Alumni Success StoriesScott Wilbur, M.B.A. '98
What kind of business did the entrepreneur start?
Scott Wilbur started GolfAmerica, a company he loosely defines as a "database company." The original product GolfAmerica intended to distribute was a CD-ROM containing listings and information about golf courses located across the United States. The intent was that a traveler could access this CD-ROM and find the location, course details, green fees and other relevant information for the various golf courses in the desired area. Ultimately, Scott realized that the CD-ROM was not necessarily the business’ best source of revenue and pursued licensing agreements with companies interested in book publishing, on-line services, and mailing lists.
What is the background of the entrepreneur?
Scott Wilbur graduated from Chapman University with a Bachelor of Science Degree in both Accounting and Finance and a minor in economics. He is currently pursuing his MBA at the University of Southern California and will graduate in the summer of 1998. He cites his father’s business, an accounting firm, as the likely motivation behind his pursuit of accounting. Scott tried to parlay his accounting education into his first job, a position as a staff accountant at Imperial Bank. He quickly recognized that he was not meant to work within the confines of a corporation with a rigid hierarchy and overly formalized work procedures. He was fired after working for only a single week when he attempted to streamline much of the accounting work by automating the process. Any time he met with resistance, Scott was entirely willing to "go over people’s heads" and complain to help accomplish something he thought was in the company’s best interest. His methods, however, were unacceptable to his superiors and his short tenure in the traditional corporate world ended.
Following his stint at Imperial Bank, Scott began his first true entrepreneurial venture, Artistic Illuminations. Scott used neon and mirrors to create unique wall hangings, tables, and other pieces of art. Scott soon found that the only source of revenue that would make this business viable was to sell his pieces in high-end art galleries with very large mark-ups. Scott was successful in having his pieces displayed in several major galleries, including locations on Rodeo Drive, but the economic downturn of the early nineties caused the market and his business to stagnate.
It was then that Scott began work on what would ultimately become his most successful venture to date, GolfAmerica.
How did the entrepreneur get the idea for starting this business?
The genesis for Scott Wilbur’s business was really his father. An avid golfer, and an entrepreneur in his own right, Scott’s father was often disappointed to find that during his travels he had missed the opportunity to play on many excellent golf courses simply because he did not know of their existence. He and his father decided to leverage their combined business expertise, Scott’s technical knowledge and his father’s golf knowledge and GolfAmerica had been "born."
What did the entrepreneur do to start this business?
After the initial idea had been generated, Scott began by doing a feasibility analysis of his business while at USC. Scott included in his research the various sources of revenue available for the fledgling product along with the potential costs and other concerns associated with starting a business, ranging from simple office logistics to the complexities of legal issues involved with licensing arrangements.
Having completed the feasibility analysis, Scott then wrote a formal business plan also while at USC. The idea, however, seemed too pressing and GolfAmerica was formally brought into existence in February of 1994 before the business plan had been completed. What followed was a very intense period of information gathering and organization. GolfAmerica hired a programmer to assemble the technical infrastructure of the database they were compiling. The programmer was granted a percentage of GolfAmerica’s ownership in lieu of a cash payment for his services. Scott also hired a staff of data entry and telephone operators to help collect information about America’s many golf courses.
Through a sometimes tedious process of trial and error, Scott and his staff found the most reliable method of gathering this information was through simple person-to-person phone calls. They had tried methods such as faxing requests for information, however, they found that faxes often required as many as four to five follow-up calls in order to collect the required information.
The original cost estimates for accumulating this information and producing their CD-ROM product had been estimated in Scott’s feasibility analysis and business plan at between $70,000 and $100,000, which they later found to be an underestimate. Scott’s father was a major proponent of the fledgling company and provided the initial round of financing, the full $100,000, as well as the cost overruns accumulated before reaching a marketable product.
Roughly a year later, the database had been completed, and GolfAmerica created the product it had initially envisioned, a CD-ROM with a database of roughly 15,000 golf courses throughout the United States. Although this had originally been intended as the main product and source of GolfAmerica’s revenues, neither Scott nor his father had foreseen the difficulties ahead of them in distributing through the traditional retail channels. While Scott had been busily building his product, the retail software market had gone through a dramatic shift. By 1995, when Scott’s product was ready for the market, getting retail shelf space for a software product required the negotiating clout of a major firm such as Microsoft or Intuit, a proven sales potential, or a willingness to "pay top dollar" for visibility.
Rather than abandoning the product, GolfAmerica made a logical leap and began to search for other sources of revenue for the database. One of the options considered was on-line services such as America On-Line, Prodigy and CompuServe. The Internet had not yet experienced the commercial explosion that is accepted as fact now. The company also considered licensing its information in book publishing deals and selling the information to direct marketers of golf products interested in reaching golf course pro shops.
Perhaps one of the best moves GolfAmerica made in these early stages was to partner with larger software companies to leverage their clout by getting GolfAmerica’s product included in bundles and as part of Original End Manufacturer (OEM) deals with computer hardware manufacturers. As a result, the company managed to get software distribution as part of a bundle with Interplay’s golf game "The Skins," and through an OEM deal with a hand-held computer manufacturer.
