Blog #224
In this blog, the fourth of the series, I will continue sharing my take-aways, observations, and reflections from the Inspiring Entrepreneurial Strategy course I recently took at Harvard Business School.
Professor Bill Kerr presented a case study that involved the company CrossFit. The owner of CrossFit was going through a divorce and his spouse was selling her stake in the business for over $20 million. She legally had the right to and was considering selling to private equity. This would have had a massive impact on the management and direction of the company.
In other words, he would have to find $20 million in two weeks or he would end up with an unwanted business partner.
As the case progressed, we worked our way through the CrossFit business model, the franchising/licensing approach, and where the revenue originated. As students, this helped us see what was being monetized and what was not. There was virtually no nutritional or brand-related merchandise. The case further outlined the barriers to entry, as well as the opportunities for new start-ups and gym owners. The non-traditional management structure and meetings were outlined, the pros and cons were weighed. The case explored and described the CrossFit community, the growth in membership and loyalty, and the almost-militant passion they all shared regarding the impacts and outcomes of CrossFit. It became clear that the success of the people, the purity of the brand, and the clarity of the tribe were critical elements.
As entrepreneurs, each of us identified several ways to monetize various facets of the CrossFit industry. We all had different approaches, which led to some pretty heated discussions. Our group came up with numerous ways to generate the funds needed to buy out his wife and still be “mostly” loyal to the brand and tribe.
We then watched a video of Greg Glassman, the owner of CrossFit, to see how he ended up handling it. He appeared onscreen looking like he had just come from a workout, with his hat on backwards, casually taking to his audience through the whole ordeal. He opted for an expensive solution and obtained short-term loans at high interest rates to buy out his wife. He went all in, much to the chagrin of his doubters. Greg continued focusing on his tribe and brand, never wavering. For him, it was not about the money. My belief is that for him, it was about the potential damaging impact to the brand and wanting to save the brand image. In no way, shape, or form did he, like many others, want to come to just another gym.
The results? Greg’s tribe stayed strong and he has been extremely successful. Yes, there were challenges along the way, but he persevered and remained true to himself and his beliefs. It is worth mentioning that CrossFit is estimated to be worth more than $1 billion today.
This case has had a residual effect on me. It has impacted my thinking in a positive way. For example, since taking this course, I have been thinking about how I can focus more on the impact of my organization, brand, and tribe and less on the dollars.
Are you an entrepreneur who needs guidance on staying true to yourself, your brand, or your tribe? Do you want to learn how to do all three while taking your business to the next level? Contact us today to find out how!
Keep Smiling,
Kris
