Tag Archives | business

10 Things to Learn from Sounders FC: Authentic Masterpiece: The Inside Story Of The Best Franchise Launch In American Sports History (Mike Gastineau)

imageI have been reading catching on the business of soccer lately, reading about Major League Soccer (MLS), the English Premiere League, and other aspects including David Beckham’s time in the United States with the Los Angeles Galaxy. Included in this research has has been Mike Gastineau’s introduction to the Seattle Sounders and its franchise launch. It’s absolutely a good read.

Below are 10 Things to Learn from the book:

1) Fifty-one percent of those eligible voted in the election and the decision to build the stadium passed by less than two percentage points. Mendoza’s response when asked if the vote would have been yes without adding soccer to the mix is doubtless and declarative. “Oh, God no. No way. It doesn’t even come close. If it had not been for the soccer moms and dads this thing would have died.” “It was a squeaker,” Kolde agrees. “We needed soccer. It powered this thing through. We wouldn’t have won it without that. Not at all.”

2) In a thoughtful nod to Seattle’s sports history it was the Sounders who opened the new stadium just as they had opened Seattle’s new Kingdome in 1976 in a legendary match against Pele and the New York Cosmos. On July 28, 2002 the USL A-League Sounders played their rivals the Vancouver Whitecaps. The home team won 4-1 in front of a league-record crowd of 25,515 people. Standing there that night it was easy to envision Seattle quickly making the leap to the big league of American soccer, Major League Soccer.

3) There are a myriad of reasons the NASL and the Sounders didn’t make it. The league was mismanaged and over expanded. Too many of the original owners were infatuated with soccer, but not dedicated to the long-term success of the league. In Seattle the Sounders of 1974 enjoyed little or no competition, but by 1980 the NFL and MLB had arrived, the Sonics had won an NBA championship, and the Washington Huskies had begun a long string of college football success. But Hanauer emphasizes that move from the cozy confines of Memorial Stadium to the Kingdome. Attending a game where empty seats outnumbered tickets sold couldn’t help but undermine the fan experience.

4) Leiweke proposed that Allen would own 25 percent of the team, but instead of putting up money he would provide business infrastructure in the form of the Seahawks marketing, sales, promotion, and media staff, as well as use of the team’s stadium rent-free for home games. Leiweke had convincing to do on both sides. On the one hand he had to convince Allen that his staff and management could handle the extra responsibility of a new soccer team. Allen’s only concern was whether or not his top executives would get distracted from their duties with the Seahawks, but Leiweke assured him that wouldn’t happen. Meanwhile, Leiweke convinced Roth and Hanauer that what they really needed from Allen was the Seahawks organization’s expertise. Roth and Hanauer wouldn’t get any capital in the deal, but they instantly had an office staff trained in how to run a professional sports team.

5) “One of the things I felt all along about MLS and soccer in America was they accepted their role as a secondary sport. So the first thing I felt was that we have to come out like we are a first-tier sport, like we are baseball, basketball, or football. I kept saying that everything we do we’ve got to do first tier. Our enemy was the 50-year-old white male sportswriters who thought of soccer as something their daughters played.”

6) for the primary marketing effort, the entire group felt the “market to the youth soccer organizations” model favored by many MLS teams was simply the incorrect way to go. “I never want to do something because it’s the way it’s always been done,” Hanauer says. “I can’t stand that kind of thinking.” He had studied and liked the way the MLS expansion team in Toronto had integrated into the community by marketing to soccer fans. “Toronto illustrated to us that this business didn’t need to be and shouldn’t be built on the backs of the youth soccer market,” Hanauer says. “In the history of MLS prior to that it had always been built on youth soccer, but trying to get people to come to a game after they spent eight hours at tournaments on a Saturday was a difficult sell.” So while soccer moms, dads, and kids would be enthusiastically welcomed, they would not be the focus of the new team’s marketing effort.

7) the final piece to connect the new soccer team to the Seahawks culture. Phones would now be answered “thank you for calling the Seattle Seahawks AND Sounders FC.” Business cards were updated to include the Sounders logo. Email addresses were changed to @seahawkssoundersfc.com. A small detail at first glance, that decision went a long way towards establishing the Sounders credibility. They would not be an afterthought. They would be a part of an already established and successful organization. The regular meetings on the team began expanding to include more than just executives, which allowed workers to begin to feel ownership of the new team. “What they (Leiweke and Wright) did from day one,” Hanauer says, “was position this thing within the Seahawks business offices as something new and exciting. Something you not only could be proud of, but that was also was good for your career. They treated it like a top-level professional team.”

