Authors: Wanyi Tang and Rodney J. Blackman
Corresponding Author: Rodney Blackman, [email protected]
Wanyi Tang is a doctoral Teaching Assistant at the United States Sports Academy
Rodney J. Blackman, is an Associate Professor and Chair of Recreation Management at the United States Sports Academy
Startup Leadership in Sports
ABSTRACT
A qualitative, phenomenological document analysis approach was taken to ascertain and highlight characteristics found in successful sports startup entrepreneurs. This information was framed in a thorough review of leadership characteristics necessary for general startup company success, as reported by successful startup entrepreneurs in response to interview questions. Other sources of information valuable for interpretation and understanding of this phenomenon came from individuals known for their successes and reporting their expertise, based on experience, in magazine and journal articles, as well as information from focus groups reporting results from their findings in online formats, newsprint articles, and other popular literature. Accordingly, 4 primary dominant leadership characteristics were identified among sports startup leaders. These traits included sound decision making, recruitment and retention of workers that fit the company and become followers, maintenance of clear vision, and prioritization to keep that vision clear and being attentive to strategy – to continually strategize for success. Interestingly, it was also determined that sports startup leadership characteristics do not appear in isolation – but rather, in each case in this study, effectiveness was augmented by leaders who displayed multiple leadership characteristics linked in a variety of different ways.
Introduction
The phenomenon of startup companies in the 21st Century is widely recognized to be heavily reliant on new technology. Almost by default, advances in technology have emerged as a form of currency. As such, developments in new technology quickly render old models obsolete, and just as quickly have risen to iconic levels in utility, reputation, and popularity. The rapid rate of new technological developments also represents added value to this new form of currency. Accordingly, technological change sets and re-sets precedent, such that change has become the new normal. But change and technology are still affected by the human element. Accordingly, entrepreneurial leadership has gained increasing importance in the landscape of the 21st Century workplace (Godbey, 2006; Leitch, McMullan, & Harrison, 2013; Linkner, 2013).
For entrepreneurs, the inevitability and rapidity of change has bred new features into time-honored perspectives on product delivery systems, customer service, and entrepreneurial leadership. While much of the fundamental premises presented in such perspectives remain relatively sustainable – such as Covey’s seven habits of highly successful people – there have recently entered the 21st Century workforce several refinements to traditional leadership and entrepreneurship paradigms (Blackman & Green, 2016; Godbey, 2006; Linkner, 2013).
Linkner (2013) indicated attentiveness to the idea that these refinements on traditional leadership perspectives have become a staple in entrepreneurial leadership and grown with increasing momentum. Simultaneous to, and somewhat synchronous with, the significance given to new ways to lead has come an explosion of new startup companies, effectively a gold rush of unique and profitable opportunities. Understandably then, startup leadership has not escaped the burgeoning curiosity about the new breed of entrepreneurial leader – in fact, startup leadership has garnered elevated attention levels, due in part to the growing popularity of the phenomenon of startup companies. Whereas, the new generation of entrepreneurial leaders has been conditioned on fingertip effort, split-second wait times, and being ready for what’s next, interest in the revelation of new successful leadership characteristics has been generally primed and piqued. To date, research about startup leadership has been in the making for nearly a decade. However, while much has been written about startup leadership generally, a gap in the research appears with regard to startup leadership in sports (Ensley, Hmieleski, & Pearce, 2006; Hagert & Lantz, 2017; Leitch & Volery, 2017; Linkner, 2013).
Investigating successful startup enterprises in sports can serve as an indicator to inform present and future entrepreneurs interested in pursuing startup opportunities within the sports context of directional forces for their energies. In addition, the examination of startup leadership in sports is informative to provide insight into the comparison and contrast of startup leadership generally, with startup leadership in sports. Awareness of the similarities and differences that emerge will enable sports practitioners to be dynamic in their endeavors. Being dynamic is a necessity, or often a direct response, in order to adapt to the high-velocity environments of competition and rapid change that are associated with entrepreneurial contexts in sports (Leitch, McMullen, & Harrison, 2013; Leonard-Barton, 1992; Renko, El Tarabishy, Carsrud, & Brännback, 2015).
Purpose of the Study
Matching pace with the rate of change is an increasingly difficult exercise. Functionally, sorting through myriad messages is also an increasingly important skill set. To give perspective, consider that the American Marketing Association estimated that the average consumer was exposed to 10,000 messages per day in 2017, with the majority of these messages being some form of behavioral influence suggestion. That number, 10,000, represents a marked increase over the past few years: Consumers were only exposed to 5,000 messages per day in 2006, and approximately 500 messages a day in 1970 (Johnson, 2006; Simpson, 2017). An unintended result of this sharp uptick of messages has been the collapse of the average person’s attention span – believed now to be just eight seconds (Saxon, n.d.). With all the attenuating competition for people’s attention, staying focused on the right things is increasingly difficult.
For entrepreneurs in the 21st Century, navigating through distractions has become premium – yet, it is also important to know what the right things are to be focused on – thereby narrowing the margin for error by filtering out unwanted or unwarranted messaging (Hagert & Lantz, 2017; Linkner, 2013). The results of this study may be useful for informing entrepreneurs and educators alike, regarding prioritization of time and energy, for the cultivation of successful entrepreneurial leadership habits.
Interestingly, leadership may be one of the most studied yet least understood elements of the human condition. It is no small wonder that what made the great leaders in history appear to have full command of both their followers, and their enemies. While the nature of competition may be drastically different in the 21st Century, continual study of leadership and the nuances of generational shaping and re-shaping of leadership paradigms is as pressing as time itself. The study of leadership in sports is especially important because leadership is such an integral element of the activities and operations in sports themselves, as well as professional and recreational sports companies, and the myriad independent businesses that support them (Hagert & Lantz, 2017).
Accordingly, the purpose of this study was to identify and describe salient leadership qualities demonstrated by successful startup entrepreneurs in sports in the past 10 years. In addition, a sub-purpose of this study was to establish a general sector baseline, constructed of identified entrepreneurial startup leadership qualities over the same time period – in order to properly frame startup leadership in sports.
