Into the unknown: Patrick Brown

For entrepreneur Patrick Brown, a willingness to “jump into the unknown where you don’t know the end of the story” has guided a varied business career that includes forming a highly successful adult kickball league. Brown, a 1994 Harbert graduate and former Auburn SGA president, notes the importance of identifying the “core offering” of your proposed  business.

Transcript

Narrator:

Welcome to the Harbert College of Business podcast with your hosts, Sarah Gascon and Currie Dyess. Today's guest is entrepreneur Patrick Brown, a 1994 Harbert graduate, and former president of the Auburn Student Government Association.

Currie Dyess:

Patrick Brown, War Eagle, and welcome to the show. Thank you so much for joining us today. We're very happy to have you on.

Patrick Brown:

War Eagle to you both, and thanks for having me. I'm very excited to be here.

Sarah Gascon:

So tell us a little bit about your time here at Auburn. You had an interesting journey as an SGA president.

Patrick Brown:

Yeah, I was a little unique. I started off actually on an Air Force ROTC scholarship. I was in ROTC for two years, dropped a scholarship, dropped out of ROTC just because the military was downsizing at the time, and later got involved in student government and had the unique opportunity to serve as SGA president. I love Auburn. I love 100% of my time in the classroom. But without question, that was a unique opportunity, and I think that that year of service was the most educational part of my journey through Auburn. But I considered myself very lucky to have that opportunity.

Currie:

And what made you want to get involved in the student body like that?

Patrick Brown:

Well, I was just having a conversation about this, and I'd say it was probably... I knew the other people I was running against and I have a little bit of entrepreneur in my blood and I just thought I could do it a little better than they could. So it was not... I can assure you, before that decision and after, I have never had a desire to become a politician and spend all my time in politics. But that was a fun little foray. But it was led by just thinking, "Hey, I think I can do this." And hopefully we were successful in that year.

Currie:

And looking at a problem and saying, "Hey, I think I can do this better," that seems to be a reoccurring theme with a lot of successful entrepreneurs. In what way has that philosophy catapulted you into what you're doing now?

Patrick Brown:

Well, it really led my career. I did a lot of fun things right after college. At Auburn, I was an operations management major within the college of business. And so process improvement was the main theme of that major. And after I graduated, I got into special event management and planning. So I worked for the Olympic Committee, and the Paralympics, and Disney, and a lot of operational planning jobs, which were great. But a little bit later on, when I was working on my MBA in Denver, I so happened to chance across an adult recreational kickball league.

And as I have told this story a million times, it was a lot of fun, but there were a few people in the league that took it a little too seriously to the point that there were arguments and someone got a concussion at the first game I was at. So I thought, "This is probably not necessary with co-ed, recreational adult kickball." And I said, "I think I can do this a little better." So I got some friends together the next year. So we had started with six teams. And fast-forward a decade later, we grew it or I grew it into the largest single sport recreational league in the country. It all started as I can do this better than those guys are doing it.

Sarah:

Yeah, the entrepreneurial spirit is very fun and exciting. Where does it come from?

Patrick Brown:

We were recently, or I was recently at a family reunion. I didn't realize it at the time, but I think as a kid I was lucky enough to be exposed to the entrepreneurial spirit and it really normalized the risk taking and the confidence that's necessary to start your own business. My father had his own business. And in looking back on it, out of about a dozen or so cousins that were at this family reunion that are my age, I think there were two that hadn't started their own business. And so we literally hadn't put two and two together until that moment. But because our parents exposed us to their entrepreneurial spirit, I do think that it really unknowingly sent us down a path of doing the same, not because it was encouraged, just because it normalized the opportunity, whereas some people and some people's backgrounds may not be as forgiving or encouraging of entrepreneurship.

Currie:

Yeah, undoubtedly. I think that the thing that holds most people up, because how many times do you hear, "Hey, I have a million-dollar idea"? People up, is the fear of the unknown, not knowing how to start and not knowing the outcome. But you got that. You were scripted at a young age.

