State of the Business: the Dark Horse Year in Review
From Co-Founder & President Brandon Ruggles
When I started this company out of a Notre Dame dorm room with one of my best friends, Ben Fouch, we agreed that no matter how our business evolved over time, we would always make sure that people remained at the heart of everything we did. The only reason we were able to start Dark Horse in the first place was because we had an unbelievable support network of friends, family, and mentors. We never anticipated how much that network would grow with every new student-athlete, family, friend, coach, partner, and supporter with whom we have been fortunate enough to build relationships along the way. When we put people at the center of Dark Horse, we never appreciated how special that would make what has become the Dark Horse family. So, in that spirit, I decided that I wanted to give all of you who have been with us during different stages of our journey a look inside the company that you played a role in building.
This week, we celebrated our second birthday. Two years ago last night, Fouch and I were sitting in my room excitedly checking our phones and social media for notifications as friends “liked” and commented on our social media posts about the idea we called “Dark Horse”. At that point, Dark Horse wasn’t much – our assets included a half-written business plan based on something we saw in a book, a piece of paper from the state of Illinois that proved we existed, a logo designed for us by a high school friend, and a website that we built from scratch despite having exactly zero website-building skills (which was pretty obvious). We had a company on paper, but the challenge was how to turn that piece of paper into a living, breathing business. We took a gamble, betting that we could build a company on a foundation of passion brick-by-brick with a focus on each member of the Dark Horse family.
2016 was a blur, and not a wildly successful one. There’s not much to say about year one other than the fact that it taught us that we didn’t know everything (or even most things, for that matter) about our own business. Two years ago, we thought we knew exactly how our business was going to work, and then we found out that if we wanted to be successful, it wouldn’t be up to us to dictate what Dark Horse would become. We quickly turned to everyone in the Dark Horse family and bombarded you with questions, and you delivered for us. The evolution of our services and our business model are as much a credit to you as to us.
The other relevant takeaway was that we were both forced to develop skills outside of our comfort zones. I know that when we first started, I confidently proclaimed to Ben, my friends, and my family that I would drive our sales. In reality, though, I was actually absurdly nervous about hopping on calls to pitch our services to prospective clients, and speaking in front of audiences was even more stressful. I had it in my head that no one would respect a twenty-year old kid, so I originally wrote myself 5-6 page scripts that looked like one of those old “write your own story” books because of how many alternative scenarios I tried to map out in advance of each call. That was wildly inefficient and frankly silly, but when I realized that Dark Horse couldn’t survive without sales, I forced myself to figure it out. Looking back, I’m thrilled that the first year made me as uncomfortable as it did. Year one was a period of learning, trial, and error, but enough families took a chance on us to keep Dark Horse alive heading into 2017. Those families and their kids were the first members of the Dark Horse family, and I’m eternally grateful for each and every one of them.
Depending on how you look at it, Dark Horse either stumbled upon or was forced into legitimacy in 2017. I want to be clear that as the year ends, I feel that we were tremendously successful. The business is now stronger than ever, our client base has grown substantially, and I like to think we’ve accomplished some really valuable work for our players and their families. But the year was a roller coaster, and while I am certainly proud of our successes, it’s important for everyone on our team to remember that it wasn’t all smooth.
Our first year was not a realistic long-term business experience, because Ben and I neither had any costs nor did we need to make much money to survive. We were two college students with no real financial obligations and zero employees, so “management” was basically a weekly meeting in which the two of us decided what we wanted to do and then spent the next week doing it ourselves. That all changed when the Notre Dame network introduced us to two men with unbelievable football pedigree – so unbelievable, in fact, that Ben and I decided there was no way we could pass up on the opportunity to bring them into Dark Horse. So we did just that, and on the first day of 2017, we announced that we were expanding beyond our roots in basketball to open a football division that would be headed by these two men.
Just like that, we had full-time employees. These guys were incredible for a number of reasons. First of all, in a testament to Notre Dame’s community, they had the humility and passion to accept working for two kids who had much less real-world experience than them. They went on to commit themselves to building an entirely new division within a start-up company on salaries that were far less than either was worth. And with the two of them came a connection that could redefine our business: an old friend of theirs who – if we could come to an agreement with him – was capable of sending thousands of strong business leads right our doorstep. We had about thirty clients at that time, so the idea of pitching our services to thousands of new families around the country was daunting. At the same time, though, it was thrilling, and we saw a partnership as a potential opportunity to grow into a behemoth in our industry across the nation in only a few short months. Our aspirations were enormous, and we negotiated relentlessly while doing everything in our power to demonstrate to the man that we could handle the avalanche of new leads that he was capable of sending us. Only a few weeks after launching our football division, we landed the deal, and Dark Horse was forced to grow up overnight.
