The Alternative Golf Association, also known as Flogton (“not golf” backwards), is a group of Silicon Valley executives that encourages golf participation by relaxing or ignoring traditional rules to reduce player frustration.
Flogton encourages nonconforming equipment such as lubricant applied to club faces, wedges textured like cheese graters and Polara Golf Ultimate Straight balls. Flogton is about having fun and providing an incentive to play a bit more on the golf course.
Bump the Ball, Toss It Out of the Bunker. It’s ‘Flogton,’ and Its Backers Say It Could Save the Game
GOLF JOURNAL | FEBRUARY 12, 2011
By JOHN PAUL NEWPORT
It’s no secret that golf, as an industry, is lagging. Rounds played in the U.S. have been declining slowly for nearly a decade. More courses are closing than opening. More players have flowed out of the game than flowed in, says the National Golf Foundation. There may be many reasons for this, including the down economy and sociological changes, but some in the golf industry have begun to wonder aloud whether the rules of the game are really the problem.
Kyle T. Webster
Their aim is not to replace USGA golf, but to provide an alternative, with the expectation that many Flogton players would eventually migrate to the regular game, the way tee-ballers grow into baseball.
The most radical vision for a New World Order in golf is the Flogton project being pushed by a group of Silicon Valley executives whose front man is Scott McNealy, the co-founder and former chief executive of Sun Microsystems. In their view, the U.S. Golf Association’s sanctioned game is simply too difficult to attract and retain enough to keep the game growing.
In particular, the Flogtonites argue, golf needs better ways to appeal to videogame-enamored kids and to casual adult golfers who lack the time, inclination or athletic talent to master the game. “We’ve got the courses. The courses are beautiful and under-utilized. There need to be alternative golf formats that will bring more people out to play these courses,” Mr. McNealy said last month when he unveiled the proposal.
In Flogton (that’s “not golf” spelled backward), players could take their pick from several sets of rules to match their skill levels. The most restrictive format might follow strict USGA rules of play but allow souped-up balls and clubs. Mr. McNealy said this format would be popular with seniors or others who are happy with USGA golf but can’t hit the ball as far as they used to, or would like to.
The least restrictive forms of play would set purists’ teeth on edge: teeing up shots in the fairway, legalizing one mulligan per hole, allowing 6-foot “bumps” (no nearer the hole) to get relief from trees and other obstacles, and requiring the second shot from a bunker to be thrown. These games would be geared primarily toward kids or rank beginners. For each format, Flogton handicaps could be established. Different social mores would also be encouraged, from trash-talking during backswings to wearing cargo shorts.
But it wouldn’t be “goofy golf,” Mr. McNealy insisted. The rules for each format would be clearly established and enforced. “If you hit a bad shot, it will still be a bad shot that you have to take personal responsibility for. That’s the core value of golf. No excuses allowed,” he said.
Mr. McNealy is himself a three-handicapper. Some of Flogton’s other backers are also low-handicappers, including John Donahoe, CEO of eBay Inc., and Bill Campbell, chairman and former CEO of Intuit.
Their aim is not to replace USGA golf, but to provide an alternative, with the expectation that many Flogton players would eventually migrate to the regular game, the way tee-ballers grow into baseball. For others, however, Flogton might be the only style of golf needed or desired. Courses could easily accommodate both styles of play, Mr. McNealy argued. Flogton play would be faster, which courses could cope with by designating certain times or nines for Flogton play. Flogton golfers could also play with USGA players, competing with them by cross-indexing handicaps.
“We know there will be resistance. A lot of old-line clubs will never allow Flogton play, and that’s fine,” Mr. McNealy said. But skiing traditionalists at first resisted snowboarding, he pointed out, “even though by now almost everybody acknowledges that snowboarding saved the industry.”
How likely is Flogton to catch on? Not very, at least in its current out-of-the-box form. “If it were to work, it would be a conglomeration of a lot of ideas. It’s not going to end up being exactly what Scott McNealy or anyone else thinks it’s going to be right now,” said Casey Alexander, a golf industry analyst for Gilford Securities who nevertheless supports the initiative, as a way to get people talking. Mr. McNealy characterizes Flogton as an “open source” enterprise and is counting on Web feedback, to help the game evolve.
One obvious response to the Flogton initiative is that most golfers already play non-USGA golf, some if not most of the time. What regular foursome doesn’t invent a few of its own quirky rules to make things more interesting? All those scramble and Stableford formats used at outings and club tournaments are nonkosher. Who needs a new sanctioning organization to tell golfers how to have fun?
