tv Washington Business Report ABC May 24, 2015 9:00am-9:31am EDT
announcer: business news from the capital region. this is "washington business report" with abc7 nanational correspondent rebecca cooperer. rebecca: thank you for joining us for a look at bususiness and finance in the washington region. today, advice fr a cch with a winnining formula in the small business but light. in our round table, with d.c. tech in the national spotlht local innovators want to knoww why is thehe pentagon looking past its own backyard for solutions? if you had $200 million, , how would you spend it? the owner of the washington castles is one o of the region's biggggest investors, and he is using theoney to entnter the travel market. expedition inc. is one of f the
world'ss top travel mpanies. this interview was preempted last week due to the commencement ceremony, so in this week's 101, lessons from the bebest on investing. welcome. we should say the big adventure, your wife could give birth at any momentnt. salllly, thank you for holding off until we do the show. we don't know how long. we won't keep you. ellilis about adventure travel. mark: thanks for -- tell us about adventure travel. mark: it's an amazing company that has been around for 36 years. people v value experiences more thantuff. i think if e everyone shares how interesting their lives are on social media, everyone wants tlive interesting lives. we take people t to some of the world's most amazing places.
they have an amazing team, a really strong and important culture, and we are thrilled to be involved wi them. rebecca:e are goingng to show you some video of some of the different t travel advtures pele can anticipate. let't's t tart with howou chose this company. -- srt with howow you chose this company. you looked for a company you thought was worth investingng in. you told me prereviously, youou have 350 youook at seriously. how does a companget on your radadar andake it through any stage at that prprocess? mark: we lked at 350 companies over two years. we tryry to find a company that capitalizezes on trerends that we think are strong, enduring long-term. the whole graphic thing i -- psychographic thing i talked about is good. baby boors arehe
fastest-growing demomographic and history. rving them i is a terrific business oortunity. you need a g great team, andhis team iss good as it gets. then you also h have a company that has barriers, moats. whwhy is there a moat around the business? we looked at wt it takes to take people to far-flung places where ty love their expeperience. making moneyt it is rely hard, and they are t the only ones that have figured out how to do this and scale. rebecca:a: you are in a position where you can kick back and go on adventures. you invested in this companyny and you u admitted to me youou have not gone on a single one. what convinced y you, without trying it on yourself,f, that they have even more than a tech company? you have invested inot lot of successful ventures in the past. wide take on something a little more iffffy than technology?
mark: i don'tt think therere is anything iffy abouthis. their track recordrd is extraordinary. the pfitability has doubled. revenue has doubled. theyperate a basically ful capacity. the who thesis is we are bubuying a stake in the business and giving them money to build ships s and fill demand. at t this stage, i wawant to be involved with busisinesses i am passionate about, wherere i like the people. this one actually, also, i think we can do some good. what happens is,s, when you take peop to these placeces, they rerecognize how w fragile the environment is, how fragile the planet is, and ty getting gauged in ththat cause. week -- get eaged in that cae. wewe educate a help conserve the environment. it doesn't get any better than thatat. rebecca: but you are still a busissman. you want to see a return on your investment. one of the things that has been
written ababout in the wall street journal or a and elsewhere says people's happess comes from experiences, not things. renovating the house or buying a new car will not makake you as happy as goingo ththe galapagos. did you see that research and did that strike you as an investor? mark: at this point, people want experiences. we saw the scientific data. when you buy something, you get immediate happiness from it,t, but then you get used to having it around and it goes away. experiences stay with you forever. you can t think about them in your mimind, share them with your friends and family, look at the pictures. counrintuitively they arare more enduring than mateal thin. material things, you get used to. we saw that study, and it confirmed at we intuitively knew, that this s was a trend that was here and that we think will be profound for a long time in the fututure. rebecca: give advice to someone
withth capital to invest. whare some of the players that got through to you with their approach? mark anyone in our shoes see is a lot of plans. find someone who is a mutual acquaiaintance, a mutual friend who can call and make the introduction. that's the best thing you can too. it's more true in startups. actually going and getting peop's attention is sort of the first test. it's indicative of what you need to do if you are building a company. they do the same thing to find customers. rebecca: the relationship is kekey. mark: 100% the only way you can sift through that many is based onn what st of crelidibility they have. you need to have someone around who is credible or someonene who mutually says they are credible. rebecca: you are in a sse
investing in the economy, i think. sure, if you have extra income, you may want t to spendt on an experience rather than thing but if we hit economic bumps in the road luxury travel could be the first thing to go. are yoyou optimistic overallbout the economy, or do you think this could hit bumps i in the road? mark: you are a good investor. we went on a road tririp with about 80 investors and that question came up. a little later in life, this is more recession resistant. this is sothing peoeople se up for. it is not a huge extravagance. through the last two recessions this business did rely well. rebecca: it's time for the next segmt. i hope you have e time to ta one of these adventu travels. when we return, a winning
rebecca: we are back and joined again by mark. also joining us, the man i recruited to lead -- also joining us, murphy jensen, coach of the washington kassels tennis team. nice piece of hardware, coach murphy. murphy: it's unbelievable. rebecca: how many champions? murphy: five in six years. water oh in a row and counting.