Patrick Brown:

Absolutely. And I think that that's correct. As I've gone through, let's call it a career of some successes and some failures, which I think are important as well, that is the separation is the, hey, let's jump into the unknown where you don't know the end of the story. And for some people that is really scary. And for some people like me, it's really fun. So I've enjoyed it.

Sarah:

How did you make a decision between pursuing entrepreneurship or going to school? Because that's a difficult decision sometimes, especially now with young high school graduates.

Patrick Brown:

I love my time at Auburn. I think it helped me grow as an individual. I think it helped me learn to think differently, to take on challenges. Obviously, within the college of business, you learn to work with teams. And so it was very helpful. I would not say I don't recommend it, but I do think, for some people, they could jump right into entrepreneurship. I think that they could take what they would spend on in college education and invest that in starting a business. And the real life experiences that they get in doing that are invaluable. As much as you learn in the classroom, and again, I'm not suggesting that people go that route, but I think for some people in the right situation, that could be a great decision for them.

Currie:

Patrick, I've read your bio. It's going to be in the show notes for all the listeners. I am a fan. You are an entrepreneur. You're an athlete. I see here that you have donated over a hundred thousand dollars to charity through the kickball league and I'm sure other places as well. What drives you? What is it that moves you? You have so many things going on, it's not easy to train like a professional athlete and run a business. What gets you out of bed in the morning?

Patrick Brown:

That's a great question. I think it's just a self-motivation. I don't think there's great answer or I don't have a great answer for that, but I think I was lucky to have great parents and I was lucky to grow up in great community where parents of other kids helped and I had great teachers. I don't know what the exact formula is, but the thing that gets me up no matter where it came from, is just trying to challenge myself. So the sports I like are golf, where you're never going to be great, you're always going to be challenging yourself and you're always going to be striving for something better. I've done a lot of racing and triathlons in my life, and you can always be faster. You can always be more efficient, you can always do things in a better way. And in business, I guess, to bring it to that, it's there's always a way to be better.

I personally have always donated to charities and donated my time to help charities. I just think it's fun. I think it's a great cause, and that's what we all should do whenever possible. But the first year of my kickball league, and I don't know if I mentioned this, but the first year I opened the league, it was truly because I thought I could do it better than the other people. It was not as a business idea. It was something I wanted to create this recreational opportunity for my friends and I. And so I did it for free.

The money I collected was just what was needed to pay all the bills and insurance and all the things that we had. And I probably spent my own money to run that first year. But then I said, "Hey everybody, I'm participating in this fundraiser triathlon. Since I've done this great thing for you guys, would you donate to this great cause that I'm supporting?" And I think two people did out of about a hundred, and it really upset me for a while because I thought, "Oh, that's not really cool. Why aren't they supporting me?" But then I figured, you know what? They didn't sign up to do that. That wasn't part of the agreement. I just asked, you want to play this fun game? And they said yes. So the two people that donated were my best friend and my cousin who was in the league, and they would've donated anyway.

But a light bulb went off and I said, "You know what? I can add some money. We can add five or $10, and as a group, that will come up to thousands of dollars." So it was born that very first year. And so the next year I increased the price. No one said a word, and I had this basically fund that I could donate to charities throughout the year. So it was fantastic and it was really the cornerstone of what launched it into a business, was that we would also give to charity every year as we ran the business.

Currie:

The kickball league, it was not just like, hey, let's go out there compete and also make some money. There were other aspects to it, namely the social aspect, which was what made you unique. Can you unpack how you arrived at that for the business model?

Patrick Brown:

Yeah, absolutely. That became pretty apparent early on. And whenever I'm talking to people about business, it is a really good example of how to be able to identify your business or your core offering. And on its surface, you would look at this and say, "Oh, this is a sports league. They are offering a recreational or an athletic opportunity. That's their core offering." In reality, the league was made up of 20 somethings, 30 somethings. I mean, it went all the way to... We had one gentleman in his 60s, but the core of it is, core of the participants are in their 20s and 60s. It's a young people activity.