Another question is whether taking the technological limits off clubs and balls—a major part of the Flogton vision and a subject of keen interest to manufacturers—would actually help make golf more fun to play. The easiest, quickest improvement would be to the ball. Polara Golf will introduce an improved version of its nonconforming ball this spring that the company says will self-correct up to 90% of a slice or hook. That would seem to be every slicer’s dream. But would it also deprive him of the deeper satisfaction, that comes from hitting the occasional perfect shot?
The AGA believes that technology could add 25% to the distance of an average golfer’s drive and double the amount of backspin on wedge shots hit into greens. But if everybody has access to the same equipment, is the essential challenge of golf really any different than it was before, or the frustration of relative poor play any easier to abide? If alternative golf takes off, I guess we’ll find out.
—Email John Paul at golfjournal@wsj.com
BCG Article: The Beta Group: Our Innovation Incubator
Bob Zider Discusses the BCG Offshoot, Which is Still Active Today
APRIL 25, 2011
IN THIS ARTICLE
A client paying BCG an hourly rate is a whole lot different from BCG saying to the client, “We’ll take it. We’ll invest our own money, our own people, our own effort, and you’ll get equity. That’s how much we believe in this.” And that credibility with a client could be gold.
BCG has rarely extended its reach into external ventures. Most BCGers are aware of iFormation, the company started in the dot.com boom by BCG, Goldman Sachs, and General Atlantic. Far fewer are still here who remember the Beta Group (1983-1989). It was BCG’s first attempt at forming a new company that would complement our consulting. By taking creative ideas from our clients that they chose not to develop, Beta would create innovative products and give those clients equity. The work was sort of a cross between being an incubator and a venture capitalist.
Bob Zider (BCG 1976-1989), a partner at the time, started Beta. In this excerpt from his oral history interview in 2008, Bob explains the idea behind Beta, BCG’s decision to sponsor it, Beta’s work, and its eventual split from BCG. Beta is still an active company and Bob is still leading it.
Even back in the early 1980s, BCG worked with many clients developing new product and business ideas, and a lot of the time, they weren’t following up on them. I thought, “There’s an opportunity here.” How many consultants do we have out there who get new product ideas or new business ideas, but the client says, “It’s not my core, it’s not strategic to me, we don’t want it.” Or, “It’s too small.” But sometimes when they think it’s too small, they’re wrong. As consultants, we had no way to implement our analysis if the client declined. So that’s where I was going. Could BCG’s analytical horsepower and global reach be able to identify and assist innovation opportunities from “orphaned” corporate investments, or consultants’ ideas?
BCG had never funded anything external to BCG. Everybody had to leave and go start their own companies, and it was almost always a consulting company. So I never thought BCG would have interest, so I just planned to leave. Alan Zakon was CEO at the time. I went to him and said, “Alan, here’s my plan. You can fire me right now, or I’ll stay longer to transition my clients to other VPs. It’s up to you.”
Alan then raised a surprising option, “What about doing this within BCG?”
Alan’s suggestion just came out of the blue. I remember going back and writing up the reasons why BCG (or any consulting company) shouldn’t do this. The clear one was the failure rate; we’re going to lose four out of five, three out of five, something like that.
Then I thought, “There are reasons BCG might do it—like putting our money where our mouth is.” If we’re right, this has real potential for client relationships, because you’re going to be able to tell a client that we believe so much in an idea we or they have that BCG will invest in it as well. If the project fails, we will have shown we tried. If it succeeds, we will have made a major impact few consulting competitors could.
A client paying BCG an hourly rate is a whole lot different from BCG saying to the client, “We’ll take it. We’ll invest our own money, our own people, our own effort, and you’ll get equity. That’s how much we believe in this.” And that credibility with a client could be gold.
Arthur Contas and Alan Zakon were our main supporters, and John Clarkeson was also very supportive. John and I had worked on the “Specialization” quadrant of the Advantage Matrix for the CEO conferences, which was another BCG analytical tool I found very insightful.
Beta stands for Business Engineering and Technology Applications. Engineer a business strategy for a market need applying known technology. And “beta test”: take ideas to the market. We would take the idea to beta test and then hand the commercialization baton to a strategic partner who has the need, infrastructure, and financing to grow it. We would not be venture capitalists. We would develop and execute the startup strategy as a team with experienced operating people.
BCG’s strengths were in analysis; like engineers, but focused in business. Beta was basically engineering a business, on paper, and thinking through all the competitive ramifications, the economic model, the experience curve, where we think it’s going.
