Mike Hendrix (00:00)
Hello, I am Mike Hendrix from SMB Golf. And today my guest is the founder and CEO of Sagacity Golf, Brett Darrow. And this is the Tech Caddie podcast.

Brett, welcome to the show.

Brett Darrow (00:30)
Thanks, Mike. Appreciate it.

Mike Hendrix (00:31)
Well, it's good to have you in. I'm excited for the conversation because I don't get the sense that you do a lot of these. the introduction is really too short for you. mean, you also are the founder of GolfNow but certainly under a different name when you guys started. And I thought it would be really interesting for a lot of the young entrepreneurs in golf to hear from you, as well as

some of the more established companies in golf that maybe think they know about the beginning of GolfNow but maybe they'll learn a couple things today. So I'm excited for the conversation.

Brett Darrow (01:09)
Yeah, looking forward to it.

Mike Hendrix (01:11)
So just to kind of level set with everybody, you live in Oregon, I believe. Just getting through a massive tsunami. All joking aside. So you're in Oregon. founded your first, the GolfNow company, Cypress Golf is really the initial, I think, name, but you'll tell us. You founded that out of Oregon.

Brett Darrow (01:16)
I do, yes.

Mike Hendrix (01:34)
But there was Phoenix in Arizona had to play a critical role. Were you living in Arizona at some point in

Brett Darrow (01:40)
Yeah,

so I was born and raised in Portland, Oregon, and then technology background was always here in the Pacific Northwest, Portland and Seattle. And then I moved to Scottsdale in 98 and then started Cypress, as everybody knows it now, in 2001 in Scottsdale, Arizona. And I lived there for about 16 years and then moved back to Portland about eight years ago.

Mike Hendrix (02:09)
And so I'm curious to know, was there something you did of an entrepreneurial nature or maybe even of a corporate nature before Cypress Golf? Try to understand how, you decided to do this thing in, you said 2001.

Brett Darrow (02:24)
You're going way back now. So a lot of people actually don't know this story. This is, know, I got into golf from buying a golf travel package provider in Scottsdale, Arizona. So I was doing that. So my entry into golf was a company called Desert Golf Promotions. We were doing, you know, golf vacation packages into the Phoenix marketplace. And I would hang up talking to a customer like yourself from Ohio.

that wanted to come down with a group of guys and you'd say, I want to play Greyhawk and Troon North and whatever else. And then I'd hang up and I'd call true and I called Greyhawk and they'd say, I don't have any tee times available. And I'm like, this is crazy. This is insane. You know, why is it? Why am I not able to see the tee sheet or see the availability at the golf course? And so this is back in 98. And so I had this grand idea during the kind of the dot com, you know, boom of

let's give away a tee sheet and a browser, kind of like Netscape, literally let's give the tee sheet away. And we raised a bunch of capital, went hard and heavy, it's called greens.com. We had about 1500 golf courses under contract to roll out this entire application. And then as the dot com and the financial markets crashed, so did we, right? And so it was a tough, tough, you know, licking your wounds coming out of that, but it was,

You knew where this was going. We knew that, you know, at least I felt online tee times was going to be successful. And it was about somehow we have to digitize this tee time inventory. And once we digitize the inventory, then there would be online bookings. And so that's literally was the fork, you know, into online tee times was Greens originally. And then coming out of that, it was Cypress Golf Solutions.

Mike Hendrix (04:07)
And so I used to give a presentation about the internet because I was, of course, one of these people that really took your product and tried to introduce it to thousands and thousands of golf courses, ultimately, right? was my role at GolfNow. And I would talk about a relevant internet and that Google started to get traction in 96. And so that you were really about two years after that where you were trying to say like,

Okay, well now let's have some applications that are useful beyond just search. Let's have some internet based applications that people can actually use.

Brett Darrow (04:43)
Absolutely. I mean, we literally were building at that time in 98 with Greens, we built the first what I would call browser based tee sheet application. was literally a browser based tee sheet application, which was unheard of at the time. Right. And what we ran into, you know, from an infrastructure standpoint was just bandwidth even, right. Bandwidth was a massive problem going to these golf courses back in 98, 99, early 2000.

Mike Hendrix (05:07)
Yes, that makes a lot of sense. So you never really worked in a golf shop. You were the reservation person, which meant you had your own unique perspective on it. you were, yeah, completely trying to solve a problem. Makes a ton of sense. So greens.com and people don't know, but there is a famous story about greens.com and a PGA show, right? Where you guys were gonna look at tee time from the moon or tell me briefly about that.

Brett Darrow (05:20)
Yep.

Well, we I mean, again, it was the dot com days, right? So it was crazy. And so there was a lot of money flowing around. And we had it. We had in Vegas, we had a big Jake's Jam, which was the Eagles played and at the Hard Rock Cafe. was you know, it was it was pretty crazy times at that point. Right. But again, you know, when you come out of that, you look at it you're like, OK, it's the execution and the model at that time was this go for broke.

Everybody was trying to get market share. And so it was all about market share. And so it was just go for broke. And as long as the capital markets were there, you're going to be fine. But once the capital markets dried up, then we've extended way too far. was too difficult to come back from that. coming out of it, people hear my name is the founder of GolfNow or Cypress or whatnot.

There's some other people behind the scenes that really are instrumental in regards to making Cypress successful. Frank Halpin was the co-founder with me at Cypress. And was really me coming to him and saying, hey, Frank, I've got an idea. To me, this is now 2001. And 2001 was email marketing was starting to become a pretty big thing. And so I just felt like living in Phoenix, 6 and 1 million people live there, tons of golf courses.

They go to the local market when it's summer and hot, right? Because the rates are low and the customer plays there at that time. But then in the peak season, the local customer doesn't play as much. And so to me, it was like, how can we build an application that kind of allows the golf course to take a subset of inventory and push it out to an email club to the local market, right? And not bastardize their kind of travel rate in essence, right? And so.

I went to Frank and I said, hey, I think we can build an application that will sit right over the top. We don't have to integrate to anything. And we can just kind of take blocked inventory. And two, three days out, the golf course can load up some blocked inventory, push it out to their email club, and book tee times to the local market. And he's like, OK. He's like, I'll build you like a prototype. You go sell some courses and make sure this is a viable application. I'm like, OK.

