Arthur Blank used a startup mentality to build a soccer team in Atlanta. The blueprint contains lessons for every entrepreneur
There’s an organization in Atlanta that hosts employee karaoke nights every few months. New hires always sing first. In late 2016, Gerardo “Tata” Martino, a transplant from Argentina, took his turn at the microphone–thrown into the fire despite having just begun English lessons. His song selection reflected his progress. “Head, shoulders, knees, and toes. Knees and toes,” he sang, a cappella.
If that sounds like startup culture to you, that’s because it is–with one small caveat. The organization isn’t exactly a startup. It’s Atlanta United FC, one of the newest entrants to Major League Soccer. The team burst onto the American soccer scene in 2017, becoming only the fourth expansion team in MLS history to make the playoffs in its inaugural season. This year, Atlanta United is a legitimate contender for the league championship.
The team’s owner knows something about building a successful enterprise: It’s Arthur Blank, the billionaire co-founder of Home Depot. What’s the difference between founding startups and founding soccer franchises? “It’s exactly the same,” Blank says. “In terms of things that are important, there really are no differences.”
It seems an odd marriage, and the parallels aren’t perfect. Blank acknowledges a difference in scale: Home Depot can open as many stores as it wants, while Atlanta United can only put one team on the field. Atlanta United is also bankrolled by Blank, whose net worth is estimated by Forbes at $4.1 billion–a luxury most startups don’t have. And it’s enjoyed the built-in awareness and infrastructure of an already-established league.
But every entrepreneur can–and should–learn from the way Atlanta United was built to compete from day 1. It’s largely based on an element that drives most successful startups: culture.
Finding the right people
As Blank secured Atlanta’s MLS franchise in 2014, he started searching for the right person to run the team. He found Darren Eales, an executive from London’s Tottenham Hotspur Football Club, who became Atlanta United’s president later that year. During his interviews, though he didn’t know it at the time, Eales stressed all six core values Blank says he wants in his ventures: put people first, listen and respond, include everyone, innovate continuously, lead by example, and give back to others.
Starting from scratch was exhilarating, Eales says. He spent months researching other teams before filling out the rest of Atlanta United’s organizational chart, and started hiring people who craved the entrepreneurial challenge–for both business operations and the on-field product.
Eales and Carlos Bocanegra, the team’s technical director (the “general manager” in most American sports), spent time with every player they considered signing. While scouting Paraguayan star Miguel Almirón, for example, Bocanegra ate meals with him in between his matches in Argentina and talked extensively with his former teammates and competitors to gauge his personality.
The lesson, Blank notes, is that it takes time to define your culture and hire the right people to embody it–most startups fail because they move past that part too quickly. “I don’t really worry about the numbers,” he explains. “We know that if we’re doing the right things for the right reasons, whatever numbers we want will come out.”
Earning the community’s trust
With its org chart full (the team employs 78 full-time staff) and internal culture established, Atlanta United’s focus turned outward to its customers–the fans.
The team’s initial strategic plan emphasized three things: fielding a winning team, providing a positive fan experience, and connecting with the community. Eales made sure his face was familiar in Atlanta before the team even played its first game, spending up to five days a week with soccer fans at sports bars across the city. “The book we write should be called Pub Crawl Our Way to Success,” he jokes.
Earning the community’s goodwill has proved extremely important. Atlanta is often maligned as a “bad sports town,” but Atlanta United has already set MLS attendance records for a single game (72,035) and season average (48,200). On three separate weekends, the team has boasted the fourth-largest soccer attendance in the world.
Still, Eales is hyper-aware that sports fans can be fickle. That’s why, after every match, representatives from every department gather for a postmortem in the bowels of Mercedes-Benz Stadium to break down that day’s customer experience. The fan-first ethos is also baked into the team’s marketing: Atlanta United’s primary tagline is “Unite and Conquer,” and while every graphic displaying the word “Conquer” shows athletes, every graphic with “Unite” features fans.
These initial results remind Blank of how he felt when Home Depot took off–but like any startup, he says, Atlanta United can’t rest on its laurels. “You hear it and see it and feel it in a whole variety of ways, but you know when you have that kind of success,” he says. “Then it’s a matter of just being able to sustain it.” “These are the sort of things we’ve got to continue doing,” Eales adds. “The moment we start to take our fans for granted is the moment that this is going to disappear.”
From Inc. Magazine by Cameron Albert-Deitch, Inc.com’s assistant editor and a Brooklyn-based freelance writer.
