College Basketball and the Tech Entrepreneur

What do a winning college basketball coach and successful technology entrepreneur have in common?  I pondered this question while watching March Madness and the Final Four in Houston several weeks ago.  The similarities are surprising.

Leadership is the key – Whether you’re a college basketball coach or entrepreneur, success is based on your leadership skills.  As Coach K of the Duke Blue Devils remarked, “I don’t look at myself as a basketball coach. I look at myself as a leader who happens to coach basketball.”

Be secure in your convictions – Successful entrepreneurs, like winning coaches, are secure and self-confident in their abilities – – sometimes to the point of arrogance.  In both environments – – on the court and in the office – – the confidence and security exuded by the coach/entrepreneur energizes the rest of the team.  Sure, this trait can be overblown (consider Bobby Knight’s chair throwing incident and Mark Cuban’s outlandish exuberance).  But an emotional or passionate outpouring by a coach/entrepreneur can attract a loyal following among players/employees.

Age doesn’t matter – Entrepreneurs and coaches come in all ages, and seniority is not a prerequisite to success.  In this year’s Final Four, two of the coaches were among the youngest ever in the “Big Dance” – – Butler’s Brad Stevens (34) and VCU’s Shaka Smart (34).  Similarly, we all know the youthfulness of the founders of Google and Facebook (and Apple when they were first founded).  No doubt experience is helpful, but it is not a condition to success for the coach or entrepreneur.

It’s about the Ws – Winning is the key metric for the coach and entrepreneur.  Points on the scoreboard are equivalent to dollars on the financial statements.  A shortage of either one will result in a short-lived career.  In both cases, coaches and entrepreneurs are often given a honeymoon period to develop their own team, strategize and plan for winning games or generating revenue.  Patience is limited, so success must be forthcoming in a reasonable period of time (generally 2 – 3 years for a college basketball coach and an equivalent amount of time – or even less — for an entrepreneur before running out of cash).

Answering to the stakeholders – For the basketball coach, the stakeholders are the fans who pay for tickets and expect to be entertained with victories.  For the entrepreneur, the equivalent stakeholders are investors – – they also pay for a ticket, a stock certificate, and expect to be entertained with constantly improving financial performance.  Fans and venture capitalists can be your greatest supporters or most vocal opponents.

It’s lonely at the top – The coach and entrepreneur both share a similar sense of loneliness, especially when revenue targets are missed. The “Ls” stack up, the team is underperforming, fans/shareholders are complaining, alumni/board members are grousing, and players/employees are demoralized.  Entrepreneurs and coaches are well advised to have a committed spouse or partner to support them in gloomy times.

You won’t win them all – No reputable basketball coach or entrepreneur who has run a business or coached a basketball team has gone undefeated for an entire career.  Failure is inevitable, and the true test of leadership is how one responds to an “L” in the record book.  The introspective coach/entrepreneur learns valuable lessons from each lost game or prospective customer.  Importantly, the coach/entrepreneur also learns to put the defeat behind them and move ahead confident of future success.

For example, consider the Butler Bulldogs mid-way through the 2010–11 season.  They had lost games to unknown teams and were likely to miss the NCAA tournament.  In miraculous fashion, Coach Stevens led the team to its second NCAA Championship game and national recognition as a basketball powerhouse.

Following the rules is important – Both basketball and entrepreneurship are governed by rules designed to level the playing field for all competitors.  In college basketball, the NCAA is the governing body, and for entrepreneurs, the equivalent set of standards are created by state and federal legislatures and government regulators.  In both cases, violations can result in two negative consequences – – damage to the reputation of the institution (school or company) and sanctions imposed against the coach/entrepreneur.

The thrill of victory – There may be nothing more exhilarating than a college basketball coach winning his/her first college game or an entrepreneur closing the first big sale with a new customer.  Both events are noteworthy and provide a level of exhilaration unmatched in most competitive settings.  The converse is also true.  A losing streak can mean the end of a coaching career at a college, and an early retirement for an entrepreneur.

The Final Four is the IPO — Reaching the Final Four is the height of success for a college basketball coach.  On the same level, an initial public offering (IPO) for an entrepreneur provides a similar heightened sense of accomplishment.  Careers can be made by reaching these pinnacles of success.  Of course, stakeholders – – fans, season ticketholders, boards of directors and investors – – may come to expect continuing success season after season and quarter after quarter.  For a coach and entrepreneur, the challenge is part of the excitement that keeps them in the game.

This information is presented for educational purposes and is not intended to constitute legal advice. Opinions expressed are those of the author and not of Morris, Manning & Martin, LLP; see disclaimer at http://www.www.mmmtechlaw.com/privacy-policy-and-disclaimer/. Contact John Yates for more information at jyates@mmmlaw.com