So he builds a prototype and we go out and go to actually Don Rae at Eagle Mountain was one of our first clients. And we went to them and he's like, this is great. This is awesome. I said, okay, let's have your database and load it up into here so we can send out some emails. And he's like, okay, but our database is like maybe a hundred people if that, it's like nothing, I've got nothing. And so we're like, okay, well, let's load it up. And so we loaded it up and we sold tee times and it was like, this is going to work.

And as we started to expand out and go to the market, it was like, you'd go there like, this is a great idea. I love the concept, but I do not have an email database. have no customers in my, you know, this is again, this is back in 2001. So we knew there was an opportunity there. We knew tee times were being sold and they liked the fact that this was kind of a closed channel to the local market. And so that's really when we went to actually a local radio station and said, okay, we'll just going to go build, you know,

a brand in essence and drive the customers to that brand to sign up for the email club and then receive these emails from the golf courses. And that was the beginning of what we call GolfNow today. Originally it was called, yeah. Well, originally it was called, the sports radio station in town was 910 AM, extra 910. And so we went with them and we went and did a partnership and so it was called Golf 910. And that's what we started with.

Mike Hendrix (08:54)
Go ahead.

Brett Darrow (09:07)
Um, and then pretty much, pretty soon within about two, three weeks into it, I was just getting, you know, 3 a.m. remnant ad space. And I was like, this is ridiculous work. You're out. I'm just going to buy the advertising from you. Right. And so we just, said, I'm like, what can I call it now? I can't call it Nine 10. So I just changed it to Golf 10. I just, it was just Golf10.com And it was just to keep it short and simple meant nothing. Right. It was just about, you know, something, you know, at that, at that time, just keep it short and.

⁓ Mike Loustalot who's good friend of ours and and is well known about with GolfNow and his presence there Kept hearing the ads and and and we reached out he reached out to me and he said hey I really want to do this in the bay area Can I go take it to the bay area take your technology and go do it to the bay area? I said sure absolutely and He's like, what am going to call it up there? I'm like, I have no idea And so he he comes up with this golf in the area code And so he called it golf 707 up there and I thought that was a great idea. I loved

the golf and the local aspect of it and the area code. And so we bought up every golf area code and the domain in the country. And so we switched golf 10 at that point to golf 602. And we ran that with golf 602. And then again, we branched out pretty quickly. We ended up getting to about 40 markets across the country and about 1500 golf courses. let's talk about

Mike Hendrix (10:25)
the 40 markets because I think you this is starting to we're getting to where I start to become involved not not with you, but I start to interact with the GolfNow brand. some of these markets I think you did in a licensing agreement, right? I mean, you kind of did different things to make sure that the company would scale.

Brett Darrow (10:43)
Yeah, 100%. So early on, Mike was the first, one of the first licensees, another person, another ⁓ co-founder of ours now, Andy Seitz was another licensee in Austin, Texas. And then we sold about four other, five other licenses across the country. And they were, that was terrific at the beginning because it quickly got you out to scale with limited, you you didn't have to have the capital to go, you

hire the people and do all of the different things you needed to do to grow a market. And it was great because those people were entrepreneurs. And so the entrepreneur spirit lived inside of them in that local marketplace. And it was fantastic. So it was a win-win for everybody. We ended up eventually raising capital and buying back ⁓ a decent amount of the licensees before we sold.

And then in 2005, when we were now kind of scaled out kind of across the country in almost 40 markets at that point, we're like, had golf and the area code in all these different markets, right? It was kind of crazy. And so at that point we were like, Hey, we really need to consolidate this under one brand. And we were, you know, just like every entrepreneur does, you go out there and try and, you know, do a name search and try and find a domain that's good and all these different things. And we came across GolfNow.

and it was for sale for $6,000 and we snatched it up for 6,000 bucks and it was probably one the best things we ever did.

Mike Hendrix (12:12)
get a chance to meet the person that owned it or was

Brett Darrow (12:14)
No,

no, it was completely just anonymous. Yeah. Yeah. 100 % Yeah.

Mike Hendrix (12:19)
And so as you all were doing that, I Last Minute Golfer was in Atlanta, Georgia. And I don't know if Mike Last, who was the founder of Last Minute Golfer for everyone that doesn't know. I don't know if he was watching you or if it was just coincidental that he was thinking in a similar way, but the way he scaled the business was he found guys like me to your point, guys that are entrepreneurial.

I was in central Ohio and he said, gee, I think you could cover Pittsburgh, all of Ohio, you know, part of Indiana or something like that. And those deals, he was just cutting us in on top line revenue, which was kind of amazing. We didn't even have any expenses, you know? And so, and the cut-in was substantial. But come to find out that was also because I think he knew you guys were being acquired and he wanted to get his course count up as much as he could because

that was just going to raise his ticket to get acquired. He figured he'd go, let's say Comcast slash golf channel would buy Last Minute Golfer after they bought you guys. And so talk about how Comcast, golf, ⁓ golf channel talk about how they even found you. Yeah.

Brett Darrow (13:22)
Yeah, yeah.

We were, so this is probably in 2007, we'd been approached by, know, golf.com and golf magazine, which was Time Inc, right? At the time. And we've been approached by them and started having conversations originally just as a partnership to really kind of look at trying to scale out more on the brand side and just get more eyeballs. And then as they kind of started uncover what we were doing, they just really liked the business and they were like,

know, instead of let's do a partnership, actually, we'd like to acquire you. And so then we went through a process with them. And I remember taking it back to our board and said, Okay, you know, we've got a solid offer. And they're like, this is great. But let's, let's go, you know, validate it in the marketplace, in essence, right? So let's hire a banker, and, let's see, you know, what's really this thing's worth. And, and so at that point, we hired a boutique banker out of Boston, and called Boss Meridian, and then they kind of went around and, and

kind of shopped it around a little bit to see what the valuation was. I remember the first conversation that I had with Shannon O'Neill at the Golf Channel who was running, who was EVP at the time of Digitals for Golf Channel. Great guy. And I just remember, I remember the conversation very vividly. was, this is great. Love the business, but we're Comcast and we move real slow. So, I'm not sure. I'm like, okay, no big deal.

