Learning From The Soccer Business

3 Apr, 2009 | by
Topics: Sports, Strategy

Soccer

I have been spending many sleepless nights over the years watching the FIFA World Cup on TV and I can’t wait for the latest one coming up in South Africa in 2010. Between the occasional dozing off and celebrating the beautiful goals, I have been inspired to link up the soccer business with entrepreneurship, in particular startup business. I see that there are many important learning points that are useful for startups and small businesses.

The people business
The most important asset that any soccer club has is its people. So who are these people? They are the board of directors, the coach/manager, players and club supporters. Many of the clubs understand this fundamental aspect of their business and that is why they have scouts, agents, brokers, etc. scouring the globe for the best talents.

Now for the startup case, it is similar in the sense that they don’t have many assets in the new company except for its people. That is why it is imperative that the founders spend a large amount of time scouring for talents. I have some experiences putting together new startups and have also received kind advice from folks who tell me that it would be best that I get the people from my social circle, or plainly, people who I know. Despite this, I feel that it would be good actually for me to expand the talent search to outside my circle. This would not only reach out to other great talents but also to diverse views and styles. It is useful to understand that one’s personal circle is never adequate in the search for the talents of the world. The only challenge here is that managing a team of people you haven’t gotten to know very well can be a test of the person’s man-management skill.

And soccer is a small world so that’s why you see one good coach or player get poached by another club rather quickly with all the worldly rewards that they can offer. Despite this very fact, I am very inspired by FC Barcelona, which not only attracted the likes of Joan Laporta, the club’s latest president who is a great leader and very capable (he would have made a good CEO in the corporate world), to put forth his name to run for and won the presidency of the club. He reportedly has to personally put up a guarantee of 1.5 million euros to get a seat on the club’s board and subsequently manages the club with no salaries or pay! I guess this is the gold standard that all startup founders and senior management can aim for as a sign of commitment.

So in the startup arena, it is a rather small world too. It is important that after attracting the talent, the company would have to work hard to retain them. It won’t be that safe to assume that having a good technology or intellectual property is a greater asset than the crew and I always feel that developing the human resource is always tougher than developing the killer app.

Success is a patience game… so stick with your man
Now that we have the management team in place in a soccer club, the intuitive thing to do is to start measuring their success rates. Someone mentioned a very interesting point to me once that the ways of doing business could sometimes be counter-intuitive. I guess that in soccer coaching and management, it can be such as well. Manchester United is one of England’s and the English Premier League’s most successful club and guess what, they also boast the longest serving manager in England (more than twenty years of service in the same club). There was a time, way before Man United won the treble (UEFA Champions’ League, EPL Champions and the FA Cup), when many of the club’s supporters were calling for the manager, Sir Alex Ferguson, to be sacked due to abysmal performances soon after he took over. The board took no heed and kept faith with the manager, despite the intuitive action to replace the manager. The rest, as they say, is history.

The same can be said of startup founders and management teams. Many have given up, sacked their teams or lost patience soon after starting up their venture. Even for the very well initiated in the game of venture and startups, every new company/startup is a completely new animal. It will take time for the team to come together, work with new suppliers, and produce the new product. There must have been good enough reasons why the team was selected or came together in the first place, so when there are mistakes or abysmal results, let them have a chance to repay the faith placed in them in the first place. Besides, the odds are always against the startup in the first place.

The odds are always against you
We’ve heard umpteen times that a startup has its odds stacked against it and many have quoted that this is the great reason that they are not starting up. Comparing this to that of a soccer team in the league or at the World Cup, the odds are also very stacked against the smaller team to win. Looking at the winners of leagues and cups, there are very few winners coming from a handful of teams, e.g. there are 4 winners of the EPL since its inception in the 90s while the world cup winners are also from a few of the top nations of the world, namely Brazil, Germany, Italy, to name a few.

So to go around these seemingly insurmountable odds, smaller teams in the league learnt to segment themselves in their appropriate markets. They set realistic goals (like qualifying for the quarter-finals of the world cup, rather than winning it) and work hard to succeed one step at a time. Many EPL clubs, like Charlton Athletics and Bolton have had tremendous success using this strategy to ensure survival in the EPL and to attain UEFA Cup qualification spots.

The same strategy can be used for the startups. It is unwise and rather foolhardy to be going up against the Googles and IBMs of this world when you’re only getting your first few customers. Instead, plan for small victories and enjoy these smaller victories on the way up. Only when the company has learnt to “walk on his own”, then maybe it is time to buy a big name player like the big clubs. Remember: Rome is not built in a day.

Humans have attempted to go up against the odds since the dawn of our civilization. Thus we shall not be the first, nor the last, to be undertaking such a venture. Odds are just math.

Lead in the trenches
This is one of my favorite points. In soccer, barring injury and age, the captain of the team is almost always on the field to marshal his troops, or working with his team during training sessions. For some teams, he is the right hand of the coach. He would be rather ineffective when sitting on the bench or absent from the training sessions. And looking at past history, many winning teams are captained by inspirational, hardworking, no-nonsense, dedicated captains.

Now back to the trenches of the startups. It is important that the CEO of the startup is ostensibly working hard to boost morale, steer the ship in the right direction, discipline wayward team members, and project the culture/image of the new company. All these can’t be done if the CEO is off to the golf course during the work hours every other day. In fact, I think it would be a great bonus and motivation for the challenging environment of the startup, if their CEO is seen or heard working hard with the rest of the team. With modern technology, the CEO need not be on-site anymore but more importantly to remain in very close communication and contact. Leading in the trenches is tremendous inspiration

It is not only about big money and big spending
We are very familiar with the big and rich clubs of the major leagues in Europe (Manchester United, Real Madrid, Barcelona, Chelsea, etc.). They have used their great amount of funds to bring in the big name players and created a retail brand and hospitality business within their stadia and abroad. Then there are the smaller clubs which lament that they do not have the financial clout of the big clubs or do not have backers like the famous Russian or Eastern Europeans (you would know who they are if you follow the UK game).

However, we need not look further than Charlton Athletics to see that big money is not always needed if you know what needs to be done. Many years ago, Charlton didn’t even have a stadium that is befitting of a Premier League club. Under their long serving manager, Alan Curbishley (this will also relate to my earlier point of keeping faith with your people), they got their supporters to rebuild the stadium, build a sustained run in the league with average players that played wholeheartedly for their manager. They managed to not only survive in the EPL but managed to get into the UEFA Cup!

So what did Curbs, as he is affectionately known, do then that allowed his club to achieve such a relative success with a smaller club? Because Charlton didn’t have big money, they used their ingenuity and allocated resources wisely. They bought players who were relatively good but not too pricey and got their supporters to help out with the stadium.

This is very prominent in many successful SME and startup cultures as well. Instead of looking at the negatives like the lack of funds, they put their scarce resources to good use. A smaller office space perhaps, creative ways of guerilla marketing concepts are good examples of low budget business methods. On top of that, add in more heart and sweat to bring about a strongly bonded culture and a can-do spirit, and we will then have the necessary heartware as well. In fact, sometimes, having a huge amount of funding can hamper the ingenuity and entrepreneurial spirit of the team as all they need to do to fix problems is to throw money at them. I guess you can say that this is part of bootstrapping as well, as it doesn’t involve merely funds but the intelligent use of scarce resources for success.

So the next time you get to watch a soccer match, think business, think startup strategies, and it may help build your company into a million-dollar enterprise.

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