It became increasingly apparent, however, that the most natural market for GolfAmerica’s collected intellectual capital, its exhaustive database, was the on-line market. It was at this time that GolfAmerica licensed access to part of its database to the on-line content provider, America On-Line. The burgeoning Internet also provided them with several potential licensing customers, such as GolfWeb, iGolf, Golf.Com and Golf Magazine. Ultimately iGolf was granted a semi-exclusive licensing arrangement.
About the time of the deal with iGolf, Scott was becoming increasingly aware that GolfAmerica would not provide him with the continual revenue stream for which he had initially been hoping. Scott began looking for a company willing to buy GolfAmerica. Among potential buyers were the various on-line golf-related services such as i-Golf, and golfing publications such as Golf Magazine. Scott thought he had found a buyer in Golf Travel On-Line, and they signed a letter of intent, formalizing its desire to buy GolfAmerica.
Almost simultaneously, Scott learned that Interzine, the publishers of the iGolf Internet service had just acquired their second round of financing and had raised $7.5 million. Scott now had a potential buyer with far better resources than Golf Travel On-Line. Luckily for Scott, Golf Travel On-Line allowed the letter of intent’s thirty day time period to expire. Scott was now free to approach Interzine as well. Scott proved to be a proficient negotiator and successfully played Interzine and Golf Travel On-Line against each other to strengthen his bargaining position. Golf Travel On-Line threatened law suits for reneging on the letter of intent, but when Scott threatened a counter-suit for jeopardizing his deal with Interzine, Golf Travel On-Line quickly backed down.
Scott finalized a deal for the sale of GolfAmerica’s database information to Interzine in September 1996 and included in the deal a provision that enabled him to keep his job as head of GolfAmerica within the Interzine organization. Interzine has since been sold to the Times-Mirror media conglomerate, the owner of Golf Magazine.
When did the entrepreneur do these activities?
Scott and his father had the idea for GolfAmerica in late 1993. By October of the same year the feasibility analysis was done and he had begun the business plan. The company "went live" in February of 1994 and produced their first product by mid 1995. His sale to Interzine occurred in late 1996 and by March 1998, Interzine had been sold to the Times-Mirror Corporation.
What major problems did the entrepreneur encounter during the startup of this business?
One major problem that Scott encountered during the early stages of starting GolfAmerica was the hiring of the programmer who did the original database design. Scott made what he felt was a classic entrepreneurial mistake and gave the programmer a share in the company. Granting the programmer a share of the company may not have been a mistake given the fact that talented programmers are expensive and it was a way to complete technical work with no up front cost to the company. Where it began to be a problem was when Scott realized that he had overestimated the ability of the programmer and that the quality of his work was not satisfactory. He also experienced difficulty in availability with the programmer since he was in some ways "working for free." Scott actually ended up cutting him out of the deal by paying him off in the amount of $10,000.
A second major stumbling block during the start-up phase occurred when GolfAmerica met with difficulty getting retail distribution for their product through traditional software marketing channels. It was virtually impossible for a small software company with limited capital to attain desirable shelf space.
How were those problems solved?
In order to remedy the design problems that the original programmer had created, GolfAmerica contracted a consultant to come in and "clean-up" the database. The consultant moved the database from a dBase IV platform with a DOS interface, to a much more user-friendly and adaptable Microsoft Access platform that operated within a Windows user-interface. Scott utilized the consultants knowledge to become more technically skilled, learning the Microsoft Access database application in the process, and has since been able to perform the vast majority of technical work and feature enhancements himself.
To deal with their distribution problems, GolfAmerica pursued a number of different paths to capture other sources of revenue. GolfAmerica licensed portions of their database to on-line services, book publishers, and direct marketers. The company also pursued bundling and OEM deals with larger computer hardware and software firms and even attempted licensing the technology to makers of Global Positioning System devices.
In trying to capture these various alternative sources of revenue, GolfAmerica found that the growing field of on-line services was the most natural fit for their product, and ultimately became its biggest source of revenue.
Who did the entrepreneur use for help and guidance during the startup of this business?
Scott had a definite mentor and source of guidance in his father. Scott cited his father’s own entrepreneurial experience as the owner of an accounting firm, and a party to several syndication and real estate ventures as being wonderful learning experiences. His father was able to work with him through difficult strategic decisions, as well as provide practical advice about the product from a golfer’s perspective. His father also provided the original financing for the company. Scott was lucky in that he had an investor, business consultant, and typical customer in one complete package who was able to help him through the many ups and downs associated with starting and running an entrepreneurial venture.
Scott also relied on consultants and experts in various fields when necessary. Through the course of managing GolfAmerica, Scott hired a marketing expert with sales background in the golf industry who was familiar with the various trade shows and marketing channels to help gain market penetration for the product. Scott also, as was mentioned earlier, contracted a database consultant to help resolve several technical problems.