8) Along the way to their leap from the USL into MLS the Sounders were smart enough to recognize a huge community of people who didn’t just play soccer on weekends or watch their kids play. The team embraced people who lived the sport, built their days around it, and made plans to be at their favorite pub to watch their favorite team, no matter the time. Leiweke felt too many MLS teams in the past had discounted the existence of such a market in their communities, but he knew it existed in Seattle from first-hand experience, and it was those fans who become primary targets of the Sounders’ original marketing efforts. “Those trips to The George and Dragon served as the inspiration for the core fan base we were going to build around. It was the epicenter.”

9) The Sounders didn’t just hit on the idea of selling the team to the pub crowd; they’ve cultivated the relationship over the years. Their website has a list of MLS Pubs in Seattle and players, coaches, and management make regular appearances to visit with fans. Bayliss says his customers are always pleasantly surprised at how accessible the Sounders are at these appearances: “They are happy to sit down and chat with anybody.”

10) It would be a fun twist if the narrative at this point became Keller teaming up with the USL Sounders to make the jump into MLS and challenge for a championship. It would also be unrealistic. To be sure, there would be some USL guys who made the jump, but to be as good as they wanted to be — immediately — Schmid knew the Sounders would have to succeed in four areas of player acquisition. “You’ve got to find someone in the draft,” he says. “You’ve got to make sure you find someone in the expansion draft. You’ve got to do well with your foreign signings, and you’ve got to discover some guys. If you hit it in three of those areas you’ll be pretty good. Hit in two and you’re 50-50. Hit all four and you’ve got a chance for the playoffs right away. I think we hit all four.”

10a) Swedish native and long time Arsenal star Freddie Ljungberg had been signed in October as the Sounders’ designated player. It was a move that made soccer fans in Seattle (and at least one guy still coaching in Columbus) sit up and take notice. “He was huge for the franchise from name recognition,” Schmid says. “He brought more credibility to the Sounders right away. His signing and Kasey’s signing made people think ‘these guys are serious with what they’re trying to do.’ It was a statement signing.”

10b) Maybe they should. Carey’s passion for the fan vote on the status of the general manager is not just some gimmick to attract attention. By the time he met Roth, he had thought through the plan thoroughly and realized that by empowering the fans they would be building in uncommon loyalty. “It’s great because the fans are invested in the team no matter what happens good or bad. If we ever have a bad streak the fans aren’t going to turn their back. They’re going to rise up and do something about it. People are never going to go ‘Fuck this I’m not going to the games anymore.’ That’s what you don’t want. I think the vote thing will keep that from happening. Fans will say ‘We have to rally together and get rid of this GM and save the team.’ That’s what they’ll do.”

10 Things to Learn from The Monk and the Riddle [Entrepreneurship]

imageRandy Komisar’s The Monk and the Riddle is a great book discussing the reasons for entrepreneurship, weaving lessons he learned during a successful career at companies including Apple, WebTV, and LucasArts within a (fictional, I assume) story of helping an entrepreneur who struggles with securing funding for his business idea. I really enjoyed the book as I kept challenging my own business idea and motivations through what was being discussed. While the book was written over a decade ago, its lessons absolutely remain relevant today.

Highly recommended, and here are ten notable things I would like introduce from the book, with my notes in[]:

1) VC’s like to target markets with big potential, especially tiny markets growing quickly into big markets, like the Internet. If it’s a small market, the chance for a portfolio-levitating reputation-making home run isn’t there. A VC’s portfolio return is an average of all its investments, so he’d rather have a huge winner and some no-ops than a bunch of minor successes.

2) The principal use of the plan [for new startups pitching their ideas] comes at the beginning, I explained, to show that the founders are intelligent, capable of structuring the business concept and expressing a vision of the future. Later the plan can help track problems that may reflect on the startup strategy itself.

