The reigning two-time NBA MVP Stephen Curry is hottest thing in basketball right now, and he’s worth an awful lot to the company that makes the shoes he wears as well. According to ESPN:
“…Business Insider relayed a note from Morgan Stanley analyst Jay Sole on Under Armour’s business prospects. In it, Curry’s potential worth to the company is placed at more than a staggering $14 billion. Sole’s call on UA’s stock is bearish relative to other prognosticators, but for one man’s power to change everything.
“His note reads, ‘UA’s U.S. basketball shoe sales have increased over 350 percent YTD. Its Stephen Curry signature shoe business is already bigger than those of LeBron, Kobe and every other player except Michael Jordan. If Curry is the next Jordan, our call will likely be wrong.”
Before this coup, Stephen Curry had been with Nike, the dominant basketball shoe maker in the country. According to the same article, Nike and its Michael Jordan brand subsidiary had 74 percent of all NBA players signed and accounted for 95.5 percent of the basketball sneaker market in 2014.
However, when it came time to sign Stephen Curry in 2013, back when Curry was an All Star but not an MVP, Nike relegated him to second tier status and gave one of the most lackluster sales pitches of all time:
“The pitch meeting, according to Steph’s father Dell, who was present, kicked off with one Nike official accidentally addressing Stephen as ‘Steph-on,’ the moniker, of course, of Steve Urkel’s alter ego in Family Matters. ‘I heard some people pronounce his name wrong before,’ says Dell Curry . ‘I wasn’t surprised. I was surprised that I didn’t get a correction.’
“It got worse from there. A PowerPoint slide featured Kevin Durant‘s name, presumably left on by accident, presumably residue from repurposed materials. ‘I stopped paying attention after that,’ Dell says. Though Dell resolved to ‘keep a poker face,’ throughout the entirety of the pitch, the decision to leave Nike was in the works.
“In the meeting, according to Dell, there was never a strong indication that Steph would become a signature athlete with Nike. ‘They have certain tiers of athletes,’ Dell says. ‘They have Kobe, LeBron and Durant, who were their three main guys. If he signed back with them, we’re on that second tier.'”
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Under Armour’s Approach
Back then, Under Armour had but a small fraction of the shoe market. But along came a relatively unknown player named Kent Bazemore and his agent Austin Walton. Bazemore has never averaged more than 13.1 points per game in a season, but according to Walton, “I sold them on having a guy on the West Coast, having a presence there. I sold the fact that they had a couple other guys with shoe deals up, Klay and Steph, that maybe, you know, he can get some other guys on board if he makes the team.”
Then Under Armour went to work on spoiling Bazemore rotten:
“In the summer of 2012, a shipment arrived at Bazemore’s tiny bachelor pad in downtown Oakland. ‘Under Armour sent me, like, 19 boxes in the first shipment to my apartment,’ he says. ‘I didn’t even have furniture at the time; I just had a ton of UA boxes and an air mattress at my place. I was under a non-guaranteed contract my rookie year, so I didn’t even have a deal. If I wouldn’t have made the team, I didn’t know what I was going to do with all the stuff.'”
Bazemore became a natural salesmen for Under Armour and eventually convinced Stephen Curry to set up a meeting with Under Armour. Let’s just put it this way — Under Armour didn’t mispronounce his name, and the rest is history.
What Real Estate Investors Can Learn From Under Armour
Dale Carnegie noted in his great book How to Win Friends and Influence People that:
“The average person is more interested in his or her own name than in all the other names on earth put together. Remember that name and call it easily, and you have paid a subtle and very effective compliment. But forget it or misspell it — and you have placed yourself at a sharp disadvantage.”
So right from the beginning, Nike screwed this one up badly. We need to remember that despite all the math and number crunching and whatnot that real estate investment involves, like virtually every other business, it’s a “people” business first and foremost.
We were able to purchase our large portfolio of 97 houses not because we had the best offer, but because we had built the most rapport with the seller by meeting with him three times, discussing our plan to hold the properties rather than just sell them off and also convince him of our financial footing (we required seller financing to make the deal work).
A friend of mine who has amassed over 2,000 units would call virtually every apartment owner in town to build relationships with them and make sure he was the first one who would get a shot at that property when it came on the market. This ended up helping him to land a fantastic deal on a 96-unit apartment that helped launch his business to new heights.
And don’t forget that Grant Cardone discussed on the BiggerPockets Podcast how he got one of his best deals ever by literally flying out to meet the seller, whereas every other offer had just been done mechanically by what might as well have been robots.
Never skimp on networking or building rapport! Never skip the chitchat when talking to a potential seller, lender or whoever. And don’t underestimate someone and neglect them just because they don’t appear to be in your “top tier.”
None of us has a perfect memory, so I recommend keeping a list of key contacts, preferably with a picture attached, and make any notes about the person that are worthwhile. (Did they just have a kid, are they a huge sports fan, etc.) And then reference this list often.
Being a people person is more about how hard you work at it than any natural predilection toward it. And building this rapport can make all the difference, be it with sneakers or with real estate.
Investors: What do you think about Under Armour’s signing of Steph Curry? How do you build rapport with clients?
Let me know with a comment!