Golf is known as a game uniquely suited to people in business. Perhaps that's because the two disciplines share similar requirements for success: a solid strategy, calculated risk and precise execution.
Robert Bobbett has learned this lesson the hard way–in both pursuits. Although he describes himself as a “duffer” lucky to shoot 100, Toronto-bred Bobbett used to love golf, and in 2000 he combined his passion with his knowledge of technology to tee up a venture, called 4everSports. Founded in Cape Breton, N.S., with his two brothers-in-law, 4everSports sold a product dubbed the TeePod, a high-tech system that linked the Internet to the links. Touch-screen kiosks located next to each tee box allowed players to score their rounds and later track them online, as well as get detailed information on the hole and order food and drinks from the clubhouse. The system even used solar power and a wireless network to connect to a central server.
Today, however, 4everSports has been bankrupt for more than a year, and Bobbett hasn't picked up a putter since the day his business went under. “We were in the process of raising capital, and we weren't successful in raising enough before we ran out of money,” he says. In its five fledgling years, the company burned through $3.2 million that it had raised through the personal investment of its principals, their friends and family, and grants from two regional government funding agencies. “There are a fair number of people who at the end of the day lost money in this, myself and partners included,” says Bobbett. “But that was a risk we all took when we went into it.”
Business, like golf, can humble the best of us. And as entrepreneurial tech stories go, 4everSports is not unique. Inventing a new product and turning it into a thriving concern is as tough as qualifying to play on the PGA tour. But Bobbett still holds out hope that even if his golf game is beyond saving, his company can be revived. But how can he turn this failed venture into a success?
Bobbett's assessment of what went wrong has little to do with the technology. In fact, the TeePod system continues to operate at the Lingan Golf & Country Club in Sydney, N.S., the semi-public course where it was first prototyped, in 2001. “A lot of our members use it all the time. It's like a running leaderboard throughout the day,” says Lingan's head pro, Chris Bunting. “We have probably 700 members, and I would think at least half of them use it on a regular basis, for sure.”
But just like in golf, even the most advanced equipment won't get you very far without the right strategy. 4everSports' real problem? It couldn't find the right revenue model to work in the hyper-competitive golf industry. Initially, Bobbett's plan was to cover the cost of installing the TeePod system, and the course would charge golfers an extra $2 a round to pay 4everSports. The golf club would benefit from new sales opportunities (the screens could display local ads), a fresh way to attract more tournaments with the system's scoring tabulation features, and it could drive increased food and beverage sales.
But Bobbett found the industry too price-sensitive for the surcharge. “The courses are always cutting their prices in an effort to get people to play,” he says. “That's their idea of marketing: a fire sale on tee times.” Golf courses viewed $2 per round as a cost they would have to absorb. At an average of 30,000 rounds per year, it added up to an additional $60,000 annually–and for an unproven concept at that. “We had a technology that worked,” says Bobbett, “but a revenue model that didn't.”
After about a year without sales, 4everSports changed to an advertising model: it would give the courses the technology in exchange for two tee times (or eight rounds) of golf per day, plus the exclusive rights to sell ads on its TeePod system. “We bundled the golf and the ads into advertising packages,” says Bobbett. “We would go to a car dealership and say, 'For a thousand bucks a month, you get all the advertising you want on these TeePods, plus you get 10 rounds of golf at this course.' It was almost like buying a corporate golf package.”
That model began to catch on. 4everSports focused its sales efforts in the southern U.S. to take advantage of a 12-month golfing season, and finally signed on a course in Florida and another in Arizona in 2003, and three more the following year (two in California and one in Florida). But, suddenly, Bobbett was running more than just a tech business. “Every time we acquired a course, not only did we have to maintain that relationship, but we had a whole advertising business to maintain,” he says. “It complicated our scalability.”
Outsourcing the ad business was fruitless–each potential partner insisted on 4everSports carrying all the risk. “That wasn't attractive when we were trying to get investors,” says Bobbett, who moved his family to Arizona, in 2004, to be closer to his market. “Investors are looking for a revenue model that's solid–money comes in, money flows out, in a fairly predictable way.”
Soon, Bobbett thought he'd found the sweet spot. He discovered thriving wholesale markets for tee times in states such as Florida, Arizona and California. Companies buy rounds of golf directly from the courses at a 10% to 30% discount, and then resell them as last-minute tee times. “Oddly enough, you can call a course and they will charge you $100, or you could call the discount wholesaler, and they'd give you one at the same course, for $70,” says Bobbett.
Bobbett signed an agreement to sell all bartered tee times received from golf courses with TeePods to a California wholesaler. He then actually started negotiating deals with courses in which 4everSports would install the TeePod system in exchange for two tee times per day. Advertising was something the courses would look after.
For Bobbett, it seemed like the perfect arrangement. Indeed, the two California courses already operating the TeePod quickly switched over to the new deal. But 4everSports' coffers were emptying fast, and talks with venture capitalists and other funding sources stalled. Bobbett and his employees had families to feed; in May 2005, he made the tough decision to begin bankruptcy proceedings.
Bobbett's now working in IT sales, but he still thinks the TeePod, which now operates only at the Lingan course, might yet live to play again. At least the price is falling: it used to cost 4everSports about US$120,000 to install a TeePod system, and the best deals Bobbett could negotiate would give a return on investment within 18 months. His target, though, is 12 months or less, which he says will soon be possible since the total cost of a system has fallen to US$60,000 to US$80,000.
Of course, 4everSports will need capital to take another swing, so Bobbett continues to beat the bushes. Who knows, he might even be willing to dust off his clubs and do a little business on the links.