Location-based entertainment veteran Joe Vrankin joined us to share insights on the industry’s future, especially in light of the pandemic. Joe’s career includes 20+ years in various C-Level roles from CFO, COO to CEO primarily in the Sports, Leisure and Location-Based Entertainment sectors.
Today, he is leading interactive minigolf concept, Puttshack, as it expands to the US after extraordinary growth in the UK since 2018. We at ARCO/Murray are really excited to be their design-build partner as they prepare to open doors this year in Atlanta, the Chicago suburbs and Miami.
Watch the whole episode here:
Joe, let’s go ahead and jump into the history of Puttshack, its origins in the UK, and where you fall into that timeline chartering growth in the US.
Joe Vrankin: I’m very fortunate to be involved. As you said, Puttshack started in the UK, the first location was in West London. I got involved because I know the creators, the twin brothers Steve and Dave Jolliffe. The three of us go all the way back to 2007, when I was CEO of Topgolf, another concept that they created. They’re incredibly creative, inventive guys, as well as the other co-founder, Adam Breeden. When it came to Puttshack, they stepped back and said, “How can we reinvent the game of miniature golf? How do we redesign it in a way that targets a broad audience and brings it into the current setting of the 21st century?” And that’s how they came up with the idea of interactive minigolf.
Really, the basis of Puttshack is around the incredible technology of a smart golf ball. It has a computer circuit, a battery, a GPS-enabled system. It’s essentially like a mini-computer encompassed within a golf ball. From there, they created this engaging and compelling game that reinvents a traditional game of miniature golf with technology.
So six months after they opened the first location, they gave me a call to see if I’d be interested in helping them roll it out to the US. As soon as I walked in, it was incredibly clear just how amazing this concept was. Not only the product itself, but how the concept encompassed everything around it—the energy, the vibe. It was clear to me that this would work really anywhere in the world, but it’ll definitely work in the United States. So I joined in January 2019.
That’s awesome. So, obviously, Puttshack is very unique in that it’s minigolf, but interactive. Are there other elements that you see really standing out from other entertainment concepts that exists?
JV: One of the key differentiators within Puttshack is the game itself. You can only get this experience at a Puttshack. You can play miniature golf anywhere, but you’ll never be able to play it in the same way that you can get it at Puttshack. The holes are all designed to hit what we consider to be our core demographic, which are 21 to 39-year-olds, so you’ve got a Beer-Pong Hall, a Trivia Pursuit Hall, a Roulette Hall. They’re all designed to engage an adult audience.
The other part is what we like to call “developing a triple threat”. The game is fun and engaging, but then it’s also building out a really good food and beverage offering. We have an executive chef, and all of our menu is a chef-created. The creativity part is a huge aspect of it, right? Drinks have become an enormous focus, too, so you have to have this mixology component, creating fun and engaging cocktails as well.
Then the last thing is adding a great guest service experience. That’s what can differentiate us from other people in this space. If you don’t focus on all three of these things—the game, the food and beverage, and the guest experience, then people will notice and it will impact how successful you can be as a concept.
Yeah, it’s interesting to think about how you have to play with those elements when it comes to entertainment— the food and beverage, then the game itself. I’m sure you’ve seen how that formula, so to speak, or the ratio of those things affects the performance of the business. Do you think the game is more important than the food and beverage? Is the food and beverage more important than the game? What do you think is the right blend?
JV: You know, having been in the social entertainment space for a long time now, I’ve seen people really focus either on a game, and then not a whole lot on the food and beverage side. So, if I go back, and I look at bowling as a concept, it was really about the bowling and then you get fast casual dining as a food offering. Or you have others where they’re really focused on food and beverage, and then they kind of throw some activities in there. We find that you have to have a strong focus on both. You have to have a great game that people want to come back and play over and over again, so that it’s not a bucket list item.
It seems like novelty is really key– you think about things like bowling, or even minigolf without the interactivity. People know what they’re getting and it can lose its appeal over time. Can you talk a little bit about the interactivity and how that gives you an edge to continually create something new?
JV: Yeah, you have to have staying power as a concept. We can utilize the technology to tailor things to our guests. We can create the environment, because it’s a technology-based game, we can create the environment where if you really want it to be competitive, we can create a competitive game.
If you’re coming with your family, and you just want to have a leisure family experience, we can create that environment where the focus isn’t on the competition, the focus is on just the pure fun of it.
On growth, what do you think it takes to bring a concept from another country to the US? And what have some of those milestones looked like for you and Puttshack specifically?
