State of the Business: Supplementary Thoughts
Co-Founder & COO Benjamin Fouch
The greatest business duo I’ve ever seen is unquestionably Warren Buffet and Charlie Munger, the famous investors and brain trust that runs Berkshire Hathaway. If you read their annual letters (which I highly recommend if you have any interest in business), Buffet writes extensively on the company, and Charlie usually throws in a little commentary to add some more color to the events that happened. While we are certainly nowhere near the Buffet/Munger in terms of ability, I am so thankful to have someone like Brandon as a business partner where I believe we can have a similar relationship as co-owners. So, without further ado, here are my thoughts on the last year in review:
Brandon was right that Dark Horse began like countless other dorm room startups. We all know about Facebook and the cliché of these small businesses exploding into international behemoths that tower over the business landscape. That was never our goal. When you work in the services industry, scaling a business is challenging. When you work in the services industry and your product is based heavily on the subject matter expertise of a small number of individuals who are not easily replaced, growing a business is an extraordinary hurdle. We never started Dark Horse to make millions. We did it because we love helping students guide themselves through one of the most momentous periods of decision and reflection in their lives. Making a difference in the lives of those who need it most is enriching in its own way, and that wealth of friendships and relationships born through the Dark Horse family has more than compensated us for the effort. You are all what make the journey worth it.
Our results from Dark Horse have been incredibly encouraging. Over the time Brandon and I have been working with clients, we have helped them secure somewhere north of $15m in scholarship money. These are easy figures to measure and use as validation that our process works. What I think is more important is the fact that students are making better-informed decisions about their college of choice and their major of study. With college transfer rates and the average number of times a student switches majors on the rise, it is evident that many students make a mistake in their first choices. Helping our students avoid those mistakes and get on a path from the outset that moves them toward their own definition of happiness and fulfillment is indescribably rewarding. As the years of our history hopefully become decades, I expect that our greatest legacy will not be the dollars we saved, or the sports programs we help students take part in, but rather the trajectories of young peoples’ lives we improved for the better.
From an operations standpoint, our work to date has largely been marked by failure. We were extraordinarily naïve. We took part in negotiations with national partners in deals valued in the millions of dollars, yet we relied on informal legal counsel and relational guarantees. We failed in our due diligence in sniffing out what were great opportunities, and which opportunities stank. When we forecasted out expected costs, we never properly accounted for when our assumptions would be wrong, leading to cost overruns. When we anticipated demand for our services, we miscalculated and were forced to let a very talented individual go. We focused on what could go right, more than what could go wrong, and that made us less likely to question the assumptions we used to guide our decisions. That has cost ourselves and our staff enormously. As the business partner who is expected to be the more technical and operationally-focused, the blame rests most squarely with me.
Despite these failures, I am incredibly optimistic about the company’s current and future operations. We learned from our mistakes. We made better forecasts. We question our assumptions and build more realistic plans for how to meet our goals. When we negotiate with partners, we bring a reasonable skepticism and attention to detail. We are building our financial strength to allow us to self-finance our own growth. Our sales strategies are getting higher yields than ever before. We are exploring new ways to package our services so that we can reach even more people across the country. We are finally doing everything we need to from an operations perspective to ensure that we can continue to provide the best service to our student-athletes of anyone in our industry.
Along with the operations side of the business, I help run the academic division. Working with the students has been an incredible learning opportunity. Each student comes to the process with wildly different levels of preparedness and awareness of opportunities. It is a stark reminder that there is a huge disparity in outcomes in terms of college admissions not only because of ability, but because of information. We are working hard every day to ensure that everyone has the information they need to have a fair shot.
One of the most enjoyable parts of Dark Horse for me has been in developing our admissions screening tools. We have built proprietary methods of screening candidates for schools and evaluating their abilities. These have been developed with the help of admissions experts around the country, and they are our best effort to generalize and operationalize the admissions process. While it has been extremely difficult to design in a consistent and accurate way, the results and feedback we have received from you all on it has helped us appreciate the value these guideposts can have. One of main goals for this year is to continue interviewing admissions experts in order to refine the model.
Generally, we have set high goals for ourselves in the coming year for Dark Horse. We want more academic content to push to students, we want to expand our coaching contact network, and develop our network of clients across the Midwest. It will be a busy year if we hope to achieve these goals. I’ll reiterate what Brandon said when he mentioned that we are also counting on you. If you know of anyone who would be interested in our service, please send them our way. We are always looking for more good folks to add to the Dark Horse family.