The Red Sox Business Model

The following is adapted from a blog posting by Seth Goldman, co-founder of Honest Tea, a Bethesda beverage company specializing in organic and socially minded products.

When I think about how my life experiences helped prepare me for leading an organic beverage company, I normally think about how my time teaching in China connected me to the world of tea, or I recall how leading a team of 50 Americorps volunteers in Baltimore prepared me to create a dynamic, mission-driven organization. But this month as my three sons and I endure the peaks and strikeouts of the Red Sox in a pennant race (and nary a reliever in sight), I have come to realize that my years as a Red Sox fan have shaped me as an entrepreneur.

Like any good Red Sox fan, I have my share of psychological scars. Most of mine come from 1975, when I was 10 years old. Yaz and I share a birthday (August 22), so we were very close (in my mind) and I still recall vividly the lineups (Denny Doyle at second), Joe Morgan's pumping elbow, and of course the thrills and eventual disappointment. As I watch my 10-year-old endure some of the same experiences this October, I have come to appreciate that there are five pages out of the Red Sox playbook that have helped build Honest Tea over the past 10 years.

1. There's Always April -- Stay Resilient

An entrepreneur has to continually overcome disappointments and setbacks -- for our first five years we were turned down by stores, distributors, restaurants, investors . . . you name it. Most people would have given up after the first 10 rejections, but as a Red Sox fan I have always understood that "no" really means "not yet." One distributor in the D.C. area, Canada Dry Potomac, rejected our distribution proposals on a monthly basis for the first four years. But like Fort Myers in March, I always found another reason to hope, and eventually convinced (okay, some might say stalked) them to start distributing Honest Tea. Today they're one of our largest distributors.

By definition, entrepreneurs are optimists, and Sox fans quickly develop the ability to regenerate hope in the face of setbacks or in the face of Bucky Dent. I have to confess that I almost resented the fact that my sons were able to enjoy a World Series championship in 2004 -- they hadn't suffered enough! Would this championship within their first 15 years of life spoil them with a sense of entitlement? Would they come to expect great things to happen to them?

2. Embrace the Underdog

One of the reasons Sox fans resent Yankees fans is because the latter think they are somehow entitled to first place. But Sox fans, and any self-respecting entrepreneur, have to be comfortable as the underdog. In the beverage world there are companies that are literally one thousand times our size. Coca-Cola probably sells more bottles in an hour than Honest Tea sells in a year. A Yankees fan may get intimidated by it; a Sox fan just believes.

3. Invest in the Right Team, Not the Most Expensive One

After SoBe sold to Pepsi in 2000 for $370 million, we considered the option of trying to hire some of their sales managers, some of whom would have demanded salaries equal to our existing payroll. But instead of going after the big-dollar franchise players, we focused on developing our farm system -- hiring from within and developing our own talent. Yes, perhaps we grew a little more slowly than some other beverage start-ups, but we made sure we had people who understood and embraced our brand. And now that we're growing rapidly, we know we've got the right team in place.

4. Manufacture Runs

In 2004 when the Red Sox were three outs from being eliminated, they found a way, not necessarily a pretty way (Big Papi's single in the 14th inning), to win. When Honest Tea started and we couldn't get beverage distributors to take an interest in us, we found other ways to get to market. Our first distributor was a cheese distributor who went to gourmet shops, then we found a guy who brought corned beef to delis, then a charcoal distributor who went to grocery stores, and eventually beverage distributors started paying attention. Once we got our first real distributor on board, we made the most of it.

5. You Gotta Win in New York

It's great to win in Kansas City but let's face it, we all knew during those blissful weeks in May when the Sox had a 10 1/2 -game division lead that it was going to come down to Boston and New York. For Honest Tea to become a national brand, we had to find a way to build a real presence in New York. Ironically for me as a Wellesley native, we were able to gain beverage distribution in New York several years before we were able to get an opportunity in Boston. And it was our success in the Big Apple that convinced our Boston distributor that we could make it happen.

Finally, as the Red Sox chances at a championship start to evoke memories of . . . well, there are too many years to recall each of them, I take on the kind of patience and pride that has helped me build Honest Tea. This may not be the year where we claim the top spot, but the momentum is undeniable. And of course there's always next April.