NEW INC. MAGAZINE COLUMN BY HOWARD TULLMAN

 

Grow Slow and Smart -- or Grow Quick and Get Out

With so much investment capital floating around, startups will be tempted to avoid the heavy work that it takes to build a company over the long haul. 

 

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@TULLMAN

One of the toughest decisions that an entrepreneur needs to make as his or her company starts to expand and gain some serious traction is (a) whether to focus on growing the business the smart and somewhat conservative way for the long run, which sometimes means saying "No" to important customers, large new contracts, and other exciting opportunities; or (b) say "Yes" to virtually all comers, expand the team and the business as fast as humanly possible, and pray every night that things don't completely fall apart while everyone's running full speed ahead and trying to cover all the bases and put out all the fires. You might call that fast-growth strategy the latest version of the "fake it 'til you make it" philosophy.

I'm sure that arguing about what's best for the firm is a common conversation in every enterprise, but it's especially challenging when you're building a software company's capacity, which is considerably different from adding a new line to a manufacturing business or more delivery trucks. As a general proposition, throwing more software engineers at a given project is as likely to slow things down and screw them up as it is to speed things to a prompt and successful plateau and a minute's respite before the battle begins anew. This is only one of the main reasons that Software as a Service (SaaS) businesses are as complex and risky for the prospective customers as they are for the companies themselves. Because no one's ever 100% sure that they're in control while they're changing the tires as the car races around the track.

Even more importantly, in many tech firms, the most senior leaders, including the CEO, very often are NOT tech savvy enough to make effective counter arguments when their CTOs and others lecture them on the perils of going too fast or too slow. Or about the risks inherent in trying to simultaneously meet too many conflicting and competing demands, with limited available resources. The internal tensions between the senior management and salespeople on the one hand (speed and sales) and the engineers and computer scientists on the other (safety and stability) are a constant source of friction in almost every startup and early-stage growth company. Even the legendary tycoon Howard Hughes worried about these same issues more than half a century ago. He said: "One of our anxieties is de-focusing the relatively small number of engineers we have. Within our own core development, I am reluctant to fund projects that are way afield of where we are."

This debate couldn't be any more front and center than it is today with Elon Musk promising that Tesla's cars will achieve degrees of autonomy (Level 5, as in total) by year end that virtually no one else in the world thinks are remotely possible, including undoubtedly a ton of Tesla team members who probably need to keep their mouths shut to keep their jobs. As studio boss Samuel Goldwyn used to say: "I want everybody to tell me the truth, even if it costs them their job."

The SaaS conversation is usually a pretty straightforward if somewhat strident discussion. The more mature and experienced techies are focused on building a rock-solid code core that keeps growing and getting more efficient over time because ultimately this will be the entire firm's foundation and the engine on which all of its offerings will rely. They know that the more standardized and universal the core can be, the easier it will be to maintain and to deliver a common set of products and services to an ever-expanding population of customers. In fact, I wrote a long time ago that the best test of a software firm's maturity is whether the CEO can stop selling custom and bespoke solutions to new customers. Getting to this point takes time and money, but these aren't the most patient of times for many reasons.

Likewise, the sales team and the managers responsible for the firm's topline growth are constantly being presented with lucrative and attractive opportunities to sign new and large customers for the firm's software, BUT -- almost without fail -- every one of these big guys has a list a mile long of features, functions, customizations and other requirements which they just can't live without, and which need to be immediately incorporated into the solution. Also, amazingly enough, they're even willing to pay for it. Seems like a win-win for sure -- great customer, great dollars, and amazing bragging rights. Unfortunately, it's a totally one-off and bespoke version of the current product, which will need to be built by the tech team almost by hand.

And, because it's a somewhat novel code base-- even if it basically rides on the core systems -- the customized version will require additional and extensive testing and other reviews that will absorb considerable resources. Even worse, in some cases, these new versions may negatively impact other earlier customers and adversely degrade the speed and operation of the existing offerings.   

It doesn't help that your team, your customers, your board and your investors are all likely to have radically different views about the best way forward. Ultimately, the decision is going to be yours.  And, as obvious as the choice seems in some ways, there's no simple or single answer to this problem and, to make things even more difficult, the "right" decision can differ from time to time and depend not only on your internal dynamics, capabilities, resources and goals but also on a number of external variables, which also are constantly in flux.