going into a new season -- four in a row and counting. going into a new season with serena williams. rebecca: i love to have you guys back every year. this is an example of doing things out of passion. nore it. it's my phone. your wife isn't having the baby yet. you were a great tennis player. but you didn't expect revenue and ticket sales to take off in the beginning the way they did. murphy: the response we have had in the community has been unbelievable. well exceeding our expectations. every year it gets bigger and more people come. i think it appeals to everyone. the hardcourt tennis fan lov to come out because they love to see the players. more casual fans love to get lows and see these amazing athletes. people want to root for a washington team that does well. it appeals to a wide range of people. rebecca: it's family-friendly.
the ticket prices are reasononable. it's a good form for kids. it's a great corporate form. a lot of businesses like to bring people to watch. but every year you have had -- well, not evy year, but you have had different stadiums. the first one was literally downtown in a converted parking lot because you needed space. the other one was down by the river. now you have e moved to gw. turned out to be one of my favorite venues because it was so close that we were handed a piece of paper to pay attention because you could get hit by a return of serve. murphy: gw works really well because ey didn't take the existing stadium in just use it. mark said we have to design is for the fans, for the players for the community. they have shrunken down. you'reight on top. rebecca: i pay more attention
than i ever have. murphy: people love watching team sports and individual sports athletes playing as a team in a culture for the community. it's been unbelievable. rebecca: mark, you know this. and listen, kids, we don't advise this at home. you say you are still pumping and a lot of capital to make this work. it's not like you are a able to just kick back and live off thee revenue. but you have seen a lot of teams wrestle with dwindling fan bases fewer ticket sales, while others are taking off. tennis is not one we thought would take off. what is your trick to getting more and more people tough the door? mark: doing everything at the highest levels s of quality and making sure it appeals to a really wide range of people so that you are tapping into the biggest possible market opportunity. if you are sitting in the front row or the bleachers you have a
great experience and people treat you well. you feel like, i was treated real well and i want to go back. we have a relentless pursuit of excellencen everything we do. it permeates the way murphy leads the team and the way our layers feel, down to the way the fans fail. rebecca: the food is good. a lot of places get away withth pretty lousy food at high prices. our: it's literally everything to make this work the level it does. we do five tastings to get the catering menu right. businesses are like that. rebecca: let the record show i go to tennis for the food. coach murphy, i have to ask you you are entertainment alone, and then you have these phenomenal players. we have serena williams, martina
hingis john mcenroe. do you tell the teams this is theater, entertainment. we want people to have fun. murphy: we have a team of characters. everyone is an individual. the enthusiasm is paramount to the team. if i am not into it, why are they going to be into it? if the players are not into it why would the fans be into it? rebecca:a: one of my proudest moments was when my son smack talk to mcenroe and he looked up and said, "who is being rude and here besidides me?" mark: he went into retirement after that. rerebecca: it's a great business venture. here's to a n season. stayay with us. our roundtable''s next talking about ricoh and why it is in the national spotlight. plus, we often talk megamergers. this time, it's a
rebecca: welcome bk. it's time forhe round table. this week in busisiness newews, sties center around innonovation. one company around here is finding beer ways to innovate while one of the biggest customers is headed west. the e pentagon seems to think going to silicon valy is the solution to getting goverernment bureaucracy tohink outside the x. silicon valley should take a new look at why washington has become tech h cool. here too brereak it all dow de la
torre le the wasashington bubusiss journrnal, and the man featured in the washgton popost" makiking his cas for why e vernment just doesn't get it when comes to d.cch potential. jonathan was named a d. tech titan. welcome to you both. it's always juicy to get break news on a weekend. tell us s who is breaking up and why. della: the computer sciences corporation is breaking intnto two. one focusingn federal government, the other on commercialnd international business. we have seen this coming. forbout three years now, they ha undergone a a turnarounund. afr cutting sts everywher they had huge problelems growi revee, so this i is their sosolution. becca: we have seen the prom queeeen and prom ki breakup before. we h have seen other contractors
take a similar approach. wall street has been breathing down their neck to sw ththat th can better innovate. on the public side and the commercial side, what are the gains? della: they will tell you they can target the market, that onee division will no drag downhe other, but a lot of thisis has to do witith wawall street and what wall street is comfortable wit ththey tend to like your play. they will look at a government contractor and understand their competitors anand ththeir environment. recca: these companies seem to do pretty well withoutut wall street telling them how to do their job. della: they do great at costt cutting, which wall stet loves, s so their stocks went up. then revenue hit a wall. rebecc she has made the case for why this is a smart move. i am going to talk to o her before every breakup. what is your take?
