Wednesday, October 17, 2012
Why own a jersey when you can rent?
By Paul Lukas
A startup company called JerseySquare is trying to rent jerseys to fans like Netflix does movies.
People are often surprised to learn that a certain ESPN uniform columnist doesn’t buy or wear the jerseys of his favorite teams. When asked about this, the uniform columnist often replies, "I think it's kinda nuts to spend $250 on a polyester shirt. I'm amazed that so many other people are willing to do it."
That reply is actually a bit of an oversimplification. There are other reasons the uniform columnist doesn't wear jerseys, ranging from the generational (the columnist is 48, and therefore grew up during an era when jerseys weren't yet available to the public) to the practical (the columnist is 5-foot-8 and 150 pounds, so most retail jerseys are too big for him) to the political (the columnist is disturbed by the degree to which being a fan is now equated with being a consumer).
But at the end of the day, a lot of it comes down to the absurdity of paying $250 for a polyester shirt.
Ah, but what if you could wear the polyester shirt, at least for a while, without having to pay $250?
That's the idea behind JerseySquare, a startup company founded by three MBA students at the Columbia Business School. The basic premise is like a jersey version of Netflix: If you want to wear a jersey for a particular game but don't want to commit to spending the big bucks, JerseySquare will rent it to you for as little as $25. If you want to wear a rotating series of jerseys throughout the year, you can buy an annual subscription for $200.
This won't appeal to collectors, or to people who want to wear the same jersey for years, or to several other types of fans (we'll get to them in a minute). But if you're more into wearing jerseys than owning jerseys, JerseySquare has its advantages. For example, many fans have experienced the frustration of buying a particular player's jersey and then seeing the player move on to another team. Or seeing the team change its jersey design. Or any of several other things that can suddenly give you a case of buyer's remorse regarding your $250 polyester shirt.
But with JerseySquare, you're not making a lifelong commitment to the jersey -- you're just renting it. If the player is traded away from your favorite team, no biggie. You can just rent the jersey for someone else on the team. Or if you're a fan of the player no matter which team he plays for, you can rent his new jersey with his new team.
JerseySquare has its problems, beginning with the company name, which lacks pizzazz. The three co-founders are currently using the crowd-funding site Indiegogo -- similar to the better-known Kickstarter -- to raise the $12,000 they need to get started by the end of this month. As of this writing, contributions have been very slow (although that may change once this article begins circulating). Even if the funding goal is met, JerseySquare will begin with a rather limited inventory: the 10 top-selling NBA jerseys, available in only two sizes -- adult large and youth large. They plan to offer more sizes, more jersey options, and ultimately expand to have inventory for all of the Big Four pro leagues, but that's probably a long way off, even if things go fairly smoothly.
Still, the idea is an intriguing one. In fact, the columnist who can't wrap his head around the idea of spending $250 for a polyester shirt was so intrigued that he wanted to know more, so he recently interviewed JerseySquare co-founder Michael Melmed. Here's how the discussion went down:
Uni Watch: Let's start with a little information about you. How old are you, where are you from, and which teams do you root for?
Michael Melmed: I'm 30 years old and I'm from West Hartford, Connecticut. I was a diehard Whalers fan before they moved to Carolina. When they left, that kinda killed me for hockey. Now I mostly root for Boston teams, but not the Bruins, because I always hated them from the Whalers days.
Rooting for Boston teams while going to school in New York must be tough.
Yeah, I'm surrounded by Giants and Yankees fans, but I'm still rooting for the Patriots and Red Sox.
Michael Melmed, 30, is a Columbia business student and a co-founder of JerseySquare.
Do you wear jerseys yourself?
I do, although I don't own that many.
How many are we talking about?
Maybe eight. I guess I don't think of that as a lot, but it might be for some people. I don't wear them that often, primarily for safety reasons. You know -- Boston teams in New York.
How did you get the idea for JerseySquare?
It actually started with a friend of mine. He had been thinking about Rent the Runway, which is a rental service for women's dresses. It's gotten pretty big and they've raised a lot of money from investors, so my friend got to thinking about how this could work for sports fans. As soon as he told me about the idea, I loved it. We took a one-week class with Steve Blank, who's this entrepreneurship guru, and then we did a lot of research. We went to Yankee Stadium, to sports bars, anyplace where we could talk to sports fans and get a feel for whether this idea could work. It really opened our eyes about the different kinds of people who wear jerseys. There are people who wear them every day, people who are fans of a particular player, people who care more about the team than the player. And after learning all of that, we decided JerseySquare could work.
When I first heard about this idea, I thought it was sort of like a lending library for jerseys. But then I thought, "No, libraries are free." Your concept is more like renting a tuxedo, but it's through the mail, so it's like a combination of a tux rental and Netflix.
Yes, that's our concept -- a Netflix for sports jerseys.