It became clear during our innovation work at BCG that almost every great product or industry had its roots many years before. If you look at televisions and fax machines and genetic engineering and cell phones, and on and on, you can go back at least ten and probably 20 years and maybe more to find all of those roots. But it took that long to become commercial. Our premise was that anything we were going to live to commercialize was already invented, and therefore we’re applying that technology to a market need.
So Beta was driven by market need. What we said is anything we want to do has already been invented. You’ve just got to find it. So we were technology applications-focused, not technology pioneers. The developers are the scouts that get the arrows in the back. We would focus on “trailing edge” technology for known market and competitive needs. Maybe that’s why we missed the dot-com era… both ways.
A good example of Beta working in technology applications was one of our first successes, using shape-memory metals for flexible metal eyeglass frames. At the time, nitinol—nickel titanium—was a thousand dollars a pound. It couldn’t be formed, it couldn’t be joined, and it couldn’t be coated. That’s how weird this material was. It’s like metal rubber. So at first glance you say, “This is crazy. You can’t make it, let alone make a profit.”
But the thought process of BCG and business engineering said to us, “Hey wait a minute, it’s made of 50 percent nickel, 50 percent titanium. Nickel’s $3 a pound, titanium’s $5 a pound. So $4.50 a pound is the inherent cost of nitinol.” “So what makes it $1,000?” “Well, there was no volume market so it’s made in tiny run lengths because nobody’s making this stuff.” Electron-beam furnaces were needed. And all the tooling for small volume.
“But how many eyeglasses frames are sold out there?” “Well, 80 million a year.” “How much wire is in each frame?”
And you start running the numbers using the Experience Curve and say, “Nitinol should sell for $50 a pound, not $1,000. So if it sells for $50 a pound, and there are probably 10 eyeglasses in a pound, that’s five bucks. And the glasses sell for $100. So why can’t we do this?” That was all in the original presentation, I’m proud to say.
I’m a real fan of the Experience Curve, because without that, we would have never gone into that business. Silicon Valley has died and thrived by it in the past 30 years: smaller, faster, cheaper, whether they recognize it or not. Just look at the slow followers and the “space junk” left behind of great names who didn’t go smaller, faster, cheaper in the process.
Flexon went on to become the eyeglass frame world’s most successful product in the past 20 years. Marchon, Beta’s Flexon partner, sold to Vision Service Plan in 2008 for $700+ million. Beta is currently partnering with HOYA to launch a new “Distortion-Free Optics” mounting system to complement the new generation of high-definition ophthalmic lenses.
Arthur Contas volunteered to be our first BCG advisor, and for several years we had a real rapport. He had been in early venture capital and understood the startup process we were taking on. But Arthur became sick, and Beta lost its initial champion. Len Friedel had a tough, but fair, BCG oversight role, and eventually worked with us before forming his own group in Chicago. BCG was a company in transition in the 80s. It was after Len that we began to drift apart.
But BCG had changed since Beta had begun. John Clarkeson, then CEO, explains how the original intent for Beta no longer applied. “The original goal was to find new sources of growth once the core strategy business had begun to slow. By ’88 lots of changes had been made in BCG—ownership, practice areas, governance—and we were again growing very rapidly, which made it hard for Beta to compete for the time and attention of the organization.”
In Len Friedel’s words, “It didn’t work because at the end of the day, we’d begun to fix the strategy practice in a way that we could see that no matter how large Beta got, it was never going to have a financial impact on the firm.”
About a year later, BCG and Beta agreed to a buyout, and the investment portfolio had yielded a 50 percent compound ROI for BCG by Beta (by BCG’s own numbers). “While I argued this was impressive versus any VC metric during those times, to make a real financial impact on BCG overall, a lot more investment would be needed that just wasn’t there.”
From a recruiting perspective, it did turn out to be valuable to consultants to have a chance to work on a Beta project. Nobody else could do that at that time. Bain couldn’t do it, McKinsey couldn’t do it. They didn’t start anything. And it was fun for us and the consultants who could take some time to follow their ideas.
I also thought that BCG would be a big farm for ideas. It was very encouraging early on, as Mike Silverstein would likely recall, when BCG client GD Searle’s blood gas sensor project, FOxS Labs, became one of our eventual winners.
As it turned out, we got few other fundable projects from internal BCG. “Why?” was the million dollar question to me at the time. I later came to realize it was my fault for not reaching out to the BCG offices beyond the worldwide officers’ meetings, where they were focused on the (significant ) core consulting practice issues at the time. And we were focused on not failing on the first few projects. All of us were very short-term, cash focused.