3) [This is true from my experience in Vietnam] …most VCs (even if they insist otherwise) simply don’t have the time to give close management attention to the companies they’ve funded. In addition, in contrast to the original VCs, who often gathered years of operating experience prior to becoming venture capitalists, many partners in today’s firms have no executive management experience. They could be working on Wall Street as easily as on Sand Hill Road.

4) You have to be able to survive mistakes in order to learn, and you have to learn in order to create sustainable success. Once the market is understood and the product is fully developed, then move fast and hard.

5) Passion pulls you toward something you cannot resist. Drive pushes you toward something you feel compelled or obligated to do. [I must work hard to make lots of money and be financially secure for my family] If you know nothing about yourself, you can’t tell the difference.

6) Entrepreneurs, in my experience, don’t like to be told they’re wrong. It isn’t in their dispositions to sit and listen to that kind of critique. That’s why many ideas in this Valley happen against all common sense. It’s good when entrepreneurs are a little bit deaf and blind, but if they’re completely deaf and blind – and many are – they’re unlikely to learn enough from the market and their advisors to make their vision a reality.

7) Management is a methodical process; its purpose is to produce the desired results on time and on budget. It complements and supports but cannot do without leadership, in which character and vision combine to empower someone to venture into uncertainty. Leaders must suspend the disbelief of their constituents and move ahead of even with very incomplete information.

8) This was a quintessential “Brave New World” company. Despite its rapid growth, WebTV’s business model was still largely undefined. No one knew how it would finally make money. The hardware was far costlier to make than our wholesale price to distributors. Profits would have to come from services provided through the box, but which services and at what price were still unclear.

9) Where’s what I tell founders in the companies I work with about business risk and success, and what Lenny needs to understand: If you’re brilliant, 15 to 20 percent of the risk is removed. If you work twenty-four hours a day, another 15 to 20 percent of the risk is removed The remaining 60 to 70 percent of business risk will be completely out of your control.

10) Work hard, work passionately, but apply your most precious asset –time- to what is most meaningful to you. What are you willing to do for the rest of your life? does not mean, literally, what will you do for the rest of your life? That question would be absurd, given the inevitability of change. No, what the question really asks is, if your life were to end suddenly and unexpectedly tomorrow, would you be able to say you’ve been doing what you truly are about today? What would you be willing to do for the rest of your life? What would it take to do it right now?

10 Things to Learn from Working at the Ballpark [Baseball, Sports Jobs]

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Working at the Ballpark: The Fascinating Lives of Baseball People from Peanut Vendors and Broadcasters to Players and Managers by Tom Jones should be first on the list of books to check out if you would like to work in the sports industry, and most especially, baseball. It’s the sports equivalent of It’s a Living by Dr. Gerard Sasges, which discusses the working lives of Vietnamese.

Almost any job you might imagine, from the famous (ball player) to (seemingly) mundane (ball boy), is in the book as Jones interviews people across multiple baseball clubs about their jobs. Interviewees simply talk about what their working lives are like, and overall, two things stand out – 1) they love their jobs 2) working in Sports is long hours.

The book serves as a listing of all the things you could do in Sports, with the interviews providing insights on what day to day life is like, the pros and cons, and also implicit tips to consider on how you might want to differentiate yourself when applying. I really learned a lot from the interviews with specific coaches (do you know the full extent of what a bench coach or 3rd base coach does?) as well as team staff such as the Director of Entertainment (Baseball is entertainment today, not just a sports game. The ball park is like an amusement park with lots of side attractions for the family), Groundskeeper, and the Traveling Secretary.

To list the 10 best things to learn was a bit difficult since the book covers so many jobs, but I hope you’ll still gain some insights and check the book out. I’ve added job descriptions in [] to clarify each excerpt.

1) [Managing General Partner] “Baseball teams are small businesses. We’re not talking about General Motors here. We’re talking about $150 million or so in revenue. That’s not a real big business. The profile we have is so extraordinary that it’s a great platform for representing the city, and leading other businesses in the sense of corporate citizenship. Many people think that professional franchises are one indice of municipal status. So in that sense, I think it’s more of a quality of life issue than it is an economic, or standard of living, issue. I think baseball, and other professional sports, do have an economic impact, but I think it’s far surpassed by just the psychic benefit that’s derived from a city from being associated with a successful professional franchise. It can be an economic catalyst, but more importantly, I think it can be a cultural societal leader.”