And the reality is is that after you leave college, there aren't a lot of organic opportunities to meet people you've never met before. And so this really became a thing that was not a bar or not a concert loud setting where you're trying to yell to talk to someone you may have just met. This is a very fun, outdoor, and Colorado is a very active environment to begin with, but that's what it was.

So our core service that we were offering was socialization. It was wrapped in the package of kickball, but the reason that that was great was because there's no skill level required. Someone who may want the social engagement may not feel like they can play softball, for instance, but kickball is so simple, everyone was willing to sign up. And I definitely think identifying that and creating supporting events, social events, like Oktoberfest and formal parties and things like that, really added to that identification.

Sarah:

So when you started the kickball league, you had a couple of your friends with you all saying, "We could do this better." But as you began to scale and grow, who was your first hire? How did you actually come to the point where you're like, "This is bigger than what we can handle right now. We really need a bigger team"?

Patrick Brown:

I come from a entrepreneurial mindset, a bootstrapping entrepreneurial mindset, and that's different. Some people are more from a VC standpoint and some people are just from a get proper funding for whatever your idea is before you move forward. And I came from, I need to be able to do this all myself. I need to be able to do every job and I don't want to pay for someone to do this, especially as we were growing. So that first year happened, then I had another six people that said, "Hey, I played on this team last year. Can I get my own set of friends together to start a team?" So we really had double-digit growth for about eight or nine years of the league. We grew very fast. And every year that I was running the league, we grew, but we were usually 10 to 20% growth year-over-year, if not more. And we did that for a decade.

Coming back to, when did I have to hire someone? It's when I could no longer run everything in one park. So when we had to expand and we had to move to other parks within the city of Denver, I had to have someone to help. And there was a gentleman who had just been there since day one and had the right attitude. I was lucky enough, if I was gone, he would volunteer to stand in and he did a great job. So I'm very lucky that I didn't have to step out, and created a job description and interview. I had someone, who basically for a few years, had on-the-job training and had self-identified as that person. So when it came time to grow, at the beginning it was a temporary job, but he said, "Yes, I'm all in. I want to be part of this." And he was with me until the very end, until I sold the league.

Currie:

You see all the time, entrepreneurs, they start businesses to make money. Some of them start it because it's fun and some of them are purpose-driven. Everybody fails in those different areas, and there are successes in those different cornerstones, I guess. What do you think is the best for a young entrepreneur, especially being inundated with social media where it looks like money is really the purpose?

Patrick Brown:

You mean it's not easy to be a YouTube sensation? It's hard to... There are a lot of jobs, and some jobs are not fun. I loved what I did because I looked at it from multiple aspects that it was, at the end of the day, our widget was positive. It made me happy to organize fun for other people. Now, not everything, and not everyone, not every business certainly is going to be a recreational sports league, but I think, within that dynamic, the thing that is going to get you through, because if you're an entrepreneur, here's the reality, it's going to be hard. You're going to run out of money, you're going to be making decisions about do you pay yourself or do you pay someone else. It is not easy unless you are the one out of a million person who just strikes gold at the very beginning. It will be hard.

I think the thing that will get people through as they're choosing this path is something that gives them passion, something that they're excited to wake up every day and do something that provides an opportunity that they're excited to get up every day and work with the people they're working with. Because without that, it becomes a job, and a job in the worst way, right? A job not in the good way, but a job in the way that it's taxing, it is laborious, and it's something that you would rather be doing something else.

So whatever, any entrepreneurs out there, it doesn't have to be exciting. I certainly would've never imagined that I would've had the success I did in that realm, but I think as long as they choose something that makes them excited to get up every day, then they'll be successful.

Sarah:

You sold the kickball league, correct?

Patrick Brown:

I did, yes. We were able to grow it to a point that we had a very solid EBITDA multiplier when we came to sell. It was actually funny. I was thinking prior to our interview that when we were doing evaluation on the company, I have a friend who works in venture capital and works at the family office of a very, very prominent wealthy family. And so I showed him our financials and he laughed and he said, "I don't know that I've ever seen financials that are in the black, because, I mean, they invest in companies that are early and they are all money losers. Nobody invests in a company that's already making money, and they would always exit before they started making money." Obviously, they're on a trajectory to be profitable and things like that. So it gave me a little bit of confidence to know that even though we're not the Apple or Google of the world, that we had some success in the business realm to have someone like that take notice and say, "Hey, that's a great job."

