KC Underweight Deal: A Social App That Scores A Bogey

Key Stats:

Summary

Today we are taking a deep dive into crowdfunding startup SKINZRUS. The startup is developing a mobile app to connect golfers together. It’s worth noting that at this time the app is not functional and is still in the idea stage.

SKINZRUS is an application that will connect golfers with others in their community. Looking for someone to play a round with? SKINZRUS is the app for you.

 It will help the golfers connect on the basis of their age preference, gender preference, handicap or profession. The vision of SKINZRUS is to cater to the demand of co-golfers for those who like to play but do not have a partner to play with. Now, the question is, is this demand for real? Do golfers really look for strangers to play golf with?

 The application can also be used by a SKINS player or group to post an opening for a vacant spot in their group. Skins game is an unofficial-money event, and the stakes keep increasing as the game progresses. With new and unrelated people on the team, one can’t be sure of the strength of the team and their levels of coordination.

 Therefore, we will analyze the drawbacks of the idea and application associated with SKINZRUS to understand the sustainability of the business. It is critical because crowdfunding investors must rely on their understanding and examination of the issuer and the business idea before deciding to put their money in it. The potential risks and merits involved must be known to make an informed and smart decision.

 SKINZRUS: Raising on StartEngine

Management Concerns

Though we appreciate Matthew Brown’s passion for what he is building, we have significant concerns regarding his ability to lead the organization. With what appears to be no meaningful experience running any organization to date, a smattering of odd jobs in his past, and no true tech experience, we think Matthew may be underqualified to successfully run the business.

We think management is in well over their head. Though the idea for the business has validity, we think a new management team would need to be put in place if the business is to have any chance of long term viability.

Management Concerns

The golf market opportunity is significant with 24 million Americans playing an estimated 465 million rounds annually. The number of youth playing golf has also increased by 20% from 2010 to 2015, and about 6.3 million millennials play golf often, which is a positive tailwind for Skinzrus.

However, golf is still an old, stodgy game staked in tradition. Adopting a new social tool is not necessarily something that will be quickly adopted. This is a game traditionally played between friends and business partners. The idea of building a platform to bring golfers together is likely to have limited adoption, especially at the higher end of the market.

Slow Customer Adoption  

The golf market opportunity is significant with 24 million Americans playing an estimated 465 million rounds annually. The number of youth playing golf has also increased by 20% from 2010 to 2015, and about 6.3 million millennials play golf often, which is a positive tailwind for Skinzrus.

However, golf is still an old, stodgy game staked in tradition. Adopting a new social tool is not necessarily something that will be quickly adopted. This is a game traditionally played between friends and business partners. The idea of building a platform to bring golfers together is likely to have limited adoption, especially at the higher end of the market.

Misaligned Distribution Channels

We also have concerns that the team is focusing on the direct to consumer channel hoping to win users over one-by-one. This is not the right approach to build the business. Skinzrus should instead be approaching golf clubs as the channel strategy to grow the business.

Essentially, management should be working with golf clubs to market its product to their customer base of golfers. This way they can create a concentration of golfers at each club, which would heighten the value of the app. Remember, many golf clubs require a membership, so the ability to play with anyone on the app is limited to who can play at your course.

Facebook used the same approach in the early day by winning over one college at a time to build network effects of having lots of users in one small locale. Without enough concentration of users the app will not become valuable to any customer. Additionally, the cost of acquisition without this approach will likely remain very high.

The Bottom Line  

We are assigning SKINZRUS an underweight rating. As a concept, the business looks promising, however, whether or not the idea will be received well in the market is uncertain. As they say “It’s 10% in the idea, 90% in the execution.” At this time, the management team of the company lacks the experience to handle the specific aspects of this business. 

If you have any questions regarding the underweight rating of SKINZRUS, you can reach us at hello@kingscrowd.com.