2) [Senior Director of Player Personnel] You’re risking years of your life trying to get to the major leagues, and you are not really getting there because of the money. You’re getting there so you can say that you’re a major leaguer. If you’re not going to be one of those guys that really makes the money, you’re risking possibly ten years of your life. You’ve got a good chance of coming out of high school or college and being twenty-eight, twenty-nine years old, and really have no skills for the job market.

3) [Pitching Coach] The lowest batting average in the history of baseball is [against] the down-and-away strike. All the great pitchers own that part [of the strike zone]. When you own down-and-away, that allows you to go to all the areas of the strike zone.

4) [Manager] nobody should ever beat you mentally. I think that’s the thing that separates the good teams from the mediocre teams. How do you cultivate that? You just have to talk about it a lot, especially in extra-innings games where you get into a tough spot, then you really see guys bear down. They get through it and come out on the other side and win the ballgame. Then you point to it and say, “We were mentally tough tonight.” It becomes a part of the culture.

5) [Player] about the pureness of trying to hit it right. I like to hit, but the end-all is the feeling of when the ball is hit perfect—just like a golf shot if you smoke one right down the middle of the fairway with your best drive. That’s the physical feeling. What that feels like is the same in any sport: same with a tennis racket, same with any ball-striking sport. What that feels like is what it’s all about. That’s what I’m after. A home run is the one that is the ultimate. But the fact is if you strike it, it feels the same on a home run as it does when you strike it square on a low liner. That feeling is indistinguishable to me.

6) [Umpire] I guarantee you very few people actually know the rules. There are some that are tough enough where it would take four umpires together to make a decision. Let’s take interference for instance. In the rulebook, it says, “No runner shall advance or score on interference.” It’s plain and simple. There it is. Four pages later, there’s a situation where there’s interference and a guy can score. Well, wait a minute; you told me no one could ever score on interference on page ten, but on page twenty-two a man can.

7) [Ticket Reseller] They used the term “ticket scalping.” When I said, “This is wrong. I see what you’re doing here,” they came after me. So I’m in court, and it was “Scalper-this, John-scalper that.” I stood up and I said to the judge, “Listen, that term is a racist term. It doesn’t belong in your court-room. It’s denigrating to the American Indian. It’s like calling an Irishman a ‘bogtrotter’ or a Jewish person a ‘kike’ or a black person a ‘nigger.’” I said that he shouldn’t have that kind of a term in his vocabulary.

8) [Writer / Journalist] So, yeah, what often happens in sports is you will quote players accurately and you will quote them in context, but then they’ll get grief from their teammates or from the organization, and they’ll come back and claim that they were taken out of context or that was supposed to be off the record. It really is smart if you’re talking to a player on a touchy subject to lay the ground rules, “Is this off the record? Is this on the record? Is this on the record, but not for attribution?” Just to make sure that you’ve got your bases covered with the player.

9) [Groundskeeper] Once the game starts, it’s in the umpires’ hands. The umpires make the call. Any other time, it’s up to the general manager and the groundskeeper. Most of the time, the groundskeeper decides, “Am I gonna put it on overnight, or not?” If we have a chance of rain overnight, and you don’t cover the field and you get to game time and your infield’s too sloppy to play—but it’s not raining—then you lose the game, and it’s the groundskeeper’s fault. You don’t want that to happen to you. You could lose your job whether it’s in the minor league where you might have five thousand dollars at risk, or whether it’s in the major leagues where you have over a million dollars at risk. So that’s always on your mind. People say, “Luke, why don’t you put the tarp on every night just to be sure?” Well, if you do that, the grass will die. You’ve got to really manage it properly. When you put that tarp on, especially in the summer, it’s creating like a big incubator dish for disease, and the next thing you know you’ve get a big square dead spot out there that’s 170 feet by 170 feet. My rule of thumb was: If there was a 30-percent chance of a quarter inch, or more, I would put it on; if there was a 20-percent chance of an eighth of an inch, probably not. That was something that I was used to, but always dreamt about the Southwest and how those guys didn’t have to pull the tarp much.

10) [Director of Entertainment] One of the things about baseball that I feel, and I think that many people feel, is that it’s so different than any other sport because of the pace of the game, which is criticized a lot. What it allows is for you and your family to come to a game, and be able to converse while things are going on. To relax and enjoy the company of each other while still being able to follow the game, whereas, in hockey and some of the other games, you can’t do that.

