S1:E2 Navigating the Circus of Global Business With Case Lawrence

Join us as Case Lawrence discusses what it was like to make CircusTrix a globalbusiness and the principles he used to make it successful.

Summary: Join us as Case Lawrence discusses what it was like to make CircusTrix a global business and the principles he used to make it successful.

Bio: Case Lawrence is the Founder and CEO of CircusTrix—one of the largest developers and operators of trampoline parks in the world. CircusTrix has been a Top 10 Fastest Growing Company in Utah for a number of years and has been an Inc. 5000 Company for 3 straight years. In 2017, Lawrence was named Ernst & Young Entrepreneur of the Year; in 2019, he was named CEO of the Year by Utah Business. Lawrence received a BA in American Studies from BYU and a JD from Duke Law School.

Transcript

James: Hey my name is James Oldroyd, this is the top 3 things, welcome today. Today my guest is Case Lawrence, who is the founder and chairman of CircusTrix. Case, it’s great to have you on the show today. 

Case: It’s great to be here. Thank you for having me.

James: So trampoline parks, where did this idea come from?

Case: Well it really was not my idea, originally. I was in San Francisco with my two boys who were 9 and 7 at the time. 

A friend of mine had told me we had to check out this place at the Presidio, they were remodeling the military base there in San Francisco. An entrepreneur had taken one of the old hangars at the military base and turned it into one of the first trampoline parks in the country. There were probably 10 in the country at that time and so I was up there to go to a baseball game with my two boys and we got there the night before and I said, “We’ll go check this place out, we got a little time.” We walked in and it was just this incredible experience. I had never conceived anything like it. It was this sensory overload, physicality overload experience where we had trampolines, we had music playing, you had social interaction. People were there in social groups, or with families like I was. There was a design element to it and there was a competitive element to it as well.

By the end of the night, we were playing dodgeball with complete strangers there in this place. It was such a weird mashup of all these different things that I left there and I thought, “I am going to do one of these, I can figure this out.” So I set about trying to get my first one started and I did in Madera, California. That was where I did my first one. My objective with it at the time was to create a viable, small business. I was sort of a cross-roads time in my career. It was during the Great Recession and I had been a real estate developer and had really struggled through the recession. So I was looking for a bridge of income while I got my career back online and I thought this quirky, small business would be the key to providing some income to my family. That’s how it got started with very modest goals and objectives.

James: I assume it was successful and you said, “Let’s go from here!” Tell us about the scaling process or the growth process.

Case: Yeah it was really funny.

I remember sitting down with my wife saying, “Look if we could clear 5000 bucks a month with this small business, that would be success beyond our wildest dreams. It would fulfill everything we ever wanted. It ended up doing that and more. But even then I wasn’t really looking outward until a gentleman walked into the door, front doors of the business one day, and he was looking to move to the East Coast and looking to start a new business. He had been watching and lived behind this first trampoline park that I had done and had seen the traffic and the success. I thought he was there to complain about the music, but he actually wanted to talk to me about starting one of these businesses on the East Coast. Without going into too much detail, that gentleman, Mike Carpenter, this day is a great business partner and friend who is the impetus to sort of drag me into my second one. It wasn’t really my passion or drive doing it, it was kind of being dragged along by him. 

So then we did two, we did that second one in Durham, North Carolina and then from there a woman from Richmond, VA walked in and said, “I would really like to do one of these in Richmond, would you help me do it?” and I thought, “Well, ok.” So that’s how I got into my third park, all of these were just sort of responding to others’ excitement. After that third one, I knew I had a tiger by the tail because they were all performing in a very strong manner. That’s when I began really thinking about scaling this and turning it into a business. At that point, I considered each one of these sort of an independent, small local business with different partners. After that third one, I realized we could really turn this into a scalable enterprise and that’s how CircusTrix was born.

James: Once you decided this could be a scalable business after that third park, tell  us about how quickly did you ramp these, what happened as you really took off there?

Case: Yeah, the key really comes down to capital. When I had done those first three, I had cobbled together the money. I really didn’t have any money because of the recession. I cobbled everything together through angel friends and family investors. That was a lot of work. When I say cobbled together, you know 50,000 here, 75,000 here. What I found was by far the most difficult thing I was doing was raising money. I also learned that it doesn’t matter if someone puts in 10,000 dollars or they put in 3,000,000 dollars. They require the same TLC. No matter who or what size of investor, they require the same kinds of attention and relationship management. I had had 6 or 7 investors on each one of these projects and it was wearing me out. So, the real inflection point came when I was able to find a venture capital partner to fund our growth.

