What a Startups Can Learn from the Kansas City Royals
Meet David Rinehart, co-founder of ClaimJockey (pictured here with wife and ClaimJockey president Wendy Rinehart). ClaimJockey is,one of the 15 businesses participating in the first cohort of ScaleUP! Kansas City. Below, he discusses what startups can learn from the lessons of baseball and the incredible ride of the Kansas City Royals.
As the 2015 baseball season opened last week, I thought about how baseball related to the startup of our company ClaimJockey, particularly to our philosophy of leadership and team development.
There are quite a few similarities between baseball and startups. If you are a ball player, you must accept that you are going to fail. A lot. It’s what you do with that failure that makes the difference between winning and losing. If you’re an entrepreneur, you face that same probability of failure. Startups often have to make many decisions quickly, and with less resources or talent to draw on than more mature enterprises.
Focusing, building on the right moves (not the wrong ones) and knowing the difference can make or break a “rookie” in baseball or in business.
As the leader of your business, I invite you to think like a baseball general manager. You’re the one who has to build a vision that will take you to your own World Series, just as the Royals GM, Dayton Moore, did six years ago.
The first fact every GM knows: building a winning team will not happen over night, despite all your drive and desire. Even the most well-funded startups will not start off only hitting home runs. It takes time to build a cohesive team, one that has a shared vision. The second fact is that you will not, cannot and most importantly should not, do it alone. And the third realization in baseball, and in business, is that no one can predict the unpredictable. Freak storms, jittery investors or a little pine tar on the bat—whatever it is, keep focused and moving forward. The next thing you know, you win a wild card game in extra innings and your team is in the World Series.
But the unpredictable isn’t just what got you there. Sometimes unpredictability is what you have to overcome and survive. That is why the most important fact of every successful GM, or business leader, is knowing to truly build a world-class team, you must have a plan.
When they told you it takes several years to establish your business model, they were telling you the truth. Anyone beginning a new company of any sort must make many decisions, and wear many hats. It’s common to feel unequipped to play all the roles well. Regardless, early decisions have to be made.
- What is it you want your company vision to be?
- What do you sell, serve or produce?
- What do you need to move forward?
- How will you find it?
- Who will you need to play ball with?
- Where will you play?
You already know, that in any business during the beginning stages, mistakes are going to be made. Perhaps you purchased a CRM that isn’t really working for you, but you can’t yet make the financial leap to change it. The only way to make the building process successful, despite the setbacks, is attitude.
Entrepreneurship is a team sport.
As CEO, the buck stops with me. At the end of the day, I’m the one that all the problems come to. Acknowledge past mistakes and begin building a “new” plan around those mistakes, not just by overthrowing the old, but by truly learning from what didn’t work and why.
Most importantly, trust your team by including them in finding the solution. You may have started alone, but not relying on your team is a recipe for disaster. Seeking solutions from others keeps you moving forward on all fronts.
If you are going to build a team to compete, what does your team need to look like? That depends. What’s the market your company will be competing in? Can you define it? More importantly, can you define what it will take to “win” customers in your market? What two or three core competences must your team (company’s) players (employees) have to not only beat the competition but take you to “The Show” (or in entrepreneurial terms: take your company to an IPO.)
The Royals were faced with the same questions. Two major issues for Kansas City were the limited budget available to buy talent and the size of its stadium. Out of all the MLB stadiums, Kauffman has the largest outfield. Because of this, the Royals decided to focus on the two fundamentals they believe it takes to win: pitching and defense.
What they knew early on is that they had to build a team that played well at home.
The team had to match the stadium. They knew it would take some building years, but the Royals wanted to be a strong defensive team. Instead of throwing high dollars at offense and straining their limited budget on hitters, they wisely focused recruitment efforts on pitching speed, accuracy and athleticism.
By planning, recruiting and training in these areas, they reached not only the playoffs but made it all the way to game 7 of the World Series.
Now that you’ve thought about a few goals for your new company, when do you start? Several factors influence this decision.
How far will your budget stretch to acquire your team and outfit them with the necessary equipment to play? Who do you hire first, second and so on? When will you need each role to expand, and how long before your team produces ROI? How much time do they need in the minor leagues learning their craft, or do you spend a little more on people with the needed knowledge and experience in place?