10a – BONUS!) [Director of Merchandising] Like most retailers, we do a large amount of our business in the last quarter of the year, so we’re continually selling Indians product. We sell everything from shot glasses, keychains, pins, plush blankets, throws, T-shirts, hats, foam fingers, pens, pencils to three- to six-inch Grady Sizemore and Travis Hafner bobbleheads. We carry authentic merchandise for authentic fans. I mean, you can go to any other retailer and find a T-shirt or a hat, but you can’t go there and find a set of poker chips and playing cards, or golf balls. You can’t find vintage pieces like a Satchel Paige figurine in motion, where he’s actually throwing the ball. We pride ourselves on doing the things that are outside the normal retail chain.

If I am Shown on TV, Why Can’t I Buy a Clip of It? [Business Ideas]

I like to buy personalized experience souvenirs. I know that doesn’t make me special – just go to any tourist spot and see the people who want to sell a photo of you, make a caricature of you with the Golden Gate Bridge in the background, etc. You might think of a photo from a camera that flashes when you’re about to go down a steep incline of a scary roller coaster ride.

This applies to sporting events as well. For example, check out this photo taken with me and Mike and Midland at a Golden State Warriors gave nearly 5 years ago:

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At the Warriors game, you could have your photo taken, and then see it online for free or purchase a nice large glossy version for a price (probably $10 as I remember) after the game. What could have improved this photo as a souvenir was the date and a game recap (highest scorer, winning team, etc.).

But why can’t you do this for video, when you’re shown on TV? If you are at a sporting event, this could be when the camera pans over your section, you are featured on the kiss-cam, or you catch a foul ball. With so much video being captured now and the relative ease of seat tracking (in sports, it’s normal to follow and track player movements and then capture that activity into data), it should be somewhat easy to know which seats are being shown in each piece of video content. Thus would mean automated, yet new revenue opportunities after the initial investment to set up the sales platform.

I don’t have a sports example of myself, but let’s see this example of my parents on Jimmy Fallon:

(My parents are shown at the end). To get this footage, Jeff watched the show on Hulu and manually recorded the appropriate section. However, for most people, they would never be able to figure this out on their own nor would they have access to the content.

To optimize sales conversion, you would need to track contact information based on seating. Unlike the roller coaster ride, in which I visit the photo booth after I ride and pick photos, there is no easy way to set this up at the ballpark. Instead it would be better if you could email the user or contact the user directly on his/her phone, such as with the official team app. If you have linked your tickets with the team app (you essentially check in), when your seat is recognized as being shown in the video, you would be alerted and then allowed to preview it and purchase the clip directly from the app.

You would not want to ask people to come by at the end of the game as it would be too inconvenient (I want to go home!).

A clip of something nice such as the kiss-cam or interacting with a player will have more relative value and can be tagged at a higher price. Beyond that , delivery can be digital (which is virtually free for the sports team) or can be packaged into a nice gift (think of a San Francisco Giants USB drive). If you are a season ticket fan, perhaps you would be allowed to load up on the drive over multiple uses for no additional cost.

I also think you should be able to purchase a game’s highlights for games that you attend. I like to download games or keep newspapers of games that I attend so it’s easier to remember the experiences that I have seen live. I am not sure if I will ever review them again, but it’s nice to have, and I think fans would enjoy having those collections in both physical and digital formats.

What do you think? Do you enjoy personalized memories? What can sporting teams and events do more to capture revenue beyond ticket and food sales?

10 Things to Learn from Wired to Care: How Companies Prosper When They Create Widespread Empathy

imageIt has been a couple of years since I read Dev Petnaik’s Wired to Care: How Companies Prosper When They Create Widespread Empathy, so I was glad to find my notes and highlights from the reading to review. Empathy, in my opinion, is the most critical attribute to have in managing people and developing products. It’s the biggest reason for the success in my professional career thus far, and I use it to constantly reassess how I can improve in both aspects.

I think failing to talk to people, to understand why people have certain experiences or opinions, that willingness to “pound the pavement”, as I once heard a friend say, takes away a tremendous tool in your potential. Empathy allows you to accept that you (no, that guy is not just dumb) are wrong, and improve yourself.

