What does it take to build a business with 25,000 members?
Tyler Jensen was one of the founders of VAVi, a sport & social club in San Diego, CA. VAVi reached over 25,000 members in six years. The company was recognized as San Diego’s 30th fastest growing private company. Tyler sold the company for over 150 times the capital investment in 2008. Today, Tyler is the CEO of The Startup Garage, a business plan consulting and startup services firm.
Listen to the following interview to learn from Tyler what it takes to succeed:
Say hi to Tyler at thestartupgarage.com.
Read Raw Transcript Now:
Success Harbor: Hi everyone. This is George Meszaros with Success Harbor and I have Tyler Jensen with me. Tyler founded VAVi Sport and Social Club in 2002 and is also the founder of the Start up Garage. Welcome.
Tyler Jensen: Hey thank you so much for having me.
Success Harbor: Thank you for being here Tyler. Can you tell our audience what VAVi Sports and Social Club is?
Tyler Jensen: Yeah, VAVi is a inter moral sports for adults so its kick ball leagues, soft ball leagues, tennis leagues, golf leagues 35 different spots based here in San Diego.
Success Harbor: I just watched the video on the site and it’s really well explains all the different sports and everything it seems like it’s more than just sports its more of a community as well.
Tyler Jensen: Absolutely and so you know when I moved out, I went to college in Virginia and I moved out to San Diego about 15, 13 years ago are so. and was really looking to build a community out here and I wanted to do it other than just going out to night clubs and so I realize that sports was a great way to build a community of people, I’m not the best athlete I enjoy sports but I’m by no means a great athlete and so recreational sports seem to be a great way to do that and I looked around and I really didn’t see someone doing it well so I decided to started VAVi to filled the need.
Success Harbor: So was that really the need that you got here to San Diego and you just didn’t see anything like it at all in the market have you seen anything like that outside of San Diego anywhere?
Tyler Jensen: Absolutely, There’s a number of Sport and Social Clubs around the country and we actually saw that Chicago has one as well and we randomly my originally founding partner randomly ended up having dinner with somebody from Chicago and they suggested us take a look at their business and San Diego didn’t have one and we really loved it and so that night we decided to start the business the next morning got together and started putting the pieces together to get things moving out here.
Success Harbor: So let’s talk about the challenges during the first 12 months especially because that’s when most people quit business you know they start they get excited and there are all these difficulties and they just say you know what this is just too much so let’s just talk about what were some of the greatest challenges you were faced with during the first year of business?
Tyler Jensen: Yeah I mean, I think that most of the challenges are personal challenges because the businesses in that part developed and so one of the challenges was really and I think its common among most entrepreneur its, I didn’t really put into place a pay my bills plan before I started I just though the company would start making money really quickly and I could you know pay myself a salary and the reality is that wasn’t true and isn’t true for most start-ups. So I would struggled for a while to figured out how to just pay my bills while still having time to get the business started that was probably the biggest one and then just not knowing, you know waking up and knowing that you need to do things but just really not knowing how to do them.
Success Harbor: What about having no brand in the community and explaining people and even the concept because you said you haven’t seen any club like that in San Diego, So it was something new and not only you started a business you started something that it hasn’t really been done here locally.
Tyler Jensen: Yeah, you know it was interesting I did something by out of necessity but it turned in looking back now was probably one of the best things I’ve decided to do in order to get the name and the brand out there we didn’t have any capital we started the whole company with about two thousand dollars so our marketing plan was to print up some flyers and go out to the beach and hand out flyers one on one and have conversations with people that we thought would be in our target market and you know that obviously not a very effective or scalable marketing strategy, its extremely time and energy intensive and not very scalable but by doing that I one we got our first couple hundred people interested which was the hardest and having those conversations I really, what I thought was true and what I thought people would be interested in i got to learn you know by their questions that they asked and the feedback I got from the way I present the company, I really got to learn over those conversations over the first few months how to present the brand in a way that would really resonate with potential customers and so whenever I start a new business now I always go and talk to a whole bunch of customers about it and pitch it to a whole bunch of people one on one to really learn about the brand and getting the message out in the right way.
Success Harbor: Do you remember back then when you were just handing out flyers and talking with people something that surprise you or something that you though was the opposite of what you assumed before you actually talk to your market
Tyler Jensen: Great question, that was a long time ago so I’m having to ha-ha
Success Harbor: I know you talking about 2003; you know that is 10-years yeah.