And so we just hung up and I'm like, okay, they're out, right? That's not somebody that's gonna be interested, you know? And then we're having a board meeting in December of 07 and we get a phone call from the banker that says, hey, the Comcast guys wanna talk to you and this morning before the board meeting, I'm like, okay. So they give us the call and Frank and I are on the call.

And they said, hey, we're going to put together a very aggressive offer. We want the business. We like what you guys are doing. We think we'd go great with the golf channel. And this is actually super funny now when you think about it, because they go, OK, we're going to fax over the offer, which I think is just hilarious. I think I still have it, Of course. Exactly. And so they told us the number, and we hung up, and we were high five, and then it was great.

Mike Hendrix (15:27)
Yeah.

Brett Darrow (15:38)
And, um, and so the board was like, so, but the caveat was the caveat was to us. have 24 hours to sign this term sheet. Right. And so was like, okay, well, I know, I know, I mean, we've been talking with, you know, Time Inc. for quite some time and I'm like, I gotta give them an opportunity. And so I picked up the phone and called them and said, Hey, you know, we're, we're going to do this. If you guys aren't willing to step up to the plate, but you got 24 hours. It's like, I can't.

I can't, I think I can get you, I can get you a better number maybe, but I can't do it in 24 hours. I'm like, you've had this thing for six months. Sorry, man. We're going forward with Comcast. So it was a great, it was a great fun time.

Mike Hendrix (16:17)
Well, I'll just share with everybody the other side of that, the Comcast perspective on that. So I won't even bring in names because I'll get a couple of them wrong. But short story is Golf Channel is doing incredibly well because of Tiger Woods. Someone at Comcast says, well, what happens to this business when he retires? And everybody kind of looks around and they have no idea what the answer is. And so the message was,

Hey, you need to golf channel needs to diversify. You need to find new revenue streams because this cat is not going to be here forever. Right. And, we've got to figure this thing out. and so for people that don't know at one point, golf channel actually thought the business was going to be around an amateur tour and they did make an amateur tour acquisition, but they quickly learned that, this is not going to, you know, this is not going to move the needle.

⁓ but the GolfNow purchase certainly moved the needle. That business became essentially equivalent to the golf channel, business, ⁓ and really set things just in motion like that. Nobody could believe so.

Brett Darrow (17:24)
Yeah, 100%. Yeah,

Mike Hendrix (17:26)
⁓ so I, you know, one of the questions I was most excited to ask you about and talk about is after you make the sale. And by the way, that did not include every affiliate because then I became involved with like, played a role in purchasing the, the Illinois, Michigan affiliate, like had to get into that due diligence. And I learned a lot and going through that process. So not every affiliate was included in that sale. but regardless,

As you stepped back and you mentioned Mike Loustalot, he came in with the acquisition. He joined the golf channel. As you stepped back and watched the company evolve and manage and make different decisions and whatnot, I'm curious to know what you thought. did it, were there days that it hurt? Were there days that you were just so excited? You know, you couldn't stand it. Like give us a perspective of what that was like to then leave the business.

Brett Darrow (18:22)
Yeah, so I think, I mean, I knew once we sold, Frank and I were only going to stay around for a little while. I mean, that's just not in our nature. I think we're really entrepreneur in spirit and we love to build products and applications. And so I think we knew that that was going to be a short-lived scenario. But I'll never forget.

One of the first meetings that we had is once they had acquired us. And I think they might have acquired you guys as well at this point. I'm not sure if it had closed yet. But it was, why aren't we putting the trade inventory, the hot deals inventory, right, on the website? And I'm like, ⁓ well, that's not, we've just always had it in the closed channel and the email club only, right? So the only way that you could get access to the

the trade inventory and the hot deals was through the email channel, right? And so we never put – so 100% of the traffic that went to GolfNow was the benefit of the golf course, right? And so was 100% their tee time inventory, and there was no side-by-side comparison of that hot deal. And so they're like, well, we think we need to probably we need to put that hot deal on the website. It's like I understand why you guys want to do that, but I don't know if that's great for the golf course, right?

Um, and so, and then, then it was then the next question was why are we sharing the email customer, right? With, with the golf course that's our customers come through the GolfNow brand. It's our customer. And it's like, well, we've always done that, right? Number one, because the original application was built as a, as a email database system for the golf course, right? 100%. Right. The whole application was.

Mike Hendrix (20:03)
with the golf course database.

Brett Darrow (20:07)
We built GolfNow just as a brand to attract and grow the database for the golf course. And so we'd always done it that way. And we also, like, it's the right thing to do because I mean, it doesn't matter if you use ZocDoc.com to go make a doctor reservation, but you made the reservation and you're talking to your doctor, this doctor obviously gets the information of you as the patient, right? I mean, to me, it's not any different, right? And you go make a dinner reservation or whatever. I mean, it just.

Like you're there, you are the customer and you're dealing with that individual golf course or restaurant or doctor or whatever it is. And so to me, it's kind of a, you know, it's easy thing to hide behind in essence to say, we're not going to share that information because of whatever laws that are in place. But it's like that customer is playing the golf course, right? I mean, it is the golf courses customer without a doubt, right? And so we just always shared it and thought it was the right thing to do. And so

Those are the two big things that just changed the business entirely and changed the perception of GolfNow and GolfNow being bad in essence, I think in a way. But everybody needed to play ball because it was golf channel and GolfNow had all the eyeballs. And so they kind of felt forced to, and I think they still feel that way to some degree today.

Mike Hendrix (21:22)
I certainly remember going through the process of moving the trade to the website. That was a massive decision. Lots of people were nervous. What's going to happen? What's going to happen? So I remember that like it was yesterday. I also remember when we started to add services, we started to add more marketing value. Like certainly we did grow the company.

and so that was exciting. And I thought that that was, we provided a lot of value, ⁓ to golf course operators. but talk about what you think the impression of GolfNow was in the Cypress days, related to barter pricing.

Brett Darrow (22:03)
Three.

Mike Hendrix (22:03)
Pre

Golf Channel and Post Golf Channel.

