The True Story of What Happens When Olympic Athletes Set Their Sights on Abolishing a Monopoly
After competing in water polo for three consecutive Olympic games (12 years in all), Wolf Wigo was done. Competing at that level for so long, while it certainly has its physical benefits, can seriously set an Olympian back in terms of their post-athletic career.
Water polo players don’t get the sponsorships often awarded to Michael Phelps or Usain Bolt. Scale it back even to a national view, and water polo can’t hold a candle to the financial benefits of soccer or basketball stardom.
Wigo’s best option, at 31, was to jump into the coaching scene –– where so many of his fellow water polo competitors had landed.
He quickly got a job as head coach for the men’s team at UC Santa Barbara, which led to Director of Water Polo. It’s a position he still holds.
But an old friend and player from back home on the East Coast –– a rare hometown locale for a sport popular primarily in California –– had an interesting take on the duo’s potential next steps.
For Brad Schumacher, it’d been four years since he competed at the 2000 Olympics, choosing that round in Sydney to compete in water polo rather than relay (though he had qualified for both). After all, he’d won two gold medals –– one in 4×100 freestyle relay and the other in 4×200 freestyle relay –– four years before in Atlanta, and it’s not uncommon for swimmers to turn water polo players after years of swimming in their own lane, so to speak.
Then again, Schumacher wasn’t just a former swimmer turned water polo player. He was the first world champion athlete in both sports since 1904. He, unlike anyone else, knew the ins and outs of the two sports –– the needs, the requirements and mostly, all of the competitors.
Now, watching the 2004 Water Polo Olympics, his eye caught the brand supplying the caps. Unlike in swimming, where multiple brands have a share of the market, Schumacher quickly assessed the water polo situation: no one else was competing.
When the games ended, he called up his old friend –– one of the only other players he knew from the East Coast –– and laid down a little, somewhat familiar, proposition.
“What if we began competing?”
How Olympians –– Fail To –– Make Money
It’s really hard to make money as an Olympian. Unless your name is Michael Phelps or Simone Biles, you’re pretty much stuck raising money for your trip and working full or part time –– practicing on your off hours.
Yes, even if you win gold. In fact, athletes have to pay Uncle Sam nearly $10,000 for each medal won.
In fact, being an Olympian in a minor sport is a lot like the early days of entrepreneurship. It’s a lot of extra hours during your downtime, using money you’re making during your 9 to 5 to fund a dream that may or may not pay off, but that certainly has an air of “well worth it” no matter the outcome.
It’s a tale of endurance and focus, long-term strategy and superb management skills –– both in terms of money and time.
The story sounds grand. A career match made in heaven. Olympians often have the prestige and the audience, and a startup’s success hinges on the skills on which these athletes have become some of the best contenders in the world.
From a spectator’s viewpoint, there’s nothing stopping their success, few barriers that could ever stand in their way.
Yet, in 2004, when Wolf Wigo and Brad Schumacher launched their new water polo gear company –– Kap7 –– on the heels of Wigo’s last Olympic show and 8 years after Schumacher won two gold medals at the 1996 Olympics in Atlanta, success wasn’t exactly a straight shot away.
In fact, there was quite a bit potentially stopping their success, more barriers than they had originally foreseen.
The first, of which, was that their biggest –– albeit only –– competitor was a legacy brand in a niche space. It was a brand they had grown up with, whose products served as the means to the end of their Olympic dreams.
But that brand was suffering under its own success.
“That company owned market share worldwide , and they still have a stronghold,” says Alex Young, Kap7’s General Manager and a competitive water polo player himself. “When you have that, you look for any way to increase margins, and that’s what they did. This is where Brad and Wolf saw a huge opportunity”
Ever the competitors, water polo Olympians Wigo and Schumacher took on the challenge: create a higher quality product –– after all, who would know the quality needed better than Olympic players themselves? –– and force the entire market to level-up.
To do so, they started with the crux of the game: the ball.
