When Jim Shipman ponders a major move for Score-Clocks Inc., the company he founded in 1991, he never fails to call to mind ‘The Mat Tape Lesson.’
It isn’t found in any textbook, and you won’t likely hear any consultant expound upon its value. Yet most companies, at one time or another, have had their own Mat Tape Lesson, a definitive experience that leaves a lasting mark on a business.
For Score-Clocks Inc., The Mat Tape Lesson went something like this: The company-after a major stumble with the marketing of its principal product, an electronic scorekeeping system designed for tournament wrestling-finally found its niche. As a way to complement rentals of its scoring system, the company’s principals figured they could sell, of all things, mat tape, a specialized product used to hold wrestling mats together. Coaches and program directors, they speculated, would naturally find it convenient to purchase the tape as needed when they rented a scoring system for a large tournament. Pretty obvious, right?
Obviously wrong, it turns out. After Score-Clocks had invested tens of thousands of dollars in the stuff-quite specialized and with no other apparent application that could be exploited to allow it to turn a profit-Shipman realized he had pinned down the company with a big blunder. As he discovered too late, the tape, rarely purchased alone, is usually supplied by a vendor who bids on a complete package of supplies that a wrestling program would use during an entire season.
“It sounded good,” says Shipman, vice president, “but we didn’t do our homework.”
Score-Clocks did survive, however. With The Mat Tape Lesson now behind it, the company is likely better off for it. In a sense, however, this start-up has been characterized all along by major shifts in the way it views itself, some precipitated by necessity, others by opportunity.
Shipman started the company back in 1991-after hooking up with Art Spagnol, who was in the building-products business until 1980 and later involved in real estate-at a chance meeting. The timing was right, it turned out, because the meeting came just before Elpaz Instruments, the company Shipman was working for at the time, planned to close its doors.
A high-school wrestler and later a wrestling coach in Plum Borough schools, Shipman was aware that some of the biggest fights at wrestling tournaments occur off the mat, where officials and coaches frequently dispute over timekeeping or point scoring. He happened to have some of his own ideas for an electronic scorekeeping device that would be more accurate, easy to use by volunteer scorers and visible to all in attendance at a wrestling event. He had, in fact, tinkered and developed some scorekeeping devices he uses at some of the events where he served as a coach. He shared those ideas with Spagnol.
Spagnol was intrigued by the concept and told Shipman that he would give the idea a run if the young electrical engineer could come up with a prototype in 90 days. Spagnol scooped up the assets of Shipman’s employer, and Shipman beat the deadline. So he and Spagnol went ahead with plans to produce the scorekeepers for sale to schools and youth-wrestling programs.
“We had a radically new concept,” says Shipman. “The system was completely different from anything that had ever been done.”
The scorekeeping system was vastly superior to the flip charts and manual timers commonly used. But the notion of selling the devices, each priced between $6,000 and $15,000, proved-at that time, at least-to be a dud. Cost was one factor, Shipman says, but the novelty of the equipment and the relatively infrequent use that school programs would get out of them (perhaps one or a few major events a year) made potential users balk at spending the money. In all, two sales were made in 1993, one to the U.S. Navy, a second to Indonesia.
“We said, ‘OK, we’re in trouble here,'” says Shipman. “I said ‘maybe we’re in the wrong business.'”
Not the wrong business, but a misguided approach to it, they concluded. By early 1994, Shipman had decided that renting out the score clocks might be a more viable option. So he set out on a nine-month course to develop a rental program, the proper packaging for shipment, and a simple, easy-to-use unit that could be quickly set up by the user and repacked for return to Score-Clocks.
Shipman redesigned the product into a single case for the displays, replacing an earlier design that required several modules to be stacked, with an interface connecting each to the other. He also developed a new shipping carton employing reusable components to reduce costs.
But marketing the service still proved problematic, and Score-Clocks spent a lot of money on promotions that fizzled. “We didn’t know squat about advertising,” says Shipman.
As it turns out, word-of-mouth became the company’s best promotional tool, and coaches and wrestling-event sponsors soon began to pass the word around that Score-Clocks were the way to go. Now, Score-Clocks has a customer base of approximately 800. Last year, the start-up rented equipment to 24 state-tournament sponsors. Its current inventory of rental units is 310, with an additional 100 to be added in anticipation of the upcoming season.
Ironically, the rental business has spawned an interest on the part of some programs to purchase the score-keepers, sparking Shipman to resurrect the notion of selling the units. That has encouraged him to develop a smaller, less expensive table-top model. Called the Scoremaster, it includes spaces on its console that can be sold to advertisers to offset or compensate fully for the cost of the unit.
But despite renewed interest in the purchase of the products, Shipman says he doesn’t believe that sales will become the major portion of Score-Clock’s business.