A simple example of one very material internal consideration is the mental state of the key players on your team. As the prospect that we'll see an end to the pandemic grows a little brighter each month, it seems that almost everyone is taking the opportunity and making the time to take a serious look at just how they want to go forward in their own lives and in their careers.

Some people can't wait to get back to work; some will never be back; some feel that they dodged a bunch of bullets and are looking for the nearest exit; and some now believe that building a business is a lot harder and takes a lot longer than they ever imagined and they aren't sure that they still have the passion or the patience to wait for a day that may never come.  Still others are seeing new paths, priorities and alternatives for their own careers that have taken on far greater importance in the past two years.

While everyone in your company may have started out with a shared vision and a common desire, things and circumstances change, families and financial obligations grow, and for some simply tired and stressed-out folks, enough eventually feels like enough. In some ways, these kinds of changes can make those same people far more susceptible to externalities as well.

An example of a material external consideration is the state of play of M&A. If you're already thinking about bailing out and looking for an excuse and a soft landing, the emergence of a very frothy and active market for mergers, acquisitions and roll-ups in your particular industry starts to look very interesting. And it's also likely that-- and here's where things can get very hairy for the CEO-- the prospect of a near term exit can change key team members' overall perspectives on what the business needs to do to best position itself going forward.

All of a sudden, the long-haul view looks a lot less appealing and the chance to grab some large, one-off deals and goose the near-term revenues to dress up the business as an attractive acquisition target makes a lot more sense to important members of the team -- even if they know in their hearts that they're risking the whole business in the process. When your people see their peers in other companies making a bundle, and crappy businesses are cashing out for big bucks, it gets harder all the time to keep their heads in the game and their noses to the grindstone. Even turkeys can fly in a tornado of SPACs, spinouts and "story" stocks.

Building smart and stable software is never quick or easy. But that's not even the most challenging part of the business. Whether they know it or not at the outset, innovators and entrepreneurs sign up for a lifetime of iteration-- fleeting moments of joy and exciting times of inspiration and invention -- which are always followed by months of thankless revisions, repairs and constant maintenance. The nasty secret is that you're always leveling up -- or trying to keep up with the customers' demands and the competition's advances -- because in software development, there's never any real finish line. Only you can decide when enough is enough.

 

No one has ever gone up to Trump and just told him he lost the election

 

No one has ever gone up to Trump and just told him he lost the election, author Michael Wolff says in The 600-Word Interview

 

Nicholas Carlson

Tue, August 3, 2021, 12:39 PM·4 min read

• Michael Wolff is the author of three books on Trump. His latest is the best-seller "Landslide."
• He says Trump is delusional and won't listen to what he doesn't want to hear.
• So no one has gone up to him and plainly told him he lost fair and square to Joe Biden.

It seems as if your theory of Trump is that he's a not-bright insane person with a gift for reading a crowd.

Yes. He's like many actors I have known in my time: not too bright in their own particular reality, with extraordinary gifts for getting on the wavelength of their audience.

Does he know that he lost the election fair and square?

He does not know. Now, whether he has managed to successfully convince himself or whether from the get-go he was so focused on hearing what he wanted to hear, he is absolutely certain. Absolutely certain that he won the election and that if he did not win it, it could only be that it was stolen from him. And that everybody else also sees it that way. So this is delusional, which is the word I use fairly often in the book.

You also say he's mentally deranged.

Yes. I would say that seems the obvious conclusion.

I kept waiting for someone in the book to just go out to him and say "You lost."

When you haven't been in his presence, it's very hard then to actually describe for someone the fact that he is incapable of listening. He just doesn't hear anything that he doesn't want to hear. He's unable to acknowledge any deviation, any slightest departure, any merest qualification of something different than what he thinks or wants to think.

So no one has just gone up to him and said, "Sir, you lost this election"?

Exactly so. You cannot say anything to Trump that he doesn't want to hear. Everybody knows that. So to do that would mark you as incompetent or a fool or a silly person. It just doesn't happen.