jonathan: it's crazy relationship advice. look, wall street hates government conacting because the gornment keeps tryrying to squeeze the mains narrower and narrower. if you are in a cost plus business like lockheed martin, itit is not great place to be like a take businesss -- comompared to a a tech siness. rebecca: this has been your cause for r quite sometime. you are trying to bridge the divide between the venture capital world the techorld and the governmentontracting world. you set up a nonprofit t that does that very thing. your op-ed this week in the washgton post says to the pentagon why are you going to silicon valllley? i say ththere areome arguments toe made for doing that. you say wait aecond. tellll us about the wait a second. jonathan: the rean the
pentagon and dhs are g going to silicon valley is because they kn they need more innovation. the absolutelyo. the problem is, you don't go to a pararty where people d't want you to behere. silicon valley suffers collectivemnesia. sisilicon valley exist today because o thehe pentagon. they fororget that. inc. you tell a successful because of a contract vehicle. rebecca: explain that to the audience. they were given venture capal by the ciaia. jonaan: thcistarted them and spread the candy on the groundndf venture capital money. rebecccca: and they produced google earthth. jonath: in order for t the pentag to get t into the gate ---
to get innovatation, thehey hahave to do things. they he to change how they workith the contractors. and thehey ve to -- entrepreneurs here serve the publicic interesest. entrepreneurs in silicon valley ve to figure out how to make the next unicorn to sell to oglele. recca: i want to mention re-code, the bible for t tech crowd. theyid a whole f five-part series on whtc is notust tech c cool but -- d.c. is not just tech h cool but tech successful. della: i i think they would argue that it's not lack of technology, but the way the government buys. technology is not geographic in nature. a few sources sasaid it's not about silicon valley or washington. it the pblem is the way procurement functionsakes it
almost impossible -- notot impossible, but extremely difficult for companies to get quickly in and sell their servrvices. rebecca: we have to gto break but it is a great reread. i want to telell the audience to read that bebecae you talk about ththe ways to bridge that vide. and they are lding the pentagon know, hey, we are here and wewe are going to be the best at innovating in the very area you need. we wilill be right back with a pop quiz. stay with us.
rebecca: welcome back. it's time for the pop quiz. jonathan, who is our compepetition outhere? jonathan: it's intertional competition. it's everywhere, noju the ununited states. but re is t key. have the abili to take advantage of the f federal government, which is where every new notion comes from. becccca: you say we can take th all on. dodo you agree >> i dbecause ion't think there are any other towns that have an interest in doing business wit narrator: puerto rico's healthcare system is on life support, putting three and a half million puerto ricans at risk.
it's an outrage. puerto ricans are us citizens and pay the same medicare taxes, but receive ly half the federal healthcare funding as the othe50 states. the headlines tell the story... woman: "unfair treatment from washington." man: "thousands without medications." woman: "it's a crisis that could imperil the whole economy." narartor: washington must act now to protect care for three and a half million u.s. citizens. before it's too late. ♪
morris: this week on "govnment matts" -- >> his gl has for he mustt been to work into wall street. morris: computer sciences corporation wi become two publicly traded companies. keyy takeaways from the split many saw coming. >> a mger of the side would be a challenge, it would be time-consuming, and it would involve serious commitment from the department of juste and both agencies involved. morris: a new report suggests the f take control of the atf. >> a smooth and effective transition is vital to our democracy today. morris: the new definition of a successful presidential tranansition begins long before november 2016.6. "government matters"" starts right now. >> from abc 7 and news channel 8, thihis is "government matters." [captioning performed by the