The Competition Heats Up
As Olympic athletes, Wigo and Schumacher are no strangers to perfection. They’d been practicing their own form for decades. They’d been teaching form to up-and-coming players for years. To them, there is no such thing as MVP (minimal viable product) –– a product launch strategy so often used in Silicon Valley.
No, the duo went straight for the jugular in out-competing their competitor.
First, they addressed ball quality –– a rather easy feat. After all, with a near monopoly on the market, their biggest competition had jacked up prices on lower quality goods. Kap7 could then maintain those price points, take a cut on margin, and source a better crafted ball. They found higher quality rubber and implemented a better production process.
In terms of form, their ball was perfect.
Next, they addressed function, using a longer buffing process to add grip to the ball, improving actual performance.
“If you look at a water polo ball, they have these little grooves in them that allow you to grip the ball,” says Young. “The buffing process allows more of the fibers of the rubber to come out, so the ball is more grippy.”
Wigo’s own players at UC Santa Barbara were among the first beta testers.
“Toward the end of the practice,” says Young, “players were clamoring over getting the Kap7 ball because the composition of it is so much better.”
All right –– so they had the players on their side and Wigo and Schumacher were satisfied with the final product. In terms of form and function, it blew the competitor out of the water. Now, all they had to do was get the ball in line sight of coaches throughout the country –– and begin to sell and produce profit.
That’s when their competitor’s biggest leg up nearly drowned them.
The Governing Bodies of Water Polo
It’s the reality for nearly all great things in this world. Rules and regulations are applied in order to keep the playing field level and fair, in order to establish rule and order out of chaos.
Regulations, in fact, are what brought us out of nature. They became those establishments by which we formed communities and safer environments –– what we’d eventually call our culture and society.
Of course, anyone familiar with rules and regulations knows one thing to be absolutely certain: they aren’t unbiased.
Humans write these rules and regulations –– and humans are often suaded, even in the earliest of days, by tradeable goods. Today, we call that bargaining chip “money.”
Even in water polo, dollar bills often get the final say.
In order to sell water polo product and gear, the governing bodies of the industry require you to become a sponsored entity –– and there are only two ways to do so.
- You pay out.
- You grassroots the thing.
Instead of bulldozing their way into the sport by purchasing large flashy sponsorship deals, Wigo and Schumacher decided to infiltrate the market through grassroots methods.
“We made sure we had a higher quality product,” says Young. “Everyone in the company is part of the sport and we know the coaches really well, so we would see them on the pool deck, and give them product to use and test to give us feedback.”
Between Wigo, Schumacher and Young, Kap7 knows roughly 80% of the coaches and players in the game in the U.S. Instead of shelling out for a superficial sponsorship win, the three went heads down on winning gold the good ol’ fashioned way: perseverance and dominance.
They began packing up. It was time to get face-to-face with their desired customers, on a road trip of sorts to coach’s conference and clinics across the country.
Winning the Admiration of Adolescent Players
Two Olympic water polo players have a lot to offer coaches beyond a new ball. Their names can bring in new talent and fill up the roster for camps. Better yet, their drills and experience can inspire as well as truly train the next generation of Olympic players.
Kap7’s roadtrip to meet coaches and show up at clinics turned into a mutually beneficial relationship.
“We told coaches, ‘Hey, we’re going to do these clinics to help you and your team, get better, which in turn allows more opportunities for kids to go to college. We’re going to make sure you have these functional training products, and you’re going to have really good customer service. We’re going to make sure you get all the information you need on how to use them, follow up with you, making sure you are successful.’”
That’s how Kap7 earned their spot as the official high school water polo ball for schools as well as associations for that age range. To date, their high school equipment sector is still the largest driver of growth for the company –– which has allowed the team to expand their offering, finally giving Kap7 the leg up on the competitor, and solidifying their share of the market.
