To Build a Successful Sports League, This Executive Had to T…

Editor’s Note: In the new podcast Masters of Scale, LinkedIn co-founder and Greylock partner Reid Hoffman explores his philosophy on how to scale a business — and at Entrepreneur.com, entrepreneurs are responding with their own ideas and experiences on our hub. This week, we’re discussing Hoffman’s theory: to lead an organization to scale, you have to be as skilled at breaking plans as you are at making them. Listen to this week’s episode here.

What happens when your best-laid plans turn out to be wrong? That’s when you become like every other entrepreneur — because even guys like Scott Rudmann can’t plan perfectly. He spent three years at McKinsey and Company, was an investment banker at Deutsche Bank in London, and founded the private equity firm Nectar Capital. And when he cofounded GLORY Sports International, a professional kickboxing league, he put all that expertise to use and developed a plan to achieve a big goal: He wants GLORY to be the world’s top stand-up combat league, and eventually grow bigger than the UFC. “It was always go big or go home with GLORY,” he says.

And yet, almost immediately after launching in 2012, he discovered he had to break almost every plan he’d made. Today, following a lot of change to how the company operates, GLORY is a worldwide phenomenon: It holds live events around the world, which are televised in 175 countries and watched by 10 to 12 million people. (In the U.S., its Numbered Series is broadcast by ESPN and its SuperFight Series is broadcast by UFC Fight Pass.) Here’s how breaking old plans led to better, bigger plans.

Related: Sheryl Sandberg Shares What She Learned About Growing Teams for Facebook and Google

What was the first time that you thought, “My original plan needs to be radically changed?”

We realized six months into the process that, uh-oh, our initial plans — and indeed fundamental tenets, fundamental pillars of the strategy that we were executing — were completely wrong. And not only do we need to make adjustments; we needed to completely rethink, and rethink it fast. We needed to change management. We needed to change strategy. We needed to change execution tactics. We needed to adjust our product. We needed to change personnel. And we had to do it all really rather fast, because when you’re in a live events business, you can’t just take six months off.

That’s a lot to change after six months! What were the signs that everything was wrong?

Well, I’ll tell you one very interesting and very powerful and compelling driver, and that is: Oh shit, we’re burning money way faster than we thought and we’re going to run out unless we change!

That’ll do it.

That’ll do it! There is a real art and a lot of science to starting a new business and seeing how it develops, and the dashboard dials show a lot of different things. Among them are strategic and marketing indicators — audience shares, viewership figures, attendance figures at events, all these sorts of things. And then at the same time you have an overlay of finance. So, are you hitting the revenue projections that you thought you were going to make? Are you using cash at the same rate of speed that you thought you were going to, or are you behind or ahead? Are you behind or ahead of your revenue budget? How are your margins developing in accordance with what you projected?

We had a vision for GLORY, which is to be the world’s number one league in stand-up combat. So our original planning was to run enormous, highly produced WWE-style events with incredibly highly paid athletes, lasers, and giant stage productions, and all this kind of flashy stuff that was very expensive to create in an arena, and to have huge audiences paying lots of money for tickets to come on in and watch it. And we thought it would be attractive on TV, and people would be so excited by this that we would be able to use our investment capital to build out the brand over time.

Well, by mid-2013, we were six months into it: We’d done a couple of events in Europe, we’d done one or two events in the USA, and we discovered that, wow, breaking into the sports market is a long-term endeavor. It’s a marathon, and not a sprint. And it’s not even a question of how much money you throw at it. It’s a question of time and education about the customers and bringing them into the fold and making them understand what your brand values are. We had to answer for people: What is stand up combat? What is GLORY? We recognized pretty quickly that it wasn’t going to happen as fast as we thought it was going to happen. So we needed to reformulate the events.

What did you do?

We simplified the events so that we didn’t have such flashy production. We cut the costs of screens and computers and smoke and giant ramps and DJs and lights and lasers and all that stuff, on the recognition that people were coming to the shows to see the combat. There’s a certain level of production that you need to make it look nice, to make a nice product for television and entertain the customer, but you’re not putting on a circus. So we had to re-tune our arena show so that it cost us a fraction of what it used to.