Methodology
Descriptive analysis research design was used in this qualitative study. Primary source documents representing first-person reporting were interpreted by the researchers in order to establish patterns in the data, analyze meanings, and determine leadership characteristics demonstrated by notable entrepreneurs in sports startups over the past decade. In addition, other primary source data including public records such as mission statements, annual reports, policy documentation, and strategic plans were also included in researcher interpretation. These sources were influential for establishing patterns and meanings, as well as the codification of leadership characteristics. Additional secondary sources such as popular literature, magazine articles, online reporting, newspaper articles, blogs, and other social media postings were used to fortify interpretation, support meanings, and add valuable information for detailed analysis.
Criteria for data inclusion in this study included two phases, and the second phase included two rounds. In the first phase, for information on general startup entrepreneurial leadership, the descriptive records selected for inclusion in this study had to:
- Appear in a public domain;
- Be relevant to the topics of entrepreneurship and/or startup leadership;
- Address relationships between entrepreneurship and/or startup leadership; and
- Be utilitarian in their contribution to the codification of entrepreneurial leadership and/or startup leadership in general.
Additionally, in the first phase, data from both primary and secondary sources were identified, examined, analyzed, organized, and arranged based on interpretation of their fit into the entrepreneurial leadership startup perspective. Baseline descriptions of general entrepreneurial leadership startup characteristics were established as a stepping-off point for perspective, and to frame the review and description of entrepreneurial startup leadership in sports.
In the second phase, a distillation process of two rounds was used for selection of data inclusion. In the first round, a population of startups from the last 10 years was ascertained according to a wide search field, whereas the startups reviewed did not necessarily have to be aimed at the sports market, as long as their product was fittingly associated with sports. Accordingly, this broad-based tactic included startups focused on player safety, fan engagement, wearables and sensors, smart stadiums, active lifestyle, performance, e-sports, new sports, teams, entertainment, venues, and fantasy sports. Rationale for this approach was that starting broadly would ensure inclusion, selection, and netting of valuable, desirable, and useful data points for the depiction of entrepreneurs in sports startups, with sufficient and effective posturing for additional criteria to be met in the second round of this phase.
Accordingly, in the second round of phase two, additional criteria had a narrowing effect on the number of sports startups to be examined in this study. The narrowing occurred according to evidence of popularity, successful acquisition of equity funding of at least $500,000, and the profitability, or reasonable promise for profitability, of the startups. In addition, popularity, sustainability, and likelihood for future success were determined according to the presence and clarity of definitive, positive information identifying the startups and/or their entrepreneurial leaders as financially successful, fiscally responsible, noteworthy, remarkable, and/or extraordinary. They had to have established themselves as having aroused the attention of the public and possess varied and unique features that would propel them to continue to arouse and inspire public attention for the foreseeable future. Moreover, a detailed review of the four sports startup entrepreneurs and their startup companies is presented in the next section.
Descriptions of Selected Sport Startup Entrepreneurs and their Startup Companies
The first successful sports startup founder examined in this study was Brian Verne, whose startup company, Phenom, was founded in 2013. Mr. Verne received his bachelor’s degree in sociology from Oberlin College, in Oberlin, OH. He says of himself and his success,
I was just a kid who happened to be an above average baseball player. I was fortunate enough to play in college, and for the first 22 years of my existence, being an athlete was the most important part of my persona. As we move from childhood to adulthood we often lose sight of what it’s like to be a kid, and the excitement we got from pursuing our dream, no matter how big or small, becomes a distant memory. (Verne, 2016)
Verne’s company, Phenom, was founded in Cleveland, OH, and features an app that provides users the opportunity to create their personal athletic brand. Unlike traditional recruitment platforms, which mainly allow athletes to showcase their skills in the hope of getting the attention of college recruiters, Phenom positions itself as the digital identity for every young athlete. On the Phenom app, young athletes can upload photos and videos of themselves in training or competition. They can also share their personal athletic styles with their favorite gear and apparel (Adams, 2016).
In less than two years, Phenom had reached 40,000 users. In November 2015, Verne decided to move the Phenom team and their operations to San Francisco, CA, where the startup company had been accepted into the 500 Startups accelerator program. After completing the accelerator program in May 2016, during which time it more than doubled its use base, the Phenom leader once again chose to move – this time back to Cleveland (Adams, 2016). As of the data collection term for this article, their equity funding had reached $728,000 (Crunchbase, 2017b; Suttell, 2016).
The next sports startup founder identified in this study was Vasu Kulkarni, founder of Krossover, a web-based, sports video breakdown and analytics platform. Kulkarni attended the University of Pennsylvania, where he earned his Bachelor of Science in computer engineering and entrepreneurship. In addition, to Kulkarni’s credit, he was named one of America’s Top 25 entrepreneurs under the age of 25 by Bloomberg Business Week (Kulkarni, n.d.).
Notably, of his background and preparation for life as an entrepreneur, Kulkarni (n.d.) said,
Sports in general have a way of bringing people together in ways that nothing else can. They are the common denominator between the rich and the poor, the black and the white. The game of basketball has been a teacher of life for me.
Also notable has been the sheer volume of data and analytics that Krossover has amassed. Based on analysis of approximately 50,000,000 possessions in 14,000,000 minutes of footage of 350,000 games, Krossover has developed the world’s largest database of searchable game film integrated with interactive statistics in the form of charts, reports, and heat maps (Blue Star Sports, 2017; Lariviere, 2015).
The potential of Krossover has understandably captured the interest of several high-profile professional sports personalities to become investors: Stephen Ross, Chairman of the Board and owner of the Miami Dolphins; Dan Gilbert, owner of the Cleveland Cavaliers; and former San Antonio Spur and National Basketball Association (NBA) champion David Robinson. Not surprisingly, in May 2017, Krossover was acquired by Blue Star Sports, a sports management company with a focus on innovative technology, and Ross, Gilbert, and Robertson all signed on to become shareholders in Blue Star (Blue Star Sports, 2017).
The third successful sports startup founder examined in the study was Alex Mather, the co-founder of The Athletic, a subscription-based sports media brand, whose primary target segment is die-hard fans. With a monthly payment of $7.99, subscribers obtain access to exclusive content from some of the best sports writers across the country (The Athletic, 2017). Newly founded in 2016, the Chicago-based media publisher set itself apart from others through the founders’ belief that they could create a profitable news outlet despite the trend of free journalism heavily reliant on healthy payloads from advertisers. Instead of showing ads and using click bait content to increase view counts, Mather and other leadership at The Athletic made the executive decision to provide in-depth coverage and analysis that is ad-free, yet is compelling enough that consumers are willing to pay for it (Heitner, 2017a).