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“We’re unique in the market because the Kap7 brand is flagshipped by the water polo ball, and we also have all of the exclusive rights to Spanish swimwear brand, Turbo. We’re really the only full-service water polo company that can offer you all products. If it’s something we don’t carry, we make sure we distribute it.”
That expansion into customized swimwear, Kap7’s other speciality outside of the water polo ball, wasn’t random. High school teams are rambunctious, creative and spirited –– and they often want their own version of swimwear unique to their team.
“It’s the funniest thing, because [the kids will] buy eight at a time,” says Young. “I’ve probably had four in my life, maybe five, and I work for the company that makes them. It’s hilarious to me to see that. The different sections of our business are driven by the different customers, but that’s what makes it interesting.
It’s probably the more fun side of the business, too, because we can make a print, like these Rio, Brazil Olympics prints. Our top seller though, is the jean print. Parents hate it, but the kids are like, ‘Oh, it’s so cool. It looks like denim!’”
Printed swimwear is now one of Kap7’s most profitable markets. So much so, they partnered with the Spanish swimwear brand Turbo to exclusively distribute suits in North and South America –– expanding their product offering beyond the Kap7 ball.
Breaking the Glass Ceiling of a Niche Segment
It’s been a more than a decade since Wigo or Schumacher competed in the Olympics. They’ve spent all those subsequent years still dedicated to the sport, but growing their skills not in the pool, but on the sidelines, next to the coaches and training the players.
It’s won them both high school and NCAA sponsorship status. The latter coming only five years ago –– and providing an even more intimate level of product critique. After all, the collegiate level in the highest you can go in the U.S. Those college kids and their coaches are the elite of the sport –– outside of the Olympics, at least.
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It’s why the Kap7 team has begun to look internationally for expansion. Europe has multiple professional leagues, for instance. But, like here in the U.S., it’s the close knit community that wins fans –– and Wigo and Schumacher are much less connected in that arena.
Plus, they only launched a functional ecommerce site a few years ago. Before that, they had a site, but orders had to be called in. The process worked well for a custom order base –– as coaches called in to make order placements for their teams. Expanding to a B2C base has helped the bottom line –– and it’s also given them the power of the internet, an already international medium.
“[High school and college kids in the U.S.] constantly want more and more content, someone to talk to, skills to learn, and how they can get better at the sport,” says Young. “That’s really why we have the Drills & Tips page. In turn, it keeps the traffic on our page. We want to be the go-to water polo website.”
The company has turned its focus on becoming a water polo content powerhouse, using Wigo and Schumacher not just at clinics and in-person, but on video and YouTube in order to drive growth no matter location. In many ways, it’s the same strategy which earned Kap7 their success today –– a grassroots movement powered by recommendations, perseverance and dominance.
It’s about listening to your customers –– the same way an Olympian listens to his or her body in order to excel.
An Olympic Launch into International Waters
Of course, international expansion has been made easier for Kap7/Turbo USA this year with the Olympics. Turbo USA secured the sponsorship as the Official Competition Gear Supplier for the United States Mens and Womens Olympic Water Polo Team. Notably, of the 24 water polo teams competing in the Rio Olympics, 9 are competing in Turbo.
For Wigo, Schumacher and Young, though, the excitement around Rio and 2016 games is about more than just winning the official sponsorship. After all, they personally know everyone competing for the U.S. They’ve supplied their gear for the better part of a decade. They’ve seen them grow. They’ve trained with them. They’ve played with them. They are part of the larger water polo community –– in the tightest knit way.
“All of the models on our website are competing in the 2016 Rio Olympics”. John Mann is one of those. He’s 31. He’s going to commit for another four years. You really put off your career to commit to a dream. It’s very humbling to put off your life and career to chase a dream.”
Then again, 31 is exactly when Wigo and Schumacher turned their Olympic focus and love of competition toward a business idea, bringing water polo dollars back to water polo players and proving once and again that with enough perseverance, the Davids of the world can take down any Goliath.
All photos courtesy of Kap7.
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