Related: To Scale, Sheryl Sandberg Shares 7 Ways to Build Resilience Into Your Company Culture

Secondly, we had to readjust our marketing spending. You know, the old traditional days — of spending millions of dollars on above-the-line advertising to pump your brand out into the masses — are long gone. It does not work that way anymore. We redeployed our marketing budget to viral marketing, social media marketing, activities and marketing endeavors that would generate grassroots involvement. And that worked much, much better.

And then, we found out that the management team that we put together to execute Plan A was not the right team to execute Plan B. There’s a certain set of skills and mentality that managers and senior executives have. And some are better at executing one kind of plan than they are at executing others.

In other words, the people who were good at putting on big, flashy shows weren’t the right people to put on small, scaled-back shows?

That’s correct. And it’s a mentality, right? Our initial management at the company was populated with executives who are very, very talented, but mostly their background was coming out of big entertainment companies with lavish budgets and lots and lots of staff. They were working at companies that perhaps had already been in existence for 20, 30, 40 years, and had built-in brand equity. So if you wanted to do something at that company, you had decades of investment already in the fanbase. That’s an entirely different kind of mentality than, “Wow, the funding for this startup is coming out of a few founders’ pockets and it’s not a call to corporate if you miss the budget; it’s a very personal call to your investor backers in order to keep things rolling.”

But like you said earlier: You can’t take six months off for a reset. How did you make all these changes while still running all these live events?

The one essential component — and it won’t be a surprise to you or to anyone who might be reading these words — is your commitment to the cause. If you don’t really, truly believe in what you’re doing, if you don’t believe in your heart and your soul that you’re changing the world a little bit by what you’re doing with your business, then you probably will fail. And you have to be willing to make the sacrifices of time, and probably in economics, to really bring your vision to life. The other thing, which is an essential part, is you have to have a great team of people around you that are similarly enthusiastic about the vision. If everybody is dynamically energized towards reaching the company’s goal, then people are more flexible. People will work any hours.

So you scaled back in 2013. GLORY has grown a lot since then. Have you added back some of the lasers and smoke machines?

We have found a happy medium. But also, we began thinking of the events differently. The primary source of revenue for GLORY, and for any major promotion, is media rights. So we started producing two television shows from each event, because it costs a lot of money to build the set, to stage the event, to market the event, and to promote it.

What does that mean? Like, one audience lets out and you bring another one in?

No, no. So, let’s say you go to a GLORY event this weekend. The event begins at around 6 p.m. You sit for the first two hours, you watch the GLORY SuperFight series. Then there’s a pause of between 30 to 45 minutes, where people can go to the bathroom, get some drinks, get some food, have a burger or whatever. Meanwhile, we change the look and feel of the ring. We change the lighting style of the arena. We change the sponsors’ names on a variety of assets, and we even change the style and flavor of the music that’s played in the background and on the telecast. And then we film another part of the night, which is the GLORY Numbered Series. And that’s another two-hour segment.

If I were setting up an event like that, I’d worry that the crowd would lose interest by the end of the night.

The way you handle that is to put your biggest fights at the end, so that people stay to see the headliners. But our challenge is usually not getting people to stay to the end; our challenge is usually getting people to come early. People know that it starts at 6 and it ends it at 11 or even 11:30, so they tend to come later. So in whatever city that we’re in, we usually have an undercard where we feature local athletes. The local guys can come and fight, and usually a lot of their friends and family come to watch them. So that’s how we fill it up early before our main events are televised.

Related: How to Keep Fighting and Pressing Forward When the Going Gets Tough

In a business like yours, I imagine that you have to always be thinking about making and breaking plans, because your product is based on fighters — and fighters get injured.

We deal with it on a daily, weekly basis so you know. People get injured. Athletes sometimes have a problem entering a country. That stuff happens. You have a backup — Plan B, Plan C — and you have to be ready to execute. For every event, we schedule at least two reserve fights, which are not the fights that we advertise to the public, but in case somebody gets injured on the day of or the week before or whatever, we can we can make the reserve fight one of the featured bouts. And then once you have that plan and you’re up and running and executing on a monthly basis, it just becomes second nature. 

Jason Feifer

Jason Feifer is the editor-in-chief at Entrepreneur magazine. Follow him @heyfeifer.

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