This deal gave me a look at the best part of running my own business: when Ben and I decided we wanted to pursue something, we simply did it. And when we succeeded in our pursuit, it was our own doing.
We were given four weeks to prepare for an inflow of an estimated 20,000 new business leads that we predicted would be high-yield. As a part of our deal, we had to send a representative of our company to seventy-five unique events from Hawaii to upstate New York over the course of three months. We also needed a staff of skilled salesmen who could cold-call our leads and turn them into Dark Horse clients. To accomplish all of these tasks, we had exactly four full-time employees at our disposal. The last thing we wanted was to be underprepared for the first major business venture of our lives, so we took a risk and constructed a massive team of contracted workers from all over the United States. This team started with of a group of former college football coaches with whom we contracted to speak at events in their regions. We then went door-to-door in our dorm and hired a “phone center” comprised of twenty-five guys from our college dorm who we believed could be effective cold-callers, and we sold the manager of the Notre Dame call center on the idea of leaving his University position to run our phone team. Sleep was scarce during that twenty-eight day period, but by the time we were finished piecing everything together, we were responsible for managing a team of over fifty people between the ages of eighteen and seventy who were based out of fourteen different states. Dark Horse was going to explode, and we thought we had the perfect team to handle that explosion. It was show time.
It didn’t take long for us to figure out that something was wrong. While we were converting leads into clients at a rate pretty consistent with our forecasted percentage target, the sheer number of leads we received was extremely low. In fact, it was almost 90% below the amounts we had been promised. Costs, on the other hand, were running rampant as we were forced to set and reset travel plans for our speakers every week. There were indications that our messaging on the ground at events was off and, in some cases, inconsistent. Ben and I tried to make adjustments on the fly, re-training speakers, calling regular meetings with our staff, implementing detailed tracking of key performance indicators week-over-week, and turning to our mentors for strategy guidance, but the reality was this: we were a startup business that was hemorrhaging money on a bad deal that was bad because we neither adequately researched nor properly negotiated it. We were naïve and relatively unsophisticated in how we approached the biggest opportunity of our lives to date, and we paid a heavy price as a result.
This is when I got my first look at the worst part of running my own business: when we failed, we failed because we messed up. There was no one else to blame, nowhere to hide. Perfect accountability is great when things are going well, but a terrible burden when things go poorly.
We made a bad deal, but we held up our end of the bargain. Every single one of the seventy-five events had a Dark Horse representative in attendance. And, perhaps my greatest point of pride from the entire year, we never failed to pay a single one of our employees exactly what they were owed. We certainly weren’t making enough money to sustain the group throughout the entire project, but we felt an obligation to own our mistakes without allowing them to cost others. Without a question, the stress that came with figuring out how to meet payroll for our guys every two weeks was the toughest part of the entire year. They were working ridiculously hard not just for themselves, but also for their families. It was up to us to make sure that they could do so, and I have no problem admitting that that pressure weighed heavily on me. But we did it: our final expenses related to the deal were paid off the day after we graduated from Notre Dame thanks to several savings bonds that my long-deceased-grandfather had saved for me since he bought them the day I was born. He was a businessman himself, and I like to think that he couldn’t have envisioned a better way for me to spend that money.
As we entered the real world as college graduates, Dark Horse entered what we considered to be a make-it-or-break-it period. The summer of 2017 was a blast, filled with travel and watching our players receive the scholarship offers and attention from college coaches that we knew they deserved. Between the beginning of the year and June, we had grown our client list to nearly sixty-five basketball and football players from all around the country, and helping each of them on an individual level certainly kept us busy with the work that we loved. But around all the fun, Ben and I had to manage the business, and more specifically, we had to figure out how we were going to get out of the hole that we had created for ourselves. Sales was the answer – we knew that – but we had to balance taking care of our current clients and their families with generating new sales channels.
To accomplish this mission, we added two new members to our team: Matthew Meier, who was a former Dark Horse basketball player, and Pat Doherty, one of my life-long best friends. They provided support that I believe helped us turn Dark Horse around. Additionally, I like to think that Ben and I matured and grew as leaders substantially as we moved into the summer. People remained at the center of everything we did, but we also realized that we needed to be wiser and less rash while starting to make decisions from perspective of our business – not just our own personal feelings and emotions. For starters, we came to the conclusion that our business required us to part ways with some of the members of our team. That was an excruciating process, and it still feels like a personal failure. But the fact of the matter is that we hired people for work that we anticipated rather than for work that we had, and as a start-up business with limited capital, that was flat-out dumb. Being honest with these people about where Dark Horse needed to go moving forward was incredibly difficult, but I think that they appreciated it and they’ve all ended up in great positions elsewhere since then. I’m proud of each of them and I’m grateful for the work they did and the sacrifices they made to lift Dark Horse off the ground. They remain valued members of the Dark Horse family.