As of the writing of this article, the total funding of the company has reached $7,700,000 (Crunchbase, 2017c). Asked about his vision for the company, Mr. Mather, a Penn State graduate, explained,
We will wait every local paper out and let them continuously bleed until we are the last ones standing…We will suck them dry of their best talent at every moment. We will make business extremely difficult for them… We treat our writers really well, we pay them well, and we are doing amazing journalism. If someone has a problem with that, that’s on them. (Draper, 2017)
Consistent with this vision, Mather and fellow co-founder Adam Hansmann have adopted an aggressive operational strategy that includes not relying on the powerful advertising dollar. The unconventional tactics of Mather seem to be paying dividends, as the sport news outlet has been growing rapidly over the past two years, with new cities, sites, and journalism teams being developed and added throughout Canada, the midwest, and the west, including cities such as Toronto, Cleveland, Detroit and the San Francisco Bay Area. Additional big-name reporters have been recruited, but whether or not this aggressive expansion strategy will work remains to be seen. Skeptics are on high alert, however, given that this startup is in an industry currently experiencing overall cut-backs, and that the fundamental philosophy and service delivery system of The Athletic includes being willing to go full force and face first against primary industry trends (Rigdon, 2017).
Interestingly, similar challenges have been faced by the last startup sports founder examined in this study, Jason Robins, who co-founded Draftkings in 2012. Since then he has helped turn the startup into a sizeable corporation, earning himself the No. 8 spot on Fortune’s “40 Under 40” 2015 list of the most influential young people in business. Robins graduated from Duke University with a Bachelor of Science in economics and computer engineering. He says of his success with Draftkings and fantasy sports,
There were points at which I asked myself because there were a lot of people saying we don’t think that’s a good idea, don’t think there will be a big audience for it, you do ask yourself, ‘Am I just drinking my own Kool-Aid here? Is this really a good idea? …The business is nerve-wracking, but it’s exciting, too. The highs are high, the valleys are low, and they can switch day to day. If you get caught up in that and don’t just keep your eye on the ball, you can get distracted and get lost in the emotions of it all. (Kaufman, 2016)
It is difficult for any startup to navigate the ever-changing landscape of technology and innovation. For a fantasy sports contest provider, the ability to keep pace with the analytics trend is even more crucial for the survival and success of the business. In addition, the daily fantasy sports industry has been confronted with an increasing amount of regulatory oversight, which further raises uncertainty for the growth trajectory of the industry, in the immediate future (Takahashi, 2016).
In a successful business cycle, the ability to generate stable profits is a sign that the development strategy has been working and that the business is reaching the maturity stage (Petch, 2016). Under Robins’ leadership, Draftkings has been able to grow rapidly, having raised capital of $715,050,000 (Crunchbase, 2017a), and has been reasonably effective at being able to compete with the other daily fantasy sports giant, Fanduel, which was founded before Draftkings. However, Robins has yet to lead the company into turning a profit (Heitner, 2017b), and it may well be said that the extent of his ability to do so will have a heavy impact on the future of daily fantasy sports, and whether it prospers or struggles in demise.
While all four of these entrepreneurs effectively face the threat of demise, each in their own way seem uniquely equipped for efficiently moving beyond the fear associated with failure. To surge past said fear requires first a mastery of said fear or, in a word – courage. As Mark Twain famously once said, courage is resistance to fear, mastery of fear, not absence of fear.
And generally speaking, resisting fear was something that each of these sports startup entrepreneurs had – in addition to other unique characteristics, which also emerged in the findings of this study. Accordingly, a brief review of leadership traits identified as common in successful general startup entrepreneurs, as well as the findings from the entrepreneurial sports startups in the second phase of this study, as associated with the baseline established in the first phase, is presented in the pages that follow.
Review of General Startup Entrepreneurial Leadership
It may fairly be said that startup entrepreneurs are a breed unto themselves. That said – they are still able to be characterized. This section provides a review of identified startup leadership traits that have appeared in notable publications. Interestingly, most of these publications have dedicated resources for understanding entrepreneurial leadership in general, and startup leaders in the specific. While this review should not be characterized as exhaustive, it is formidable, and reasonably comprehensive. Accordingly, these compiled traits and the patterns in the data that they represent can be seen in the paragraphs that follow.
Interestingly, the authors who identified necessary startup leadership traits were often self-deprecating in their presentation of information based on collected empirical evidence, personal experience, and informed opinion. This was likely due to the relative uncharted territory nature of this kind of information, combined with an earnest desire to distribute information regarding success in the startup world. However, there was wide-ranging agreement among the sources reviewed for this study that one of the most prominent traits of startup entrepreneurs was the passionate commitment to creating a team by communicating clearly and regularly with co-workers – and leading them by serving them (Denning, 2018; Michael, 2017; Resnik, 2017; Young Entrepreneur Council, 2013). This trait was evidenced by startup leaders who have a daily huddle with the team and know how to inspire others. This trait was further evidenced by leaders who demonstrate that they are committed to serving their followers,
and who possess a sponge-like nature, listening to the people they have hired, letting them do their jobs, and absorbing and internalizing the information they get through feedback and observation (Kunigis, n.d.; Linkner, 2013). Such leaders also possess and demonstrate compelling humility. In addition, they work diligently to keep their governing board(s) of trustees or directors informed, regularly. These leaders know how to have a vision and inspire others with it, and they know how to create a culture of teamwork. This was often done through effective use of accountability – where they demonstrate that they know how to be accountable and call for accountability from those around them as well. This is sometimes a delicate exercise, but discomforts in this regard dissolve when these startup leaders show that they know how to communicate clearly, and properly balance being gentle with offering inspiration and challenge (Denning, 2018; Hughes, Ginnet, & Curphy, 2015; Kunigis, n.d.; Linkner, 2013; Michael, 2017; Resnik, 2017; Young Entrepreneur Council, 2013).
The second general startup leadership trait appeared as entrepreneurs who pursue and maintain high moral character. While morality is a relative concept, successful startup leaders were commonly recognized for their integrity, and widely respected for their habit to never compromise on honesty. Premium value was placed on laser focus for doing the right things and doing them the right way. At the same time, successful startup leaders show their human side – they are real people and go through common human experiences – they are just as human as they can be. Yet, their humility is uncontrived, their focus is exhilarating, and their vision is compelling. As leaders, they resist being managers and demonstrate their ownership of both success and failure through decisiveness, as well as unswervingly high standards for professional salesmanship (Denning, 2018; Howes, 2014; Resnik, 2017; Young Entrepreneur Council, 2013).
