Success for entrepreneurs is by no means guaranteed. The majority of businesses in the United States fail, and even the most seasoned business leaders make mistakes. And success is more than just a great idea — it’s a clear competitive edge, the right people working alongside you, and a willingness to accept failure.
At last week’s MIT Sloan Sports Analytics Conference, four founders shared lessons they learned from launching a business in sports.
Own your piece of the market. In his career as a baseball player turned founder and CEO of investment firm A-Rod Corp., Alex Rodriguez has learned to “untangle” himself from licensing deals and instead pursue equity. “It’s owning your brand,” he said.
Partner Jennifer Lopez once licensed more than 50 different fragrances but only had a 1 percent to 2 percent stake in each one. Now, Rodriguez said, Lopez focuses on a handful of fragrances but owns “the lion’s share.”
Nate Silver took a similar path with his FiveThirtyEight blog. He founded the blog in 2008, licensed it to The New York Times in 2010 and finally sold it to ESPN in 2013.
From the beginning, Silver said, his strategy was to own his space. “If you’re third-best at something, you have no shot in the media business,” he said, noting the struggles of companies that have tried to copy the success of BuzzFeed. “If you’re true to yourself, you’ll build an audience who sticks with you thick and thin.”
Maverick Carter, CEO of SpringHill Entertainment and the digital media platform Uninterrupted, has focused on developing a point of differentiation from networks that have paid billions for major sports’ broadcast rights.
Uninterrupted’s sports coverage has nothing to do with statistics or game coverage, Carter said. “We tell stories that show, ‘I am more than an athlete.’ We’re not going to cheapen or water down the story. We’re not going to be as big as ESPN. I don’t want to be. I want to be different.”
Find people who will tell it to you straight. Panelists agreed that the most effective leaders surround themselves with a diverse group of employees, executives, and board members who will tell founders the truth — and tell them when they are wrong.
Doing this could put founders in an unfamiliar position, Silver said. “When you gain power and authority, it’s not a natural relationship. You’re not used to having employees do it,” he said.
Ideally, Silver said, your core team members will agree with you about 75 percent of the time and challenge you the other 25 percent of the time. And not everyone should agree on the same things — Silver said the two people he trusts most at FiveThirtyEight often have opposing viewpoints.
Carter said one way to make employees comfortable with letting you know that you are wrong is to let your guard down and be willing to ask for help. “If you’re actively seeking the truth, you need to admit when you don’t know something,” he said.
Accept failure and move ahead. Only four hitters in baseball history have struck out more often than Rodriguez. Carter invested in a consumer product that failed even though it was being sold in Target and Walgreens stores. FiveThirtyEight predicted that Hillary Clinton would win the 2016 presidential election. DraftKings co-founder and CEO Jason Robins heard “no” from at least 50 investors before one venture capital firm said “yes.”
As an entrepreneur, Robins said, you have to be comfortable with the idea that you will fail. “I had thick skin about it. It didn’t matter. I kept going,” he said.
The startup mantra of “always iterate” has helped DraftKings pivot and respond to changes in the daily fantasy sports market, he added.
“You have to take crazy risks. You have to put your business on the line multiple times,” Robins said. “What got you to this point isn’t going to get you to the next point.”
As much as failure will impact you, Carter said bluntly, other people will not notice, and it will be up to you to get going again.
“Nobody really [cares] about your failure,” he said. “They’re doing their own damn thing.”