Pivot #2: Peter Forsberg's Crocs, The Pivot Framework, Ride the AI Wave

1st Period - The Pivot Framework

It's daunting figuring out the rest of your life after hockey. Whether you’re figuring out a new career or trying to navigate your current career, mental frameworks can help sharpen your focus. Enter the Pivot Framework.

The three-circle venn diagram represents the overlap of three concepts:

1. What skills do you have?
2. What skills are in demand?
3. What are your interests?

If you live your life in the shaded region, the overlap of the three circles, it is very likely you’re leading a life of high well-being. Aim for the shaded region--an in-demand profession that you excel at and find interesting.

SKILLS
When reflecting on your skillset, ask yourself, 'What am I good at?' Do you have a natural talent or expertise outside of hockey? This can range from hard skills to soft skills.

Soft skills – communication, critical thinking, leadership, problem solving, conflict management, creativity, persuasion, organizational, etc.

Hard Skills – writing, coding, analytics, carpentry, financial modeling, accounting, plumbing, foreign language, etc.

Another way to think of a skillset is being a subject matter expertise. Become an expert in a field or topic that people would come to you to learn. If you do not have a skillset outside of hockey that you can monetize, get one--become good at something. This holds true, even if you want to stay in hockey after playing.

DEMAND
Challenge yourself to think about which way the world is heading. In 5, 10, 20 years, how is the world going to be the same or different? Now you're starting to develop a worldview and self-asses how you fit into that worldview. Another way to reflect on this topic is asking, "What are people willing to pay you for?"

Here's a scenario. Who's done better financially over the past decade? A highly-skilled salesperson with excellent communication skills who works in the newspaper business OR an average salesperson with average communication abilities who sells enterprise software? The average dude working in software. Point being, go sailing with a tailwind, not into a headwind. Over half the battle is focusing on the right place to apply your skillset.

Read, talk to people, pay attention, and think about the tailwinds in the world and do your best to align yourself accordingly.

INTERESTS
Understanding your interests is a useful compass to help navigate areas you'll find success financially. First, let me caveat this by saying the Interest circle in the venn diagram is a dashed line for a reason. In my view, it's a 'nice-to-have' if your professional life lines up with your interests. The adage "follow your passion" is a little bit bullshit. The CEO of Waste Management is James Fish. He's been at the helm of the company since 2016. Do you think James grew up enjoying garbage? I'm going to say probably not. But, James is likely a high aptitude leader and enjoys applying his skillset at a large corporation like Waste Management. My example is a bit tongue-and-cheek but point proven. You don't necessarily need to love the content of your work, but I bet more often than not, if you are successful at your work, you learn to love it.

Having said all that, if you are starting with a blank canvas, exploring your interests is a fantastic way to engrain yourself professionally after hockey. Hockey players often say they only like hockey. It's all they know. That's lazy. Do you pay video games after practice? Great, the gaming industry is massive and growing. From e-gaming to product development to sales there are so many areas a person could venture into with gaming, and it is a huge head start if there is genuine passion for it. A lot easier selling a product you enjoy and understand.

Keep the Pivot Framework in mind as you navigate your career.

2nd Period - Ride the right wave; don’t have to be the best surfer

If I had a $1 million to invest, I’d create my own venture portfolio investing $100k in 10 different companies working in artificial intelligence (This is not investment advice). I think you’d have at least one 10x winner, a loser or two, and the majority would be 3-5x winners.

Artificial intelligence is the wave. A massive wave that everyone is looking to surf. We are in the midst of an arms race among corporations and capital holders to invest, develop, and implement AI. It’s early innings of what is akin to the internet wave of the late-90s and early-2000s. It’s like being able to invest in nascent Google or Amazon.

Most importantly, you don’t have to be the best surfer. You don’t need to have a degree in computer science or be the best AI programmer or be the best salesperson. Just be able to spot the wave and get in the water. As long as you’re in the water, the wave coming will lift you up. This is a crucial point. Remember my newspaper salesperson vs software salesperson from above.

There are so many ways to ride this figurative AI wave. All industries and most all professions will be impacted. Everything from law enforcement to manufacturing to finance will be impacted. Some jobs within these industries will become obsolete from the infiltration of AI, but many will benefit, and new types of jobs will develop that do not exist today.

If you do not have the $1 million portfolio to invest, you should be contemplating how your career can ride the wave. How can you best position yourself to benefit? This could require a career change all together or you being the one that implements AI in your current business. Study, learn and assess the potential impact.

3rd Period - Peter Forsberg / Crocs

Peter Forsberg's off-ice earning have been something of folklore. While earning over $84 million (Cap Friendly) in the NHL, it's been rumored that Forsberg's earnings away from the rink, notably in Crocs shoes, are higher. It wasn't until Forsberg's interview with Spittin Chiclet's (Youtube), we got a glimpse of Forsberg's business endeavors. I'll attempt to weave together the mosaic of what Forsberg has going on.