Now, there's a set of billionaire types - sort of what passes for friends - who have at least described to me instances in which they have tried to, if not exactly level with him, bring him around to a new understanding. But also the feeling that you come away from those descriptions is that even these people can't get over the barrier of saying: "You're an idiot. You're a fool. You don't know what you're talking about."

Partly because it would require that kind of extreme language. And, given that he was the president of the United States, and given that everybody knows he doesn't listen anyway.

And given, of course, that people who are talking to him want to remain in his favor.

It's almost another power of his, if every time he encounters someone they can't bring themselves to be direct about the circumstances.

Completely. But just think of it as talking to a crazy person, a person whose capacity to parse reality in some logical way is so diminished that you have to humor them, essentially. Everybody knows that reality can't get through here, so the best you can do is work at the edges.

In your first book about Trump, you called Jared Kushner and Ivanka Trump "Jarvanka." Everyone knows it's "Javanka." Did you hear about that criticism?

Yeah. And I don't know what to say about it. I know that Steve Bannon invented the term, and that's the term he used with me. You know, did it somehow change underneath? I don't know. I think I was probably one of the first people to put it into print. So who knows? I don't know. I have no knowledge there. I said to Steve, "Is it Javanka or is it Jarvanka?" And he said, "Javanka, Jarvanka, let's call the whole thing off." So I don't know.

 

JOE – Wake Up!! Don’t Settle for Infrastructure Crumbs (which you may not even get) While These Republican Scumbags Steal the Vote and Kill Our Democracy in Every State. Get Rid of the Filibuster.

 

JOE – Wake Up!! Don’t Settle for Infrastructure Crumbs (which you may not even get) While These Republican Scumbags Steal the Vote and Kill Our Democracy in Every State. 

Get Rid of the Filibuster.

(Dobbs) Biden Should Fight Harder

There's probably just one path to secure the right to vote. He's not taking it.

Greg Dobbs Aug 3

“We are facing the most significant test of our democracy since the Civil War.” 

When Joe Biden said that three weeks ago in his speech about voting rights and voter suppression at the National Constitution Center in Philadelphia, I think he got it right. Unequivocally right.

But there’s a disconnect. Yes, the president is talking the talk on voting rights. In fact as those rights are challenged in many states, it is not just a “significant” test, it is an existential test. But he’s not walking the walk. There’s a way to face that test, but by letting the modern-day Republican party corrupt our democracy with a filibuster in the United States Senate that would kill any new federal legislation to protect voting rights, he’s turning the other way.  

Not that Biden isn’t ardent about those rights. “Help prevent this concerted effort to undermine our election and the sacred right to vote,” he pleaded in the wake of new laws in Republican-led states that make it harder instead of easier for citizens to cast their ballots. Laws that reduce the availability of mail-in ballots, that reduce the number of ballot drop boxes, that reduce the window to vote early and on Sundays, that reduce the right to deliver food and even water to people waiting in long lines at polling places. Given voting trends, it’s largely minority citizens who are targeted. It’s becoming a case of politicians choosing their voters instead of the other way around.

Biden went on to ask those who have supported suppression in all its many forms, “Have you no shame?”

Apparently they don’t. He got it right again. Yet there is still that disconnect.

Speaking in the cradle of American democracy, Biden correctly claimed, “Some things in America should be simple and straightforward. The right to vote freely, the right to vote fairly, the right to have your vote counted. The democratic threshold is liberty. With it, anything is possible. Without it, nothing.”

He is so right about that. Free elections are the foundation of our democracy. Without them, we could become a one-party state, with a dictator at the top. Voting is an inalienable entitlement, and politicians don’t have the right to take it away from us. Any of us.

But still, with what Biden called “a new wave of unprecedented voter suppression, and raw and sustained election subversion,” they are trying.

Thus, the disconnect. The president is passionate about the problem, calling the passage of new voting rights laws on a federal level— to supersede suppression on a state level— “a moral imperative.” But he is ineffectual about what is, realistically, the only way to pass them now: abolishing the filibuster, eliminating the requirement that 60 senators approve to turn legislation into law.

Sad to say, our tradition-tied president doesn’t buy into that. He told a CNN Town Hall late last month that killing the filibuster would “throw the entire Congress into chaos and nothing will get done.”

As if a whole lot is getting done now?!

