115. Miniature Golf

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If you take a drive through the coastal town of Carolina Beach in North Carolina, you'll see a lot of familiar businesses. There's a Walgreens, a CVS, a Dollar General. But if you pay attention... You might also catch a glimpse of a 15-foot-wide animatronic octopus wriggling its tentacles in the distance.

I mean, it was about 20 grand for that, but it's a wow factor. I want my kids to be able to say their dad owns an octopus. You know what I mean? Like, who doesn't want to do that, right? That's Mike Mattsinger. He and his wife are the owners of Surf's Up. the mini golf course where that octopus lives. The concept is that you're kind of surfing the whole time. As you go through each hole, we have write-ups about that hole that give you the conditions for surfing that day.

It might say the current's pulling strong left today. Be careful, you might wind up in the rocks. We have a 1974 redone VW Bug with surfboards on top of it. We have five ponds. Now we've got a 15-foot tall waterfall. Like many mini golf courses. Surf's Up has 18 holes. It takes around an hour for a family of four to reach the final obstacle. In the center of the hole, there is this mound, and there's rocks all along the mound on either side.

And if you hit it up and you leave it a little short of the peak of the mound, you roll down to the right into the water. The people that get most upset about it... are the good golfers. They've got the collar shirt and their own putter, and then they're angry at me when they leave because it's humbled them, you know? It's a tough course. Surf's Up is one of around 5,000 mini golf courses in the U.S.

It's a quirky industry full of quirky people, mini golf course designers, construction firms, turf installers, and architects of artificial waterfalls. Bringing a course to life? is complicated and pricey. But once it's up and running, it can be a financial hole in one. Someone comes in and you hand them a putter and whether they pay a dollar or they pay $100, it doesn't cost you anything, but has the opportunity to be a very profitable business. For the Freakonomics Radio Network.

This is the Economics of Everyday Things. I'm Zachary Crockett. Today, miniature golf. The game of golf first came about in Scotland during the Middle Ages. By the 18th century, it was a formalized sport. But it was a sport that required a ton of land. And as populations urbanized, people started to think about ways to consolidate certain parts of the game.

into smaller spaces. The earliest adaptations were more of a miniature version of golf courses. That's Sal Connaboy. He's a mini-golf expert. It really started as a business venture in the early 1920s with Tom's Thumb Golf. They created miniature golf courses with whimsical themes that you would picture in your mind as...

an old school style miniature golf course. So these were sort of like the precursors to your classic windmill and artificial turf courses. Yep. Yep, exactly. That kind of carried through the 20s and the 30s. It became very popular in places like New York City on rooftops. It was all throughout the city. In the post-war 1950s, the pastime surged in popularity.

You had national chains like Putt-Putt that emphasized real golf skills. And you also had themed courses with all kinds of gimmicks. Castles, bridges. and those giant mechanical clown faces where you had to hit the ball into the open mouth at just the right moment. Today, a lot of those older courses are still around, but you may also notice a more modern type of mini-golf experience.

One with more water and a lot more space. Our average size course is probably around 18,000 square feet for an 18-hole course. And it's probably going to have a multitude of water features. Sal is the president of Harris Miniature Golf. He co-owns the company with his wife, Katie Conoboy, who serves as CEO. We're still able to create...

fun obstacles on the course without having things like windmills. So we like to include waterfalls and streams on a lot of our courses. And then we also have other things like sand traps along the side of the hole to keep it interesting. Harris was started by two entrepreneurs in the 1950s and was later purchased by Katie's father, Rich. Today, it's one of the nation's leading mini golf course design and construction firms. We have built over...

900 miniature golf courses. We average around 25 courses per year. The company has built mini golf courses all over the world in all kinds of locations. Yeah, I mean, the Caribbean, Australia. Ireland, Saudi Arabia, Germany, and then we've built in 49 states except for Alaska. I would say probably half of our customers build standalone golf courses while the other half are part of another facility.

You have campgrounds, ice cream stands, restaurants, bars, beer gardens, resorts, you know. By the latest estimate from the National Golf Foundation. Some 18 million Americans play mini-golf each year. Total revenue across the industry is now north of $2 billion annually. And it's likely to keep going up. In recent years...

The space has been flooded by a number of corporate operators, like Puttery, Putt Shack, Drive Shack, and Popstroke, which is co-owned by Tiger Woods. But Katie Conoboy says that many of Harris's clients... are independent operators who just want to start a fun business. A lot of our golf courses are maybe an older retired couple who are kind of looking for what's next. We've also had people who are looking to get out of their corporate jobs.

And want something that they're going to really enjoy and be able to put their full time into and have fun when they go to work. And then we have a lot of entrepreneurs who are looking to start larger entertainment centers or a resort owner who needs to have. the greatest amenity to add to their resort. These clients usually come to Harris after they've secured a plot of land for their course. And the process begins with a comprehensive design plan.

