Travel back in time－A look back at 20 years of GDO history (Part 3)

The founding members assemble, and the countdown to launch begins.

Ever since his days as a student in the US, he’d nurtured a vision of building a golf business on the Internet. Now, it was time to make it happen. With the dotcom bubble bursting and markets in a nosedive, he kept a level head and began assembling a small launch team. What was on their minds during those final days leading up to service launch? Golf Digest Online (GDO) CEO Mike Ishizaka tells us in his own words about the company’s beginnings and how it got to where it is today. 

It was in 2000, the last year of the 20th century, that I reached an agreement with Golf Digest (GD) on a business plan to launch Golf Digest Online, a golf-oriented Internet business.

With that done, I met with a variety of people to make connections and get their advice on startups, and began looking for my launch team. My thinking was, I’d need at least two or three people besides myself to make this business work. GD managing director Masahiro Kimura was really generous with his time in helping us launch the tee time booking business, but it was hard for him to focus solely on GDO, so at any rate I had my hands full with headhunting.

Long story short, I managed to put together a three-person launch team. None of them were people I’d planned to recruit. They each came to the team in ways I never would have expected. 

One of them was Takero Kaneda. He came from a general trading company, and I met him through his coworker Hironobu Tamaki, who I knew from business school. When Kaneda heard I was starting a golf business, he was really eager to help out. The day after we first met, he announced his intention to join. And barely two months later, he’d quit his job and become part of the GDO team. 

His father was famous for his lifelong devotion to golf, and he himself had a strong desire to get involved in the golf business. Even so, considering how long it took me to build up my own resolve to start the business, I was a little worried about how prepared he really was to be part of a startup. In fact, in the month or two before he joined the company, I asked him over and over how committed he was just to make sure he was really serious about it. 

As for Tamaki, he was my classmate in business school, and I had a chance to talk to him when I quit my old company to start a new one. The day before I paid him a visit, he and Kaneda had been at a company drinking event together where they discussed their mutual interest in the golf business. Talk about good timing! Tamaki didn’t intend on joining himself at first, but a week or two after Kaneda announced his intent, Tamaki called me up and said he was in, too. That was quite the surprise. 

And then there was Masahide Nakamura. He just happened to have an appointment with GD to talk about a business proposal. GD managing director Masahiro, who was the one meeting him, said, “There’s another guy coming to talk about some kind of Internet business,” and he asked me to join the discussion. That’s how we met. It turns out Nakamura had a plan for an Internet-based score management business, and he was asking GD to help him start it up. I gave him a quick rundown of the preparations for launching GDO, and asked him to call me if he was interested in joining the venture and working together to make his own business plan happen. Nakamura’s enthusiasm and decisiveness were nothing short of amazing. I got a call from him that very night saying he absolutely wanted in on the project. 

So that brought our founding team to five members. Our first meeting was at my house. It was me, Kimura, Kaneda, Tamaki, and Nakamura, and I was the only one without a job. But without a doubt, I was the most excited. Our first task as a team was to refine the business plan I’d come up with on my own. 

How much startup funding did we need? I had prior experience setting up an LLC by myself, but this would be my first real joint-stock corporation, and I needed to think it through. What we finally decided on was to prepare a small startup fund first and then accept outside investment after that. By accepting outside investors, especially venture capital, we had to be prepared to deliver on their expectations for return on their investment. And to do that, we had a choice to make: either take the company public within a certain timeframe, or give investors the opportunity to sell off their shares. 

With all that in mind, we made it clear to the initial stakeholders that one of the milestones in our business plan was to go public. Our business needed a certain level of investment up front, and moving forward with just our own funds risked severely limiting our scope and speed. The aim was to actively encourage outside investment and increase the speed of that investment. 

The golf industry was in a popularity slump at the time, too, and that was another big factor in us wanting to expand the scale of GDO by taking it public. Not only to breathe new life into the industry writ large, but also to show the world that there were dynamic new companies emerging on the scene. 

More than anything, though, the goal of going public was a way for me and the other founding members to motivate ourselves. It wouldn’t have an immediate impact, but looking five, 10, 20 years down the road, it was sure to benefit the company in terms of trust and name recognition. 

The talks with GD took about three months. In the end, they accepted all our terms, and we agreed to jointly put up the finds to create Golf Digest Online Inc. Our approach to management was focused on independence and originality; in return for entrusting everything to me as CEO, we promised each other we’d work toward going public in three to five years. 

We started out with \80 million in capital. That’s how much we figured we’d need to build our system architecture and do active marketing to attract new members, assuming our revenue would be basically zero initially. We estimated this startup would take about six months. 

So now it’s March 2000. The dotcom bubble is collapsing and people are shocked at how much the market is cooling down. Now that I think about it, starting up a company in May, when all that was happening, was pretty challenging in a lot of ways. But in another sense, you could say that the rapid tightening in the finance market (especially venture capital) allowed us to concentrate on pulling together enough funds on our own to get the company started on a solid footing. 

In the midst of those turbulent times, thanks to some fortunate encounters and the know-how and strong will of its founding members, GDO was finally able to launch its service. 

To be continued.