That’s why I think on this one, Biden is unequivocally wrong, and is putting our right to vote— everyone’s right to vote— at risk, by not fighting to end the filibuster.

I’ve written about this before but because we’re at a pivotal point on the issue, I want to explain it again: the filibuster is only a rule, not a law. It wasn’t created by our Founding Fathers. It’s not enshrined in the Constitution. It was dreamt up 50 years after the founding of the republic, basically to prevent tyranny of the majority by allowing a minority in the Senate to talk a bill to death. But here’s what’s wrong with it: the filibuster means only 41 senators out of a hundred can block a bill. That is tyranny of the minority.

And to Biden’s fear of throwing Congress into chaos? How about throwing liberty into chaos instead. At the height of the Jim Crow era, Southern Democrats used the filibuster to block legislation that would protect (or to be realistic, simply establish) the civil rights of black Americans. Now, when it comes to voting, it’s Jim Crow redux. Or as Biden put it in Philadelphia, “Jim Crow on steroids.” 

Because the reality is, the leading elected Republican in the nation right now, Senate Majority Leader Mitch McConnell, argues there’s no need for Washington to pass new voting rights laws. “This is not a federal issue,” he said back in June. “It oughta be left to the states. There’s nothing broken around the country.”

If only.

What’s broken is that Republican state legislators, claiming that they are stamping out fraud but with a clear eye on stifling Democratic votes, have reshaped voting laws to favor their party even though the 2020 election was hailed by experts— not politicians, but voting law experts— as the most fraud-free in our history. The almost uniform rejection of the Big Lie by judges both Left and Right, and by state voting commissions both Republican and Democrat, backs that up. 

In an op-ed yesterday in The Denver Post, Democratic Colorado congressman Joe Neguse wrote about our plain and simple right to vote, “It is a right that many people have died to secure and a right that civil rights leaders… were harassed, jailed, and beaten to protect.”

But it won’t be enshrined without another fight.

President Biden has moved at lightning speed to reverse the crippling impact of the pandemic, human and economic. He has restored some faith in institutions after January's insurrection. But his long-lasting legacy hangs on voting rights. If he’ll see the light himself and put pressure on the holdouts in his own party to just scrap the filibuster and be done with it— the way he has been pressuring members of both parties to achieve his aims on infrastructure— Joe Biden might be recorded as one of history’s most effective presidents.

If he doesn’t, the rest may be moot.

NEW INC. MAGAZINE COLUMN BY HOWARD TULLMAN

 

Be Sure to Sell Your Story, Not Your Product

As we stumble toward a post-pandemic economy, here are three rules to keep in mind as you re-engage with customers, especially those who have wildly unrealistic expectations. 

 

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@TULLMAN

Customers are returning. In-person events are resuming. (Springsteen on Broadway-- the Boss is back in town!) Orders are slowly creeping up to pre-pandemic levels. Offices are looking more like going concerns than graveyards, for at least a few days a week. Kids are headed back to school. And, throughout it all, the stock market continues to soar.

In fact, almost all the trends today are happily up and to the right, unless you're an unvaccinated Trump voter living in a Red State led by arrogant MAGA idiots and hypocritical vax deniers. Then, your chances of dying are increasing. Meanwhile the country's economic recovery continues to be threatened by vaccine resisters and new virus variants which their willful ignorance facilitates and helps disburse. 

But, even as most things are headed in the preferred direction, every business needs to be more careful now than ever not to squander the once-in-a-lifetime restart opportunity that is in front of them. To aggressively build back and build better, but with some considerable degree of care.   It's not going to be easy with demand rapidly spiking, employees deciding not to return or returning half-heartedly, resources and supply chains still constrained, prices of materials and components inflating.  And, worst of all, consumer expectations haven't adjusted anywhere near realistically to the new, more modest business offerings and service levels. This is due largely to their desperate thirst for the good old days.

People were reasonably understanding during the peak days of the pandemic, but now that the social, political and peer pressures are diminishing, at least for the moment, the gloves have also come off. We're quickly returning to a greedily grasping world of "I want it all and I want it right now." Tolerance and moderation are much harder to come by as the scramble for scarce products, services, properties, and reservations is full on. Airline passengers continue to act out in aggressive and hostile ways. Waiting, sharing, or the willingness to accept even a little less of just about anything in order to make room for others, is strictly for wusses. This selfishness masquerading as individual freedom is just one of the many Trump legacies that we'll have to live with for a long time. We have to start dealing with it now.