There are lots of different levels of retail jerseys these days, from high-end authentics to low-end replicas, and sometimes a middle level as well. Which kind will you be offering?
We want to go with the highest-level authentics. For the NBA jerseys that we're starting out with, we're going with Swingman jerseys, which are sort of the mid-level, just as our point of entry. But ideally we plan to offer authentics, so people can feel they're getting the best value.
So let's say I want to rent a jersey from you. What does it cost me, and how long do I get to keep the jersey?
When we talked to fans, we found there were two very distinct needs out there. First there's the fan who just needs to wear one particular jersey one time, for a special occasion. And then there's the fan who needs lots of different jerseys throughout the year. So we'll offer two options: a one-time, one-week rental for $25. Or you can sign up for an annual subscription for $199.
Let's say I sign up for the annual subscription. Is there a limit to how many jerseys I can rent in the course of the year? Or a limit on how many jerseys I can have out at a given moment?
Both. We're still working out the details, but we're thinking one jersey at a time, with a cap on how many times you could exchange it in a given month. We're thinking probably two or three times.
It occurs to me that many people out there aren't just jersey wearers -- they're jersey collectors. They really like knowing that they have all those jerseys in the closet, or displayed on the wall, or whatever. Obviously, your project won't appeal to those people.
Correct. For a lot of people, JerseySquare is not for them. They want to own the jerseys, either because they're collectors, or they're grossed out by the idea of wearing something that someone else has worn, or whatever. But we also talked to lots people who really liked the idea. So JerseySquare isn't for everyone, but we think it will still have strong enough appeal to be successful.
You've opted to start with the 10 top-selling NBA jerseys. Why NBA? Why not the NFL, since their jerseys are more popular?
Part of it is timing, because we're getting ready to start right at the beginning of the NBA season. Also -- and this is backed up by many of the people we interviewed -- we felt that NBA players are more like individual brands and make more of a statement when you wear their jerseys. So even if you're a Celtics fan, you might consider wearing a Kevin Durant jersey. You don't see that in the other sports.
But you hope to expand to the NFL, MLB, and NHL, right?
You're also limiting yourself to two sizes: adult large and youth large. I admit that I haven't done a formal study of this, but my very unscientific observations over the years have indicated that sports fans tend to be more on the XXL side.
It was a tough choice based on limited resources. We basically felt like those two sizes give us the most options as we're getting started, especially because we're hoping to appeal to male and female fans. In fact, our research indicates that women are particularly interested in that one-time rental option. We realize that having only two sizes means we're going to miss out on some potential customers, but we plan to expand our size offerings in the future. We also hope to have the jerseys that are specifically designed and tailored for women.
Part of your pitch is that it sucks when a player moves to another team and fans who'd bought his jersey are left holding the bag. But if your project successfully launches, you'll be the ones holding the bag if a popular player changes teams. You'll be sitting there with a bunch of his jerseys that nobody will want to rent anymore. What will you do with them?
It's true, we are taking on the risks for our customers. We've explored a few ideas for that type of situation. One would be to take the name off the back of the jersey and offer it as a lower-priced rental. We've also looked into a custom-jersey rental operation, where we could put any name on the jersey, instead of the player's name, and you could rent the jersey. That could work really well for a group, like for a bachelor party or a birthday party.
Let's say you reach your funding goal by the end of the month. How soon would you expect to have everything up and running?
We expect to move pretty quickly. We'll take the money, order the jerseys, and start taking rental orders.
Speaking of funding, you mentioned earlier that Rent the Runway had gotten lots of private investors. Why did you go for the crowd-funding approach, instead of the investor approach? After all, you guys are business students, so I'd think you'd know how to approach investors.
On the one hand, we're business students. But on the other hand, we're just students, so our time and budgets are limited. We felt this was the kind of thing where, if we do get money from private investors, it'll only be after we've already proven that it works. So we wanted to use Indiegogo as a way to get it going. And if the project turns out to be successful enough that we need to expand, we can use that success as a way to tell potential investors, "Look, this works -- we just need more capital."
What happens if you don't meet your crowd-funding goal? Will you explore other options, or will that be the end of the project?
Our fallback plan is to run the whole thing at an even smaller scale -- a smaller inventory, at least to start. But we really believe in this idea.
And there you have it. As Melmed acknowledges, JerseySquare won't be for everyone. But with so much of sports being driven by merchandising these days, it's interesting to see someone trying to bend the merch machine into a new shape. Here's hoping he and his colleagues get this project off the ground.
Paul Lukas still has no plans to buy a $250 polyester shirt, but he's considering the rental option. If you liked this column, you'll probably like his daily Uni Watch web site, plus you can follow him on Twitter and Facebook. Want to learn about his Uni Watch Membership Program, be added to his mailing list so you'll always know when a new column has been posted, or just ask him a question? Contact him here.