Sarah:

Yeah, playing a game that you played as a child.

Patrick Brown:

Yeah, exactly.

Sarah:

So what was your next step? What was your transition, and where did you go next? Where did you want to go next?

Patrick Brown:

I mentioned as we were talking that an extension of the league were other social activities. So I had already started two other businesses. One was a large festival company. We ran different festivals of different sorts, such as beer tasting festivals and things like that that we had started to do around the country. And then I also started basically an app-based marketing platform to get people to go to new restaurants and bars. The festival company I closed down really during the transition because there were some very large national players that were getting into this space. And in that world, whoever has the deepest pockets wins. And so I didn't want to be in that competition. And then, for the application, closed that down a few years afterwards. That was something where the market really shifted and we couldn't meet the numbers that our customer acquisition costs were too high. Our lifetime revenue per customer was just not where it needed to be.

I wouldn't say that was a failure. I think everything's a learning opportunity, but that was one where the market shifted literally as we were developing the app, and it was more of a freemium model as opposed to a pay model, and it just didn't work for us in the freemium model. And so close that one down as well. And not long after that, COVID happened, and now I'm involved in real estate development and some other similar projects like that.

Sarah:

To follow-up on the closing the app, did you do additional market research or talk to experts in the field? How did you determine that it was the right time to shift and jump, get out of there?

Currie:

Yeah, because you dodged a bullet.

Patrick Brown:

And frankly, I dodged a bullet with the sale of the kickball league also.

Sarah:

Oh, did you?

Patrick Brown:

Obviously, we had no idea. I sold that in 2017. 2019 was when we completed the transition. So there was a couple year turnover where I was advising and payments were still coming in and yeah, boom. Then everything happened. So who would've... I think we would've been okay, but I am really glad that I didn't have to weather that storm. That's for sure.

Currie:

Yeah, there's a lot of government money that would've floated you, but that is not ever fun.

Sarah:

No.

Patrick Brown:

No. And even, it was an outside activity, but the entire city of Denver was shut down. There were no permits, there was no... It didn't matter.

Currie:

Oh, my gosh.

Patrick Brown:

You couldn't do anything for a year. And then the next year, '21, there were a lot of restrictions in what you could do. And the reality is, like I said before, we were not a sports league, we were a socialization league. So it would've massively changed what we did. So yes, I feel very lucky from that standpoint.

But to get back to your question, no, I think at that point is it was just looking at the figures. I keep spreadsheets. We have all the figures on our marketing expense, our customer acquisition costs and revenue. And when you add it up, it's either going in the right direction or it's going in the wrong direction. You don't need to overthink that. And I had mentally said, "Okay, I'm going to invest this much money into this trial, this experiment." And we got to that point and I said, "Okay, no more. That's it." And it is hard. I will not lie. There have been times in the past that I've gone past that point because of passion and that attitude, "Oh, I can do this. I can do this better than someone else. I can get through this." And at those points, they were not smart business decisions, but luckily I learned from those past experiences, and in this situation went ahead and shut it down.

Sarah:

It seems like a typical characteristic of an entrepreneur, though.

Patrick Brown:

Do you mean by typical that they go too far?

Sarah:

Well, that they go and they believe it and they know the purpose or they're in it and they think they could flip the switch, change position.

Patrick Brown:

It's tough. I mean, if there's... I love talking business. I love getting together with entrepreneurs who are starting their own business. And probably the two things that we talk about most, every single, 100% of people I've talked to about starting their business... Because I love talking business, I'd love to talk to anyone who's listening to the podcast who has any questions within my realm of experience, I'd love to help any way I can. But there are two things that always come up. Number one is cash flow, and number two is the source of their money.