Supreme Court Decision Means New Frontier for Sports Data By Ted Leonsis, Cofounder and Partner, Revolution Growth
Stats have always been the lifeblood of sports fandom, and a fan today has more stats available to digest and analyze than was imaginable even a decade ago: player movements, biometrics, hyper-detailed opponent history. Data analytics have become integral to teams’ success — but also to diehard fans’ enjoyment of the game.
So, the Supreme Court’s decision today to repeal the federal ban on sports betting and clear the way for legalized sports betting across the country is in many ways the logical outgrowth of fans’ obsession with data. It brings a multibillion dollar industry out of the shadows and into the sunlight, where its integrity can be guaranteed and consumers can be better protected. I believe today’s decision will change the face of sports fandom for the better.
Sports betting is built on a rock-solid foundation of data, plain and simple. The more data a fan has about a player or a team, the better he or she can predict the outcome of a game, or a possession or a play. And as our data analytics have gotten better, sports betting has only gotten more popular. A 2017 gaming industry study estimated that offshore bookmakers are earning $2.5-$3 billion from people in the U.S who are betting illegally. The same report suggested that about 12–15 million Americans are currently active illegal bettors — and they don’t include “casual” or “social” bettors in that count. The appetite for sports betting is there, and now, instead of offshore bookmakers reaping the benefits, we have a pathway to bring this revenue into the US economy — and to ensure that Americans aren’t getting ripped off when they place their bets.
Think about it this way: Wall Street is another industry that’s all about data. It’s about making informed decisions about what the market will do based on the data you have available to you. And there are tremendous safeguards in place to protect consumers — the SEC, for example — to ensure that trading happens on a level playing field. Sports betting is no different. Today’s decision paves the way for the implementation of safeguards against fraud in sports betting, including things like licensing betting operators to ensure they are legitimate and regulated monitoring of betting lines.
Many ask if this decision will impact the integrity of sports themselves. I think it’s just the opposite. I think that the increased transparency that will accompany more legalized betting around the country will only further protect against potential corruption. They say sunlight is the best disinfectant, and in this case I believe that is certainly true.
Of course, there are a huge number of questions about how today’s decision will play out across different states and throughout the different leagues. I don’t claim to know all of those answers today, but what I do know is that this is a new frontier for professional sports and teams who don’t seize on this opportunity will be left behind. As millennials and Gen Z continue to embrace the second screen, it’s not hard to imagine in the near future fans on their devices analyzing data, placing bets and communicating with each other in real time during games. Legalized sports betting will only bring fans closer to the game, ramping up the action in each minute and creating more intensity. It will bring new revenue into the economy, creating jobs and growing our tax base. Today’s decision is a great one for sports fans and I am eager to embrace it.
There is a deep mismatch between the skills our education systems nurture and the needs of society
In a typical Western education system, results indicated that “since 1990, even as IQ scores have risen, creative thinking scores have significantly decreased”. Traditional education does not sufficiently value innovative and entrepreneurial thinking – our system even dumbs down the creative genius that we were born with, according to a test developed by NASA.
Yet creative skills and mindsets are indispensable in a workforce that must be responsive to change and capable of finding new solutions to complex problems. The World Economic Forum itself has identified social abilities such as coordinating with others and persuasion, as well as complex problem-solving skills, as essential in the knowledge-based workplace of the near future.
We live in the times of autonomous cars, reusable rockets and artificial intelligence, yet we are still teaching in an education system that was set up for factory workers some 200 years ago. What we should be doing instead is to focus on skill-building and setting any learner – be it in compulsory education or in lifelong learning – up for success.
Entrepreneurial education as solution
Entrepreneurial education teaches the important skills of innovative and creative thinking, helping people develop a flexible “growth mindset” that can adapt to new problems. It is not about teaching business skills such as accounting and pitching, but what it means to be entrepreneurial – what mindset does an entrepreneur have, how does she stay motivated, how does she solve problems, and get people to see and follow her vision?
These kinds of skills are useful beyond the job market. They give people the tools to be active citizens in a complicated and fast-changing world, and should be a priority in European policy.
According to the European Commission’s new Entrepreneurship Competence Framework, entrepreneurial education includes life skills as well as business skills. It means learners can act upon opportunities and ideas and transform them into value for others, whether financial, cultural, or social.
Despite the importance of this mindset, according to a 2016 Eurydice study, no country has made entrepreneurial learning mainstream within education, no country effectively assesses student learner outcomes, and few countries have embedded experiential learning to develop this mindset and skills.