You've got to be ready to meet these new challenges if you want your business to succeed, and the window for doing so is quickly closing. There likely won't be much of a opportunity for second chances or do-overs. Everyone's in too much of a hurry, wants whatever they can get, and the prevailing sentiment seems to be that settling (not happily) for a little something is better than ending up with nothing.

This is a different game and a different mindset than many businesses have faced in the past and - for better or worse - this means that their "stories," the tales they tell their customers, are going to have to change and adapt as well. But some basic rules of the game never change. You've just got to keep them top of mind in all you do.

It starts with a simple formula: satisfaction equals experiences exceeding expectations. SEE for short and SEEing is believing. If you focus on telling the right story to your customers and setting the proper expectations, and then deliver against those promises, you'll have long term customers who are happy campers willing to stick with you as things improve over time. It's still a WYSIWYG world - what you see is what you get. In this universe, the best story always wins.

On the other hand, if you overpromise or try to move too quickly to do everything you used to do, you're almost certain to disappoint them and fail. And, as an aside, you'll also burn out your employees, whose angst will become painfully apparent. The best ones will leave, and the underperformers will "quit" without leaving, which is even worse.

In troubled times, it's hard to overestimate the importance of the reassuring connections your customers had and have with your front-line employees - not just your senior management team. Keeping them all happy is critical because your customers will never be happier than your least happy employee.

So, three key rules to keep in mind:

(1)  People buy stories, not things. Your story for today needs to closely and carefully match exactly what you can consistently deliver at the moment and your whole team needs to be onboard and committed to the plan. You'll get better over time, but for now you should definitely plan to under-promise and over-deliver. Don't rush; do a few important things really well.

(2)  Stories are a powerful way to build loyalty and maintain connections. Your story needs to be about acknowledging, understanding and valuing your customers' needs and desires. There needs to be a simple explanation of how you expect to satisfy them through hard work, honest communications, and a continued personal commitment to getting better every day - just as they will be. Make them an integral part of the program and partners in the solution.

(3)  Stay away from pitching math or metrics or relying on technology for now. Everyone has the same tools these days-- they offer no edge or competitive advantage. What matters is who has their hearts and heads in the right place and can best tell their story. This is the time for an authentic people-to-people pitch and no amount of cold technology, stats, or spreadsheets can ever turn a sterile story into a heartfelt one. People don't make emotional decisions based on numbers, they fall in love with your story, or they find someone else.

AUG 3, 2021

LOOP NORTH NEWS

 