That was Purity Partners in Palo Alto. I was put in contact with them. They were a non-traditional, private growth capital family office. We came to an understanding and hit it off really well, but they put a program in place which allowed me to grow with just them as an investor. That really made all the difference. From that point on, once that program was in place, we were doing 12, 13, 14 of these a year and really putting the pedal to the medal.

James: You could just focus at what you were good at, right? You could focus singly on that. 

Case: Exactly. You hit it on the head. We could really focus on the product and on finding buildings and leases in markets to grow.

James: I am really curious. You got dragged to the East Coast from West Coast, how did you go international? Was that also someone coming in or what’s the impetus there?

Case: It started with the realization that this concept was going to jump the pond as we say. Trampoline parks, the first couple outside of the US, had begun to open and there was a sense that the appeal of these parks were universal. The demand for them was strong even in these other countries and other cultures. So there began to be a sense of a race to land grab to grab markets internationally. About that same time, a friend of mine here in Utah Valley returned home. He had been working for a local company in Hong Kong and was familiar with that mark. Over lunch with him, we discussed the possibility of what it would take to build a building in Hong Kong and he had some contacts there and so we reached out. I will never forget talking to the real estate broker on the telephone call. This is the gentleman that I was put in contact with by my friend and explaining to him what we wanted. 

He said, “You’ll never find that in Hong Kong. It could be 10-15 years, even if you did it would cost over $100,000 USD a month to rent that kind of space that you need to do it.” So it seemed like a real flyer. We ended the call by saying, here is my contact info if you do find anything, give me a call. We lo and behold a week later he called and he was almost apologetic, he couldn’t believe it. He said, “I cannot believe this, but we have a unique opportunity on Hong Kong Island. It was an old wine warehouse that was on the 5th story of a skyscraper right in the middle of the island. It had no windows so it could not be used for office space. Because of that they were having a hard time leasing it and the rent was a lot more reasonable than what was typical in Hong Kong. It was almost like it was gift wrapped and appeared on our lap so we jumped at that opportunity and we opened our first international park in Hong Kong. 

That was back in 2014. 

James: From there, it just took off again? What kind of processes did you put in place to get it going internationally?

Case: We call that our great learning experiences. It was both a blessing and a curse. The blessing was that it was phenomenally successful. We had our best opening in the Hong Kong park that we had in any US park. We did almost half a million dollars the first month. Beyond that it was just easy. Everything had gone very smoothly, interacting with vendors there was simple, interacting with the local government there was almost unbelievably simple. So the whole thing was too easy. The curse to that was we look back now, we developed sort of a paradigm for what it would take to grow internationally from our experience in Hong Kong. We sort of projected that on our plans going forward. 

What we found was it was much harder elsewhere. That was our first big lesson internationally. This easy success we had in Hong Kong . It was a setup for some adversity in the future.

James: So every year the World Bank ranks countries on the Ease of Doing Business. Hong Kong is always 1 or 2. So I think that is exactly what you found as well. This is an extremely easy place to do business. So I have lots of businesses that are thinking of going international, what advice would you have for them? What are some of the things that you have learned specifically with CircusTrix, what [unintelligible] international?

Case: Well there are a couple of things. I think the first thing that I learned that we at CircusTrix learned from our international experience was found its way to a rule of business that we use now at CircusTrix, that I will use in whatever other business experiences I have in the future. That is we will never do business in another country without local partners. 

To just reference back to that Hong Kong experience, we did that directly. We leased the building, we owned the business, we owned the park and did it all directly. It was fine when there was no adversity and no friction as I mentioned was the case in Hong Kong. But, when we got into the UK and into Europe in general and we ran into government bureaucracy and some challenges there, we found without a local partner who understood the culture, understood the political machinations of local governments. There was just simply no way to really function and really fight off any adversity from a business stance without a local partner. So we learned the hard way there, based off of those experiences, we will never go into another country without a local native partner again.