What would it look like to teach creativity as entrepreneurial skill?
Currently, creativity is often limited to one-off activities such as brainstorming or mind-mapping, rather than a continual emphasis on creativity throughout learning.
Research into creative mindset development indicates a minimum of four to six months’ continuous development is required to develop the neural capacity and enhanced plasticity required to be creative.
Ideally, this learning should extend across the whole age range of formal and non-formal education. Short-term “stun and run” creativity activities such as brainstorming or mind-mapping have limited value. Yet established entrepreneurship education programmes prioritize experience of the business start-up process. These programmes are not demonstrating positive impact in terms of the student perception of their own entrepreneurial capacity or their interest in following an entrepreneurial career.
There is a focus on the process of business development rather than a specific focus on the creativity needed to continually innovate; while this is valuable, it may miss a significant opportunity to equip individuals with the innovative and creative-thinking capacity they need. Education neuroscience indicates that without a sustained deep-learning approach, the levels of creativity will continue to fall as children progress through formal schooling. Prevalence of competition-based formats linked to start up or business ideas is detrimental to learner development in terms of self-belief, entrepreneurial skills and ethics. Entrepreneurship education has coalesced around an understanding that winning is a goal, yet research shows that this is patently not the case.
The impact of teaching creativity
The impact that sustained teaching of creative and innovative thinking has can be broken down into various areas:
Creativity as a skill: learning more is ineffective unless you can relate and link it to something else – if we so wish, we can think of the brain’s neurons as inherently “sociable” in that they wish to contact other neurons that they already know and are comfortable with. But creativity is about creating new connections; by teaching divergent thinking, we enable new connections in unexpected ways.
Creating innovative business models: equips young people with the skills to respond to the business opportunities they identify, equipping them with the competencies to adopt and create innovative business models aligned to their particular product or service.
Contributing to higher youth employment: provide opportunities to consider important but incidental aspects such as drop-out rates and difficulties relating to what teachers often describe as “difficult to teach pupils”; specifically, it responds to the skills gap identified, within Europe and beyond between the needs of employers and those of school leavers
Creating new markets and new jobs: new jobs and new markets are heavily reliant on innovation and spotting opportunities. By teaching entrepreneurial skills such as spotting opportunities, ethical and sustainable thinking and vision as laid out in EntreComp, new ideas for communities and start-ups will emerge, increasing employability of young people and developing the entrepreneurial and innovative skills required by employers.
The tech world can sometimes feel like Logan’s Run. If you haven’t made your start by the end of your twenties, you’re officially past it. Daniel Ek founded Spotifywhen he was 23. Steve Jobs launched Apple when he was 21. And Mark Zuckerberg found the time to launch Facebook amidst a busy schedule of breast feeds and playdates.
Where are all the old people? Y’know, the people with spouses and kids and gray hair and bad backs? The ones with cassette collections and landlines, and whatever other ageist stereotypes you can think of.
According to a working paper from MIT Sloan professor Pierre Azoulay and PhD student Daniel Kim, they’re busy starting companies — and are arguably doing a better job of it too.
Azoulay and Kim crunched data from the Census Bureau’s Longitudinal Business Database, and from the Internal Revenue Service. The pair discovered that the average age of a founder that went on to hire at least one other person was 45.
This was especially true for companies in the high-tech “knowledge economy.” Per an article on MIT.edu, from Meredith Somers: The researchers broke out the data into high-tech employment, VC-backed firms, and patenting firms. Across the entire United States, the average founder ages were 43, 42, and 45, respectively for those divisions.
The team looked at ages and startups in areas like California, New York, Massachusetts, and specifically Silicon Valley. The closest any founder age got to “young” was in VC-backed firms, where the average age was 39 in New York.
Similarly, the average founder age for one of the “youngest” technology sectors — in this case wireless telecommunication carriers — was 39 years old. The secret sauce behind the success of these older founders is experience. According to Azoulay and Kim, entrepeneurs are 125 percent more successful if they have previously held employment in the industry they’re operating in.
That makes sense. If you’re going to “disrupt” an industry — or at least exist within it — it helps to actually know what you’re doing. And if you’ve worked in an industry for some time, you’re best placed to see any gaps in the market that could be filled by an innovative new startup.
And I imagine older founders would have some innate advantages over their younger counterparts. For starters, they’d probably have access to more start-up capital, either through savings they’ve built up over time, or through assets they can sell or mortgage.
Age allows you to build connections and social networks. It follows that older founders would have the guanxi needed to find investors and customers, where younger entrepreneurs might struggle.