Third, startup entrepreneurs maintain a healthy balance between their personal life and professional life. Effectively, they are good to themselves, they live with purpose, and they maintain multiple healthy relationships for their life outside of work. They have achieved a mastery of self-awareness and are intimately tuned to the knowledge of their own personal strengths and weaknesses. This high level of self-awareness and honest self-appraisal enables them to bounce back quickly from setbacks, which is especially important, given the speed of change in the world of startup companies (de Haaff, 2015; Kunigis, n.d.; Linkner, 2013; Nowsourcing, 2018; Young Entrepreneur Council, 2013).
Moreover, building and maintaining a healthy team is one thing – enabling them to be successful is something more. Accordingly, some behavioral overlaps begin to appear upon examination of the fourth leadership trait of startup entrepreneurs, which is the ability to establish, cultivate, and consistently nurture a culture of success. Because they are willing to walk through walls to make the business succeed, their employees can sense this, and deep loyalty is often the result. Further, it was reported that successful startup leaders blanket everything they do with positivity (de Haaff, 2015; Howes, 2014; Kunigis, n.d.; Linkner, 2013). This is frequently manifest in their ability to listen, and to display a genuineness that reduces friction in the solicitation of honest feedback from their followers. In addition, successful startup leaders have a well-developed ability for receiving feedback, good or bad, and successfully internalizing what they have heard and observed. They maintain high-level responsibility, and in doing so, they can easily spot and unmask possibility, not just for themselves, but more importantly, for their followers. They possess a mastery of goal-setting and demonstrate that they know how to set clear goals and stay focused. In addition, these startup founders show that they are ready, willing, and able to learn from others. Further, not only do they know their own personal strengths and weaknesses, they are also aware of the strengths and weaknesses of their team members. Allowing and assisting team members to maximize their strengths and minimize the effects of their weaknesses then requires a substantial amount of flexibility, which is offered with enthusiasm. In the end, this enthusiasm is contagious – and, there is a belief that workers who are happy for the right reason(s) are workers who will also go the extra mile to ensure success (Nowsourcing, 2018; Young Entrepreneur Council, 2013; Zwilling, 2010).
The next common trait of successful startup leaders identified in this study was that they conduct and maintain a constant vigil of situational awareness. This translates into a necessity that they give honest feedback and know the subtleties of how to be effective at giving and receiving feedback. Further, they know how to manage costs efficiently, as well as knowing how to execute action effectively. Successful startup leaders pay close attention to new potential competitors, and they are diligent to spend appropriate time on their company’s initial positioning. These leaders also do their homework on minimal capital requirements (Howes, 2014; Kunigis, n.d; Linkner, 2013; Zwilling, 2010).
In addition, around them there is a sense of urgency, almost as if they are running down a road like loose electricity (Hewson, Evans, Mullen Jr., & Clayton, 2009). But this is not to say that they are reckless. Not at all – rather, they rely on methods that they know have worked well before and will likely work again. They are the opposite of reckless. Consider a hint in the word – reck comes from reckon – and they do more reckoning than most others (Child, 2017). Still, they know when to call in outside business experts. Typically, they have elected to offer customized products or services, which often requires that they also choose a large market in a growth industry (Howes, 2014; Kunigis, n.d; Linkner, 2013; Zwilling, 2010).
Another trait common to successful startup leaders is that they practice perseverance. They do not just have it – they practice it. Such perseverance was referred to by one source as stick-to-it-ness (Young Entrepreneur Council, 2013). This suggests close adherence to a plan; or, dogged persistence, and patience. Such is the perseverance required of successful startup leaders. Perseverance of this nature also suggests risk, and risk management. Successful startup leaders are strategic and intentional about effective risk management. This is part of the practice of perseverance. It is not as if there are no risks. Of course, there are risks; but these startup leaders welcome risk because they know how to handle it and they are attentive to the details of risk. So, they continually promote innovation and they have established a mastery of networking. They seek out established suppliers and channels, and they outsource nearly everything that they reasonably can, all as a part of practicing perseverance (Denning, 2018; Howes, 2014; Nowsourcing, 2018; Resnik, 2017; Young Entrepreneur Council, 2013; Zwilling 2010).
The final trait of successful startup entrepreneurs in this study can best be characterized in that, they are in possession of an X-Factor. Pedestrian understanding of the X-Factor is that it is some special talent, or quality, that has the potential to substantially impact outcome(s). This is not to be confused with luck. Some have observed that luck may be considered a skill. However, in the end, luck, or good fortune, is most often simply what happens when preparation meets opportunity. But the X-Factor of successful startup leaders is not luck. Interestingly, among startup leaders, this X-Factor is manifested in a variety of ways. Commonly, it appears in that they live in a state of uncomfortable – and are comfortable with that. Others have reported they live with paranoid confidence. Certainly, it has to do with risk, and their handling of risk. For some, it may be that they are very curious, and that success is attached to their curiosity, and their handling of what fascinates them. For others, it is perhaps the pleasure of their company, because they are confident without being cocky. At some level though, and in their own way, almost to a person, successful startup leaders possess a certain X-Factor. (Denning, 2018; Howes, 2014; Hughes, et al., 2015; Linkner, 2013; Young Entrepreneur Council, 2013).
Findings
Startup leadership, as a relatively new business phenomenon, has garnered the attention of business leaders worldwide. To get situated within the startup industry as an entrepreneur takes many things, as this study has demonstrated. The real focus of this study, however, was to discover the unique characteristics of entrepreneurs who have elected to open their startups in the narrow window of the sports startup industry. After identifying four sports startup leaders and developing a base level understanding of what has been reported as required of successful startup leaders in general, the focus of this study turns to the identification of characteristics necessary for entrepreneurial success in the sports startup industry. Accordingly, the following paragraphs in this section will highlight those findings of this study.