• "Have to do something after hockey" (1:34) - Even Foppa understood the inevitable. The game ends for everyone and it's critical to occupy your time productively when you are done. Forsberg acted early, too, alluding in the interview that he was working on "side businesses" throughout the last 8 years of his career. Everyone can do this. Work on a little something on the side. It doesn't and shouldn’t take most of your time, but the earlier you can prepare and have a life after hockey ready-to-go, the easier the transition will be.

• Build relationships outside the game - In describing the genesis of his involvement in Crocs, he points to Tom Doran, a friend he met from Boulder, Colorado. The pair clearly have a solid business relationship with Forsberg mentioning Doran previously helped him with a skate sharpening business. Doran, an early employee of Crocs, got Forsberg involved in the funky sandal company.

• Leverage your strengths and take economics - It sounds like Forsberg worked out a deal where he received exclusive distribution rights to bring Crocs to Scandinavia, which I interpret as he got a piece of the unit economics as well as equity in Crocs. This is a guess on my part. Forsberg's strength is clearly his likeness among Scandinavians, which combined with the distribution support from Crocs, he was confident he could sell the shoes. Not everyone has Peter Forsberg’s name and likeness, but everyone has strengths that are value-add to situations. If you don't have a name or capital to bring to the table, sweat equity in the form of a value-add skillset is the next best thing.

So how much did Forsberg make with Crocs? Here’s my best guess. His earnings were comprised of two parts 1) Equity shares in Crocs (Ticker: CROX) and 2) A take-rate based on sales of Crocs in Scandinavia. First let’s try to guess the equity. Based on SEC filings from CROX IPO in 2006 it looks like Forberg’s old buddy Thomas Doran held nearly 257k shares

I’m guessing Forsberg did not receive more shares than Doran. For the sake of simplicity, we will assume Peter had 250k shares of CROX. At IPO, the stock traded at $20 per share, which means Forsberg had a cool $5 million in equity. Here’s the CROX stock price chart. You can decide when/if Forsberg sold his hypothetical 250k shares.

If he still has the shares today, they’re worth a little over $20 million, but for much of his hold period (when Crocs became uncool) they traded below the initial IPO price. This also does not take into account any additional equity Crocs may have given Forsberg along the way. A lot of variables, but finger-in-the guesstimate suggests Peter walked with $5-10 million in CROX equity proceeds (before-taxes).

Now the distribution part of his earnings. In the Chiclets interview, Peter makes it seem like the endeavor was wildly successful and states they sold 500k pairs of Crocs in his second year of distribution. To calculate his earnings, I am making several large assumptions: 1) Forsberg distributes Crocs from 2007-2016, the year 2007 being the year he sold 500k 2) Annual growth in sales is 10%, which approximates Crocs historical sales growth 3) The price for Crocs is $50 for the entire period and 4) Forsberg gets 20% of the per unit price. Here are the results.

Over the 10-year period, Forsberg made nearly $80 million as a Crocs distributor. Combined with his equity compensation, Peter Forsberg possibly earned $85-90 million from Crocs. I can’t caveat enough that I made some large assumptions throughout the analysis, but I feel pretty good about this number range because I’ve always heard Forsberg made more from Crocs than he did in the NHL, so our $85-$90 million guess jives well with his $84 million NHL earnings number. Even if you slice this guess in half, it’s pretty incredible.

There are some final learning lessons to close.

• Rinse and repeat – Like I said earlier, Crocs was not Forsberg’s first business endeavor with Tom Doran. They did something else together. In the interview, Peter alludes to a skate sharpening business and some other ancillary business dealings. I’m willing to bet those first ventures were not as successful as Crocs, but it’s those early reps that helped Forsberg get it right with Crocs. The early reps got Forsberg involved and in the business game. It might not be the first venture you do that makes it big, but learning and experience compounds. Do something that allows you to compound your skill set.

Sticking with the rinse-and-repeat theme, Forsberg is doing this exactly, today. It seems he’s taken the blueprint from Crocs and applying it to Inuikii, a European luxury footwear company. He likely has Inuikii distribution rights to Scandinavia, equity in the company and he’s a true strategic partner, in that he’s bringing his likeness and experience from Crocs.

Checkout the Inuikii brand presentation. Forsberg mentioned on the second page. Here’s Inuikii featured in Vogue Scandinavia. Look at that handsome devil posing in the last photo. We don't all have Peter Forsberg's name and likeness, but there are lessons from his story that are applicable to our own pursuits.

Game Notes

• Former MLB Pitcher, 1st Round Draft pick, turned financial advisor, Jake Turner breaks down MLB player retirement benefits
• A Minnesota hockey coach is one of the most important people in the Republican party
• U.S. weighing record $1 billion loan for massive lithium mine in Nevada... the arms race for battery production inputs is nuts.
• Amazon's answer to ChatGPT
• AI is now cooking steaks
• Even Brock Purdy can't afford San Francisco
• 11 little habits of highly successful people
• The latest fitness trend: rucking
• Americans are obsessed with Birkenstocks. (I have two pairs)
• How many times should you wash your jeans? Levi's CEO will tell you

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