Don’t kid yourself, or your kids, about being an entrepreneur For the class of 2021, starting a business may seem like a cool thing to do. But most youngsters are not ready to run a company. Here’s a three-point reality check. By Howard Tullman 2-Aug-21 – These are tough and complicated times for parents to try to give any career advice or direction to their children who have just graduated from college and who are about to enter the working world. A subset of these students will head to graduate school for a year or so to postpone their inevitable transition, another group will pursue gap years or philanthropic and social adventures. But plenty more will need to hit the ground running and find something remunerative to do with their lives, especially as the clock on their student loans starts ticking. I’m a little afraid that too many of them will decide to become “entrepreneurs” and try to start their own companies without having a clue as to what a painful and precarious road building a new business is. Or what the process really entails. And, naturally, if they decide to chance it, they’ll turn to their parents and family for support and financial assistance. As one who meets dozens of these wannabes and sees hundreds of alleged business plans each year, you parents have my deepest sympathies. Don’t try to prepare the path for your kids. Instead, prepare your kids for the path. Remember that it’s more important to do things with your kids than for them. To make these imminent, heart-to-heart conversations with their kids even more difficult, many parents – largely because of the pandemic – are in the midst (voluntarily or otherwise) of rethinking their own careers, alternatives, and businesses while facing their own financial challenges. Stuck between supporting their kids’ colleges and dreams and their own parents’ ailments and infirmities, they are truly the sandwich generation. For many of these folks, looking for something new to do isn’t exactly their own choice, since there’s no longer any job or business for them to return to. For others, the end of the mandatory, 16-month COVID-19 respite from the daily grind feels like a once-in-a-lifetime, guilt-free chance for their own do-over. Sadly, too many of these people will also think that being their own bosses sounds great and that they have the skills, aptitude, and mental wherewithal to start their own businesses. Overall, this is a bad idea for most of them. The only worse thing I could imagine for them would be to try to go into business with one or two of their kids or other family members. Assuming that you are smart enough to resist these temptations yourself, you still need to be very careful about the advice that you offer your overly optimistic and woefully naive offspring. There may not be a right answer, but there are plenty of ways to go wrong if you’re not paying attention and prepared for the inevitable conversation. First of all, be honest. If everything about your work were joyous, it would be called fun and not work. Serious and important work is challenging but strenuous, and sometimes thankless. It steals time from your family and often seems like there’s never an end in sight. It takes perseverance and grit. If you enjoy what you’re doing, make that clear to your kids. But please don’t ever tell them that you’re doing it for the money so you can buy or do whatever. We work because we enjoy it and we’re proud of what we do and we work to help others. Ideally, that’s what your kids should be aspiring to as well. Second, please don’t tell them to pursue their passion. In these times, and at this time in their lives, that’s utter BS. Seriously awful advice. Even if they actually had an overwhelming passion, they’d be ill-equipped and unlikely to do anything in pursuit of it fresh out of school. They’re good at taking their needs and desires into consideration, but rarely their abilities. There aren’t any shortcuts to real success or fantasy outcomes, and it takes time, skill, preparation, and a whole lot of experience to succeed in just about anything meaningful – none of which your kids are likely to have at this stage of their lives. Down the line, when they finally do settle on something that’s real and important to do, passion for the project and the work will be critical – but passion should not lead this parade. Passion without focus, patience, and precise execution is simply a path to chaos and waste. Please don’t tell them to pursue their passion. In these times, and at this time in their lives, that’s utter BS. Seriously awful advice. Even if they actually had an overwhelming passion, they’d be ill-equipped and unlikely to do anything in pursuit of it fresh out of school. If you’re going to have the “talk” with your son or daughter, here are the three most important things to discuss – long before you get to passion. Number 1 on my list would be two little things called responsibility and ownership. Your kids need to understand and appreciate that they didn’t get where they’re at by themselves and that they’ve accumulated debts and obligations of various sorts that they now need to own and be accountable for. The “free ride” is over and whatever plans they have for moving forward need to take into account – and make adequate and realistic provisions for – supporting themselves and paying their own way. Covering the rent without starving has an amazing ability to inject a large dose of realism into whatever dreams and plans they may have cooked up with their friends. In dreams begin responsibilities. Wherever you want to end up, the path starts with getting a real job and earning a living wage while you’re learning the ropes and getting ready to do your own thing. Number 2 is preparation combined with perspiration. One of the worst sins of the business media that exalts successful entrepreneurs is that, apart from the disgusting celebration of excessive wealth and its accompanying perks, there’s sometimes an undue emphasis on how quickly these wondrous things came to pass without giving ample recognition to the fact that there are very few overnight successes. In fact, as I’ve said before, the painful backstories are an equally important part of describing the journey and debunking the idea that anyone with the will and desire and a little luck can also be an overnight hero. It’s simply not a good idea to unduly encourage novices to believe that they should do their own thing when, in fact, the very best thing they can do is to find someone else who’s smart and successful and who’s doing it and go to work for them for a while. You need to be a hardworking role player (and get really good at it) before you try to roll your own. Number 3, please stop telling your kids how smart and talented they are. You’re setting them up to feel like failures when they get out there in the working world and find that brains and book smarts aren’t nearly enough. For every Elon or Zuck, there are tens of thousands of sad and disappointed people who fall flat on their faces and have yet to recover from the experience. The real world is full of smart and talented people who never made anything of their lives because they lacked the two most essential components of all: grit and perseverance. There are always going to be smarter people around and many who are more talented, but the trick is simple: If you can’t outsmart them, you can always outwork them. Effort trumps talent all day long. And the people who get the most accomplished are those who stick with the task through thick and thin and never stop trying to get better and get the job done. Great works aren’t the product of strength; they’re the result of perseverance. Howard Tullman is General Managing Partner for G2T3V, LLC – Investors in Disruptive Innovators, and for Chicago High Tech Investors, LLC. He is also the author of You Can’t Win a Race With Your Mouth: And 299 Other Expert Tips from a Lifelong Entrepreneur. By Howard Tullman | Loop North News | h@g2t3v.com