So both of our designers are landscape architects by background. I don't think either of them had planned when they went to college that they were going to be designing and building miniature golf courses. Fortunately, they are really amazing at it. The designers start with a topographic survey of the locations where the mini-golf course is being built, a map that details elevation, trees, and other natural features of the land. Then they design each hole.

using software like AutoCAD and Lumion. While every course is custom-built, Harris has some signature hole designs that it often reuses if the space allows for it. Sal has a favorite. So this hole, it's pretty much a dog leg left with a stream running through the center of the hole. You have a little tiny bridge to shoot over the stream, and it's designed to make the ball go into the water. So you hit the ball.

The ball goes into the water and you think you lost the ball, but it continues down the stream. You're chasing the ball. All of a sudden it goes under a log and it pops out onto the green down on the other side of the hill. So that's one of the holes that we tuck in the center of the course because people are going to play it again and again. A decision that's made early on is whether to build a heavily themed course or something more basic.

We try and convey to our customers, you should always be thinking about your return on your investment. In a heavy tourist area where you're competing against other courses that have castles on them or have Scooby-Doo features. Of course, you're going to need to compete with that. In smaller markets, it might not be that necessary. Regardless of what the client chooses, part of the challenge in mini golf course design is striking the right balance and difficulty level.

You want a course that's easy enough for a five-year-old to play, but challenging enough to give mom and dad a few head scratches. So some of the easier holes are going to be... A little bit more straightforward where you can put the ball almost directly to the hole. But we will offer banks around the side or planters that can get in the way to make sure that the hole is still interesting and fun. There's different obstacles.

The classic pipe shot where it goes into a pipe and you might think it's coming out in one spot and comes out in another spot. That's kind of classic miniature golf, right? We're constantly creating multiple different angles on a shot. It's not just about designing fun holes. It's about knowing what order to put them in. Too many difficult holes in a row might cause traffic jams on the course. In the beginning.

We need to have some of those easier, faster playing holes so there's not a buildup for customers to get onto the course. And then as you're playing it, there needs to be a bit of an alteration between a hole that takes a little bit longer to play with the easier.

quicker playing holes. That makes it more fun for the people as well. You don't want anyone to get frustrated and kind of feel like, why am I here? This isn't fun. I'm not good at this. We want everyone to feel like they are successful.

It usually takes around two to three weeks to design a mini golf course. And once the plans are in place, the project enters a four to six week construction phase. Harris has an in-house team of workers that travel all over the world to build courses. These crew members that we have are extremely specialized tradesmen. They're going out there and they're creating art.

They have to be able to visualize exactly how the hole is going to play. And then we do a lot of specialized rock work like you would see at Disney or Universal. We recently built a 20-foot... volcano in Cape Coral, Florida that shoots a ball of flame 30 feet up in the air and has three waterfalls on it as well. How much does a volcano like that cost? All said and done with the pyrotechnics and...

Everything that has to go into that, you know, there had to be propane tanks put into the ground. It could get up to about 500 to 600,000. Once the site is prepared. The concrete walkways are poured, the water features are installed, and any volcanoes are done. It's time for the turf to go in. And that's an entire specialty in itself.

The turf that we select for our courses is a polypropylene turf, and it's a commercial grade turf that holds up for seven to 10 years. And that's really important with the high traffic. that the courses are going to see and then also withstanding any type of weather rain snow and things like that we use the best miniature golf carpet installers in the world

You know, you wouldn't think that that's a specialty, but it definitely is. And we use them. Do you have a rough idea of what it would cost to carpet like an entire 20,000 square foot course? It's probably around $30,000. That's a relatively small part of the overall cost to design and build a mini golf course. It depends on what somebody is looking for, from three holes to 36 holes with all the bells and whistles.

On average, it's around $300,000 to upwards of $2.5 million. And how long does it generally take a new owner to make that upfront investment back? Most of our customers tell us that they're able to pay back their investment within the first two years. So once the course is up and running, what's it like on the other side for the new business owner? That's coming up.

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When Mike Matzinger moved to the coastal North Carolina town of Carolina Beach six years ago, he was already a seasoned entrepreneur. I started my first business when I was 14 years old. It was just a little lawn business in South Jersey, as a matter of fact. And I always knew that I wanted to create things and work for myself. He owned a chain of mattress stores, ran one of the biggest poker leagues in the country, started a bar trivia business, and even dabbled in board games.

We actually had a top 500 seller on Amazon called Really Karen. And it's a game where you get to go around town and act like a Karen for the day. The more people you make cry, the better chance of winning. After his move, he was looking for a new venture. Sitting on the beach one day, a friend suggested building a mini golf course. I just immersed myself in everything I could learn about the miniature golf business and decided after five days that it was a good chance we were going to do this.

One of the things that was very interesting and really kind of turned me on about it was that I didn't have a cost of goods sold. Of course, you lose some balls or some putters get broken or the course takes some abuse, but you didn't have to worry about carrying a lot. lot of inventory and the high risk of that. Now, it's a huge upfront cost, of course. That upfront cost started with the land. Some many golf proprietors lease land. Matt Singer chose to buy it outright.

