La Jolla Golf Company
In 1995, Steve Cade took control of a small, struggling golf manufacturing company that had lost all of its seed capital. In order to re-establish profitability, he and his team added women’s clubs to its product line, as well as golf clubs specifically engineered to help children learn the proper way to play golf.
Within five years the company was distinguished in Golf Digest as the #4 company in the industry for custom clubs. The golf clubs were sold in nearly 1,000 country clubs across the USA and had captured the #1 position for women’s clubs. Despite strong competition, La Jolla Club was one of only three companies that had operated profitably for three or more years.
In 2000, however, the investors decided to change La Jolla’s brand name, raise pricing, and start spending millions of dollars on marketing. Subsequently, this started a decline that eventually led to the failure of the company.
It is often said that we learn far more from our mistakes and losses than we do from our good fortune. As a result of this experience Mr. Cade reverted back to his core beliefs and competencies:
- Run companies strictly on a disciplined budget
- Grow revenues within the companies’ ability to maintain profitability
- Avoid businesses that require large marketing expenses to persuade people to buy the product or services.
- Avoid borrowing large amounts of money
- Stick to B2B companies that produce “must have” products