CUBS MANAGEMENT IS USELESS - OWNERSHIP IS WORSE

 

The Chicago Cubs Are a Baseball Travesty

BY ALEX KIRSHNER

JULY 31, 20214:33 PM

The Chicago Cubs just completed a fire sale, shipping out star closer Craig Kimbrel and a trio of franchise cornerstones: Anthony Rizzo, Javier Báez, and Kris Bryant, all of whom were key contributors to the club’s 2016 World Series title. For the Cubs, this is clearly the end of an era, but it didn’t have to be this way. One of those moves—the trade of Bryant to the San Francisco Giants for a pair of minor leaguers—feels particularly rotten even if it’s not surprising. If you know anything about the Cubs and their owner, it was inevitable that it was going to end this way.

Bryant’s major-league career began in 2015, but not at the beginning of the season. Although he was clearly the Cubs’ best option at third base, they held him in the minors for two weeks. By keeping him off the big-league roster, they ensured that Bryant wouldn’t complete his sixth full year in the bigs, the threshold for free agency, until the end of the 2021 season. Magically, after 12 days in AAA ball, the Cubs decided Bryant was ready to hack it at the highest level; if he’d come up one day earlier, he would’ve accumulated a full year of service time. Bryant then won Rookie of the Year, before following that up with an MVP season and leading the Cubs to a championship. That Bryant later lost a grievance over the Cubs’ service-time shenanigans does not invalidate what anyone could see. The franchise’s key decisionmakers— former team president Theo Epstein, his successor Jed Hoyer, and most importantly chairman Tom Ricketts—were screwing with their best player to save money.

Since his debut season, Bryant has been the third-most-valuable position player in baseball, behind only Mike Trout and Mookie Betts. For the Cubs, he was the epitome of a franchise player: He had elite numbers, a gorgeous swing, and great rapport with the fans. He was also willing to be a billboard for the team and the sport as a whole. The 2017 ads he did with Rizzo—who just got dealt to the Yankees—were some of the best sports commercials ever.

There’s nothing more that Bryant could’ve possibly done to earn a rich, long-term contract from his rich and successful team. But it doesn’t appear the Cubs ever got close to offering Bryant a reasonable deal, despite him making it clear that he was interested in staying in Chicago. And because the Cubs also didn’t invest in keeping a great team around Bryant, they are out of the 2021 pennant race. So, they traded Bryant to a team that’s in contention. His last action as a Cub was to stare wistfully out at Wrigley Field from the dugout after a loss on Thursday. Bryant likely didn’t play in that game because the Cubs feared he might get hurt, tanking his trade value. The player who led the Cubs to their first title in 108 years didn’t even get one last at-bat and one last raucous ovation.

There’s nothing inherently wrong with bad teams moving potential free agents at the trade deadline. It’s part of the life cycle of modern sports, and the haul of prospects the Cubs just brought in will surely help them rebuild. Bryant, too, is a client of the famously hard-charging Scott Boras, who might have advised him strongly against taking any deal at all. Bryant also struggled badly during last year’s pandemic season, and he’s been good but not an absolute superstar in 2021. At age 29, it’s unclear how many more elite seasons he has left in him. And so, maybe when we look back at this trade five years from now we’ll conclude that it made the Cubs better.

But even if you’re willing to concede some or even most of that, the Bryant deal is still incredibly bleak. To appreciate the scale of this crime against baseball, you have to understand two things. The first is how wildly promising the Cubs were five years ago. The second is how rich the Ricketts family is.

The baseball playoffs can be fluky, and a title isn’t a guarantee of future success—just ask the Kansas City Royals. But the 2016 Cubs were different. Most of the key hitters on that team––Bryant, Rizzo, Báez, and rookie masher Kyle Schwarber among them––were between 22 and 26 that season. The pitching staff was older, but the Cubs still looked like a dynasty in the making.