Knowing these answers is crucial in building a company. The Royals correctly set a direction to acquire core talent and grow them together into a winning team with a shared vision. A vision so inspiring, the rest of the country gained a new respect for their team.
Do you know what a winning culture looks like?
That’s OK… just like this article’s analogy—learning from other’s success is a valuable tool. Sometimes you have to borrow what you do not yet have.
When I was with General Electric Capital, we called it “Not Invented Here.” You must know what a winning culture looks and feels like, and then you must have the discipline to recruit those with talent that understand and are willing and able to adopt your culture.
The Royals correctly understood that one person does not make a team: a team is a group of focused people working together for the same goal. A very good place to grow from is necessity. However, to survive the dark days of early growth, and the sometimes turbulent storm clouds that come with it, team members must have a shared vision.
As your team’s GM, this, too, falls on you. It’s your job to look at what is possible, not just what is probable, to bolster the team, to remind them there are “building years’ ahead of you, but the vision remains.
The Green Monster
At ClaimJockey my team lovingly calls my plan “The Green Monster.” My “G.M.” consists of a series of integrated spreadsheets with interlocking formulas that serve to give immediate projections on everything from work product per salary breakdowns to market penetration projections all in one neat little 900,000 spreadsheet long package (a little hyperbole perhaps, but not by much according to my staff).
From the early days of beta testing years ago, I was building a picture of this business that we have today. It has changed over the past few years. Business is a living organism, so it grows and adapts to our understanding of the market for the better as we add more information, gain new clients and obtain new insights.
But from the very beginning stages, when we were still working out of my home basement with only five core employees (players) and surviving on a shoestring budget, the projections we made for all our key items still hold true. Our labor costs are what we projected. Growth is happening in our market (12,000 baby boomers have been turning 60 years old daily and have been for some time), advertising costs, how many claims we can manage at our current location down to exactly what month we will need to look for larger office space to accommodate said growth—all of it is in the plan/Green Monster.
By researching, documenting, learning and factoring in as many uncontrollable variables as you possibly can, just as the Royals did, less initial mistakes are made. Your team can believe in your vision even easier.
The losses, when they do come, are simply practice for the bigger future win.
Inevitably, if you are the person who started your company (and this can be true for ALL leaders), letting your team take over to see your vision through can be difficult. Imagine: you’re at bat, and you slam one, dropping the bat and taking off for first. You know you hit a bomber, so you don’t even think as you fly by and make a break for second. As you round second base the first few steps are clear, and even though the third base coach is waving you to stay, you make a break for it. All of the sudden, a guy with the arm of a cannon in right field throws a bomb and your hope for homer just died: you’re OUT!
So what do you do when that “unexpected” throw comes? How do you recover?
You tip your hat to the other team, get up and dust off for the next inning. Hopefully, you learn to start listening to your team.
Because one of the core decisions that you, and the Royals, made when you started this thing was to grow a group of talent to win.
You’re out, but you’re just one person on the team and when you fall, they are there to pick you up because they believe in your company’s overall vision. The strawberry on your leg doesn’t hurt quite as badly now that your team is there to back you up. You know now that you can look to your third base coach and they will have your back, and they know in return they will be heard, and valued. When that next monster throw comes, your team will tell you to stay at second and not be distracted.
And this time, you will listen. This time you will reach third because of your team.
It’s all about pushing the final run across the plate.
It takes a lot of years and personnel changes to build a winning team. What you learn is that it took the team and the plan to score that run. In fact, by now hopefully, you’re winning most games.
It took 29 years for a national love story to emerge of the little team that could win the American League Championship, and fell only one out short of winning the biggest prize in baseball. We all know what happened after the season ended. The Royals began their bid to take the crown in 2015. They have a brand new season and brand new challenges to plan for, work together and fight through. So will you.
As of this article, the Royals have the best 2015 record in baseball: 7 wins 0 loses.
Baseball is a game of adjusting to failure and planning to win in spite of it. Do you have what it takes to fail most of the time and still fight through? Do you have the guts to take the field again after striking out? Do you have a vision and a plan to get you and your team there?
If so, then… Play Ball.