Here are 10 notable quotes to remember from Wired to Care:

1) Based on her work, companies as diverse as Boeing, Merck, and Toyota developed new offerings that grew their businesses and differentiated their products. It turns out that senior citizens aren’t just some niche market—they reflect unarticulated needs that many of us have. When you make doors that are easier for seniors to open, you make life easier for all of us, young and old. Through her work, Pattie Moore has helped to make life a little bit more livable for people in many parts of the world.

2) [Harley Davidson] the company was on the verge of bankruptcy as strong Japanese competitors eroded market share and introduced cheaper, lighter models that undercut all of Harley’s product line. In response, Harley refocused its attention away from itself and onto the people who rode its motorcycles. They energized the Harley Owners Group into an army of evangelists. Harley transformed itself into an icon of American freedom. The widespread empathy that Harley employees had for riders helped them make a thousand better decisions every day.

3) In keeping IBM together, Lou Gerstner defied the advice of Wall Street analysts, competitors, and even some of his own lieutenants. He was able to transcend a barrage of bad information because he possessed contextual knowledge that others lacked: the experience of being an IBM customer. The existence of category specialists like Oracle and Intel wasn’t an argument to break up the company. On the contrary, it was because there were so many specialty players that an integrator was needed. Corporate customers simply didn’t want to get into the business of designing their own multiplatform technology solutions.

4) The challenges facing the makers of Tubbs Snowshoes going forward reflect an important truth of the global economy: It’s much harder to succeed when you create things for people you don’t know and whose lives seem alien to your own. When companies make products for people who live far away from them, they often make silly mistakes in their design and marketing. These mistakes are caused at least in part by linguistic and cultural differences.

5) During their heyday, U.S. automakers created programs that gave their top managers use of their latest vehicles for next to nothing. Senior executives didn’t even have to pump their own gas. At the same time, auto companies created the A Plan, which offered every employee a deep discount any time they decided to buy a new car. Those discounts applied to friends and family of employees, too. Anyone connected to a car company could buy a brand-new American car at prices below wholesale. While this made it great to be a car company employee, it also served to make people at car companies different from the rest of us. Drivers in Detroit switch cars more often and for less money than people anywhere else in the country.

Many of Detroit’s problems stem from the fact that decision makers have little incentive to try out other manufacturers’ cars. They don’t view the market through the eyes of ordinary Americans.

6) The neuroscientists called their discovery “mirror neurons” because they allow us to replicate in our heads what we see other people doing. Remarkably, mirror neurons not only light up when we perform an action, but also when we watch someone else perform an action. If you turn a page in a book, a specific set of mirror neurons lights up. If you watch someone else turn a page, the same set of mirror neurons lights up. And that’s not all. Incredibly, even if someone just describes page-turning to you, a similar set of mirror neurons will light up.

This makes mirror neurons incredibly important for learning. When you watch someone else expertly dribble a basketball, your mirror neurons start to help you learn how to get better at it yourself. On a subconscious level, we learn just by watching. The most incredible power of mirror neurons, however, is their ability to pick up on tacit information about other people. They do more than help you learn; they help you experience other people’s lives.

7) [Empathy in organizational change] Real strategy is the aggregate of thousands of decisions that employees make over time. When you improve those decisions, you improve your strategy.

8) Target corporate headquarters used to be the same way. It wasn’t unusual to see executives wearing the same clothes that they helped put on the shelves. That changed in 2004 when Target created a strict dress code requiring formal business attire. Changing the dress code created two obstacles to empathy. First, Targeteers no longer looked like their customers. Second, and more important, they now had to shop at other stores to buy clothing that was more suitable for work.

9) In its New York offices is a wall covered with hundreds of lost gloves, all hanging in neat rows. The gloves range from fashionable ladies’ gloves to construction workers’ gloves to children’s mittens. Whenever OXO employees find a lost glove on the street, they bring it into the office and hang it on the wall. It serves as a reminder of all the different kinds of people and all the different kinds of hands that OXO products need to fit.

10) They have understanding without empathy. That can result in a lot of really awful solutions. People start making geriatric kitchen devices that they themselves would never think of buying. They shrug and say that this is what the customer wants. They have some understanding of the outside world, but they still view that world as a weird place, populated by people who are not like them.