Sound decision making has been a standout leadership quality for the first sports startup entrepreneur in this study – Brian Verne. As his startup company’s leader, Verne faced a daunting dilemma when deciding whether or not to move Phenom from Cleveland to California to participate in the 500 Startups accelerator program. Decisiveness is clearly a desirable startup leadership trait, and this was not an easy decision. To make this move required more reckoning than less, and it required Verne to ensure that he was not being reckless. The lives of his followers would be dramatically affected. There was no guarantee of success but, there was a hint of promise; the promise of a unique opportunity to grow the business, and a development partnership with a history of success.
Making the decision to root up and roll out may not have been Mr. Verne’s favorite thing to do. Consider it, he would be asking people he cared about, had cultivated relationships with, and hoped to continue to work with to move to a completely new place, which was over 2,400 miles away. They would be moving to a new sub-culture in a new climate and be experiencing new routines. Everything would be new and not very much like it used to be. This could be expected to force them outside their comfort zones. Still, the decision had to be made; and it was his to make. Whatever the systemic structure, support scenario, consultation construct, methodology, or process, Mr. Verne had to make the final call. And, as the CEO, Verne made the decision. He and his followers took a step of faith; over 2,400 miles worth of steps.
No doubt he consulted them; so, with some measure of consensus, the whole company moved across the country. Clearly, Verne had engendered their loyalty. Clearly, they bought into the vision. Were there guarantees? Not really. Would this require some measure of sacrifice? Yes, to some degree. So, to get settled in, they would likely need to take a deep breath and try to enjoy the sunshine. It would help if the followers from Phenom would be interested to try new things. While that can be exciting, it can also be frightening. In addition, they would need to try to make new friends. And often in cultural or sub-cultural changes like this, one might be tempted to think that the people in the new place are weird, simply because they are different from the people in the old place. Eventually, for full adjustment it is common to realize the new folks are not that different after all. They just look at life differently. Perhaps the entire exercise would be tiresome, and potentially even dizzying. Yet, in the case of Phenom, the followers made the move, made the change, and, the company itself came through doing extremely well.
And then there was the decision to move back to Cleveland. Doing so meant saying goodbye to their new friends. Perhaps they would stay in touch. Perhaps they would take a different highway route back in order to experience more new things. Quite possibly though, going back was what was meant to happen. Maybe it was a package deal as part of the first move, so that made it easier going out, because they could rely on the promise to move back. Maybe that was part of the vision. That seems even better. Still, think about it. This was full commitment, out and back. Was it a good decision? In hindsight, all good decisions are good. This decision; well, it turned out great. The company is flourishing. So, was it genius? Maybe it was. At the very least, Brian Verne demonstrated the leadership quality of sound decision making.
Interestingly, what also emerged from this story of Phenom’s cross-country back and forth is that attached to sound decision making are many other startup leadership traits. For example, the ability to foster loyalty in team members, having a vision and communicating it effectively, being attentive to details, maintaining vigilance for situational awareness, cultivating the ability to work well with others, and being respectful of others’ ideas and vision for goals and solutions. These all become manifest as lived-in forward motion when sound decisions are made, and followers commit to their outcomes. Accordingly, good decision-making skills and systems are paramount for sports startup leaders.
Moreover, not uncommon to the questioning minds of aspiring sports startup leaders is How do you hire good people? You cannot just Google it. Therein lies a truth; Google does not have the answers for everything. Maybe someday such answers will be fingertip accessible, just a point-and-click away, but most likely, not. When it comes to hiring good people, there is a different feel for the truth. This was evident from the second entrepreneur in this study, Vasu Kulkarni. His story, and the story of Krossover, his startup company, was illustrative of the importance of hiring skilled followers to the success of a sports startup company.
Kulkarni’s approach to hiring the right people may be thought of as a bit counter-intuitive. Consider what he said when asked to respond to the question, what has been the hardest part about starting a company?
Initially you think it’s the money…. Eventually, you realize that money is the easy part – someone is always willing to back a good idea, it’s getting the right people that matters… In today’s market, when capital is becoming so easy to find, and the big tech companies are doing so well on the public markets, hiring quality talent and retaining them is the biggest challenge. (Taub, 2013)
This response is better understood in the context of what Kulkarni has said about the organizational culture at Krossover. When asked about giving advice to prospective startup entrepreneurs he said,
The biggest thing I tell everyone at the company, and whenever I speak [publicly], is that passion never fails…. I live the game every day – it’s been a teacher of life for me, and that passion is infectious. It trickles down to everyone who works at Krossover, and we make it a point to find people who really care about sports. (Taub, 2013)
Accordingly, the second key leadership trait for sports startups appears under careful examination of Kulkarni, and his approach at Krossover – and it is this: Recruitment and retaining employees that fit the company is vital to its success; there is great importance in followership. Establishing and cultivating followership is at a premium for sports startups. Not unlike team sports themselves, motivating others to work together, to make the sacrifices necessary to come together and to be effective together. This is a dominant feature among sports startups. It also helps a lot if these followers have a love and a passion for sports. Followers are important, very important! Recruit them and retain them, make sure they fit the company, then invest as much time and energy as necessary to maximize their contributions.
The third successful sports startup founder in this study was Alex Mather, co-founder of The Athletic. Mather and the story of The Athletic illustrate two other important sports startup characteristics, vision and prioritization. What Mather and his investors have set out to do has the potential to flip new-age journalism on its head (Heitner, 2017a). For him, it is not about the short run; it is the long-term that he has foremost in his mind. Yes, matters along the short run have importance, and he has been attentive to those, but the real traction for his idea may take some time to develop, and he understands that and is comfortable with it.
In the day and age of the 24/7 news cycle, even the sports news cycle, where the majority of reporting is reporting what someone else has already said, the art of original reporting may be lost. Mather and his mates aim to change that. To revive original reporting, and to reinvigorate the potential for authentic accounts of sports and its stories (Heitner, 2017a). Not unlike Verne and Kulkarni, Mather has sold his vision to his followers, and his investors, and together they are working to restore original sports reporting to its days of authenticity, enthusiasm, and creativity.
Of this vision, and the effects of clear vision and priorities, He, Standen, and Coetzer (2014) developed a model for understanding leadership and entrepreneurship outcomes. This model can be seen in Figure 1. Summarily, it is an image of the intersections of vision and passion with personality, motives and values, and cognitive abilities as they collectively pass through pursuit of opportunity and ability to motivate, problem solving skills, expertise and knowledge, and emotional intelligence toward leadership and entrepreneurial outcomes.
Figure 1 – Leadership and Entrepreneurship Outcome (adapted from He et al., 2014).
