Entrepreneurs Can Earn Their Stripes in the Minor Leagues, Too

NY Times.com
Published: April 26, 2007

Branch Rickey is renowned for allowing Jackie Robinsonto break baseballs color line in 1947 by signing Robinson to play for the Brooklyn Dodgers. But he was also celebrated for another significant contribution to the game.

Mr. Rickey was the architect of baseballs modern farm system, the web of independent minor league teams around the country that serves as the training ground for young players hoping for a shot at the major leagues.

It became a model for Thomas S. Lyons, a professor of entrepreneurship at Baruch Colleges Zicklin School of Business in New York, and Gregg A. Lichtenstein, a business consultant in Margate, N.J., who were searching for ways to develop entrepreneurial talent. We kept coming back to baseballs farm system, Professor Lyons said. It is one of the best talent-generating systems in the world.

The pair had an ambitious goal: to build a system in underserved and overlooked regions of the country for identifying, recruiting and developing entrepreneurs. In so doing, they said, they hoped to revitalize local economies and stimulate business development in areas that needed a jump-start.

Their model is likely to seem familiar to baseball fans. The Entrepreneurial League System features clearly defined talent levels  rookie league, single A, double A and triple A  along with general managers, coaches and scouts.

Just as the Yankeesscour the bushes for the next Derek Jeter, the league is looking for the next Michael Dell or Bill Gates.

In two years, the pair formed leagues in West Virginia and central Louisiana with a third league starting this month in western Michigan. Nearly 150 entrepreneurs joined teams with the hopes of honing their skills to make the show. In this case, the show doesnt necessarily mean the major leagues, but it does serve as incentive for these entrepreneurs to learn as much as possible to steer their businesses successfully.

Professor Lyons and Mr. Lichtenstein have worked together for more than 15 years developing methods for training entrepreneurs and creating business incubators. Mr. Lichtensteins consulting firm, Collaborative Strategies, is paid a fee for building the leagues by several foundations, including the Kellogg Foundation, the Rapides Foundation and the Benedum Foundation.

The entrepreneurs are coached without charge, though the plan is to charge double A and triple A entrepreneurs a monthly fee as the concept gains wider acceptance.

Our goal is to help these entrepreneurs create as profitable and effective a business as they can at the level they are at, Mr. Lichtenstein said. Some will develop into major leaguers, but some will never make it that high. Theyll stop at single A or double A and do quite well at those levels.

The Entrepreneurial League works on the theory that a structured group support system is far more effective in helping small businesses get off the ground, the founders say.

Any system where you have a mutual support safety net is superior to toughing it out on your own, said Ian C. MacMillan, professor of entrepreneurship and management at the Wharton School of the University of Pennsylvania. This is a great idea. The sports metaphor is a powerful organizing principle.

Amanda Short, 28, an artist in Kanawha City, W. Va., joined the local Advantage Valley E.L.S. in Charleston last August to prepare for starting her own stained-glass retail business. Like most other rookies, she was driven by her belief that she could make money with her skills. I knew I could make stained glass, but I had no idea how to run a business, Ms. Short said.

Most rookies, it turns out, are clueless about the fundamentals, like creating a business plan, understanding a profit-and-loss statement or finding financing. My coach took me from an absolute amateur who knew nothing, to the point where I felt confident that I could do this on my own, Ms. Short said. She has already been promoted from rookie league to single A.

Successful entrepreneurs who had made their fortunes and were eager to give something back to the community were tapped to become general managers and coaches. Keith Rabalais, 56, has been hired as general manager of the central Louisiana E.L.S., which covers nine parishes surrounding Alexandria, a city of 50,000 that is at the heart of the league.

Mr. Rabalais started a quick oil-change business, similar to Jiffy Lube, in 1979 and expanded it to six locations. He sold the business to Quaker State in 1996 and retired at 46, but he became bored with golf and sought a way to keep his hand in commerce. He, in turn, recruited coaches like Edwin J. Caplan, 75, who had spent 43 years in a family retail business in Alexandria.

Mr. Caplan noted that Alexandria has always been a farming community, a sleepy town without much entrepreneurial zeal. But the completion of an interstate highway five years ago has been a boon to the economy and a catalyst for new entrepreneurs.

Mr. Caplan is coaching the single A team, which is made up of 12 entrepreneurs, all in dissimilar businesses. He meets one on one with each of them every week and holds a team meeting each month. The single A group is a step ahead of the rookies but still struggles with broader issues of finance and long-term visions for their businesses.

I have one guy who runs an extremely successful grocery business, Mr. Caplan said. But I looked at his financial statement and he was carrying a pretty good cash balance, around $100,000, and yet his bank was charging him $12,000 a year. I asked him what that charge was for, and he didnt know. They told him it was for bank charges. I urged him to question his bank and suggested he could do better with a local bank. He switched banks and saved that $12,000 charge, plus he got 5 percent interest on his $100,000.

In West Virginia, where the league has more than 90 entrepreneurs, Mark Burdette, 35, is general manager of the Advantage Valley E.L.S., based in Charleston. Mr. Burdette says the baseball analogy is an apt one because there are definite differences in skills between rookies and double A entrepreneurs. Grouping fledgling business owners together by skill level and working with them in teams is a potent model, he said.

There is accountability, not just to the coach, but to your peers, Mr. Burdette said. If one team member doesnt come in with a game plan, 11 others get on him.

Dr. David Clayman, 60, a clinical and forensic psychologist, is a double A entrepreneur in Charleston and an entrepreneur addict in recovery. Dr. Claymans confidence took a big hit when his former practice failed and he lost everything. He is back in his own private practice and joined the league because I did not want to make the same mistakes again.

I learned how to say, I dont know and that you dont have to be a major leaguer to be a success, he said.