Azoulay and Kim are both very explicit in that they don’t want to discourage younger founders. In the aforementioned MIT piece, Azoulay pointed out that there are young people who have founded “very robust, very large successful businesses.” The likes of Zuckerberg and Ek are living proof of that.
But it’s worth remembering they are outliers. We know their names because they’re exceptional people, who have created exceptionally world-changing companies.The real picture of success isn’t the cliched hoodie-wearing millenial wunderkind, but is in fact much, much older.
Since the Great Recession in 2008, startups have become a major force in society. Today’s entrepreneurial culture — with lower financial barriers to launching a business and people’s increasing desire for flexibility, freedom, and purpose in their work — has bred a whole generation of young companies that have quickly scaled and revolutionized a wide range of industries. A number of those companies, like Airbnb and Uber, have achieved explosive growth and evolved into bonafide conglomerates in recent years. Meanwhile, older organizations looking to remain relevant and thrive are striving to figure out the practices that allow these startups to excel — and how their corporations can adopt them in order to catch up.
At the helm of this paradigm shift is Eric Ries, author of The Lean Startup and leader of the movement of the same name. The Lean Startup ideology focuses primarily on how startups can apply practices from Japanese manufacturing methodologies to be more efficient with both human capital and creativity.
In his latest book, The Startup Way, Ries has bridged the gap of these learnings from the startup realm into the larger world of big business, helping large companies innovate, acquire and retain talent, and increase revenue. With insights on the practices of historic powerhouses like GE and Toyota, as well as more recent disruptors like Twilio and Facebook, The Startup Wayprovides management practices for organizations of all sizes. Here are some of his top tips for established companies looking to leverage startup practices to evolve and grow their businesses.
Cultivating your workforce should start with accountability, not new hires.
Many business leaders think success happens solely by hiring superstar employees from high-profile companies. Ries warns that the cultivation of strong teams is not this simple. “If you’re unhappy with the innovation results you’re getting, the natural thing people do is go top-down by simply replacing people,” Ries explains. “They try to hire a hot-shot entrepreneur or acquire a startup or put up some sort of motivational posters — which is nonsense. It’s backwards.”
Ries outlines four layers of priorities that companies must tackle to ensure they’re growing and maintaining a talented and reliable workforce:
First, companies need to keep current employees accountable through clearly defined goals and rewards systems. To construct these, organizations must take inventory of their resources, including general budget and opportunities to promote current staff, to determine what is possible logistically. With clearly outlined responsibilities and incentives, employees will be more motivated to contribute to the organization’s short- and long-term goals.
From there, companies can build informed processes that determine how they handle decisions and work day-to-day. In order for an employee to contribute to a company-wide goal, they must understand how the broader organization operates and how their particular role may contribute. For example, if the aforementioned employee’s goal is to increase sales leads by 10% and the employee feels motivated by the offer of a $10,000 bonus upon its completion, they will only be successful if they understand the correct stakeholders and processes that might interact with this goal.
New hires won’t fix a company’s problems if the company doesn’t foster an environment conducive to retaining them long-term, Ries argues. He says workplaces that focus on an open exchange of ideas and learning opportunities are best positioned to draw in and keep talented individuals. These people want to work somewhere where they can have influence and grow personally.
“If you want to attract the best of the best, they have to believe that they’re going to have a significant impact with their own ideas in the company,” he explains. Ries also encourages companies to focus on investing in ongoing education for employees. Employers who encourage workers to learn new skills and be collaborative will not only satisfy the employees’ desire for professional growth, but will also enhance the existing talent within the company.
A benefit to taking the steps above is that you may expose hidden talent within your organization by empowering employees to join teams and take on the tasks best aligned with their strengths. This is common practice at growing startups, where roles and duties can change quickly. Employees often wear lots of hats out of necessity in order to tackle different business needs, often driven by whatever skills they’re good at.
When employees know how to be successful within an organization and are provided with opportunities to highlight their strengths, they can take on work that provides the most organizational value. As such, Ries believes companies should focus on unlocking talent of current employees before looking externally.
“What I have seen is remarkable,” Ries says. “When you change the structures around people, you discover talent in your midst that you didn’t even know you had.”
One way to expose this talent is to continually encourage employees to develop new skills, and ensure that your culture values continued education and personal growth. “Companies need to get serious about cross-training and cross-functional collaboration and not just talk about it,” Ries adds.
Entrepreneurial experiments drive personal development and company-wide innovation.