JV: Sure. So, it’s a great question, because I’ve had experience with this before in the past where the Jolliffes originally started Topgolf in the UK. We brought that in and rolled it out successfully across the United States. But there are a lot of concepts that have tried to either come from the US and go to Europe and have not done well, and vice versa. So, part of it is recognizing what translates well, and then also understanding the cultural differences.
When going from England to the US, we, in theory, speak the same language, although it’s not entirely the same. But a lot of things do translate well, game-wise. We’ve recognized if the game does well there, it’ll do well here.
Now, there are other cultural differences that you need to be aware of. Food and beverage is very different in how it is viewed and consumed in the UK, compared to what we look for in the US. Also how big a venue is and how much space there is. We like more space here, while they’re used to tighter quarters in London and other parts of England. So understanding behavioral differences is a big part of it, and then understanding how the food and beverage component varies from market to market. Even within the United States, when you look at the US, there are things that work in Chicago that will work very differently on the food and beverage side in Dallas.
That’s really interesting. I’m wondering how you’re gaining insights as you’re exploring new markets to enter? How do you determine what the appetite is?
JV: Well in the US, we break our demographic down really into three groups. One is that 21 to 39-year-old, which is what we call our core demographic. The next is our event groups, both social and corporate. And then the third group is families. So when we look at a market, we look at the size—for example Chicago has a greater metropolitan area of 10 million people. Clearly, it’s a market that can absorb multiple Puttshack locations. Then we begin to hone in and say, okay, well, where are the guests that really come to visit the most? Then we hone in on the hotspot areas, and then we say are there certain places that would be a good fit for a first location in that market? Because if we’re going to open four in Chicago as an example, then where do you want to be first? So we really try to look at where we’re going to be most successful, and we focus on the data that will tell us that and we do the same thing as it relates to any market across the country.
We honed in on major markets initially, but we’re refocused now on getting one in the north, one in the south, one out east and one out west since we want to establish that it’s a national concept and understand the nuances of seasonality, guest traffic and food and beverage by region.
If we could zoom in a little bit further into the site specific selection— how did you pick Oak Brook Terrace for the Chicago suburbs or the Interchange for Atlanta? I would love to hear a little bit about picking the actual space.
JV: So we’re very data driven in the way we look at site selection. At the end of the day, it’s retail, and as they say it’s location, location, location. The Oak Brook Mall is a great outdoor lifestyle mall. It’s a top 20 revenue-producing mall in the US and the demographics in that area fit well with the guest demographic that we’re targeting, both for walk-in guests and also corporate events.
In West Midtown in Atlanta, that’s more of an urban location for us, but it’s the same kind of analysis that we went through. We literally create scorecards for this. West Midtown is a great hotspot area. It’s growing and only becoming more and more popular. We’d ideally like to be more focused on urban locations versus suburban locations in the future. There’s tons of mall space available, but malls aren’t necessarily the place we want to be. You want a hot spot area in a place where people think about spending their evenings or weekends.
Oak Brook fits that bill very well. They have a lot of nightlife and nighttime activity that goes on. And West Midtown Atlanta fits that well, too. And then we’re opening in Miami at the Brickell City Center—that will be our third location. That’s also a hotspot area that combines an urban location with a lifestyle mall environment, right in the heart of downtown Miami.
For sure. Now of course, the unavoidable question: in what ways do you think Puttshack has been weathering the storm of COVID? What are your insights watching how the shutdowns have affected the UK locations?
JV: Yeah. So, you know, like everybody within hospitality, it’s been an incredibly difficult window. I’m really proud of our team, in how we’ve managed through it, and how we’re coming out the other side. Like everybody, we were forced to close down our three London locations.
We were able to reopen in August, and we got a phenomenal response. In one of our locations, we were doing essentially the same revenue numbers as we were doing the prior year in August. And in the other location, we were actually up year on year. Within our space, that was absolutely unheard of.
I think it’s the compelling part of the game and how great it is. And then the other part is putting COVID protocols in place so that guests feel safe and secure when they’re coming and playing. For us, part of the technology creates an inherent advantage for doing that, because we can space people apart within the game.
As you’re getting ready to open new locations, I’m sure that projections and expectations have changed a bit. What do you hope for in terms of growth, once the doors open at Atlanta, Oak Brook, and Miami this year?
JV: For us, the biggest impact in this stage was delaying construction and thus the openings of our first US locations. Right now, Atlanta actually is not that far off– we were anticipating opening in February, and it’ll be a couple of months later. Oak Brook, on the other hand, we were hoping to have open already. It’ll open later this year, but those are just short-term impacts. They’ll work their way out with the schedule. It’s kind of like a weather delay– it delayed you, but it’s not going to have a major impact.