And I would say to everyone, if you are considering starting a business, the number one thing to consider is your cashflow. How are you going to pay the bills? And whether it's you or your employees or your products or your cost of goods sold or whatever it is, how are you going to pay for that? Because you may have the best idea. I guarantee you there are a million ideas out there that were better than the product or service that's currently on the market, but they didn't have the cash flow to get them through to profitability. And so they went out of business. And that happens every single day.

It is very easy for me as an entrepreneur to get excited about the product or the service or the offering and really go down the rabbit hole, so to speak, about how do we make this better? How do we perfect this? But the reality is, at the end of the day, you're running a business. And as great as your product is, if you don't have the money to bring it to market, then it doesn't matter how good your idea is. A lesser idea that has proper funding is going to be more successful than an awesome idea that is not properly funded.

And so cashflow number one. But number two, on the heels of that, when you ask the question, well, how are you going to fund it? Everyone says, "Oh, well the SBA, I'm going to get an SBA loan." And a really good entrepreneurial friend of mine, we get together for coffee and we laugh because almost every single person says that. And I'm not picking on the SBA, we're not picking on anyone who has that idea, but if you are sitting there thinking that you are going to get an SBA loan to fund your new project, you're just wrong. And it is a myth that I have heard in business classes, not at Auburn, but since then, I've been sitting with people who were teaching and they would say, "Just go out and get a SBA loan," and you just can't. SBA is built for established businesses and buying equipment and real estate.

So the very first business I started out of college was a plastic storage case company. Long story, not worth going into. But I walked into a bank and I had done everything I needed. I was working in a job, I knew where I would get my ongoing cashflow, but I needed about $35,000 for an investment in equipment, a mold that had to be built for these products. And I walked in, I said, "Can I get this through an SBA loan?" And they said, "Well, you need to have $35,000 of collateral in our bank first." And I said, "Let me get this right. If I want to borrow $35,000 from you, I need to give you $35,000 so then you can charge me interest on it?" They're like, "Yeah, that's exactly right." I said, "Well, why wouldn't I just spend my $35,000?" This is true. This is a bank vice president. And she said, "Yeah, you'd probably be better off just spending your own $35,000."

But collateral... So it's not just an idea. That's the bottom line. The SBA doesn't give you money because you have a great idea. The SBA is a great government program for the right people, but it's really for established businesses that are looking to expand. So as you look for funding, any entrepreneurship class is going to say, probably go to the three Fs, friends, family, and fools to borrow that money from, credit cards. Whatever you do, you need to know what that source of income is.

Currie:

Patrick, we got a little bit of time left. You have some really fun projects you're working on right now. You have your golf company, you have an osteoporosis awareness website. Talk to us a little bit about that, and maybe what's next? What's coming for you down the road?

Patrick Brown:

Oddly enough, they're connected, those two ideas. So a few years ago, my mother-in-law was diagnosed with osteoporosis, and we very quickly found that there's a lot of misinformation available out there. There are a lot of doctors who are not "specialists" in the field, who are doing their very best with the information they have. So I'm not saying anything negative. They're doing the best they can, but they are giving sometimes incorrect information. If there's a public service announcement out there, if you have someone you love who is diagnosed with osteoporosis and they get a DEXA scan, which is what it's called when they look at the density of your bones, and the person walks into the office and says, "Okay, your score is this," that means that we're going to put you on this drug to try to strengthen your bones. If that happens, go see another doctor because it is not just a number.

And there are people who are not extremely educated in the field, and that is the only point of information that they have to be able to give these drugs. And unfortunately, these drugs have bad side effects. They can be taken only for a limited amount of time. And then, in some cases, once you're off the drug, your bone density is in worse shape than it was when you started.

So I'm not a doctor, I'm not trying to give advice, I'm just trying to say if you find yourself in that situation, find someone who is really an expert from a study standpoint. The reason I give you that background, that's just one example of how it's difficult to get proper information. This is a disease that we found out very quickly. My mother-in-law fractured some vertebrae. She has back pain for the rest of her life because of it. She had no idea that she had osteoporosis. And there's nothing you can do, there's very little you can do about the breaks in her spine. But had she known years ago, she could've done some things differently. And so our goal is to put together as much information as we can to make it not in medical speak, not in jargon, to make it very easy to understand.