It was about $600,000 for the land, for an acre of land. Matt Singer then brought in Harris Miniature Golf to design and build his course. He says he paid them around $500,000. But the total cost, including leveling the land and installing underground utilities, was significantly higher. In addition to the 18 holes and the $20,000 animatronic octopus,

He chose to put in a two-level tiki bar that serves beer and wine. All in, he spent around $2 million. Matt Singer's course, Surf's Up, opened for business earlier this year. And the first decision he had to make... was how much to charge for a round of mini-golf. In middle America, a course might charge around $10 per person. In a resort town, there's a premium. Carolina Beach is a two-hour drive from Myrtle Beach.

a city that is often called the mini-golf capital of the world. The region has more than 30 mini-golf courses in a 60-mile stretch. Surf's Up is priced on par with those courses. $15 for adults and $12 for kids. Every weekend during the summer, the doorbell rings and there's the new people. What do they want to do?

They want to play mini golf and they want to go to the beach and they want to go to the aquarium. All the normal things you do when you're on a beach vacation. The next thing he had to do was think about how to manage the flow of foot traffic. It takes around an hour for the average person to play a standard 18-hole mini-golf course. And the rule of thumb is that you don't want more than 90 people playing at any given time. That's roughly one party of five at each hole.

But Batsinger learned that mini golfers don't always play in an orderly fashion. I did the math. I said, OK, we need to have 90 putters. And when we first opened, my son was there. And I get a text, Dad, we're out of putters. What I didn't realize was that I only took into consideration there would be 18 groups on the course at a time. I didn't consider...

groups waiting in between holes. That was one of those big aha moments. And so I think now we have 200 putters or something. We haven't run out of putters in a long time. In a way, running out of putters is a good problem to have. Each one of those clubs represents a small sliver of revenue. You don't have a huge amount of fixed expenses, so the break-even is very, very low on a daily basis. We have to do $500 a day.

to break even for the day. Now, that's incredibly low. I'd rather not share our best day, but I will tell you, it is significantly higher than that. In many places, including North Carolina, mini golf is a seasonal business. We are six months a year full open and then six months a year limited hours. We were an hour wait in the summertime every day.

And then as soon as Labor Day hit, it was like this massive depression I was in. Everybody's like, are you OK? I'm like, we're not packed. The typical Harris mini golf course generates 250,000. to $500,000 in revenue per year. And as Matt Singer says, the fixed expenses are pretty low. Most courses only have around two employees on shift at any given time, earning somewhere around minimum wage.

And the cost of the equipment is negligible. Your standard mini-golf putter, ordered in bulk, runs about $14 and lasts five years. Those classic colorful balls are around $1 each. And of course, can never have too many of them on hand. We have this one hole that people just whack it too hard and it goes through our fence. And we have this massive ditch right next to our course. It's totally overgrown. You don't want to go in there.

I don't know what's living in there. And so we always joke that at some point in time, we're going to find $10,000 worth of golf balls in there, you know? is the maintenance of the course. The water systems that power the ponds and waterfalls generally have to be emptied out two to three times per year. And that fancy $30,000 turf needs constant love and attention.

If you're the kind of person that really doesn't like vacuuming your 2,000 square foot home, do not build a mini golf course. All 18 holes get vacuumed twice a week. How long does it take to vacuum the whole course? It takes about an hour and 15 minutes to an hour and a half of straight vacuuming. There aren't any shortcuts for manual labor like this. Minigolf generally isn't a business that can be optimized with technology.

Matt Singer has experimented with things like digital scorecards, but he says around 80% of his customers still want to write their scores by hand. Part of the mini golf experience is jabbing yourself in the leg with that pencil. figuring out how to carry a beer and a scorecard at the same time. More technology doesn't necessarily make it better. You don't want everybody on their phones, right? You're out there, you're having fun with your friends and family.

The social element is also part of the appeal that draws operators like Mattsinger to mini-golf. Katie and Sal Conoboy, the owners of Harris Miniature Golf, say that the business of designing and building courses...

has never been better. The demand right now is higher than it's ever been before. Why do you think that is? You know, after COVID, there was a big boom of people wanting these outdoor activities. And once that hit, it hasn't slowed down. People are looking to do something different. You know, they're looking to get out of their normal day to day. And this offers that, you know, running a miniature golf business is the dream. For Mike Matzinger, there's only one downside.

Since building his course, he hasn't had much time to improve his mini golf skills. I hadn't played mini golf in 10 years before I started doing this. I'm there for the fun. If you didn't keep score, it wouldn't matter to me. But no, I am. Definitely not a very good mini golf player. You don't have to be good at mini golf to open a mini golf course. For the economics of everyday things.

I'm Zachary Crockett. This episode was produced by me and Sarah Lilly and mixed by Jeremy Johnston. We had help from Daniel Moritz Rapson. And special thanks to Drew Heffelfinger for suggesting this topic. All right. Until next week. You'll never expect the grandparents out with their grandkids and how competitive that could get my grandpa used to clean me up on the mini golf course the freakonomics radio network the hidden side of everything Stitcher.

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