MI Rewind: The Business of Sports w/ Dan Soviero

0:00You're listening to TIP. On today's show, we're resharing some of the older episodes that are my favorites for a few reasons. One, we get a bunch of new listeners each week, so new listeners may not have heard this episode before. Two, even if you've been listening for a while, you may have missed this episode when it originally came out. Or three, even if you've heard it before, it can be a great episode to learn from again. If you've already heard this episode or you're not interested in hearing it, feel free to just skip it. There's no harm in that. And you can pick up with our new episodes next week.

0:30That's all I had for you for this new intro. Everything going forward is going to be from the original episode. I hope you guys enjoy it. Other than that, I'd say reading. Reading is something that I did not value as a kid, and it's something that has been instrumental.

0:47On today's episode, I talk with Dan Soviero about how he decided to drop out of college and become an entrepreneur, how he formed a relationship with the National Lacrosse League and other sports leagues to build his business, how he used equity crowdfunding to raise money for his business, what that process is like and what it costs. And we talk about a bunch of other stuff as well. I'm personally a big sports fan. And I, of course, love business and entrepreneurship and investing. So being able to combine the world of business and sports is always interesting to me. And that's why I enjoyed this conversation with Dan.

1:22I hope you guys enjoy it too. Let's dive right in. You're listening to Millennial Investing by The Investor's Podcast Network, where your host, Robert Leonard, interviews successful entrepreneurs, business leaders, and investors to help educate and inspire the millennial generation.

1:47Hey, everyone. Welcome back to the Millennial Investing Podcast. As always, I'm your host, Robert Leonard. And with me today, I have Dan Soviero. Welcome to the show, Dan. Robert, thanks for having me. Really appreciate it. Excited to be here. There are a lot of different things I want to talk with you about today. But before we get into those topics, tell us a bit about yourself and a quick rundown on your background. Yeah. So my name's Dan Soviero. I'm a former Division I lacrosse player turned serial entrepreneur and recently named to the Forbes 30 under 30. I launched Signature Lacrosse in 2016.

2:25And over the past five years, we've built multiple patented problem-solving products, achieved over 10 million in lifetime sales, and really built a foundational brand to scale. At the end of 2020, we created Signature Athletics, the parent company of Signature lacrosse. And Signature Athletics is a sports apparel and technology brand that's changing the way players get their gear and what they expect out of their gear. This completes our ecosystem for our B2B2C model and is allowing us to achieve industry-leading customer acquisition costs and scale our brand through grassroots account-based marketing.

3:06So we like to say Lacoste started in tennis, Nike started with track, and Signature started with lacrosse. Robert Leonard You, being a D1 athlete, did you have the opportunity to go professional for lacrosse? And did you just pursue entrepreneurship instead? And we'll get into dropping out of college in just a second. But I'm curious, did you have the opportunity to go pro or was that not really on the table for you? Robert Leonard I would love to say that I did. I would say that there were a lot of guys that were a lot better. Maybe I could have gone in the B League for the pros, but that just was never something that was a goal of mine.

3:41And I was always super passionate about business and knew that that was the field I wanted to be playing on. Did the salary have any impact on your thoughts of potentially going pro? As I was preparing for this, I was doing a little bit of research and I saw that major league or just major professional lacrosse players don't make much money. So I'm wondering if that made any impact. No, it really didn't. For me, it was more about... My dad, he's not a religious man, But he used to say a prayer every single night that me and my brother would have a positive impact on the world. And that's always been a guiding North Star for me.

4:17And I saw the ability for me to have the biggest impact really in business, developing leaders on our own team. And then also the impact we can have making the sport more accessible and getting more kids the opportunity to have the same experiences that we were fortunate enough to have through sports growing up. So I was really drawn to that more than the money. I think that in business, financials are the best measuring stick. And being a former athlete, I'm super goal-oriented. So we use finance as a metric for goals and KPIs, but it really isn't the thing that gets me up in the morning. It never really has been.

4:58Yeah. It's interesting because for me, I had a similar type situation. When I first got into podcasting, I didn't want to be a podcaster for the money. But up until then, all I cared about was business ventures that made money. I didn't really care about the impact. And then I started doing this podcast. And a ton of people reach out to me all the time about how what we're talking about on the show is changing their lives and how I've had such a big impact. And that to me has meant so, so much. And I always thought that the people that said they do it for the impact, not for the money, were just totally putting on a front.

