Monday, October 01, 2012

Athleague Acquisition and Reflections

I wanted to throw up a blog post to announce a life change for myself: We recently put the last touches on a merger of my startup, Athleague, with IMLeagues, one of our former competitors in the college intramural sports web solution space. The outcome wasn't quite what we had hoped for when we started out (and is mostly dependent on the performance of the combined company), but after extended internal reflection, we ultimately agreed it was the right direction for the company and a conclusion of which we could be proud. I will be sticking around for a short while to assist with transition issues on a part-time basis and will continue to help as needed going forward on strategic and operational issues. I also thought this would be a good time to express the deepest gratitude to those who helped us on our journey: amazing and loving friends and family, eternally supportive and wise investors and advisers, and, most of all, an incredible team. You've all heard from me, but it's worth saying again (and again and again) - Athleague would not have happened without your support and hard work.

In a wrap-up email to our investors and advisers, I reflected on some of my failings in building Athleague, four in particular. A few of them asked me to compile those thoughts into a blog post that they could share, and I figured it might be a fun read for entrepreneurs and friends alike. I've edited and pasted the relevant portion of the email below, followed with a quick conclusion on what I think we actually did right. I'd love to hear comments and feedback - get in touch.

First, I just didn't get product development. While I feel the tech community has a proclivity toward taking new trends too far (everything from the "lean startup" model to the glorification of the next big thing in UX, like Pinterest right now), I certainly got the feeling as the "Customer Development" product methodology became popularized by Steve Blank's Four Steps to the Epiphany that we missed something crucial in our product development process. Specifically, the situation was ideal to closely involve customers in our product development, leaning on them for everything from roadmap feedback to actual beta-testing. With a systematic process of customer inclusion, we probably could have halved our overall development time, not to mention built an incredible community amongst our customer base (which would have had a great impact on sales, brand, etc.). Instead, we wasted precious time building features we probably didn't need. It wasn't even as if we ignored our customers completely, but we were not thoughtful or systematic about their incorporating them into the overall process. Major missed opportunity.

Second, I completely underestimated what it took to build a high performing sales and, to a slightly lesser extent, customer service operation - the procedures, the rigor, the self-evaluation, etc. - and, worse, didn't realize how to match the sales and support pieces of our company to our unique customer base (late adopter, fairly technology-phobic). It certainly hurt that our tech-savvy team was so different from our primary customers (school admins), blunting our advantage of being quite similar to our secondary customers (university students). Fundamentally, what we thought was the most important thing (technology) just wasn't that crucial to our customers. They valued human interaction: they wanted to be sold the product, and they wanted someone to talk (frequently) to once they got going. They were making a huge leap of faith in moving their intramural programs online, and the biggest barrier to making that jump was emotional and psychological. Superior features were simply a secondary concern to feeling secure about their decision to do things drastically differently than their entire school was used to doing. 

To phrase it differently, we were a bunch of diverse Ivy League and MIT-ers touting cutting-edge technology to a Heartland crowd and trying to optimize our cost structure by automation. Looking back on it all, it's absurd how poor our strategy was. We truly dropped the ball when it came to our two major touch points with customers: sales and customer service.

Third, I was blinded by a characteristic Silicon Valley hubris: assuming the best product would win. We often snubbed our noses at our main competitor (IMLeagues), whose product was consistently inferior in design and functionality. The net result was that we not only underestimated our main competitor, but it took us longer to figure out what they were doing right (sales and customer support) and copy them. The realization of hubris's deleterious effect on tangible things - operations, strategy, etc. - was a painful but important one that will hopefully serve me well in future projects.

Now, I will say here in our defense that we were outgunned - IMLeagues had boatloads of family money and spent very liberally on both sales and support (and everything else, really). And despite an order of magnitude resource disadvantage and a smaller staff, in the last year and a half, we largely figured this stuff out, out-dueling our eventual acquirers for a number of key schools (Michigan, Stanford, Arizona State, and others). But it was too little, too late, and there is no denying the mistakes above kept us from fulfilling the promise we had at the outset. 

And there were plenty other mistakes - for example, I started the company without a true full-time cofounder. It wasn't until Bo (a technical lead and co-founder in name) came on full time in 2010 that I realized what a necessary piece of the puzzle having a co-founder is - his presence provided a jolt of energy and moral authority in decision-making, which he skillfully wielded to be an appropriate counterbalance to my leadership. (To clarify, Bo was around since the beginning but had remained part-time even after we raised cash because he had a high-paying job that required a low number of hours, and we thought we could move the engineering forward faster by having our two full-timers be other people.) But when I look back at everything, though, these three mistakes jump out at me as the most drastic.

However, there is a last takeaway for myself as an entrepreneur that I believe, in the final analysis, will be the most important: the lack of ambition and self-confidence at the outset. In hindsight, 21-year-old me was approaching the entire notion of starting a company from a place of insecurity. The subconscious thinking was probably that this small vision of intramural leagues was manageable, and that once it was conquered, I'd have the ability/skills to tackle something much larger. When confronted with ideas about pivoting into larger spaces (very much a possibility early on), I didn't take them, in hindsight, primarily for this reason. This concept probably even impacted at a much more micro level - I was certainly aware of our shortcomings in product development and sales at some mental level in the early days, but the combination of fear/lack of confidence and the hubris mentioned above probably inhibited me from taking more serious action than I did. While trying to evaluate the effect of the subconscious on the conscious mind is nearly impossible, looking back on the early days, I'm reasonably confident some strain of this line of thought was clouding my thinking and execution. Thinking fearfully and small is a mistake that I'll labor to not make again.

All of that said, I think, as a team, we did one thing right that partially trumped all of our collective failures: we survived. Paul Graham's How Not To Die perfectly articulates the concept - as a start up, the longer you stick around, the greater the chance that something awesome happens. The resiliency of our team and the support of our investors allowed us to take a concept that probably wouldn't have lasted and turn it into a company that will hopefully be part of an organization that makes sports league administration and participation easier and more fun for years to come. That's not to say this is some ironclad start up concept - sometimes, staying alive just means you burn more cash and have to shut down later. But, for us, I'd say it made the difference.

I'm hoping this post marks a true return to blogging - I'll very much try to post regular thoughts on here in the coming weeks and months. Please get in touch with comments, feedback, ideas for projects, thoughts on the weather, the meaning of life, and everything in between. Thanks again everyone!