So that’s number one. Number 2 I think the other thing we found was that brands and to a lesser extent, products, really never translate one to one across countries and across cultures. They can get close, but the example I used with everyone is that even Diet Coke, here in the US is not able to translate directly, it’s Coke Lite in Europe and tastes a little different and branded a little different. We learned that in the trampoline business as well. I will give you an example. Space is very valuable in our parks because we have a limited amount of space and we have to utilize every square foot of that space to put attractions that will engage people. One of our most popular attractions in the US is trampoline dodgeball. It’s maybe the most popular attraction in our US parks and has been since the trampoline park industry.

Interestingly when we put those in Europe and in Hong Kong, they went virtually unused. What we found was that it was just a real unique cultural idiosyncrasy that Americans are willing to engage in direct combat, namely throwing nerf dodgeballs at strangers heads in close proximity. Other cultures just wouldn’t go for that and we ended up finding ourselves with a lot of dead space in these international parks where we put these dodgeball courts. We just couldn’t afford to do that so in all of those instances we ended up swapping out that space within a year and learned that just because a product works in the US to assume that would work in any other culture is usually wrong. Usually some iteration of it will work, but it needs to be nuanced and massaged to fit that country and that culture. So that’s lesson number 2. Lesson #3 I would say is another thing we’ve learned the hard way. 

It’s that the media and journalism in other countries is much, much different than in the US, in particular its relationship with business. When your business is based a lot on PR and earned marketing as we call it now in the US and trying to get the word out through media and journalism about your product. There is a strategy for doing it in the US, that’s pretty tried and true, pretty predictable and can be very successful. In other countries, what we found is that the media, in particular the way media views and interacts with business is a lot different than the US. If you try to utilize the media to market your business internationally outside the US, you will more likely than not run into serious problems. So that’s the other rule of thumb, those are sort of three practical lessons that I have learned.

James: That’s great. So a lot of students are thinking y’know what about an international career?

What about working for either for a multinational, going abroad and being an expat or working for a foreign company, do you have any advice you would give them?

Case: Yeah, I think those careers are ever more viable as the world is getting flatter and order is getting lower. The ability to have an expat career in particular is very possible and the options and diversity of opportunity have never been greater. For example, our operator in Hong Kong served a mission there, speaks the language and decided early on that he wanted to live and have a career in Hong Kong. He started out as a real estate broker there, and established his family there. He has proved to be very valuable to us for many of the reasons I mentioned earlier about having a local partner who knows the culture and the language. But, I think the key if someone is interested in doing that, there is a little bit of a faith jump in needing to get over there.

I think it is very hard to source many opportunities from the US. Often, I have found the most successful way to do that is to have the faith to relocate yourself into the market you want to work in and begin doing the work there to get your life started and establish yourself and look for a job there. I think the romantic notion of being able to sit here comfortably in the US and throw resumes around and interview for jobs in Singapore or in Hong Kong or in Paris, it’s possible but its a lot harder. I think if you are really serious about it, the key is to find a way to get yourself over there and start a life in those cities and find a job there. I think that is more successful, more likely, more times than not.

James: You’ve just recently won CEO of the Year, you are cited all the time as being a phenomenal leader, if you were to again, looking at a 20 year old student as they are thinking of starting their career, what leadership advice would you have for them?

Case:  I don’t know that I have a particular style or strategy that I try to implement. I think the same values and characteristics that make someone a good person translate into good business leadership. I think sincerity and genuine caring for your employees and their families and feeling the weight of that responsibility, the weight of people’s livelihoods in your hands and what that means to them and their families. I think people who take that lightly will never be good CEOs and good leaders. People know when their leaders really do care and have genuine concern for them. You can’t fake that. Business quotes and one-liners are never gonna replace people knowing that you got their back and you care about them and their families and their careers. I don’t have any flashy style or clever style.

I just try to be the best person I can be, and care for my stewardship the best I can, in terms of the employees. Whenever I am guided by that, that leads to the best culture and the best environment in the company.

James: I love that. If you are a good person, you are going to be a good leader. That is actually profound.

Case: Sometimes you try to overcomplicate those things and I have never found it to be much more than that. 

James: Thank you, thanks for talking with me today. What a fun company, a fun organization. I am a business strategy professor and I am looking at overcrowded markets and I think in this case you had a wide opener, blue ocean it is called. Fun to be on the forefront of that and create a global brand.