Brett Darrow (22:05)
Barter was always at the beginning, right? We basically kind of figured out quickly that, you know, it's hard to get dollars out, you know, as a technology provider to get dollars out of a golf course, right? They just don't have the discretionary, you know, revenue to really spend on CapEx on technology that much, right? And so, you know, barter was always an option for us right out of the gates. And really what we said was, listen, you know,

give us your shittiest tee time of the day, right? Give us 1:52, right? That's right before Twilight that you never sell, right? And we'll take that one and it's in a private channel. so, you know, to us, was literally, it didn't really cost you anything because it was this tee time that pretty much never sold, right? And so there's always that kind of gap between where Twilight changes, you know, on price. And so, you know, that was a, when you look at,

1:52 as a trade option for the services and application that we were providing, I think it was a really good value to the golf course.

Mike Hendrix (23:09)
The other difference, because this even existed early days when I was there, but the other difference was that that tee time actually could also not float around. Right. In that like, no, look, the agreement is 1:52.

Brett Darrow (23:22)
1:52. What are you doing booking 1:40 It's like can't do that, right?

Mike Hendrix (23:25)
And what happens if I sell a big outing that includes 1:52? Well, GolfNow just lost on that deal. I it was just part of the cost of doing business, right? And so, but then we went through, I don't even know if you know this, but we got into this whole thing where we started paying today. People would be called, they'd be called like a BDR, a business development representative or something like that. We called them a CSA, a course sales associate. We were paying CSAs to call golf course operators and say, Hey,

There's been 10 days of rain this month. Would you mind if I posted those 10 days on the good days coming up? Some of us would sit around and say, man, you got to have a lot of balls to do that, to make that phone call. But there were so many operators that were just appreciative that someone would call them and have a conversation. It actually, you learned a lot about relationship building that you could quote unquote, get away with it. But I don't think that was happening in the Cyprus States.

Brett Darrow (24:23)
No, that would be a, I mean, to me it was like the operator would be like, I had the same 10 days, right? You had one tee time, right? I had 200. mean, come on. What are you talking about?

Mike Hendrix (24:41)
The thing that you all did differently that we ultimately changed is I think you really worked without contracts.

Brett Darrow (24:47)
100%. Yeah. The philosophy there was always just, if you don't want to work with me, I'm not going to hold you to it. Right. I mean, that's the that's just terrible business. And so we were just say, hey, cancel time.

Mike Hendrix (24:59)
Yeah,

I was with, so full disclosure, I'm in Hilton Head right now. I'm not in Columbus. And I had a meeting yesterday with a multi-course owner here in Hilton Head. And we got into this discussion about the length of contracts in today's world. And I was simply counseling him and everyone in Ohio knows I counsel everybody I can. I just don't think you need to sign anything longer than a year. Everybody might ask for something longer than a year.

But I feel that you really need to sign it. mean, I think that can be one of your negotiating points where you say, look, I think I like your product. I think we're going to like working with you. But I just don't want to put my name down for longer than 12 months.

Brett Darrow (25:38)
Yeah, 100%. And, you know, I hate the apps, you know, the whole renewal piece, right? You 30 days, you know, it's like, it's just an auto renew. It's like, and then the golf operator, I mean, they've got so much going on, right? I mean, at end of the day, they're gonna, are they really gonna be paying attention to that contract expiring? And then all of sudden, and it's like, oh, I'm stuck in it another year. I mean, it's just ridiculous.

Mike Hendrix (25:58)
Right. Okay. So enough of the old days, but let's talk about, I'm just going to assume you had some kind of a no compete with Comcast that expires at some point. the next, you, but correct me here, but I think the next thing you roll out is called Quick 18, but tell me if I'm right or wrong on that.

Brett Darrow (26:21)
Correct. Yep, no, you're correct.

Mike Hendrix (26:23)
And at launch, give us just a quick synopsis of what Quick 18 was.

Brett Darrow (26:28)
Yeah, Quick 18 was 100 % direct-to-consumer booking tools, right, is the application that we originally built, which was mobile at the time was becoming really big. No one was really doing mobile well, right? And we just thought that, again, if you can get the customer to just book directly, mean, you know, that was one thing that we knew at GolfNow. The customer really is loyal to, you if you play it at a local market and, you know, take Portland, Oregon as an example, you play that one golf course 70, 80% of the time.

You might sprinkle your other rounds maybe a couple times a year around other courses, but you have one local course that you play on a regular basis. And so for us, it was like, let's provide the best booking tools possible for the consumer to go direct to that golf course and let them have that experience. So mobile, a booking engine, again, the email tool application we built, a whole application there. So it was really around giving the...

Because to me, what happened was when Comcast acquired GolfNow, it was all about the GolfNow brand, right? And so the B2B tools, yes, they maybe had them, but it wasn't in their best interest to build the best B2B direct-to-consumer tools. Not in their best interest, right? The better the tools that they make for the consumer to go direct, the worse it is for them, right? And so we thought that there was a big opportunity there.

Mike Hendrix (27:40)
That's exactly it.

Brett Darrow (27:52)
And at that time, this is like 2012, they hadn't started the buying spree of buying up Harry Ipema and Fore! Reservations, and everybody else. And so we got interfaces to all the old guys that we had known. And we'd actually helped write most of those APIs with IBS and Fore! Reservations.

Crescent systems and you know, all of the old players that were out there, right? EZLinks, exactly. So we had written to all those applications and, we're just, you know, going and, and we quickly got a lot of success and, and it was, I mean, we probably sold 250 golf courses within the first 12 to 18 months. I mean, it was, it was going very quickly. And then I'll never forget when we got a phone call from, I can't remember if I got a phone call from Harry.

Or if I got a phone call from somebody at GolfNow who just said, we just acquired Fore! Reservations and we're going to cut off your interface. I was like, oh, OK, nice.

Mike Hendrix (29:00)
Yeah!

Brett Darrow (29:00)
That's interesting. Okay, you know ⁓

Mike Hendrix (29:04)
And

so for people that don't know Harry Ipema who owned founded and owned owned Fore! Reservations out of Chicago. He had really become our biggest nemesis. I mean, we certainly were dealing with Andrew Wood and we were dealing with J.J. Keegan. But but Harry was was was difficult for us. And everyone in the golf world was kind of shocked when they woke up one day and realized, oh, Harry just sold the business to the guy he hates the most.

⁓ That's what happened. that what we had done at GolfNow, just for people that are interested in strategy, we had gone out and locked up like a nine year interface agreements before we announced that acquisition, because we wanted to know that we were going to be able to work with Club Profit for another nine years. We wanted to be able to work with Crescent or IBS to your point for another nine years while the dust settled and everybody really learned that they were going to

fight us. And so I think that was brilliant that they locked up those interfaces. They did. They made the purchase of Fore! Reservations and then the whole company changed.