These decisions, no matter how difficult they were from a relationship perspective, deserve the credit for what happened next. Over the final four months of the year, Dark Horse began what I think continues today as a controlled explosion. New clients poured in, most as referrals from a mixture of current or previous clients who were happy with our services. Our website, which is now designed by a professional rather than me or Ben, also played a big role in our growth, and our guy Mike Ferguson (The Affordable Web Guy), has done everything and then some to help us establish an online presence since he built our site back in the fall. Matthew Meier designed an outstanding digital marketing plan for us over the summer and Pat Doherty has produced mountains of media content for us to market. They can certainly be credited for increased brand recognition that has sparked our growth. Bob Chmiel (who we call “Coach”) has buckled down and invested so much time and energy into building out our football division. And finally, Ben and I embraced our roles as the leaders of this company and began generating and executing plans (while holding our people accountable to their responsibilities) rather than simply running our operations on the fly.
These factors and more, including the support and help of so many people not named in this piece, enabled us to move our client list to over 100 athletes by the end of 2017. In the past calendar year alone, we have successfully placed just about fifty athletes in college programs around the country while helping them save nearly $15M in athletic, academic, and merit-based scholarships. Our 2018 boys basketball class in particular is enormous, and by the time they have all committed, we anticipate that 30-35% of the state of Illinois’ output of college basketball players from the 2018 class will come from Dark Horse. 2019’s class, by the way, is shaping up to be even bigger. We’ve moved into our first physical office space, a gorgeous second floor office right by Notre Dame that includes floor-to-ceiling windows overlooking my favorite college campus in the country. In reality, it isn’t much, but I’m so proud of it anyway. That office naturally includes a mini basketball hoop, where I am undefeated, and we have the name of every single Dark Horse player written on the wall to remind us that everything we do is for those kids and their families. Finally, as January comes to a close, we have now posted four consecutive profitable months as a business during what should have been our four slowest months of the year. We’re not where we want to be yet – not even close – but I have never felt so confident about the direction in which we are moving.
As we move into the third year of Dark Horse’s young life, we have bigger and more well-defined plans than ever before. You can expect to see more Dark Horse digital media content, including our weekly Recruiting Reports, our Commitment Reports, an improved and significantly more active social media presence (Twitter, Facebook, and Instagram), and potentially some podcasts and reporting on our individual athletes. We’re so good at placing our athletes because we do a better job of providing college coaches with information about our players than any other service in the country. It makes sense: if a coach knows everything about one player and far less about another, he or she will be more likely to recruit the one he or she knows best. With that in mind, we’re only going to increase the methods we employ to place information on our players in front of the right people.
You can also expect our girls basketball division to rival our boys basketball division in size by the end of 2018, as we have secured dozens of new players in that space in recent weeks and we have several proposals out to others. Our football division will see dozens of commits in during the next twelve months, as a significant portion of our loaded football division will be graduating next May. We are extremely excited to see what our student-athletes will be able to accomplish in the coming year, and we have high expectations for every single one of them.
We have secured partnerships with individuals and organizations who we believe can provide exceptional services to our athletes, and we will place a strong focus on leveraging those partnerships and others still to come into mutually beneficial relationships that can create business for both us and our partners while providing our athletes with resources they need in 2018. These partners include, among others:
- Christopher Spartz Basketball
- Legendary recruiting guru Tom Lemming
- Highlight video producer Recruit Reels
- Speed and agility providers Acceleration and Get Fast
- Mercury Elite AAU basketball program
- The Truth AAU basketball program
- Hoop Mountain Basketball
Finally, you can expect a more efficient and well-managed Dark Horse that will grow steadily while still working tirelessly to produce a higher-quality service for every player who is or will become a member of the Dark Horse family. At the end of the day, Ben and I still have everything to learn about running a successful business, and we are indebted to the many people who have taken chances on us as we’ve worked to figure it out. This is a business that will grow through word of mouth, so if you or someone you know has been happy with the services that we have provided in the past, spreading the word is the best way you can help us get to where we want to be. The support we have received from clients, friends, family, and even complete strangers over the last year allowed us to advance to where we are today.
As we move into 2018 with vast goals, we expect that this year will be filled with as many challenges and successes as the last two. We look forward to each and every one of them and we know that with your support behind us, we can handle anything that comes our way.