What advice would the entrepreneur give to someone thinking about starting a business?
Scott Wilbur is now a truly seasoned entrepreneur, and, as such, has several valuable pieces of advice garnered from his own personal experiences. The first bit of advice was that it is very easy to underestimate the costs associated with major projects. There are often unforeseen circumstances that are difficult to anticipate. One such instance in Scott’s experience with GolfAmerica was the turnover and associated retraining costs of his data entry staff. He found that it was necessary to develop a training manual and pay higher wages to help reduce employee turnover.
Another piece of advice Scott volunteered was the need to understand the distribution channels and marketing practices associated with your product or service. Scott stressed the fact that a good idea or great product can fail if you can not reach your target market. One solution to this problem according to Scott is the Internet. He considers it in many ways "a great leveler" that can dramatically reduce the barriers to entry for a fledgling entrepreneur.
One final bit of wisdom that Scott imparted is the necessity of exploring all your options. Had Scott simply focused on marketing the original CD-ROM product, GolfAmerica probably would have been another statistic among many failed start up businesses. Instead, Scott pursued any and every option available that would leverage the strengths of his business, and made GolfAmerica a success story.
Why was this entrepreneur successful at getting into business?
In looking at Scott Wilbur’s methodology and actions in starting and building GolfAmerica, it may not be much of a surprise that he was ultimately successful. David N. Perkins and Robert J. Weber in their article "Effable Invention" identify several behaviors and mannerisms that are common to many stories of successful inventors and entrepreneurs in a wide array of fields. They develop a metaphor for the "search" that an "aspiring" entrepreneur undertakes in developing his product or service.
Of the various search methodologies outlined by Perkins and Weber, at one extreme is "sheer chance," the possibility that an active searcher may "stumble onto" something out of pure luck. At the other end of the spectrum is the "safe bet," where a searcher uses formal methods that are almost guaranteed to result in success. Scott Wilbur, like most successful entrepreneurs falls squarely between these two extremes. Using Perkins’ and Webber’s terms, Scott’s undertaking of GolfAmerica would easily be categorized as a "fair bet" in which the searcher prototypes a possibility (or two or three) with reasonable expectations that it will serve with modifications. If it does not, other possibilities are explored.
This metaphor is almost an exact fit for the manner in which Scott built GolfAmerica. After doing the research necessary to build a feasibility analysis and start a business plan, Scott built his first prototype. Although he had to hammer out several technical details and had to modify his end product to fit the distribution methods that eventually proved optimal, he was working with reasonable assurance that he would hit upon a viable product.
Perkins and Webber also detail the actions of both compressing and expanding a search. Compressing the search involves reducing the amount of work necessary for the search to succeed, while expanding the search involves making sure that viable solutions "actually lie within the range being searched." Scott Wilbur achieved this by limiting his initial product to a simple but comprehensive database that would be functional but easy to build. At the same time, Scott was expanding his search by actively pursuing any and every potential revenue stream available to him.
In addition to the search methodologies that Perkins and Webber detail, they also include several other elements that are relevant to an inventor or entrepreneur’s success, the first is the psychological characteristics of the searcher. Perkins and Webber, on the psychology of inventors, state that, "Of inventors, one would certainly expect intelligence, ingenuity, and articulateness." These are all characteristics that describe Scott Wilbur almost perfectly. He is a pleasant and amiable person who communicates the intricacies of his business and industry with an obvious intelligence and enthusiasm. He also demonstrates a keen ability for making a connection between somewhat unrelated fields. The linking of technology and the hobby of golf into a viable business is just such the "making (of) fertile connections between one domain and another."
Even Scott’s general attitude fits the prototype Perkins and Webber found common to many inventors. He has a laid back sense of humor and a practical way of communicating his business without relying on technical jargon. He clearly has an "aesthetic sensibility," most clearly demonstrated by his first venture which saw his art find its way into several expensive art galleries.
Scott is definitely a creative soul who enjoys building concepts into real working entities. He has become a master at recognizing his strengths and utilizing them while understanding his weaknesses and finding ways to downplay or even eliminate them.
But, perhaps beyond his individual characteristics that have come into play in making GolfAmerica a success, are Scott’s well-polished social skills. Perkins and Webber make the point that "as technology has become more complex, invention is inherently a highly social enterprise."
This statement finds complete validation in Scott Wilbur’s story as an entrepreneur. He has managed to take what may be the world’s greatest social game and merge that with technology. That in and of itself is somewhat remarkable, but in this world of technological innovation, it is likely that had Scott not been the one to start GolfAmerica, someone much like him would have. What made Scott and GolfAmerica a success is that he was able to communicate his vision in a social context. Although much of the original development for his database did not include a need for social interaction, when he had a marketable product, the social aspect of his business became the single most important element. With the revenue stream from his CD-ROM product not what he had anticipated it to be, Scott was forced to find other markets that would support his business. By engaging the on-line services, book publishers, and other software companies, Scott turned what had been a failing product into a successful one.
- Paul Zimny