Three Things Golf Taught Me about Business Strategy
I've been listening to this podcast lately. And it’s taught me so much about content, community, and business.
The one catch? It's not even a business podcast – it’s about golf!
I'm guessing I’ve now lost about 99% of you, but give me a second. I want to share three of the top takeaways I’ve learned from listening to this podcast – and they’re all about business strategy.
Background: Different Leagues Equal Different Strategies
Okay, so for the non-golf-obsessed out there, here’s what you need to know about the golfing world.
The PGA Tour has been the dominant Pro Golf circuit for decades. But a new entrant, the Premier Golf League (PGL), is trying to change the tour. The PGL aims to change the business model of how players and companies make money and the entertainment value for fans.
They’re doing this by recommending a different playing format that involves the regular individual competitions alongside team competitions. And one of the teams is selected solely by fans.
So, What Does This Have to Do With Business Strategy?
A lot!
The fascinating takes from the podcast that you will care about:
1. Decentralization and Financial Incentives Work
Web3 experts will love this. The PGA is exposed because of its business model, which is extremely top-down and centralized.
The PGL, on the other hand, sees a growth opportunity in giving the players ownership of the league. The PGA is a non-profit and thus can't do this.
But when each player has a financial incentive to make the league better, it likely will be better.
Takeaway: Individual agency and financial ownership are powerful ways to improve your product and team.
2. Ad Revenue Only Goes So Far
The way the PGA tour makes money is broken because it's 100% advertising-driven.
The PGL thinks they can cut down on ads during the sporting events by creating better experiences on the course and driving revenue through additional products, not just ads.
This move away from advertising is not exclusively happening in pro sports. Twitter is looking to build recurring revenue, and so are other businesses.
Takeaway: Advertising is reaching a tipping point, and companies worldwide, from Twitter to Pro Golf, are trying to figure out ways to monetize that are more aligned with users. Ads are not aligned because they take you away from the action.
3. Teams are the Key to Success
Each week, on the PGA Tour, you have a field of around 150 players. There are 203 total players on tour. Each week, you don't know who is going to show up.
On the other hand, the PGL would be the top 50 players in the world, and they would be on teams.
The ultimate goal is to build deeply unified and scalable fan bases and build loyalty to the sport.
Going back to point #2, this makes the whole tour more merchandisable so that they can diversify away from the ad-driven model. People who buy shirts need to watch fewer ads :).
Takeaway: A focus on teams, team excellence, and team culture can build loyalty and morale over the long term.
Final Thoughts
Who knew you could learn so much about business management from golf? I’m a massive golf fan, but I also love the insights we can learn from the business models of professional sports. It gets particularly interesting when an upstart new league comes along and threatens to disrupt the status quo.
Those are the times that business leaders should listen and observe. After all, it’s a fun way to learn.
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