A bunch of the Cubs’ plans went awry after 2016. Outfielder Jason Heyward forgot how to hit, and it turned out that shortstop Addison Russell didn’t belong anywhere near a major league clubhouse. But the Cubs still had that core group of stars, and they also had an owner whose deep pockets could at least theoretically fix whatever problems inevitably arose. The Ricketts family—led by Tom, the chairman––bought the team and a few related assets for a reported $900 million in 2009. The Cubs are now worth several billion dollars. Even apart from that profitable investment, the Ricketts clan has long been one of the richest families in America. No team has an excuse not to spend heavily to compete. But the Cubs really, really don’t have an excuse.

After 2016, the Cubs’ roster did get more expensive, owing to young stars getting into their arbitration years (after three full seasons in the majors, typically, but two in Bryant’s case) and costing a few million dollars each instead of hundreds of thousands. The team was as high as third in the league in payroll in 2019 (an estimated $204 million on Opening Day), which is about where a team in the Cubs’ position should be. Whether because the Heyward contract was a bust or, more likely, Ricketts wanted to avoid a hefty luxury tax bill, the Cubs never gave a long-term contract to one of their big young hitters. The Cubs’ big free-agent move in this period was a six-year, $126 million pledge to starter Yu Darvish. They salary-dumped him to the San Diego Padres before this season, and he’s been one of the league’s better pitchers—as usual.* By Opening Day 2021, they’d pared their payroll to $147 million, 12^th in the league. And the Cubs are now getting what they’ve paid for: This year’s sub.-500 outfit will make it four years in a row without a playoff victory.

While the Cubs were sitting on their hands, their competition was investing. The Los Angeles Dodgers in essence bought the rights to Betts, the second-best position player alive, from the salary-shedding Boston Red Sox. (And L.A. just added more stars right as the Cubs were doing their house-cleaning.) In the Cubs’ same division, the Milwaukee Brewers signed outfielder Lorenzo Cain for five years and $80 million in advance of the 2018 season and would’ve made the World Series that year if the Dodgers hadn’t been so good. The St. Louis Cardinals traded for elite third baseman Nolan Arenado and have left the Cubs in the dust spending-wise (though the Rockies are helping with Arenado’s contract). Even the Cincinnati Reds paid $64 million for Nick Castellanos, a Cubs deadline pickup in 2019 whom Chicago did not re-sign.

For the last few years, the National League Central franchise the Cubs have most closely emulated is the Pittsburgh Pirates. And the Cubs should know better than anybody that you do not want to emulate the Pittsburgh Pirates.

Ricketts has the right to run his team how he sees fit, just as Cubs fans and everyone else have the right to see him as a loathsome cheapskate. If one of the richest clubs in all of sports won’t make a serious run at retaining one of the best players in baseball—a fan favorite who came up through the team’s farm system as the No. 2 overall draft pick and brought the team glory it hadn’t seen in generations—then something is fundamentally broken in Chicago. And it’s not just Bryant. The Cubs treated Rizzo, an inferior but still great player, the same way.

The Cubs finished below .500 every year between 2010 and 2014. During that run, if you’d have told a diehard fan that they’d make the playoffs five of the next seven years and win a World Series, I can guarantee they would’ve taken that deal. (Actually, if you’d have said the Cubs would’ve win a single World Series and accomplished absolutely nothing else, they would’ve taken you up on it.) But even so, what’s happened to the Cubs is massively disappointing, for fans and for the sport. If they’d signed a few big free agents to fill lineup or rotation holes during Bryant’s run on the North Side, not keeping him around would feel more understandable. If they’d found a way to hang onto Báez, or extended Rizzo earlier in his career, it might have softened the blow. But the Cubs did not do any of those things, and now a potential golden era has thudded to an end.

After trading Bryant, Rizzo, and Báez, Ricketts issued a statement to “personally thank” the players for their “critical role” in recent seasons. He didn’t take questions, but if he ever does again, someone should ask him why any Cubs fan should believe he’ll ever spend to support a winning team—whenever it is that he has one next.

Correction, July 31, 2021: This article originally misstated that the Cubs didn’t add any big-ticket free agents after the 2019 season. They added star pitcher Yu Darvish to a big contract, before dropping him after one season.

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