Brett Darrow (30:09)
Really? Yeah.

Mike Hendrix (30:10)
And so then, so how does Quick 18 evolve? you, you learn of that situation, but like how did the company evolve over the next several years?

Brett Darrow (30:20)
Yeah, mean, so then we were forced in essence to get into the tee sheet business, right? Because it was just kind of like the writing's on the wall. They're going to roll up a bunch of these guys, right? And we're going to need to get into the tee sheet business so that we can protect that side of the equation. So we thought, OK, we've got the best direct-to-consumer tools. We've got the best. And now to us, had built. The other thing that we had done early on in Quick 18 was it was very apparent to us, too, as we were talking to all these golf courses that

The direct-to-consumer tools were in desperate need of better tools, which we were providing. But the flexibility, again, on the pricing side and really kind of yield management, dynamic pricing, those kinds of things were really just rudimentary in nature, I would say. And so we'd started building a lot of flexibility in regards to pricing and yield and all those kinds of things into the application. so once we had built that side, because it started on

pricing and direct to consumer tools. It was pretty easy to then slap in ⁓ a tee sheet application because then you're just talking about intervals and different things like, know, shotgun starts and stuff like that. But the whole pricing application was already taken care of, which was usually is the most complicated thing, right? And so, you know, I won't even get into point of sale. I've never gotten into the point of sale business. I don't plan to get into the point of sale business. We just always wanted to stay focused on the tee sheet side of the equation.

⁓ And so we built, know, Quick 18 built its own tee sheet And so, you know, it definitely hurt us from a scaling out standpoint, without a doubt. But it, you know, as we, as we evolved, we got good partnerships with IBS and Anthony Strange at, know, at that point ⁓ with our tee sheet into their point of sale system. And then there are new players coming in, right? From, you know, foreUP and Lightspeed and all those kinds of players now, right?

Mike Hendrix (32:08)
Exactly. And you do have your one, I mean, maybe nobody else has this. You have two integrations today with your tee sheet. Clover, which is kind of like one of these standard SMB point of sale things, just like a Square is or something like that. And then more recently you did an integration with Toast. And so, and I don't know if there's another tee sheet that has two kind of non golf integrations like that, but, know, you're

To your point, you don't want to be in the POS game. You just want to interface to lots of POSs, I would think.

Brett Darrow (32:41)
Yeah, 100%. Yeah. And so we still have, you know, to the, you know, to the golf centric ones, I mean, we have Lightspeed and, you know, great integrations into Lightspeed. We have integrations into the EZ Suite point of sale, which is the old IBS platform. And I think there's a couple of... foreUP. Yeah, foreUP actually have one too, exactly. Yeah.

Mike Hendrix (33:01)
And you actually have an integration to Club Caddie as well. mean, that's one of the reasons that we will get into this how the Ohio Golf Course Owners Association has now partnered with part of what you guys are doing at Sagacity. But one of the big reasons we picked you guys is because you just have so many daggone integrations. It just makes it easier. When you sit

in this, in this world of like looking over 600 golf courses, you start to value a company that has many, many, integrations. makes it so much easier. So, then Quick 18, I don't know if you would say, maybe you could just explain it. You, you, morph into Sagacity Golf or like explain how got you Quick 18 to Sagacity Golf.

Brett Darrow (33:31)
Yeah, 100%.

Yeah, so again, going back to, you know, Mike Loustalot, Andy Seitz Andy was at Arcis Golf working on doing, you know, running their revenue management for them. And then Mike was doing, he was doing benchmarking, right? And all the data set side of the equation, he'd come to us. I can't remember the dates exactly when he came to us, but he was like, Hey, will you guys, I need, I'm doing all this work on the consulting side of the business.

really diving into all of this data, but I need somebody to build me a tech stack to kind of house all, you know, a complete data warehouse. And then organize all of this data into something that actually is actionable for the golf course. And so we took on that project. so by doing that as being the technology stack, we took a ownership position into Orca at that time, right? And so we were working closely with Mike and then Andy started using Mike's data because

It's very difficult when you're trying to do true revenue management and yield management at Golf Course. It's really hard to get the data that you need out of these systems to do true yield management and really dynamic pricing. Andy couldn't get it out of his systems at Arcis. And again, particularly at a management or an ownership level, you've got

different systems kind of across the board, right? You're not standardized across every single golf course, particularly as they acquire new ones and different things and what happens, right? So he had come to Mike and said, hey, you guys are sitting on this goldmine of data right now in regards to true revenue management and forecasting. And he's like, I need access to that, right, to be able to do it right. And so then at that point, we just said, I think we actually are better.

coming all together under one roof, right? We're kind of working together, you know, closely, but not actually as one company. And what Quick 18 had was this transaction platform and all the integrations, right? And it had the technology, you know, division to actually build all the applications, right? And then Mike had the data set and the expertise in regards to really scrubbing the data and organizing it and.

putting it back into a format that actually could be consumed. And then Andy actually had the actual algorithm in regards to a forecasting plan for a golf course. And so in 2019, we said, let's just bring all three of these entities together and form Sagacity.

Mike Hendrix (36:14)
Yeah. And, and, um, so Andy Seitz for probably like one of the guys in golf that very few people have known, although he, you're like, say with Arcis if you ever get a chance to speak to Andy, he's got amazing ideas about distressed inventory. What, at one point he pitched us a business at GolfNow. That was a really cool idea, but super smart guy. And then, and, then, and I think, uh, Mike Loustalot is also super smart and Mike just has like,

tremendous relationships, amazing work ethic. He's like a real mentor to me. He taught me so much about GolfNow and about just tee times in general. So you all of a sudden you have this amazing team, you know, that's kind of back together and Frank is still involved.

Brett Darrow (36:57)
Frank is involved and then Duane Craw too is our CTO and Duane was with us early on. Frank is a very good engineer, super good entrepreneur, but quickly realized this thing was scaling early days of GolfNow, realized it's scaling to a point from an engineering standpoint that he couldn't do. And so we had brought on Duane Craw. Duane Craw actually goes back a long time with my family in regards to technology and worked for my dad.