And then also, uniquely, one of the great thing... I mean, exercise is great for everything in life, but for osteoporosis, weight-bearing exercise, and especially some certain kinds of it, are very helpful in strengthening bone density. And you may say, why is that important? Well, there are hundreds of thousands of people diagnosed every year with osteoporosis, and the most common break you'll have is a broken hip from osteoporosis. Everybody's heard of that, maybe unfortunately knows someone who's had it. But the statistics are awful. If someone has a broken hip, 30 to 50% of them unfortunately will be dead within a year. And so the statistics don't say, "Oh, they died of osteoporosis." They died of the broken hip or sepsis or something that happens after the broken hip. So it is not something to be taken lightly.

Anyway, we're providing this as a way to give back to provide information. And also, we'll be developing some exercise videos that will be free to help people who can't go to the gym or aren't in an area that they can go to the gym in a way, hopefully, that they can help themselves.

And the golf, interestingly, hopefully that will be released by the end of the year, osteoporosis by the end of the summer, the exercise videos. But while developing the exercises for the osteoporosis exercise campaign... One of the issues with osteoporosis, as people can probably imagine of the picture in their head, as people get older, they develop a kyphosis, which is a bending of the spine. So a lot of people lean forward and that posture actually leads to falls. It creates an imbalance in human movement and can actually lead to falls. So that is part of the exercise program.

Well, lo and behold, as I was doing these exercises and developing them myself, my golf game improved. And so after some experimentation and reading a few studies that are out there, it turns out that actually posture improvement helps your golf game. So that is the connection, odd though it may be between osteoporosis education and a golf program that will help you shave some strokes from your game.

Sarah:

So what are some of the greatest lessons you've learned and advice that you'd give current college students or recent grads?

Patrick Brown:

Well, I think the most important is what we just talked about, cashflow is king. I mean, you don't have a business unless you have the cashflow to operate it. Another one would be, don't forget to pay yourself, which I did for years. And there are a lot of entrepreneurs that they look at the spreadsheet or the profit and loss column as a whole and say, "Oh, the business is making money." And then you say, "Well, how much did you pay yourself?" Well, turns out not very much. And so when you add in the time that they are essentially donating to the business, turns out that business isn't that profitable.

So when you're developing your business plan, which is incredibly valuable, and I had a professor once said, "The most valuable thing about a business plan isn't to show you how to run a business, it's the research you do to teach yourself why a business shouldn't be started in the first place." So just taking that mentality and saying, "Oh, I'm not creating a spreadsheet of how to list," go into it saying, "Okay, I'm going to prove to myself why this isn't a good business idea." Then if at the end of the day you can't give yourself a reason why not to start the business, then maybe it's something that you can go into. But cashflow, paying yourself, those are the starters. Those are the ones that I forgot when I was just getting started. So I'd probably start with those.

Currie:

Yeah, man, that's really good advice. It's going to help the listeners as they themselves begin their entrepreneurial careers. It has been truly a pleasure speaking with you today. You have so much information and your energy can be felt by, I think, everybody who listens to you talk and talk about business and all the things that you love. How can our listeners keep up with your journey and maybe contact you if they have more questions?

Patrick Brown:

Well, like I said, I'd love to help any way I can. LinkedIn, obviously, I think you can put that in the show notes. Feel free to contact me with any questions that you have. My email address is... Our osteoporosis project that's called Ostego, O-S-T-E-G-O, .com. So it's just patrick@ostego.com. Feel free to email me, but if anything changes there, LinkedIn is a way you can always reach me.

Sarah:

Patrick, it's an absolute pleasure. Thank you so much for your time. And War Eagle.

Currie:

War Eagle.

Patrick Brown:

Thank you guys. And War Eagle.

Narrator:

Harbert, inspiring business.