“My opinion is the sales will be a supplement to the rentals,” says Shipman. In fact, he harbors some concern that sales could cannibalize the rental market.
While Score-Clock has apparently sorted out most of its marketing issues, Shipman has moved to put into place the systems that will allow the company to grow. He has worked with several software vendors, taking on the task himself of integrating several software packages to handle administrative functions, rentals and contact management. After two years of operating a manual system to coordinate rentals, Shipman believes that the company has to phase in a computerized system to handle them more efficiently.
“We already have a good manual system to rely on,” says Shipman, who adds that the new one will be implemented over upcoming seasons.
Score-Clocks Inc. at a glance
Operations
All company operations, directed by Shipman on a day-to-day basis, are conducted at Score-Clock’s Murrysville complex, which is located in a building owned by Spagnol. Additional space at the site will allow for expansion, if required.
Components for Score-Clocks products are produced and assembled by several subcontractors and then shipped to Score-Clock’s Murrysville headquarters. Rental units are packed in specially designed cartons with instructions for use and a label for return by UPS. All rental units are checked for proper operation before they are shipped to the next user.
Demand has increased so strongly that Shipman plans to assemble another 100 units for the upcoming season. He plans to hire four to six new employees to meet the requirements of the upcoming season.
Sales and marketing strategy
Rental business has been brisk, doubling every year since 1995, so the company has done no advertising for two years and has relied on word-of-mouth referrals for new business. As Spagnol points out, it’s difficult to reach the thousands of events held each year by using advertising. While they are reluctant to provide details, he and Shipman are exploring other means of distributing the product.
Score-Clocks plans to develop additional scorekeeping products that can be used in other tournament sports. The first will be for use
by outdoor volleyball tournament sponsors, but Shipman says he has about a dozen additional products planned for development, including a $1,000 model that wrestling coaches can use to program an entire season’s practice schedule, a project that University of Pittsburgh’s head wrestling coach Rande Stottlemyer has been urging.
While products are sold through a few independent dealers, Shipman is considering distribution of units for sale through two large networks of athletic-products distributors, Team Athletic Goods and Athletic Dealers of America.
Financing
Spagnol has invested $1.6 million in the venture to date, and he and Shipman figure additional capital will be necessary-the exact amount needed dependent on which direction the company goes. In any case, Spagnol indicates that bank financing, not additional investors, will provide the needed capital.
Sales
Although income has been modest, Shipman points out that the company is carrying no long-term debt and has sustained steady growth with limited staffing or promotion.
Score-Clock’s 1996 sales were $85,000, nearly doubled to $160,000 in 1997, and should pass the $300,000 mark in 1998. Shipman expects at least $500,000 in revenue in 1999, but says sales could top $1 million with line extensions and more aggressive marketing of the rental service and sales of products.
Market outlook
Al Bevilacqua, director of championships for the National High School Coaches Association, a group that sponsors about 25 tournaments a year nationwide, including the National High School Championships held in Pittsburgh each spring, describes Score-Clocks as nothing less than a revolutionary development for amateur wrestling. Development of a softer mat in the early 1950s by another Pennsylvania company, says Bevilacqua, allowed the sport to gain significantly in popularity.
“I think (Score-Clocks) has done the same for wrestling,” he says. “Now we’re able to market our sport to the mass audience.”
It can boost the sport’s visibility, he adds, by giving audiences more information and taking some of the mystery out of what is going on during a match.
Shipman believes the company has tapped only a thin slice of a huge market that includes schools, universities and community-based youth-wrestling programs. In addition to state tournaments and collegiate wrestling, a myriad of youth programs are conducted annually by various sponsors.
Shipman believes the referral aspect of the business will continue to provide adequate rentals and sales in the short term, especially as Score-Clocks continues to land prestigious events like the Division I Wrestling Championships that were held this spring at Cleveland State University, and foster good relationships with groups like USA Wrestling, a major event sponsor.
Biggest challenge
Although Score-Clocks has had to make major marketing shifts, Shipman says he thinks those fundamental changes in the way the company does business are behind it. Going forward, he says, the practical issues of administering a business that poses some demanding logistics issues will be its biggest challenge.
Shipman says the new information-management system developed over the past year will allow Score-Clocks to accommodate new products and services as they’re created, as well as handle the rapid growth of its rental business.
Equally as important, he realizes, is putting into place a strong management team that will bring strategic and tactical strength to the business to allow it to reach its potential. To this point, Shipman says, he and Spagnol have been able to run the business themselves, but those times will soon come to an end.
As the business expands, Shipman says, the stakes become greater and the need increases to bring in more specialized managers to handle the business.
The Mat Tape Lesson, it seems, has sunk in deeply. Says Shipman:.”We put in too much time and too much money now to screw it up.”