murschell and the Trigelle founders, Smetana and business
partner Amye Kurson (aka Ame) said they were looking for head covers that were, in Kurson’s words, “fashionable and didn’t have an animal on them.” That led them to begin marketing their own stylish headcovers.
Smetana hopes “to grow a brand, not just a headcover company.” She envisions something akin to the Kate Spade accessory line, branching
into other high-end golf and tennis accessories.
“We’re selling to people with a lot of disposable income, and I think that’s a pretty safe place to be,” Smetana says.
So far, she and Kurson have financed the venture with their own money and small-business loans, and she wants to keep it that way. Smetana says she has learned at least one truth about investors like herself. “Investors are pains,”
she says. She recommends entrepreneurs “boot-strap it” for as long as possible.
That’s what Breaker has been doing. He says he and Olson have remortgaged their homes. “We’re into the annuity now, but I know there’s going to be a payback,” Breaker says.
Breaker has owned oil and gas and telecommunications businesses – rough-and-tumble industries – but he says golf is “by far the hardest” venture he’s undertaken. In his previous businesses, he was used to six- and seven-figure deals. Now he’s trying to convince consumers to spend $30 for 12 Birdieballs and
a Strikepad, from which the balls are launched. (The wholesale cost is $15.) But he says he has sold more than 100,000 Birdieballs at his 3,500-square-foot store in the Colorado Mills Mall and is starting to make inroads with retailers.
Some consumer marketing issues – such as developing attractive packaging and in-store displays – were new to him. And his store has given him first-hand experience with consumers conditioned to look for bargains.
“The golf consumer is spoiled rotten,” he says. “They get so much for so little.”
But he’s convinced he’ll win over golfers. He says he is pondering an infomercial, though he knows that will require at least another $500,000, and he’s weighing whether it’s time to look for investors.
“I keep asking myself: Are you doing this because you’re having fun or are you doing this because you think it will make money?” says Breaker. “Right now, I’m still convinced it’s going to make money.”