Tyler Jensen: You know nothing really rings a bell right this second ok I can think about it and if something pops up later I can
Success Harbor: Yeah, I’ve been interested because you know today everybody is talking about the lean start-up and the lean brand and the lean entrepreneur and their always talking about to build your brand, build your company you know and everything with the customer in mind and always constantly talk to the customer as you do it, you know and I always just thought maybe it was a long time ago so maybe we’ll come back to that. You grow VAVi to 25000 members in 6-years and I mean that is a tremendous number you know it’s not something where you just click and put into an email address this is kind of the old fashion way of building a business, So what was you growth strategy aside from just handing out flyers was it more of a viral thing or what help you for the business to take off like that.
Tyler Jensen: You know at different stages we had different methods that worked the best and obviously the flyers what was accessible to us in the first you know probably a year and believe it or not this is a time where MySpace was around and effective and so we did dome marketing on MySpace that helped build the community as well and then we try a whole different of marketing techniques we ended up signing one deal with 24hour fitness gyms where I think 25 gyms around San Diego and they agree to put posters up in all there gyms all around town around our Sports and Social Club and in exchange we would give them some advertising to our member and really that set us over that tipping point locally here it became not something we struggle to tell people about but all of a sudden people knew about it within a couple weeks of moving here or just moving into town someone would tell them oh hey check out VAVi it’s a great way to meet new people and those types of things and once we reach that critical mass everyone who plays into the leagues would get a T-shirt and those T-shirt were branded and so at any given nights after the leagues they would all go out to bars and so we should have a 1000, 2000, 3000 people going out to happy hour for the game with one of our branded T-shirt on and so after a while it just became our marketing supported itself and we had to do a lot less marketing so as you can see it kind of evolved overtime.
Success Harbor: Ok, So partnering with 24-hour fitness was a big big plus for you guys.
Tyler Jensen: Absolutely! It was a game changer.
Success Harbor: Yeah Yeah, How did VAVi make money? Was it a membership thing or was it through the actual events, can you get into that a little bit
Tyler Jensen: Yeah, It was an event-driven model so people pay to play a sport, you know we have the sports leagues so it range from like about $50-100 per leagues and that would get you into a about a 8-week league, we always had social events we had a big new year’s party or have a big new year’s party and tried some trips out at different times as well we would go to like Vegas or Camping and things like that as well and they were all event-driven and there were also some advertising revenue as well partnering with advertisers that wanted to you know get the word out to our customers.
Success Harbor: And then you sold VAVi right? What year was that?
Tyler Jensen: It was January of 2008
Success Harbor: And can you talk about how much you sold it for or how much you were generating with VAVi at the time you sold it.
Tyler Jensen: Yeah, contractually not allowed to talk about all the details of it but what is public about it was that it was a small business still but it was doing just over 1 million in revenue when i sold it.
Success Harbor: Ok, That’s respectable right think about it and in a few short years now why did you sell VAVi? What was the reason for selling it, it should like it was going really well.
Tyler Jensen: You know it was more personal than business related I had really just you know I read online a whole bunch of places where there is something about the six or seven-year mark for entrepreneurs where they get burnt out and I didn’t I thought oh well people are different but looking back that’s about the time when I just got burnt out, I wasn’t as excited and motivated anymore to continue to build a company and then a series of conversation happen with I had a business partner at the time and I just, I thought i would have bought him out and at the end of the day him and another, somebody else came in and bought me out at the last-minute they thought it was worth more than I did therefore they ended up with the company.
Success Harbor: Ok, so you had general burn out and you know sold the company, how did you feel after you sold the company?
Tyler Jensen: Was really nice I decided to take a year off and really not make any commitments at all and do whatever, I woke up every morning and did whatever my heart desired and at that time I lived right on the beach and I just spent a lot of time on the beach and rest taking naps and just relaxing and enjoying life for a year and really just I’ve been working so hard for so long that I think I look back now it was really just a year of resting and recovering from all the hard work I put in to the business.
Success Harbor: Do you think it’s possible or do you think it would have been possible to build VAVi without burning yourself out or you just think it’s part of the territory when building a business?
Tyler Jensen: No I absolutely think it’s possible that what I’m doing now I have a consulting company and I advice other entrepreneurs on how to go through the start-up process and one of the big pieces although our business plan is really around writing business plans and helping start-ups raised capital one of the things that is motivating for me is to help them to coach them through the personal process of it and how do you make sure that you plan the right way so that you’re not in crisis mode all the time and how do you make sure that you have enough capital to do what you need to do one of the major issues that we had been that we were undercapitalized one of the only way to overcome that is to sweat equity meaning just putting in a lot of extra hours yourself, so there’s definitely ways around it and I spend the last 5 or 6 years really learning and teaching others how to not get burnt out when starting a business.
Success Harbor: So the starts up garage your consulting company?