In a small, growing organization, it’s often easy for employees to get their ideas in front of company leadership and put them to the test. For larger companies, though, there’s a much longer pipeline from idea to testing — which can lead to missing out on products that could grow the business.
Ries says in his initial talks with organizations, he seeks to understand how they enable employees to propose and test ideas for new products and features, if they even have formal processes in place for doing so.
He strongly advises that large companies develop frameworks that empower individual contributors to vocalize and potentially test their ideas in a real-world context. This leads to personal growth, but is also essential for driving innovation and remaining competitive in today’s business landscape.
To do this, companies can create streamlined processes that allow employees to run experiments that impact P&L to a degree. These experiments can provide valuable insights on a project before more widely scaling, while simultaneously mitigating larger strategy or financial risks.
They also create highly effective environments for training employees in general management skills. For example, an employee could expose a new onsite feature to a small percentage of visitors to understand its efficacy. From this minimal but genuine exposure, the employee will have concrete data to determine whether or not the feature should be further invested in or scaled broadly.
“The companies that are able to do this will harness creativity, test out people’s good ideas, and allow people to grow quickly into leadership opportunities if merited,” Ries says. “They will kick the butts of old-fashioned companies.”
Jessica Buffington began her real estate career at the worst time possible — right before the great recession of 2008. However, working in a fragile housing market in Memphis helped Buffington find her niche in bank-owned and foreclosure homes. But then things changed.
“I helped build a mom-and-pop company to a multi-million dollar precinct firm because we were representing a lot of foreclosure properties at that time,” says Buffington. “Then the market started to turn around and there weren’t a lot of foreclosed properties. We were actually, as a firm, going into the red.”
Necessity is the mother of invention, and Buffington came up with an out-of-the-box idea to connect realtors with clients for a flat fee rather than a traditional commission fee. Though the idea wasn’t taken very well by her partners, she knew there was something there.
“I was basically at a crossroads where I could stay with the company I helped build and become partner, or I could break away and open my own company,” says Buffington.
The startup founder chose the latter. With $500 in her pocket, in 2015 she founded HelloHome, a platform where real estate agents get matched with sellers and buyers for a $3,500 flat fee. Following a stint at Memphis-based Start Co. accelerator and a $25,000 investment, Buffington has grown HelloHome to active listings in 17 states, 88 cities, and has saved home sellers over $5 million in commission fees.
The Memphis-based startup has seen rapid growth due to their simplified commission process. Often realtors charge high commission fees, around 3 percent, to represent the seller and buyer. On a $300,000 house, this could be up to $18,000. For first-time home buyers, who often get overwhelmed by the process, HelloHome provides a platform to save more money up front.
“They pay at closing when their home sells because there’s no upfront fee and it includes a full service agent, it includes all the marketing, getting into multiple listing services,” says Buffington. “We partnered with a company so it has professional photos and then we do one long cut and get their home ready to list.”
HelloHome has in-house agents, a team that has grown from four in February to 25 by the end of April. While the platform puts the customer first, the real estate agents benefit as well from exclusive listings, less costs upfront for marketing and staging, and time savings.
“Depending on the agent, who only work for themselves, they have to go out there and spend money out of their own pocket to try to convert their business. So what we do is we actually convert the listings for them and then match them with a home seller,” says Buffington.
“We cut out 70 percent of the work for the agents so by the time they’re matched with a home seller they are basically introducing themselves, putting their sign in the yard and key box on the door, and working that listing.”
That valuable partnership between the startup and the agent is the foundation of their revenue model. The home sellers pay the flat $3,500 fee with 50 percent going to the listing agent and 50 percent to the company. Huffington is also exploring an unfulfilled model — a finder’s fee-based network of home service professionals.
“At their fingertips during a transaction, they may need a termite person or they may need a real estate attorney. We have a dashboard that helps them connect with them automatically,” says Buffington.
The HelloHome team is gearing up for expansion across the Southeast, including Atlanta, as soon as they close their seed round with their eyes on a Rise of the Rest tour pitch next month.
“The seed round funds are going to get us to the next technology build as well as adding key hires and hiring more agents,” Buffington says, adding that they’re aiming to raise $1.5 million.
“We’re super excited and humbled that we were picked for Rise of the Rest. We’re preparing for our pitch but just being ourselves. Just showing the confidence that we came from — having to fight through the change I’m trying to bring to this industry.”
Courtesy of Hypepotamus https://hypepotamus.com/companies/hellohome/, Atlanta’s tech startup site.