And so we brought Duane in early into GolfNow, and then he's been with me since, you know, with Quick 18 and Sagacity now as well.

Mike Hendrix (37:29)
What's your dad do,

Brett Darrow (37:31)
Yeah, he was an entrepreneur, really it was IT consulting, building custom applications for Fortune 500 companies. A company called Claremont Technology Group that went public back in 96, and then another one called Emerald Solutions in the early 2000s.

Mike Hendrix (37:51)
So speaking of applications, it's a good way to segue into Yards. You're just now kind of really re-entering, if you let me say, the marketplace world again, right? Under this brand of Yards, we'll talk about our partnership here in a second, but tell us about when you decided or when Yards made sense to you.

and explain for people at home what's so different about Yards versus just about any other golfer app you're going to find out there.

Brett Darrow (38:21)
Yeah. So again, going back to Quick 18, where we were building direct to consumer tools for the golf course, primarily around mobile apps. Right. And so we've been in that business for quite some time. And we felt like we always had a super click, you know, easy way to just, you know, couple like three taps and you booked a tee time. Right. But as we were doing it, we were realizing it. And then we kind of, you know, I wouldn't say pivoted, but we pivoted to

really working on Sagacity and the yield and the forecasting and pricing and all those analytics side of the business, but always had these direct to consumer tools. I think one product that we haven't talked about, which I want to talk just quickly about, then I'll get into Yards, is our Daily Deals. And Daily Deals is a technology application that has come out of Sagacity that every golf course in the country should have.

Right? Because it is what we call Smart Deals. Right? So from the B2B side, call it Smart Deals. From the consumer side, call it Daily Deals. But really what it is, is because of how Sagacity works from the pricing side, we take three years of historical data and then we benchmark that on every hour of every day. Right? So we know next Thursday at 10 a.m. or 9 a.m. or 11 o'clock or 2 o'clock, right now today,

how many rounds the golf course should have on its books, right? And then from there, we have a booking curve window that goes all the way to, you know, expiration of the tee time, right? And so we're, the system is constantly gauging where they sit to that historical booking curve window. And it's heavily weighted. And this is where Andy's, you know, brain comes into it and Duane's brain comes into it and way past me, right? But just philosophically, it makes so much sense. And if we just take, again, go back to what a lot of golf courses

still do today, but used to do a lot of, which is, I look at my white space on my tee sheet and I see all this white space, and there's no bookings in there. They hit the panic button, and they go, let's send out an email blast to our entire database, right, that we have discounts from 11 to 2 o'clock on Thursday, right, or 10 o'clock to 2 o'clock on Thursday next week. In reality,

They're actually maybe right on pace or maybe just the 10 o'clock hour was behind pace, but 11 and noon and one actually don't start picking up until two days out anyway, right? There was no need to panic in essence, right? And so this Daily Deals widget that sits on the golf course's website or in the apps is an intelligent platform that says, you don't need to panic. We know exactly where you're sitting right now.

And there's no need to do anything. But it'll tell you if you are behind pace, right? It'll say, hey, you know what? Yes, that 10 o'clock on Thursday next week is behind pace right now. And it's behind pace by five rounds. You actually probably should do something about that. And so you have parameters in there that allows the golf course to say, when I'm two rounds behind pace or one round behind pace, throw up a tee time with X percentage off on the Daily Deals.

Once that gets booked and that gets them back to pace though, that goes away, right?

Mike Hendrix (41:33)
Just to interject there, going back to your mention of Orca and Loustalot, that's why that three-year historical is so important. To do this the right way. To do it the right way.

Brett Darrow (41:43)
100%.

And that goes the other direction too, when you're really looking to push price higher. I'm just right now talking about when you're behind pace. But there's a whole application on the other side, which is pushing the price higher when your demand is skyrocketing. Because Phoenix Open is in week, whatever is happening. There's some event or weather, whatever it might be. But again, going back to that kind of Daily Deal side of the equation and the Smart Deals, it is

It's the fact that we know all of that historical data. We know the booking per window and the algorithm that we've built. It doesn't matter. And that's the great thing about it is it doesn't matter where the booking comes from. If the booking comes from GolfNow, if it comes from over the phone, if it comes from the golf course own website, wherever the distribution is, it doesn't matter because we're looking at the entire application and knowing exactly where the courses are sitting. And so to me, it's important to understand that side of the equation. And then

The next piece is what we did, right, is what we call Yards, right? And so Yards is really about engagement because now that we've kind of, we've really solved the problem in regards to pricing tee time inventory at Sagacity on the upside and on the downside, right? Now it's about, let's make sure we get as many eyeballs as we possibly can on those tee times because we all know the more eyeballs we can get on those tee times, the more demand that's gonna be there and it's gonna push price.

demand higher, it's going to make more money for our golf course operators and owners. And so that's literally all we think about at Sagacity all the time is how can we make the golf course owner more money, number one. And so to me, Yard's kind of morphed into this, we've got this customer that's downloaded the golf course's app and they maybe open it once a week to book their weekly tee time. That's kind of all they're really doing with it. And so it was like,

I what we could do to kind of get that stimulate them to open it every single day. Right. And so we introduced this engagement platform called Yards and Yards to me is just, it's, it's a great brand. Everybody wants more Yards. want more Yards on your drive, you know, all those kinds of things. Right. And so it's just about how can you get more Yards and more engagement, right. To then do different things with the golf course. And so let me, yeah.

Mike Hendrix (43:56)
Cause I think it's, just said it, but I just kind of want to double down on it because this has been my pushback on apps for golf courses. I don't know how much engagement there really is with them. It's kind of this thing that sits on your phone. How often do you really open it up? And so what I thought a big unlock is that you guys came up with was you thought of this idea of what if I could let you come to it every day and I actually could regulate.

that you have a 24 hour period and then it resets and resets to go earn Yards doing different playing games. And I just, I just found that to be quite novel, at least in golf. I, I'm sure it's happening with other SMB apps or something like that, but in golf, I had not seen that yet. And that's kind of what got my attention. So, so go on.

Brett Darrow (44:43)
Yeah, so we basically introduced this concept of just daily claim of Yards, Claim your 300 yard drive, in essence. So you get 300 Yards every day if you open the app and you claim those Yards, right? And so that was the beginning of this kind of what we would call an engagement platform. And then inside of that, the golf course then has a yard store and the course controls the redemption value of those different stores and they can do it on.