Mather and his team at The Athletic fit squarely into the operations of this model. Mather’s vision and passion, combined with his prioritization skills and personality, have developed into a realistic pursuit of the opportunity to revive original sports reporting. In addition, Mather has expanded his business acumen by surrounding himself with high-quality sports writers with expertise and knowledge of the field. Challenges along the way have been addressed with raw skills and emotional intelligence in such a way that what to others may be problems or weaknesses have been converted to strengths and improved opportunities. Evidence for this has come in the way that Mather and The Athletic team have responded to opportunities for growth – they have seized them, aggressively, and in such a way that may be considered surprising to the business environment surrounding them.
This is the mark of a true entrepreneur, and one of the factors that separate entrepreneurs from other business owners. Moreover, according to Saeed and Ibrahim (2016), the pursuit of expansion is an important factor in differentiating entrepreneurs from small business owners. While Toronto was the only city where The Athletic was turning a profit, a snapshot of the short run does not provide a clear enough view of an idea patiently waiting for the time of its full potential. The addition of more cities and more quality writers only serves to build momentum for such potential. Having the patience to rely on the strength of a good idea is the foundation for having the vision and prioritization skills to implement good ideas. Mather’s patience is cloaked with enthusiasm, and his holding out for the long view combined with his ability to differentiate task importance are prime examples of the importance of vision and prioritization to sports startup entrepreneurs to sports startup success.
Also important to understanding sports startup leadership is to know that to have vision and prioritization without a strategy is not effective. The fourth sports startup leader in this study, Jason Robins, and his innovative company, Draftkings, was illustrative of the importance of strategic leadership in entrepreneurial contexts (About Draftkings, n.d.). Robins as CEO of Draftkings, oversees company strategy. Make no mistake, Robins’ meteoric rise was not by accident. Kaufman (2016) reported that Robins started aiming for it while he was still in elementary school, although at the time, he did not realize it. Remarkably, early on his great success as a CEO specializing in strategy may have been hard to predict. He was a self-described tech-geek who, as a youngster, had taken his pleasure from memorizing box scores and having his parents quiz him on them at the breakfast table. He rather stumbled on his interest in numbers and his gift for strategy. On reflection, he said,
When I tried out for one of my Khoury League teams, they published all the ratings of all the players and I was more successful at memorizing everyone else’s ratings and who got what than I was at actually playing baseball. (Kaufmann, 2016)
Robins’ early interest in strategy also came from playing chess, Scrabble, and other board games as a youngster. As he grew older, he translated the strategy skills of his youthful game-playing days into the high-stakes strategy of the business side of sports. He studied how general managers assemble teams, and how they think about balancing salary caps. He was into sports analytics before analytics became a staple across the sports industry. He was a math whiz ahead of his time, or biding his time, as he continued to sharpen and develop his skills of strategy (Kauffman, 2016).
In addition to being a strategist, Robins also has well-established networking skills. His networking skills landed him associations with the other two co-founders of Draftkings, and in 2012 they launched what has grown into a phenomenon that has changed the way sports are consumed. Having raised over $700 million in capital funding since the company was founded, the innovative strategist has led Draftkings to become the #1 daily fantasy sports destination (Kauffman, 2016). Not surprisingly, new challenges are looming ahead, as some courts are looking to legalize gambling, and in time, such legalization seems a near-certainty, which could derail daily fantasy sports, at least temporarily. Yet, Robins is already working on a new strategy for that. Where others might see it as a setback, Robins has his mind set on making it good for business (Novy-Williams & Boudway, 2018). Understandably, challenges such as these only serve to underscore the importance of the necessity for strategic leadership for sports startups.
Conclusions and Discussion
Startup companies have been getting substantial attention over recent years. Part of this is business, and part of this is social, both key indicators of popularity, but not necessarily of success. Forbes has indicated a 90% failure rate for startup companies. It follows that understanding what worked for the 10%, or what were the salient factors in successful startups, can be an aid in understanding startup success (Cole, 2018; Robehmed, 2013). This study focused on sports startup entrepreneurs and what made them successful.
Another reason for examining the characteristics of successful sports startup leaders is because it is a socially responsible endeavor. To inquire and seek to understand what makes others successful falls into the right thing to do category, on the social responsibility spectrum, if for no other reason than to help someone else become more self-aware, and consequently, more likely to be successful. This would be true whether a startup company is pursued, or not. Individuals with greater self-awareness are more likely to behave in a socially responsible manner than individuals who are less self-aware (Dillon, Back, & Manz, 2014; Simsek, Jansen, Minichilli, & Escriba-Esteve, 2015).
This study has demonstrated that, while there are a myriad of characteristics that can go into the construct of a successful sports startup entrepreneur, there are a few that can be highlighted. The leadership traits highlighted in this study were sound decision making, recruitment and retention of workers that fit the company and become followers, maintenance of clear vision and prioritization to keep that vision clear, and being attentive to strategy, and to continually strategize for success. These characteristics highlighted in this study, given the circumstances and other qualities of the sports startup founders, were necessary for the success of the sports startup entrepreneurs in this study. It is not likely they would have been as successful, had they not possessed and employed the qualities highlighted in this study.
What also emerged in this study was that these characteristics of sports startup leaders do not operate and cannot exist in isolation. Effectively, several leadership traits are inextricably linked, not necessarily in a predictive fashion, to one another, as in, which traits are known to be linked to which other traits, but simply that the linkages themselves must appear. Accordingly, dominant primary leadership characteristics must also be coupled to other dominant primary leadership characteristics. For example, Brian Verne’s decision to move his company across the country, not once, but twice, back and forth, also required that he had the ability to engender the loyalty and trust of his followers. Likewise, for Vasu Kulkarni, recruiting and retaining employees was directly tied to his ability to implant his vision and passion into the hearts and minds of his followers. Kulkarni himself suggested this occurred through a trickle-down process, where the energy of his passion was visible to his employees, and infectious, as he called it.