There are actually some positive things that came out of the pandemic, too. It’s created more opportunities for us in site selection and location. So, in building our pipeline, we’ll open a little bit later than we wanted to, but we are actually building a more robust pipeline for quicker growth over the next 24 months.
That’s great. So then, zooming out to the location-based sector of entertainment, do you think that the pandemic is going to have any sort of long-standing impact?
JV: I don’t think you’ll be surprised to hear that I’m actually very bullish on location-based entertainment coming out of the pandemic. We’re currently in what will hopefully be the last lockdown in London. But we had a three-month window where we were reopened, and the question was, will people go back to an indoor environment? Will they be coming back in the same volume? And they did.
And I think part of my belief was that as much as anything coming out of the pandemic, people are going to be more attracted to location-based entertainment. We like location-based entertainment, we like the connections that are involved with it. But we always took it for granted, we could do it whenever we wanted. The pandemic really highlighted the value and how special connections with people really are when we lost them.
So my belief is that our space is going to see a resurgence in a post-pandemic environment, because people are wanting to be engaged and actively involved as they create those connections with the people they’re out with.
I just came across a headline this morning about how even the most mundane things like going out and grocery shopping can almost invigorate that sense of doing something which we’ve all been starved of.
JV: The closest thing we have to look back in history at was a hundred years ago, the last time we had a global pandemic with the Spanish Flu. And coming out of that led to the roaring 20’s in the US.
Yeah, that’s a great point. I’d be curious to look at more examinations of that correlation.
What do you think are the biggest risks involved for food and beverage concepts and location-based entertainment? Obviously, we have this risk of the pandemic that kind of came out of nowhere, but once things return to some level of normalcy, what do you think are the biggest hurdles and obstacles?
JV: The risk in our space in general is, do you have an engaging activity that people want to do multiple times and will keep coming back to? Then, looking at the economics of the concept, how much of your revenue can you generate from just the game or activity? And how does that balance with the food and beverage? There are a lot of concepts that are out there that don’t have a hugely compelling activity, or it only makes up a small percentage of the revenue. Then you’re at risk of the same things that impact a bar or restaurant.
We live in a world where there are cycles of one sort or another. The reality is sometime over the next window of time, you’re going to have a recession. You don’t know when, but it’s predictable that it’ll happen. And you want your business to be able to weather those kinds of things, and then come out the other end and continue to grow.
So, from your perspective, what do you think makes one concept succeed? And another one fail?
JV: I think one of the huge things is the activity has to be unique and compelling and fun, where people are going to come back over and over. If they can get it just anywhere, then you really don’t have a differentiator. That’s one of the great things about Puttshack– we have patents around our game so it’s unique from anything else. The only place you’re going to get that game experience is through a Puttshack.
The other thing is, you can make a misstep on the food or beverage side, but you can fix that. If you don’t have a compelling experience activity, then your biggest risk is becoming a fad. Or people will just go once and they won’t come back.
I think what we have at Puttshack is pretty rare to see. For me, it’s pretty clear that we not only have something that’s really compelling today. But based on the way it’s all designed around technology, we can continue to always make it better.
Yeah, it’s like what we were talking about earlier, where something might become trite once it’s familiar, and you have a lot of access to the same thing.
So the last question, what knowledge would you want to impart to entrepreneurs within this space?
JV: You’re going to need perseverance. You can do as much planning as you want, and you can do as much good strategy work. But things will happen that you can’t predict.
I can’t think of a better example than the pandemic right now, but there are other cases. Businesses were sidetracked dramatically after 9/11. They were sidetracked dramatically after the Great Recession and in 2008 and 2009. There are things that happen that are not part of your plan. You’re going to have to persevere through the challenges that come with that.
The other is always be looking for how you can be better. The best way to do that is to never stop learning. I think one of the biggest risks that entrepreneurs have is when things start to go well, you can start to think that it was really me that did that. But the reality is remaining humble and understanding that that’s not really me. I’m surrounded by really great people. And I have this great concept. And it’s my job to continue to learn as much as I can.
Learn as much as you can from other people, and avoid mistakes that you see other people make. It’s like they say, wisdom is one of those things, you get about five minutes after you really needed it.
For an entrepreneur, that’s very true, because we learn a lot through our mistakes. But we can learn a lot from watching other people’s mistakes and how to avoid them. We can also watch what other people do well, and learn how to replicate it.
Yeah, that’s true. Well Joe, that’s all our time today. Really appreciate the insightful conversation, thanks so much!
JV: Of course, thanks for having me.