They can do coupons on happy hour if they wanted to, or drinks, or range balls, or tee times, or whatever. And there's all kinds of flexibility in there that they can manage to how the customer redeems the Yards. And so what we saw was all of sudden we moved this customer from opening the app once a week to book his tee time to opening it every day to claim their 300 yard drive. And so we're like, OK, wow, we're really kind of onto something here. This is actually.

really cool to see this customer go back to the courses brand every day and open this thing up. And then, so then we start, okay, what else can we come up with? And so we came up with some stupid idea, which was just spin the wheel, right? And it was in there's, you know, there's eight tiles on the wheel and it's only

Mike Hendrix (45:55)
There's only 12 booths at the PGA show that have spin the wheel, so you might as well...

Brett Darrow (45:59)
Exactly.

It's not like this novel idea in any way, shape or form. Right. But it was just like, let's, again, put it around Yards. And so we introduced this spin the wheel and we said, okay, let's make them, they can spin the wheel one time and then they have to wait an hour, right. And come back and spin it again. And we ultimately said you could only do it like four times a day. Right. And so all of sudden we're like, we moved this customer from once a week to once a day.

to four times a day. And we're like, holy shit, this is crazy, right? This is like, these guys are so into this, you know? And it was really cool to just watch this evolution of the customer, really get into the games of Yards and the engagement of Yards. And then we actually then built an entire giveaway platform. So it's a whole platform that we've built all around redeeming, know, again, just more ways to redeem Yards.

and not leverage it all on the golf course, right? ⁓ In regards to having them provide discounts on different things or whatever, right? But it's all around this concept of engagement. It's all around this, you the only thing that we've really found in this whole process as we've done this is the golf, you know, there's just this micro community at each individual golf course, right? And there's so much that's going on there that the customer doesn't really know about.

But they want to be a little bit more connected into it. And we think this is one way to connect into it. And I think as the golf courses start to realize how much that customer is interacting with their app on a daily basis, or in the Yards ecosystem or marketplace regular basis, and how they can be in front of that customer. We talk about it all the time. They post to Instagram, or they post to Facebook, and the golf course is doing different things. And they might have

you know, a thousand followers or two thousand followers or whatever they might have. But that doesn't mean they pick a post that that two thousand customers are going to see that post. Right. The algorithm that is in place for Instagram has nothing to do with that golf course. Right. And it's not in the best interest of that golf course. Right. It's in the best interest of how do I get, you know, Mike Hendrix to stay engaged in Instagram feed and let's serve them up other things. Right. And so for us, it's about this feed application.

this Yards application, it's about keeping the golf course in front of that customer all the time,

Mike Hendrix (48:22)
And then and so then why a Yards app kind of an uber Yards app if you will that kind of sits above that. What we'll talk to us about that and for those people that don't know this is where the Ohio Golf Course Owners Association has partnered with you guys because golfers can buy a membership to Yards and you all are sharing that revenue with our association.

We're giving golf courses an opportunity to earn dollars whenever someone signs up for a subscription, et cetera, et But talk about why that over the top app. ⁓

Brett Darrow (48:57)
Yeah, I mean, at the end of the day, we think that there isn't, you know, GolfNow, we started 20 plus years ago, right? And from a consumer standpoint, it hasn't really changed that much, right? I mean, you book T, I mean, you go to GolfNow and book tee times Yeah, they have GolfPass and they've got other things that are there, right? But how does the golf course communicate to that golfer about what's going on at that golf course, you know, through that application? It's truly kind of more of

It's a transaction platform that is book my tee times, move on, book my tee times, move on kind of thing. And so we think that there's a need for the marketplace that provides the golf course, an expansion beyond just their individual app. Because like I said, there's going to be that 70% of the customer that's totally loyal to them. And is there a loyal customer that plays them on a regular basis?

but there's another 30%, and then there's all these other people moving into town or whatever that's going on, right? The marketplace makes sense, right? And so we think that it's, but what's great is that it's all interconnected. And so if the golf course makes posts, it goes out to the network, you know, different things that happen. And so we just think it's about expansion. To me, the best thing about what we've been able to do though is provide a new marketplace, right, with Yards without any expense to the golf course, right?

So, I mean, there's zero expense. There's a brand new marketplace that you can do so, you've got your own store in there. You can do promotions in there. You can do your tee times in there. You can do Daily Deals in there. You can do everything that you want, right? You've got posts and you've got customers and it's this whole attraction of building up your customer database, sharing that customer in the database and then building this marketplace that they can go out and promote to the customer all for free.

Mike Hendrix (50:44)
Right. you know, I just like Google. So a lot of people don't know this, but on your Google business profile, you can post, right? You can do that on your Google. And Google has made it such that you can then share that to your Facebook page or share that to your Instagram page. One thing that I think a lot of people don't understand about Yards yet is there's a whole feed that the golf course can post to. it's good to post to your own Facebook page.

but it's just your followers that are going to see that. Wouldn't you want to post to a larger community of golfers? know, these are, there are golfers. They're not non-golfers on there. and then, and put your stuff there. I think what you're going to start to find is it's what we found at GolfNow too. There will always be some great marketing people at these golf courses and they're going to dial in on that and they're going to go, ⁓ that's my new thing. going to go pull that in my market.

host their religiously, we're gonna build a community, et cetera, et cetera. I think that that's what we're gonna see happen.

Brett Darrow (51:42)
I agree 100%.

Mike Hendrix (51:43)
Yeah. so, so, I, I've been trying to ask everybody, about AI. And so I want to include you in that you really have this kind of growing large golf technology and marketing company now, clearly AI must play some kind of role in there, but I'm curious to know, like, what are you thinking about AI? What's the future look like as it relates to Sagacity Golf and AI?