Much later, after Beta worked on innovation projects with GE, Motorola, and J&J, I realized we had only scratched the surface of the potential while within BCG. Maybe like so many ideas, we were about 20 years too early.
All that said, I really doubt our original plan would have worked without BCG. We’ve remained close to BCG all these years, and will always be thankful for their support in those tough times.
John Clarkeson, thinking back on BCG’s work with Beta, says, “It was a demonstration of BCG’s belief in innovation and willingness to invest for it, at a time when the firm had a fraction of the resources it enjoys today. The fact that BCG and Beta have both grown to be impressive institutions in their own right is perhaps not that far from the ultimate objective at the time.”
Charlie Garvin worked in the Menlo Park office—brilliant guy, from Mississippi. He had this idea which became Personics, in 1984, and that was going to be one of our very first projects and Beta’s second partner. To this day, I will say that that was the best idea I’ve seen in 25 years, all Charlie’s, and he was a manager at the time.
He’s commuting back and forth to the city and he’s got this tape deck, and he’s sitting there saying, “I’ve got this car that’s high tech and I’ve got this cassette that I’ve got to rewind. And it takes me hours to just make a compilation tape. Why can’t we put this on a computer and make custom tapes?”
That led to “You pick the song, we make the tape.” Basically what we did is we took analog music, had to digitize it onto optical drives, then convert it back to analog at ten times playback speed on Nakamichi drives. But what that allowed us to do was to have a kiosk in a store with five, ten thousand songs on it where you could literally scroll through any songs, hear on the listening post snippets of the song, push “buy,” then you walk away and in ten minutes up comes a full cassette with ten songs or 12 songs, even the label, all laser printed. And then all the royalty information is stored, and we could even wirelessly upload it every night.
The record companies saw what we were afraid they’d see. “Hey wait a minute. If you look at all the albums that are out there, almost none of them have more than two hits, other than the Beatles. People are buying an album of 14 songs for 14 bucks to get two songs. If they can cherry pick those two for a buck each, your revenues go from 14 to 2.” The light bulb went on. They said, “We’re not letting these guys cherry pick.”
We tried raising the prices and royalty rates—still nothing doing. So what we got was 5,000 songs, mostly stuff that didn’t chart. We didn’t have the songs we needed. It’s not like we didn’t see it—we had the record companies as major investors, and a great logic that 90 percent of all revenues were in the first two years of release, so our catalog would be gravy for them.
After a great technical and consumer success, Personics’ lack of a strong catalog proved our undoing. Deep, but weak. The record companies simply released the chart-topping songs to us at a much slower rate than our cash burn, so in 1991, we shut it down. After that, each year, at a minimum, probably every six months, I’d call Charlie and I’d say, “Charlie, anything going on out there?” “No, no.”
And another year went by and then we heard Blockbuster did a joint venture with IBM. And they were going to do Personics. Same thing, almost identical. I said, “Charlie, has anybody called us? Have they called you?” “Nope.” “Have they called the technical guys? Have they called any of our directors?” “Not as far as I know.”
IBM/Blockbuster put $100 million into it, and guess what? They didn’t get the music. Just like us. So we’re sitting there saying, “OK, we spent $17 million, and even Blockbuster and IBM with $100 million couldn’t make this work.”
And then we saw Napster, and I immediately called up Charlie and I said, “Charlie, they called me about this thing Napster. And they can digital file share. The cat’s out of the bag, this is free.” “What?” “Given that it’s free, they’re going to go ballistic,” he said. My response: “Why don’t we take Personics back to the market—go now to the music companies and say, ‘We have your solution. You should have funded this.’ This is the only way to prevent Napster from doing this. And unless we can get a business plan back to them real fast to show, ‘OK guys, you should have done this ten years ago, here we are again. This is the way to do it, and it’s a buck a song, not free.’”
And Charlie said, “Nope, they’re not going to listen. They’re going to fight this in court.” I said, “Come on, they got a $300 million market cap. If nothing else, we can start a Napster, too.” He says, “How much time you want to spend in court?” He said, “It’s a legal game.” And sure enough, Napster lost.
My own view is that Napster did finally break the code. They set in motion a “whack-a-mole” nightmare for the labels. Personics needed to make money on the songs and the kiosks. Apple didn’t, so likely passes almost all the $1 price to the labels. The template was in place, we just missed the right strategic partner…..and they were right next to us.