Tyler Jensen: It is yes!
Success Harbor: So when did you start-up that business and why did you start it?
Tyler Jensen: Yeah so I started it back in abound 2009 we picked up our first client, it was about a year after I’ve sold the company and I really wanted to I learned so much of starting and running and eventually selling VAVi that if I had known what i know in the end at the beginning I would have done it very very differently and so i wish I had somebody like me at the beginning to teach me what I teach other entrepreneurs now that has been my real motivation now and so for the last five years I’ve helped over a hundred different companies get started all over the world actually a lot here in San Diego but we help them all over the world as well.
Success Harbor: So you talked about mistakes let’s talk about maybe some of the biggest mistakes you made with VAVi maybe in the beginning or maybe later on in the business that was a good learning experience for you or maybe our audience could learn from it.
Tyler Jensen: Ok, yeah I mean I mention already the under capitalization problem, you know that was a big thing I was personally not set up right I didn’t have a good pay the bills plan, so I didn’t know how I was going to pay my bills each month, so I was making business decision that would lead to me to be able to pay my bills when there weren’t the best business decisions and then overtime I just needed some more capital to get the business going which I didn’t take on and so it made me have to really do things they way that was really inefficient because I didn’t have the money to pay for the right marketing or pay for the right team to put that in place so that was one of my mistakes, there is another one which I think was funny as I look back now the day I launched the company we spent all of our marketing dollars on buying these flyers and we built a basically a two or three page website that really was just here is what we’re doing give us your email and your phone number and we’ll call you and sign you up you know it was really basic and the morning I woke up to hand out the flyers for the first day our website was doing and it turned out that I had registered the website with an email address that my mother was still in control of and she had cancelled that email address so I didn’t get the notification that it need to be renewed and the day that we launched we lost VAVi.com.
Success Harbor: Oh wow
Tyler Jensen: It was one of those Wow, Maybe I’m not doing this the right way like maybe I’m not suppose to be doing this but by the end of the day we had regrouped we had bought goVAVi.com web domain we had bought stickers and put on a sticker with the new web address and the 5000 flyers you know it was about 12 hour delay in our launch of our business but it was definitely one of those moments of like Oh no what am I getting myself into ha ha.
Success Harbor: Yeah, so basically if you had started VAVi over what would be the biggest change that you would make, would it be the capitalization part you think that was the biggest I don’t know deterrent or what made the business the most difficult for you, what would be the one thing that you would do differently.
Tyler Jensen: I had a lack of planning, I didn’t plan ahead, I didn’t really understand the financial part of the business, I really had a huge passion for the product but I really didn’t understand the financials and that includes more than just the capitalization, I didn’t understand how i was going to make money one of the expenses it was going to take to actually do it the right way and so it was it was about I didn’t put the financial projections together and the business plans together before hand which would have saved me a lot of headache and heartache and a lot of mistakes if I had done that before I started the business.
Success Harbor: Let’s talk about been efficiently at time, especially earlier on in business, what do you think is the biggest time waster for entrepreneur, you know stuffs they shouldn’t spend their time on but they do , they insist on spending their time on.
Tyler Jensen: Well i can answer this a couple different ways I think first thing that pops in my mind it’s that entrepreneurs are not falling in love with their product or service and the big picture of things the products and service is really only about 5 percent of building a company and so I find much time just diving in doing product development, and doing product development and reiterating and reiterating which is important but they ignore all the other parts of the business as well, so I think that’s probably the best way to answer that question.
Success Harbor: Ok, Now you had ups and downs that you just mention losing the VAVi.com which you know I could imagine it would have at least in the short-term you would really feel devastated by this but there are all these ups and downs when a business so how do you deal with or what advice you have for others to deal with the roller coaster ride of being an entrepreneur.
Tyler Jensen: Yeah you know it’s interesting as I look back to VAVi I wasn’t really good at that, I was very emotional driven an I was young I was in my twenties and didn’t have the like skill sets to deal with all that and so it impacted my business and it impacted my ability to create partnerships and relationships but now as I look back what works for me is some really good personal practice and focusing and make health my number one priority and not only physical health but mental, spiritual and emotional health as well, so I would daily practices , I have a place now that really helps now where I get up I run or either gets not walks in the morning and then I do between 30 mins to an hour of meditation and prayer in the morning and then during the day I make sure I have a very clear plan and I take breaks to make sure that I’m not getting off track and kind of in my head about everything and it’s that really helps me to stay efficient and focused.
Success Harbor: So you are working with entrepreneur and start-ups and you know other businesses today consulting with them, what do you think or maybe the top 2 or 3 or maybe even the top area where they need help with, you know it’s kind of a like an open question but what is it the one thing that comes to mind when you think of these business in general?