Brett Darrow (52:06)
Yeah, mean, actually, Frank Halpin is heading that up for us and really diving into that piece. think that whole side of the business is going to change. It's relating it to bookings, right? mean, that is what we know more than anything is on the booking side, but it's going to change for even on the yard side of the equation in regards to just consumers, right? You're going to know much more about your customer and the deepness of

of the relationship because AI is going to help you. It's not easy today to sift out all that information about a customer, right? Whereas AI plays a huge role in that, you know, going forward, I think. So I think marketing automation is going to be a big part of it. think booking is going to be, and automation is going to be a big part of that. I think, you there's early AI agent stuff that's out there that we're looking at hard that I think is going to be successful or will for a little while. I mean,

This stuff is moving so dynamically and so rapidly that I think in five years we have no idea what it's gonna do. But I think at the end of the day what it's gonna do is it's gonna make everybody's life easier.

Mike Hendrix (53:06)
And hopefully it makes ROI easier, frankly, right? Let's talk in a little more detail about the partnership with the Ohio Golf Course Owners Association. So for people that don't know, when I started to work with the association and I took on kind of this responsibility of growth, I wanted to grow the association, I wanted to bring in more sponsors, I wanted to bring in more members.

I actually sent out an RFP to just kind of do some tire knocking on would anybody be interested in building a marketplace with us? Because Brett, my perspective way back when was I was surprised that golf course owners as a group didn't try to do something similar to what we were doing at GolfNow. It made sense to me that a golf course owner group would do that, but it kind of never really happened.

And so I've always had that in the back of my head. And I thought, well, heck, if I'm going to actually help the Ohio association to grow and to strengthen, why don't I go back to what I was thinking about 15 years ago? And so I put together this RFP and I thank a ton of different companies for coming to me. I won't, I'm not going to name people, but, but a lot of big boy companies came to us and said, we'll do this with you. but your proposal.

obviously stood out. thought Yards was super unique. I keep going back to, like the golfer engagement play. It's different than the discount play. I mean, that's really what we're talking about here, right? One angle is discount. One angle is engagement, what have you. I like this engagement angle, but why did you all want to work with us? What was the, what, what do you see as the upside for you guys?

Brett Darrow (54:45)
Yeah, I mean, think, you know, it's funny if we go back from our earlier conversation about how we scaled at GolfNow, right? We scaled through licensees, right? And got the brand out there pretty quickly and got to golf courses quickly through local entrepreneurs in the marketplace, building it out in that, you know, Ohio market or wherever that market was. Right. And so I looked at it as very similar to that. Right. In regards to Yards, but

I didn't want, in essence, I didn't want you guys to go build your own brand and marketplace because at the end of the day, it's just going to be Ohio, right? And you're not going to get all of the benefits of a nationwide, in essence, brand, right? An ecosystem that the mass community can all participate in, right? And when you go back to the licensee model, those licensees made out very, very successfully, right?

because they had the license, they had it in a marketplace, couldn't be taken away from them, right? And so we were able to build from a contract standpoint, safety for Ohio, right? But if any owners association today, if they had the opportunity to go back and buy the rights to GolfNow, right? Right.

Back in 2004, 2005, it would have been the best decision they had ever made for themselves. That's exactly the idea behind Yards here for the state of Ohio in my mind. And that's why it makes a ton of sense.

Mike Hendrix (56:19)
And think about the different things we talked about too, how GolfNow evolved, know, like trade move from email to on the site, phone calls from the CSA of make good trade, all those different things. Think about if the owners would have had a real stay in. Really.

Brett Darrow (56:35)
day. Yeah, right. would have been

so much better. Yeah, exactly. And so for us, it's like, hey, we've got the technology stack and we've got a brand that's that's engaging with these customers every single day and hundreds of times a day. I mean, they're playing the wheel, they're spinning, they're doing yachts, they're doing all these different things on it all the time. So we've got this ecosystem. Now it's about how do we go expand it out? And I think

what you're doing there in Ohio and I think what you guys can accomplish there together under that brand is a national brand I think will be fantastic.

Mike Hendrix (57:09)
Yeah. And again, I know I mentioned it once before, but the fact that you have so many interfaces, right? That makes it so much easier for someone sitting in my seat to say, that's where we want to go because we want every golf course in Ohio, part of the association to feel like they can participate in this thing. And so that's important. And then I will say, we know,

Brett Darrow (57:28)
100%.

Mike Hendrix (57:37)
We have many golf courses in Ohio that don't even have a tee sheet today. But I also knew that you guys would be able to check that box if need be. so that was one of the reasons I felt really comfortable with the decision. And frankly, the board, you know, the board, one of the comments from the board member was, well, if Yards is going to happen, you know, you might as well get involved with it. Right. I just thought that was such an obvious common sense kind of way to look at

Brett Darrow (58:06)
Exactly. Yeah, 100%.

Mike Hendrix (58:08)
So we're looking forward to it. If anybody wants more details, I'm happy to follow up with me. I'm happy to talk about it. Listen, I am in Hilton Head. I did want to mention some of the customers you guys have because again, I think one of the hidden gems in Sagacity Golf is actually the tee sheet you have. I just don't think a ton of people know about the fact that you guys have a sheet. But for people that don't know,

Harbor Town Golf Links is running their golf course on this tee sheet. Of course, Don Rae at Augusta Ranch is running his golf course on this tee sheet. it spans a wide, wide range. Don't you have Braithawk too or something like that in Arizona?

Brett Darrow (58:49)
They do you. Yeah. Yeah.

Mike Hendrix (58:51)
So a wide range of golf courses use the tee sheet. I think that that's the glue. I've always felt the tee sheet was the most important piece of technology that golf course can use. But then again, you've got all those interfaces as well too. So it's exciting. Can't thank you enough for your time.

Brett Darrow (59:07)
Thank you. Appreciate it. It's reminiscing back going back 20 plus years. You dated me.

Mike Hendrix (59:12)
Well, sorry, sorry to do that. But listen, it was a, I always tell people even for Last Minute Golfer, and for those people that don't know our acquisition was lower than Brett's acquisition, but an exit, a successful exit is a successful exit and it should always be celebrated is the way I look at that. So I, I, I'm sure you're happy with how that went. it's set a course for your life. I'm sure that that's been, you know, amazing. And now you get to be right back in a, in a builder's seat and

try to go do it again.

Brett Darrow (59:39)
Yeah, absolutely. Thank you. Appreciate the time.

Mike Hendrix (59:42)
All right, Brett, take it easy. Have a great rest of your week, and we're looking forward to working with you in Ohio.

Brett Darrow (59:47)
Sounds great, thanks. All right, see you.

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