Striking it rich
Despite celebrating a decade at the helm of his $30 million revenue business, Melbourne entrepreneur Michael Schreiber has no intention of slowing down any time soon.
Schreiber is the founder and chief executive of Strike Bowling Bars, an 11-strong nationwide network of bowling alleys, which opened its first venue on Melbourne’s Chapel Street in 2002.
In a bid to create a new out-of-home experience, Strike brings night-time elements to an otherwise daggy pastime, with a full-line kitchen, bar, plush lounges and private party rooms.
Pool tables, interactive games and karaoke rooms – in addition to touchscreen iPads – add an extra layer of “cool” to the setting.
Schreiber has also introduced laser skirmish at Strike, mindful that he is competing with social networking for the attention of his young target demographic.
“We’re offering social networks in a face-to-face sense, which is far better company than a boring old computer screen,” he says.
“Ten years ago, I literally travelled the world looking for what sort of adult entertainment concept might take off in Australia.”
“When we looked at bowling, we knew that we’d found the concept.”
“What Strike did with bowling was to take this entertainment format and completely reposition it. We made it a social experience rather than a competitive sport.”
Schreiber talks to StartupSmart about traveling around the world in search of ideas, why he chose bowling, and what it took to build the Strike empire.
You travelled around the world looking for the right start-up concept for Australia – why?
When I first entered the entertainment industry in the mid 90s, I travelled extensively as part of my role.
I principally visited the major amusement and attraction trade shows such as IAAPA (the International Association of Amusement Parks and Attractions).
Along the way, I used to visit and keep abreast of trending and emerging concepts in the US and other international markets.
This travel, along with my experience in concept development and management in Australia, informed my thinking around the Strike concept.
In essence, Strike was a construct of the various concepts I had seen and experienced over the years as well as the input of my own experience.
Which ideas did you reject before deciding on bowling?
I think which concepts had I tried before settling on Strike is more informative.
I was involved at a senior level with the development of everything from high-tech indoor theme parks, next-generation interactive games venues, sports bars, next-generation family entertainment centres, nightclubs, and the kernel of the Strike concept, Kingpin Bowling.
The development cost of these businesses ran into the hundreds of millions, and only Galactic Circus (next-generation family entertainment centres) and Kingpin still survive.
So in many ways, the Strike concept was forged from live experience and is modeled off the best-of-breed from what came before it.
What made you realise that bowling was the best option?
The epiphany was hard-earned in many ways. The prevailing logic was that the next form of out-of-home entertainment would be based on high-tech and this is where the global concept developers were focused.
Besides the work we were doing in Australia with Village and Nine, Sega teamed up with Dreamworks, and Steven Spielberg oversaw the concept creation behind Gameworks, their interactive concept that first opened in Las Vegas.
Gameworks too has faded away in its original form and Dreamworks are no longer involved.
Shifting through the ashes of all this innovating and pioneering, I was struck by the consistent appeal of bowling, which was housed in the Kingpin concept.
With the benefit of hindsight, bowling is an obvious choice – time-tested, all-ages appeal, easy to play but hard to master, all-weather availability.
Looking deeper into the trends around bowling (data from various organisations, Google searches, etc.), it became obvious that although the model was in transition, operators had focused on the sports side of the business at the expense of the entertainment side.
Once I had the core attraction nailed down, we surrounded it with symbiotic activities such as pool, karaoke, a bar, DJs, interactive games and great customer service to define the concept.
We continue to innovate, and have recently added laser skirmish as a second core attraction.
How do you decide whether a good idea will actually make a good business?
In the first instance, I stay abreast of trends and what is happening around the traps. I trust my instinct and try different experiences, and form an initial view.
If I see something that I like, I will study, break it down and model it up to see if and how it makes sense.
We more than often reposition or repackage and improve versus just pick up a piece to bolt on. The decision at the end of the day has to be around commerce and not ego.
I have seen too much money burned in my career and I have an intense dislike of the smell of burning money, specifically when it’s my own.
How long did you work on Strike before you launched it?
All my life in a way, but physically six months.
How did you fund the business and what were your start-up costs?
The start-up and initial implementation was funded by a combination of debt and equity.
Building something as complex as Strike is not for the faint-hearted. Our start-up costs were close to $3 million for the first unit.
When did you hire your first staff member and how did you grow your workforce?
I took care of a lot of the groundwork alone and stared hiring once I got closer to opening.
I was fortunate to have worked with lots of great people in my previous lives before setting up Strike, so I had a good network.
I am proud to have a core team that has been with me on and off for the last 10 years. I am biased, but an outstanding trait of Strike is its people.
In 2002, Strike opened its first Melbourne outlet, Strike on Chapel. In the years since, an additional 10 Strike Bowling Bars have opened across Australia, employing more than 300 staff.
I am often humbled when I witness the dedication and passion that the team embodies. Beyond any doubt, the people make the difference in the hospitality industry.
How did you promote the business initially?
We prepared a good sized launch using multiple mediums including a fair amount of below-the-line [advertising].
We have refined our initial strategy over the years. However, the core strategy is still evident in how we go about launching today, aside from the growing importance of digital.
In the start-up phase, what was your greatest challenge and how did you overcome it?
Getting the right folks on the business, in the right seats, is probably the greatest challenge and it is ongoing.
You overcome it by building an organisation with a culture and value system that resonates and attracts a great team.
We have done a lot in this regard over the last few years and it has helped with recruitment, retention and performance.
Have you ever had any difficulty securing sites for your venues?
The real estate is probably the biggest barrier to entry; finding the right size site, in the right location, at the right cost.
How did you get around this?
Before we really proved our worth as a mini-major in terms of driving unique patron traffic, we had to take some medicine to earn our stripes.
Today, there are many more opportunities as the market recognises the benefits of including Strike in their centres.
We are a destination – the model is difficult to displace on the internet, the demand for entertainment is insatiable and traditional retail models are in flux.
What are your revenue projections for 2011/12?
Close to $30 million.
What advice would you give to start-ups?
Research your idea deeply, have an open mind, create a detailed plan, work like hell and never give up.