Tyler Jensen: Yeah I mean i think that, there is two types of entrepreneurs that I generally work with one is the brand new entrepreneur and one is the serial entrepreneur and they have I would say different needs you know like you’re asking and so for the beginning entrepreneur the top areas that they really need help they generally come to me and said listen I have this great idea for this product or service and I really if I’m been honest I don’t know how to make this into business and so this it’s just learning how the whole process works, there’s a step by step process that really makes sense when you starting a business and a lot of times just understanding what to focus on when changes the whole game plan for entrepreneurs they start doing things that really don’t need to be done for 12 months or 18 months and ignore things that are really important earlier on in the process and so for the first time entrepreneurs, I think the biggest thing to understand what to focus on when is probably the biggest area and for the serial entrepreneurs that come to us they generally has gone through the process they know how it works and everything and they just need help with they just don’t have the bandwidth to do the work that we do you know business plan in the financing model they just need a great service provider to provide an objective opinion and really poke holes in their plans so that before they go to investors it’s already being pick apart and put back together and so that investors don’t have to pick it apart as much.
Success harbor: So what do you think serial entrepreneurs do right I mean there are people who are struggling just to get that one business off the ground and (clear troth) excuse me I’m losing my voice and there are these others that every five, ten years or so maybe even more frequently they start a new business and they know, there is something they have that hit you know I’m sure it’s so hard to finger on, what is it that makes somebody just get it , what it takes to build a business solid move on to the next one or whatever what do you think that hit is for you know I’m sure it’s not one thing but what comes to mind when you think of a serial entrepreneur that is successful over and over and over.
Tyler Jensen: You know this is my opinion and I’m sure many people would disagree with me but having working with so many people I really think it has little to do with the business and more their personal practices their personal beliefs of who they are and really ultimately their kind of spiritual grounding I find that the ones that is more successful, have something that ground them in life and it was able to put everything into prospective whether that be religion or god or something along those lines or something just a deep spiritual path and a spiritual practice has been my expense of the ones that are able to do it over and over and over and because no one knows all the things in business and nobody is good at all the areas of business and so that’s everyone has their own strength and weaknesses and entrepreneurs I see them in all shapes and sizes with all different strength and weaknesses and that doesn’t correlate to success or failure it’s really about who you and their personal lives and are able to overcome the challenges and really create what they in vision.
Success Harbor: So if somebody I’m talking about a first time entrepreneur, somebody came to you, you know they had a job but they have an idea for a business, what would be the first thing you would teach that person, that you kind a help them get to start the right way about becoming an entrepreneur.
Tyler Jensen: Yeah the first thing I would say is don’t quit your job definitely a lot of people are like want to know when that it, that’s definitely way way longer after you start a business you want to hang on to your job as long as you can because that takes care of the , the place I tell them to start is the research so specifically industry research, market research and competitive research generally the have a new idea and they haven’t seeing it but sometimes they are going into an industry they’re not that familiar with they don’t know all the different types of competitors and they don’t know who their target market is so this is probably the more lengthy pieces of the puzzled and could spend 1-6 months even on this process depending on a day or week that you actually put into it and it’s really not a piece you want to skip out on one of the most exciting for you jut researching and learning what other people are doing but man it is valuable down the road if you don’t skip the step.
Success Harbor: Do you have a is there a book is there a couple of books that you recommend for people to do this for or that would help entrepreneurs.
Tyler Jensen: You know there is a couple that I really like that are good for really kind of the first time entrepreneurs one is called E-Myth and then one is called ducked tape marketing, E-Myth is about building system which a business if just a set of system that’s how I look at it along with some other things but at its core its a lot of systems so understanding that and how to put that together its really critical people and most people at the beginning stages fail at the marketing side of things their unable to get traction for a number of different reasons they don’t know when why they’re not getting traction and ducked taped marketing provides a really basic understanding of marketing that I thought was a good place for someone to start who is really new at this whole entrepreneurial gig.
Success Harbor: Well Tyler thanks very much for coming online and share you story about VAVi and your consulting business how can people connect with you if they have questions or they just want to check out your site?
Tyler Jensen: yeah absolutely, our website is thestartupgarage.com all one word and they can email me @thestartupgarage.com as well those are the best ways to get a hold of me, happy to answering any questions are you know guide anyone down the path of entrepreneurship.
Success Harbor: So everyone out there thank you for listening and be sure to say Hi to Tyler at the startupgarage.com Thank you Tyler.
Tyler Jensen: Thank you so much George really appreciated it.
Success Harbor: Thank you.
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