Similarly, the vision and prioritization skills of Alex Mather at The Athletic would not get the chance to come to fruition unless he also was able to inspire others with his idea, solicit their alignment to his vision, and get complete buy-in for his counter-intuitive approach. Evidence that this has happened for Mather came via the aggressive expansion campaign that he and his followers have implemented. In addition, Jason Robins’ strategic success with Draftkings has not come without the assembly of highly skilled partners who have augmented Draftkings in ways such that sports enthusiasts, commentators, professional sports commissioners, business experts, judicial personnel, and politicians have been completely taken by surprise. Robins networking skills were necessary for the establishment of relationships that translated into cooperative working relationships. The formation of these relationships through networking have led to the kind of popularity and growth that have effectively moved even ancillary issues of gambling legalization to the forefront of business discussions across political party lines and over collective bargaining tables.
A final conclusion evidenced by the results of this study was that the constellation of factors that make up each successful sports startup entrepreneur are unique to that individual. Unlike a recipe, these circumstances involving these people cannot really be replicated. Each individual success story is a story unto its own. Certainly, there are takeaways, and certain generalities; but there really is no generalizability beyond the scope of these sports startup success stories. Upon review of this study, one may internalize the information, and upon self-reflection see a need to be more decisive, or visionary, or strategic, but the actual lived-in forward motion of these startups is unique, as are the successes of virtually all startup companies. Does that make this information worthless? No, but what it does do is it sets the parameters for readers going forward. In effect, the moral of these stories is that to be a successful sports startup entrepreneur, one must be diligent to consistently and frequently make certain that they are perfectly tuned to themselves, their abilities, their strengths, their weaknesses, their surroundings, and their circumstances. Essentially, sports startup hopefuls must maintain a mastery of self-awareness.
Future research in this topic area could conceivably go in multiple directions. Whereas additional sports startup companies are likely to be successful, future research similar to this study may be conducted in order to ascertain additional information about sports startups, but again, the generalizability of those results would be limited. Further investigation is merited regarding the self-awareness of entrepreneurs in successful sports startups, and perhaps information on tools or techniques for achieving high-level self-awareness would be generally beneficial to the growing sports startup industry.
References
About Draftkings. (n.d.) Draftkings executive team. AboutDraftkings.com. Retrieved, June 2017 from https://about.draftkings.com/executives/.
Adams, H. (2016, July 13). This startup left Cleveland for Silicon Valley. Now it wants to return. Forbes.com. Retrieved May 2017 from https://www.forbes.com/sites/henriadams /2016/07/13/this-startup-left-cleveland-for-silicon-valley-now-they-want-to return/#5cf 970762909.
Blackman, R. J., & Green, M. (2016). Sports and recreation management trends in New England. International Journal of Education and Social Sciences, 3(2). Retrieved February 2016 from http://www.ijessnet.com/wp-content/uploads/2016/03/4.pdf.
Blue Star Sports. (2017). Blue Star Sports acquires Krossover Intelligence. (2017, May 26). Krossover.com. Retrieved June 2017 from https://www.krossover.com/articles/ blue-star-sports-acquires-krossover-intelligence/.
Child, L. (2017). The midnight line. New York, NY: Delacorte Press.
Cole, N. (2018). Why do most startups fail? Because founders get stuck making this 1 shameful mistake. (February 9, 2018). Inc.com. Retrieved February 2018 from https://www .inc.com/nicolas-cole/the-majority-of-startups-fail-heres-why-thats-a-founder-problem-not-a-startup-problem.html.
Crunchbase. (2017a). Draftkings. Crunchbase.com. Retrieved December 2017 from https://www.crunchbase.com/organization/draftkings
Crunchbase. (2017b). Phenom. Crunchbase.com. Retrieved December 2017 from https://www.crunchbase.com/organization/phenom.
Crunchbase. (2017c). The athletic. Crunchbase.com. Retrieved December 2017 from https://www.crunchbase.com/organization/the-athletic.
de Haaff, B. (2015). 3 habits of highly successful entrepreneurs, HuffPost Blog, (August 17,
2015). Huffingtonpost.com. Retrieved, December 2017 from https://www.huffingtonpost.com/brian-de-haaff/3-habits-of-highly-successful-entrepreneurs_b_7990476.html.
Denning, T. (2018). Startup grind: The 9 habits of highly effective leaders who outperform the rest. Medium.com. Retrieved, January 22, 2018 from https://medium.com/startup-grind/the-9-habits-of-highly-effective-leaders-who-outperform-the-rest-704fc5707f50.
Dillon, P. J., Back, R. M., & Manz, C. C. (2014). Authentic corporate social responsibility based on authentic empowerment: An exemplary business leadership case. Journal of Values-Based Leadership, 7(1).
Draper, K. (2017, October 23). Why the athletic wants to pillage newspapers? New York Times. Retrieved May 2017 from https://www.nytimes.com/2017/10/23/sports/the-athletic-newspapers.html
Ensley, M. D., Hmieleski, K. M., & Pearce, C. L. (2006). The importance of vertical and shared leadership within new venture top management teams: Implications for the performance of startups. Leadership Quarterly, 17(3), 217-231.
Godbey, G. (2006). Leisure and leisure services in the 21st century: Toward mid-century. State College, PA: Venture.
Hagert, S., & Lantz, G. (2017). Sailing through storms: A practical exhibition of entrepreneurial leadership methods (Dissertation). Umeå Universitet, Umeå, Sweden. Retrieved July 2017 from http://umu.diva-portal.org/smash/get/diva2 :1108791/ FULLTEXT01.pdf.
He, L., Standen, P., & Coetzer, A. (2014). An exploratory study of entrepreneurial leadership: The perceived characteristics of entrepreneurial leaders. Small Enterprise Research, 24(2), 97-119.
Heitner, D. (2017a). Why $2.1 million was invested in a sports news subscription site. Forbes.com. Retrieved May 2017 from https://www.forbes .com/sites/darrenheitner/2017/01/10/Why-2-1-million-was-invested-in-a-sports-news-subscription-site/#23efbbf815e7.
Heitner, D. (2017b). The first five years of Draftkings. Forbes.com. Retrieved May 2017 from https://www.forbes.com/sites/darrenheitner/2017/04/25/the-first-five-years-of-draftkings/#1280bf865254.
Hewson, P., Evans, D., Mullen, L., Jr., & Clayton, A. (2009). Breathe. On No line on the horizon CD. Islands Records: London, United Kingdom.
Howes, L. (2014) Leadership qualities of successful entrepreneurs. Entrepreneur.com. Retrieved December 2017 from https://www.entrepreneur.com/article/238065.
Hughes, R. L., Ginnet, R. C., & Curphy, G. J. (2015). Leadership: Enhancing the lessons of experience. (8th Ed.). New York, NY: McGraw Hill.
