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Both sell soccer gear by mail. both are on the Inc. 500 -- and in the same area code. But that's where the similarities end
I can think of two reasons why someone might start a soccer-equipment catalog business: for the love of soccer or because it's a good business. Both work. I know that because there happen to be two companies on the Inc. 500 list this year that sell the same selection of balls, boots, and shorts to the same 700,000-plus names in the same $60-million market. They use the same delivery mode and operate out of neighboring towns in the same state. The founders of those companies -- both blue-eyed and born in 1965 -- in other respects are mirror opposites. Until I invited the two of them to lunch, they had never formally met.
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One is Mike Moylan. He's the one who began with a passion for soccer. The other is Evan Jones. He began with a plan.
Moylan says, "I'm interested in the growth of the game. Sales growth parallels that."
Jones says, "What I like is building the business. It doesn't matter to me a whole lot what we're selling."
Moylan has played soccer all his life. In high school he was good enough to attract the attention of national recruiters. He attended Georgetown on an academic scholarship. After graduating in 1988, he came home to North Carolina and took up the business he'd begun four years earlier: selling soccer gear through the mail to other soccer fanatics. His catalog, called Eurosport, was as much a cult magazine as an outlet for hard-to-find equipment. Like Patagonia founder Yvon Chouinard, Moylan developed a bond with his customers that was far stronger than anything marketing could have achieved. Today the business he started in a bedroom of his parents' home has become Sports Endeavors Inc. (#424; #127 in 1994), the largest soccer retailer in the country, with $23 million in sales last year.
Jones attended Duke on an athletic scholarship; his game was tennis. He stayed in Raleigh-Durham for his M.B.A. and then joined Prudential-Bache Capital Funding in New York City, working in mergers and acquisitions. But he had his eye on Sports Endeavors. "The people had a good grasp of the market," he says now, "but they weren't savvy. They were doing well in spite of themselves."
Jones thought he could do better. So, for six months, while his friend and partner, Kelly Weadock, went to work for Sports Endeavors (to "see how they do it," says Jones), the tennis jock wrote a business plan for selling soccer gear and raised $200,000 in venture capital.
Launched in 1989, TSI Soccer Corp. (#64), with $12 million in sales, is number two in the industry to Sports Endeavors' number one. But over the past five years Jones's company has grown almost five times as fast as Moylan's.
Sports Endeavors lost $2 million in 1994, when a software conversion went haywire and froze customer shipments for two months at the height of World Cup competition. Moylan's pain was Jones's gain. TSI Soccer earned 5% on sales in 1994, its third consecutive profitable year. Profits would have been higher, says Jones, except that he had to buy out his former partner, Weadock.
Sports Endeavors does business in an old furniture factory outside Hillsborough, N.C. -- 17 acres, 15 buildings, 125,000 square feet. The floors in the main building are oak; the massive rafters are pine. Funky accessories, like the Empire mahogany-and-purple-velvet divan purchased for $100 at a garage sale, give the place a distinctive look. In the employee lounge staffers gather after hours and on weekends to watch live soccer matches on a wide-screen TV.
Since the software conversion, Sports Endeavors has cut its peak staff requirements by 60% in the warehouse and 40% in the call center. But even at 220 full-time employees, Sports Endeavors still looks and feels luxuriously staffed. Moylan admits that the company is a refuge for "soccer pilgrims," fanatics of the game who show up at the old furniture factory from time to time and are given something to do. At one time you had to be a soccer player to work there. "Now," says Moylan, "if you're willing to learn the game, we'll take you on."
TSI Soccer operates from a bland warehouse behind a shadeless shopping center hard by Interstate 85 in Durham, a five-minute drive from Hillsborough. The front door to the company's headquarters opens on a prototype retail store -- a glimpse of TSI Soccer's future. "It has a nice high-tech look," Jones proudly points out. Although some of the company's fewer than 100 employees are soccer fans, and a few are players, soccer know-how has never been a prerequisite for employment. "We've had some soccer players who we hired mainly because they were soccer players," Jones recalls, "and they didn't work out." To help them keep up with the game, Jones encourages employees to read and initial the magazine Soccer America, to which the company subscribes.
On two walls that meet in the corner of Jones's office (three times larger than the space Moylan shares with four members of his management team), TSI Soccer's past and present converge. On one wall hang framed catalog covers; on the other, a map studded with pushpins representing retail stores. Two TSI Soccer stores already are open near Baltimore. Two more are planned for November near Atlanta, the site of next summer's Olympic games. Jones hopes to have 8 stores open by 1996 and 20 by 1998. By then, he figures, he'll be on his way to transforming TSI Soccer from a mail-order company into a national chain-store retailer with sales approaching $40 million a year. He expects to leave a winded Sports Endeavors eating his dust. It will "fade away or sell out," he says.
We had lunch at the University Club in Durham -- Moylan and Jones, their respective seconds, and I. The conversation between the principals was polite, circumspect. In response to the question "What do you admire most about your competitor?" Jones credited Moylan with blazing a new market; Moylan praised Jones for "sheer determination."
And long-term plans? Jones answered first: "I like growing the business, seeing how big it can get," he said, his back stiffening. "I have a goal of being the number-one soccer retailer by 1998."
Moylan sat silent across the table. A long moment passed. Finally, his younger brother, Brendan, a Sports Endeavors vice-president, spoke: "Nineteen ninety-eight? I know I'll be at the World Cup in Europe for six and a half weeks."
Odds are Mike Moylan will be there too -- market leader or not.