News Column

Learning the Game of Hard Knocks

October 2003, HISPANIC BUSINESS Magazine

Scott Williams

Entrepreneurs Eli Portnoy and Mike Frankel distribute advertising booklets at a minor league game.
Entrepreneurs Eli Portnoy and Mike Frankel distribute advertising booklets at a minor league game.

Anyone who has ever started a business will tell you that you can take every college course ever offered on the subject and still find yourself grappling with unanticipated problems.

Eliezer Portnoy, a University of Pennsylvania senior, and Michael Frankel, a recent Penn economics graduate, learned this timeless lesson firsthand after founding Direct Venue Marketing in their college dorm rooms last April.

Faced with bleak prospects for internships or, in Mr. Frankel's case, a first job, they decided to start their own business distributing advertising booklets at minor league baseball games. The idea amounted to a merger of their interests and experience. Mr. Portnoy's father had run a printing company dealing with advertising and direct mail. Mr. Frankel had interned for a minor league baseball club, the Staten Island Yankees, and wrote his honors thesis on variable ticket pricing in sports.

"Essentially, Michael and I were talking about the summer and the coming year, and neither of us wanted to do traditional banking jobs," says Mr. Portnoy, 22, a native of Mexico majoring in international relations and political science. "We started talking about different things we could do and try, and the timing was really perfect. I had the summer off, and Michael had graduated and had time."

So the two budding entrepreneurs, who met at college and have been friends for three years, set up offices in their dorm rooms, alternating between the two locations as needed. They set up an Internet fax service, printed business cards, used their dorm addresses and phone lines for business, and put together a business plan with help from their fathers and an advisor at Penn's Wharton School of Business.

Their idea required that they establish a distribution network among minor league ball clubs, so one of the first orders of business was to get permission to hand out booklets at ball games. They went right to the top, calling general managers to set up meetings in order to explain their idea.

Mr. Frankel, 22, who lives in Manhattan, says a few GMs said no without even listening to them. While a few never returned their phone calls, others met with them, listened, and, despite reservations about their age and experience, worked out an agreement.

"Only one really turned us down after we gave him a full pitch," Mr. Frankel says.

The first to sign on was the New Jersey Cardinals, a St. Louis Cardinals affiliate based in August, New Jersey. Club general manager Tony Torre says he was skeptical initially.

"They thought they could put everything together and do it quickly, but it doesn't happen like that," he says. "I suggested they put a game plan together and start selling in October when we do."

Despite his misgivings, Mr. Torre worked out an agreement with the two, in part because he wanted to give them a chance and because it's his job to produce revenue for the club. Besides, it wouldn't cost the club anything, and the team stood to receive a percentage of the ad revenue the booklet produced.

Messrs. Portnoy and Frankel eventually put together a distribution network of seven clubs with total nightly attendance of about 20,000 and season-long attendance of about 1 million.

"One of the biggest challenges was making advertisers see that, yes, it's minor league baseball, but it's not just reaching people in the boondocks," Mr. Frankel says. Minor league baseball officials say some 38 million people attended games at approximately 175 minor league ballparks in the United States, Canada, and Mexico last year.
The pair began calling potential advertisers and quickly saw that they would need help. "We realized we were in way over our heads. We couldn't contact as many advertisers as we wanted, just between the two of us."

So the two partners convinced college friends to make sales calls on a commission basis. They soon learned that most major companies set their advertising budgets a year in advance, and convincing them to reopen them was difficult.

"It was easier with the local businesses, because oftentimes it's just someone who doesn't set a budget," Mr. Portnoy says. "It's really a game of numbers."

Although Mr. Portnoy and Mr. Frankel had no real experience, the one thing that got the attention of advertisers was their prices.

"We were able to price it so inexpensively that it made sense," Mr. Portnoy says. "If you can show that you are cheaper than another medium, they will be very likely to listen and explore the possibility further."
The two partners focused on keeping start-up costs to a minimum, and estimate that their out-of-pocket expenses were about $100. "The most crucial aspect of our business is that we really focused on making sure it was profitable before we put our money into it," Mr. Portnoy says.

Despite their best efforts and help from friends, they wound up producing just one booklet, for distribution at an August 18 game between the Staten Island Yankees and the Aberdeen IronBirds. The four-page, full-color glossy, which measured 8 1/2 by 11 inches, was distributed on Jewish Heritage Night by Mr. Portnoy, Mr. Frankel, and five friends who volunteered their time. They both describe it as a success despite the fact that the game was cancelled due to rain an hour after it was scheduled to begin.

"In a sense it may have worked out to our benefit that there was a long rain delay," says Mr. Frankel, adding that 3,000 booklets were distributed at the game. "You have nothing to do but eat, read, and talk when you're standing there for an hour." He says advertisers seemed pleased, and that they received no complaints.

Mr. Frankel says revenues for the first booklet amounted to about $2,500. Costs, he says, have yet to be determined, and he declined to make revenue projections. Mr. Portnoy says the two partners plan to try to build on their experience and stay involved in minor league baseball, and they hope to work with college teams to distribute booklets at their sporting events.

Although business isn't exactly booming, Mr. Portnoy says he has enjoyed the experience and wouldn't think of working for someone else right now. He plans to continue working on the business while attending Penn on a part-time basis, with graduation scheduled for May of next year.

"It's more rewarding to build up something than to work for something that's already established," he says.


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