Johnson, C. (2006). Cutting through advertising clutter. CBS News Sunday morning CBS.com September 17, 2006. Retrieved from https://www.cbsnews.com/news/cutting-through-advertising-clutter/
Kaufman, M. (2016, February 6). DraftKings founder Jason Robins, king of daily fantasy sports, got his start in Miami. Miami Herald. Retrieved June 2017 from http://www.miami herald. com/sports/article58787513.html.
Kulkarni, V. (n.d.). Homepage. Retrieved December 2017 from http://www.vasukulkarni.com/.
Kunigis, A. (n.d.). Startup leadership done right. Harford. Retrieved February 2018 from https://www.thehartford.com/business-playbook/startup-leadership.
Lariviere, D. (2015, February 4). Marriage of film breakdown and analytics makes Krossover a force in athletic instruction space. Forbes.com. Retrieved June 2017 from https://www.forbes.com/sites/davidlariviere/2015/02/04/marriage-of-film-breakdown-and-analytics-makes-krossover-a-force-in-athletic-instruction-space/#4bad39a43ba4.
Leitch, C., McMullan, C., & Harrison, R. T. (2013). The development of entrepreneurial leadership: The role of human, social and institutional capital. British Journal of Management, 24(3), 347-366.
Leitch, C., & Volery, T. (2017). Entrepreneurial leadership: Insights and directions. International Small Business Journal, 35(2), 147-156.
Leonard-Barton D. (1992). Core capabilities and core rigidities: A paradox in managing new product development. Strategic Management Journal, 13(5), 111-125.
Linkner, L. (2013). 7 Habits of highly successful startup leaders. Forbes.com. Retrieved November 2017 from https://www.forbes.com/sites/joshlinkner /2013/08/27/7-habits-of-highly-successful-startup-leaders/#360c96ab684d.
Michael, J. (2017). Startup leadership essentials: How to get ahead by not really trying to. StartUs Magazine. Retrieved January 2018. Available: https://magazine.startus. cc/startup-leadership-essentials-get-ahead-not-really-trying/.
Novy-Williams, E., & Boudway, I. (2018). If Supreme Court legalizes gambling in N.J.,
FanDuel and Draftkings will be rocked. Philly.com. Retrieved February 2018 from http://www.philly.com/philly/business/supreme-court-ban-sports-betting-new-jersey-fanduel-draftkings-ftc-christie-20180117.html.
Nowsourcing. (2018). 3 habits of highly successful startup founders. SmallBizClub.com. Retrieved February 2018 from http://smallbizclub.com/startup/personal-readiness/3-habits-highly-successful-startup-founders/Petch, N. (2016, February 29). The five stages of your business lifecycle: Which phase are you in? Entrepreneur. Retrieved May 2017 from https://www.entrepreneur.com/article /271290.
Renko, M., El Tarabishy, A., Carsrud, A. L., & Brännback, M. (2015). Understanding and measuring entrepreneurial leadership style. Journal of Small Business Management, 53(1), 54-74.
Resnik, N. (2017). 3 Characteristics of the best startup CEOs. Entrepreneur.com. Retrieved October 2017 from https://www.entrepreneur. com/article/287187.
Rigdon, J. (2017, July 14). Amidst industry cutbacks, The Athletic hires big names for new cities and a national site. Awful announcing. Retrieved December 2017 from http://awful announcing.com/online-outlets/seth-davis-stewart-mandel-big-names-reportedly-heading-athletic.html.
Robehmed, N. (2013). What is a startup? Forbes.com. Retrieved June 2017 from https://www.forbes.com/sites/natalierobehmed/2013/12/16/what-is-a-startup/#50dbad840440.
Saeed, M. S., & Ibrahim, F. (2016). Perception and importance of entrepreneurial leadership in small and medium sized companies. Case Studies in Business and Management, 3(1), 64-74.
Saxon, J. (n.d.). Why your customers’ attention is the scarcest resource in 2017. American Marketing Association. Retrieved October 2017 from https://www.ama.org/partners/content/Pages/why-customers-attention-scarcest-resources-2017.aspx.
Simpson, J. (2017). Finding brand success in the digital world. Forbes.com. Retrieved from https://www.forbes.com/sites/forbesagencycouncil/2017/08/25/finding-brand-success-in-the-digital-world/#522f1d01626e
Simsek, Z., Jansen, J. J., Minichilli, A., & EscribaEsteve, A. (2015). Strategic leadership and leaders in entrepreneurial contexts: A nexus for innovation and impact missed? Journal of Management Studies, 52(4), 463-478.
Suttell, S. (2016, March 28). Phenom founder offers blunt advice for backers of NE Ohio startups. Crain’s Cleveland Business. Retrieved June 2017 from http://www.crainscleveland.com/article/20160328/BLOGS03/160329787/phenom-founder-offers-blunt-advice-for-backers-of-ne-ohio-startups.
Takahashi, D. (2016, February 22). Daily fantasy sports outlook: No profits, lots of uncertainty, and dying unicorns. Venturebeat. Retrieved July 2017 from https://venturebeat.com /2016/02/22/daily-fantasy-sports-outlook-no-profits-lots-of-uncertainty-dying-unicorns/.
Taub, A. (2013, December 25). Krossover is building the ESPN for the 99% of athletes who will never actually be on ESPN. Forbes.com. Retrieved June 2017 from https://www.forbes.com/sites/alextaub/2013/12/05/krossover-is-building-the-espn-for-the-99-of-athletes-who-will-never-actually-be-on-espn/#2d33434424b1.
The Athletic. (December 2017). Homepage. TheAthletic.com. Retrieved December 2017 from https://theathletic.com/.
Verne, B. (2016, January 27). Phenom, a 500 startups company. Hackernoon.com Retrieved June 2017 from https://hackernoon.com/phenom-a-500-startups-company-ba232c37c3db.
Young Entrepreneur Council (2013). 12 essential traits of startup leaders. Inc.com. Retrieved January 2018 from https://www.inc.com/young-entrepreneur-council/12-traits-of-successful-start-up-leaders.html.
Zwilling, M. (2010). The 7 habits of highly successful startups. Businessinsider.com. Retrieved December 2017 from http://www.businessinsider .com/7-research-proven-habits-of-successful-startups-2010-9.