5:30But now that I've actually done it myself, I totally agree with exactly what you're saying. Yeah. Once you feel it for the first time, it's probably one of the most addictive feelings in the world. Just helping others is so fulfilling. Yeah. It's one of those things. I really didn't believe it until I actually did it myself. And it's so true. I think that's our generation as a whole. I think that's a big theme, that the more people feel it, the more people get a chance to use their passion or their skill to actually have a bigger impact, I think. It's really a beautiful thing. It's hard to grasp too.

6:05I mean, you can hear people talk about it all you want. I heard people say it all the time. And I just didn't fully grasp it until it actually happened. Yeah. And for me, the first business I ever started, besides stealing mangoes off the neighbor's tree and setting up a stand and selling them back to all the neighbors with my brother, but the first business was really private lessons with kids. So in high school, when South Florida wasn't a big area for lacrosse. So me and a couple other buddies were some of the first to get a division one scholarship. So we set up private lessons and started coaching kids one-on-one.

6:40And the impact that you have coaching a kid one-on-one, not just their skill in the sport, but also just the connection that you build. What's your favorite class? Why is it your favorite class? How are you doing in school? How are you doing with the girls? Like all those different conversations then you can see it really change a kid's life. And there's kids I coached actually eight years ago now that I just saw last week, and he's going to play college lacrosse. I started coaching when he was probably eight or nine years old. Yeah. That's such an awesome feeling. I have people that tell me that they listened to the first couple episodes of this podcast and now they're buying their own rental properties.

7:19And it's the same thing, right? Fast forward a couple of years, they're buying rental properties, your people are going to play college lacrosse. It's an awesome feeling. So the first thing I really want to dive into was your decision to drop out of college. And funny enough, you actually attended what was at the time my dream school. And for those who don't know, that is the University of Tampa. Based on my math, I'm assuming you dropped out around your junior year. What made you decide to drop out? Yeah. So I was originally recruited to play lacrosse up at St. John's in Queens. And after my freshman year, when they brought out the snowplow to clear the field so we could practice, I realized I'm probably in the wrong place.

8:00So everyone on the team always talked about University of Tampa and this program and how awesome it is. And I had never heard of it. Growing up in Florida on the East Coast in Jupiter, you never really heard about Tampa. It just wasn't, I don't know why, but nobody ever talked about it. So the first time I heard about it was actually when I was up at St. John's in New York. And as soon as I made the decision that I wanted to transfer and play division two lacrosse so I could have more time to focus on the business, I knew I wanted to either be in California or Florida in the warm weather again.

8:34And so I ended up transferring to Tampa. And within about six months, we were doing over a half a million a year in sales. It started to become a very real conversation that I was having with myself. Is this the right move for me? Do I want to keep going to school and playing lacrosse? Or do I want to drop out and focus on the business? And it was one of the harder decisions I ever made, because I was so passionate about playing. And I knew that I could have a real impact on the field, but I hadn't really had a chance to do that yet. So I really struggled with it. And then I had a meeting with a mentor of mine, Jamie Aghasty, who's been a mentor now for four years or so.

9:18Amazing guy and 30 minute conversation, I learned more than I did in an entire semester taking full course load. And so that was the point where I realized this isn't that hard of a decision. I'm going to drop out. I'm going to focus on business and I'm going to surround myself with mentors that I can just accelerate my learning tenfold. When you first said it was a hard decision, was it hard because you put pressure on yourself and you weren't sure what the right path was? Or Or did you not have the support of your friends and family? How did that dynamic play out? I'm a pretty independent guy.

9:55So I like to make decisions pretty independently. It was just really a personal struggle for me. Yeah, I guess there was to some degree wanting to make mom proud and have the diploma on the refrigerator. But once I realized that I can make mom proud, having an impact on the world through business, it became very easy. And what is school really for? This was a conversation I had with my father, actually. What is college really for? It's to help you find what you're passionate about and then give you the education to pursue it. I found what I was passionate about growing businesses. And you don't learn how to grow businesses in college.

10:32You learn how to grow businesses by growing businesses and making mistakes and failing and learning from it. And so once I really realized that that was my path and that was what I was passionate about, it really did become a pretty easy decision. Was my math correct? Were you a junior when you dropped out? I probably should have been, but I was probably a sophomore in credits. So being halfway done or somewhere along those lines, did you not see value in just finishing and then working on the business? Did you feel that there was an urgency to really get going on the business now? Yeah, definitely.

