
May 14, 2021
Baseball and business with A-Rod | Business Casual with Alex Lieberman
Check out the Starting Greatness Episode Page & Show Notes
Key Takeaways
- Alex Rodriguez is disappointed by the US education system not teaching financial literacy
- “It’s arguably the most important class than any young person can take today” Alex Rodriguez
- 78% of NFL players experience financial distress within 2 years from retirement
- In the past years, there has been a shift of power from the institution to individuals
- What should pro-athletes do for their finances?
- Surround yourself with the best people in the world and build long term relationships
- Do so during your career, not after it
- Surround yourself with the best people in the world and build long term relationships
- Many athletes don’t invest in networking
- Whenever Alex went to a new city, he would meet with local entrepreneurs
- 3 main lessons learned from Magic Johnson
- You always want to stay relevant
- Television allows you to do that and stay connected to your fans
- Go out for speaking engagements
- It allows you to connect to the next generation of entrepreneurs and investors
- Surround yourself with a world-class team
- You always want to stay relevant
- Alex’s 90% Rule
- He’s happy leaving 10% of the deal on the table to encourage a long term partnership
- “It’s not fun getting rich by yourself” Alex Rodriguez
- A lot of reputation has to do with taking a long term view
- What can you do for your partners?
- How can you create more win-win scenarios?
Intro
- Alex Rodriguez (@AROD) is a former professional baseball player (3-time MVP and World Series Champion), entrepreneur, and philanthropist
- Host: Alex Lieberman (@businessbarista)
- In this conversation, Alex Rodriguez talks about his transition from pro baseball player to entrepreneur
What Inspired Alex to Start a Business
- Alex had always been fascinated with business
- He remembers having to move to different houses as a kid because of the high rent
- He promised himself that as an adult, he wanted to be a landlord
- In his twenties, Alex bought 2 apartment units
- With time, he grew that to over 10,000 units in over 15 states
Financial Literacy Among Athletes
- Alex is disappointed by the US education system not teaching financial literacy
- “It’s arguably the most important class than any young person can take today” Alex Rodriguez
- Some stats
- 78% of NFL players experience financial distress within 2 years from retirement
- 12% go bankrupt within 10 years
What Should Pro-Athletes do for their Finances?
- Surround yourself with the best people in the world
- Do so during your career, not after it
- Build long term relationships with them
- Many athletes don’t invest in networking
- They assume that things will just come to them
- Alex was mentored by Magic Johnson
- Whenever Alex went to a new city, he would meet with local entrepreneurs
- Most people love sports, so they were happy to meet with him, and teach him some business lessons
- Have a good attorney that is not over-protective
- As an entrepreneur, you have to take some risk, albeit calculated
- In the past years, there has been a shift of power from the institution to individuals
- Athletes and entertainers can now create so much more value than in the past
- They have access to platforms that big institutions need and don’t have
- Athletes and entertainers can now create so much more value than in the past
What Alex Learned from Magic Johnson
- In his 20s, Alex had the chance to meet Magic and learn the lessons he learned from his business experience
- 3 main lessons he learned
- You always want to stay relevant
- Television allows you to do that and stay connected to your fans
- Go out for speaking engagements
- It allows you to connect to the next generation of entrepreneurs and investors
- Make sure to surround yourself with a world-class team
- You are the average of the 5 people you surround yourself with
- Alex looks for people with great values “Missionaries, not mercenaries”
- You always want to stay relevant
Lessons from Sports, Applied to Business
- As a pro-athlete, you don’t punch a clock
- You have to work and prepare as much as necessary
- You have to be able to persevere through hard times and be disciplined
- All things that entrepreneurs also need
- 2 Rules that Alex integrated into his business
- 10-touches
- Alex needs to have at least 10 interactions between considering partnering with someone
- It’s essential to also meet with people in person before partnering with them
- 90% Rule
- He’s happy leaving 10% of the deal on the table to encourage a long term partnership
- “It’s not fun getting rich by yourself” Alex Rodriguez
- 10-touches
- Alex’s discipline is key in making sure he complies with those rules
Lessons Learned in Real Estate
- Like in everything, work side-by-side with an expert
- Make sure you’re dealing with people with a solid reputation
- Consider your long-term goals before making a deal
- Are you looking for cash flow or to create enterprise value?
- Your goals and available resources will help you define where to invest
Building a Repuation as an Entrepreneur
- Alex taught a class at Stanford about Reputation management
- Young entrepreneurs often seek short-term gains and don’t think about their partners
- In the long-term, they make a lot of mistakes
- A lot of reputation has to do with taking a long term view
- What can you do for your partners?
- How can you create more win-win scenarios?
Additional Notes
- Similarities between professional sports and business
- Require collaboration
- Offer tremendous upside
- Encourage healthy competition and long-term dedication
- Alex and Marc Lore are buying the Minnesota Timberwolves for $1.5B
- They will start running the organization from 2023