11:11Like I said, what school was for me, what college was for me was a vehicle to find what I was passionate about and then to educate me around that passion so I could pursue it. And I realized education in college isn't going to help me build businesses. I needed to get the real life practical experience and learn from people who have been doing it their whole lives. And the faster I get started, the more progress I'll make. And we're only on this earth for so long. I'd rather spend all the time I can doing what I'm most passionate about. What advice do you have for someone listening to the show today that is currently in college and considering dropping out or is just now going into college and they're not sure if that's the right path for them?

11:56I think it's really a very personal decision. I think there's a lot of room to improve the education system in general. I think kids coming out of high school now are more fortunate than every generation before them because of what's available online, YouTube, podcasts like this. You can just learn everything that you want to learn online. And it just really depends on the person and where you are in your life and whether you know what you're passionate about and know what you want to pursue for the rest of your life. And it can make you enough of an income that you can live and take care of your family or whether you're still figuring it out, which a lot of people are.

12:40And if you're still figuring it out, I'd say go to college, experience it, broaden your mind and try as many things as you possibly can. And you'll find what you want to do. Robert Leonard You talked about how you didn't necessarily gain a ton of tactical education that really helped you build a business in college. And I completely agree with that. But one of the pieces I'm curious about is, did you build a lot of relationships in college that have helped with the business? Was the networking piece important? Robert Leonard I'd say network is probably one of the most important things in building a business.

13:13Did I build a good network in college? Probably. but post-college, my network has grown much more substantially and much more accurately, I guess you could say, with what I want to do and where I want to go. And one of the big radars that I use and that my wife uses is we try to put ourselves around people that we want to be more like when we're older. And we say that all the time. And we'll say that when we're 90 years old. We just want to surround ourselves with people who we aspire to be more like. And I think that's a really important part of networking and especially deciding who you want as a mentor.

13:52Growing up, I had coaches that were life-changing and completely moved the needle in my life. I also had coaches that were not that great and not somebody that I wanted to be like when I was older. And the same goes for mentors. You should really be selective with who you aspire to be more like. Let's take a quick break and hear from today's sponsors. Even Einstein had blind spots. That's why modern science is built on the idea of peer review. Investing may be more art than science, but that doesn't make peer feedback any less valuable. The tricky thing is finding qualified people who are interested and willing to help vet your investment ideas.

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16:50To begin getting smarter about investing, just visit theinvestorspodcast.com slash get started with stocks. That's theinvestorspodcast.com slash get started with stocks. And for a limited time, you can use code stocks15 for a 15 % discount at checkout. All right, back to the show. My next question is partially a selfish one because I'm an athlete myself and I'm interested in learning more about this. But I think it's also important to get some context for the audience before we go into our next few questions after that. So explain to us what the NLL is and how it's different from the MLL and the PLL, which based on my research seems like has just merged.

17:33Yeah. So the NLL is the National Lacrosse League. It's the largest and longest standing professional lacrosse league. It's for indoor lacrosse as opposed to the MLL and the PLL, which is outdoor lacrosse, field lacrosse, we call it. So in indoor lacrosse, you're playing actually in a ice rink. The floors are turfed and it's five on five. So it's a lot higher speed. There's a lot more touches. There's a lot less rules. It's a lot more physical of a game. It's very, very big in Canada, which actually lacrosse is the official sport of Canada. Not a lot of people know that. So it's the North American Pro League.

18:18There's teams in Canada and there's teams in the US. And they actually just expanded again. I believe it's the 15th team in the league now. They average around 11 ,000 fans a game. They compete with some of the hockey teams that they're in the same stadium with. It's really an exciting league and we're really happy to be a part of it. I want to talk a bit about how you're part of the NLL and some of the other professional leagues that your company, Signature Athletics, has partnered with. How were you able to form a relationship with such a big league like the NLL and the other professional leagues to become the official ball of those leagues?

18:58Networking, just not being afraid to pick up the phone and reach out. And we had a great start to the business. We created the first higher quality, longer lasting, safer ball. So the first premium lacrosse ball, which created an entirely new category in the sport. And so a lot of the leagues recognized that we were doing something different. And we were fortunate enough to actually get approached by some, and then the others we approached. And with the NLL, we realized pretty early on that what we had built with this premium lacrosse ball really wasn't a patentable idea. If we did patent it, we'd basically be giving away the formula.

19:38And so we decided, okay, well, how can we create some defensibility? If we get a first right of refusal, exclusive agreement with the pro league, we can grow with them as time goes on and become the Wilson basketball of lacrosse. And so that was the idea. And then I was fortunate to get introduced to Nick Zikevich, the commissioner of the NLL, who's one of the eight founders of major league soccer. And we just hit it off. He's a really great guy. And so he joined our advisory board. And And that was really instrumental in our strategic planning process and really helped me to identify a much bigger problem that our company can solve.

20:23and then really have the confidence to pursue it and give up an exclusive, very focused approach to building problem-solving lacrosse products and actually broaden that to building a problem-solving software and supply chain solution that can help youth lacrosse programs, travel lacrosse programs, and actually all sports programs, all youth sports programs, get custom fan gear and custom uniforms on demand. And this model that we created, it saves program directors anywhere from 50 to 100 hours a year. It makes their business substantially more profitable right out of the gates so they can reinvest in scholarships to help more kids experience the sport.

21:10And so it really aligns with our vision as a company and with our mission. and it's kind of crazy how in your entrepreneurial journey, there's so many twists and there's so many turns and there's ups and there's downs. And sometimes it's one conversation and one idea that ends up just pivoting the business and really taking you to the next level. And I'm very grateful to have Nick involved and to have his mentorship. Inventing a new ball seems like a massive hurdle to me. And I think becoming the official ball of any professional sports league is difficult by itself. But trying to implement a brand new ball just seems massively difficult.

21:54I compare it to someone replacing a baseball or a football in the MLB or the NFL. I can't imagine a baseball ever changing, at least in my lifetime. And I think there's a lot of people listening that have business ideas that seem like they're massive hurdles like this. How did you overcome such a massive hurdle? I think if you just look at history, it's bound to repeat itself. Funny enough, the football, one of our attorneys, Jay, he actually was the one who got the NCAA to adopt four-panel football. So he had had experience getting that push through to the NFL and the NCAA and was really helpful in just sharing his journey with me.

22:37For us, I think it was a little bit easier because if you just look at the history of the lacrosse ball, it has changed over the years. And it definitely needs to change. And the reason is if you draw a football on a piece of paper, if you draw a soccer ball, if you draw a baseball, you know what it is. A volleyball, you know what it is right away. If you draw a lacrosse ball on a piece of paper, it's a circle. Nobody knows what it is. if you see a lacrosse ball and you've never heard of the sport you might say that's a big bouncy ball lacrosse needs just from a macro branding perspective a ball that the sport and the athletes can identify with and if you look at golf they used to use a ball very similar to lacrosse completely round no technology in it and it sucked compared to what they're using now And so at lacrosse ball, there's so much opportunity to increase performance, increase safety, increase the macro branding of the sport by making it uniquely identifiable to the sport.

23:41And then if you just think about the color, women use yellow, men use white. I still don't know why that is. And nobody's really had an answer for that. And neither of those colors are designed for digital visibility. And as we all know, that's where everything is now. You're watching most highlights on your phone. You're watching a lot of games on your phone. And a lacrosse ball is like a hockey puck. It's small. It's moving really fast. It's hard to see. And so we were able to take actually the Pantone from tennis, who did millions and millions and millions of dollars worth of studies, and apply that to this new Pro S1 ball that we created.

24:23And so it's significantly more digitally visible. And that ball was actually adopted by Major League Lacrosse right before the merger last year. So they used it in the 2020 championship games on ESPN. And we had had our balls on ESPN for the FIL World Games back in 2018. And they actually used our orange ball. and just comparing the film from the orange ball to this new Pro S1, we call it hyper yellow color, it's night and day difference, a night and day difference. So there's really four main things that we wanted to solve. One, digital visibility, two, performance. So on the performance side, we took the same technology that they're using in golf.

25:11We created divots around the ball, which creates less drag as the ball is going through the air and less drag means that it's going to stay on plane for longer. So the ball actually has a truer flight pattern and it's actually going to go faster. So very similar to golf. So we tackled the digital visibility. We tackled the performance safety because of those divots, the ball is going to compress more on impact. So there's less pounds per square inch of force transfer. And then the fourth bucket for us was giving players something that they could identify with and the sport something that they could identify with.