The Online Trend - TeamPages
My name is Evan Carmichael and every week I preview episodes of CBC’s Fortune Hunters television program and give my advice to the business owners who are featured on the program.
This weekend my wife and I watched the most recent episode of Fortune Hunters. I must admit that I’m more than a little biased on this one as I’m featured as one of the experts on the show. I also make my living online so I’m likely going to be more difficult on TeamPages than the other entrepreneurs that have been featured. Here is the official CBC intro:
“People are connecting on the web through all kinds of websites. It’s called social networking and it’s exploding in popularity. “Facebook Factor” features Mike Tan as he tries to turn his website Teampages into the Facebook for amateur sports. Web experts Leila Boujnane of Idee Inc and Evan Carmichael weigh in on Mike’s chances of success. Plus, learn the story behind the huge success of Lavalife - how Bruce Croxon attracted people looking for love.”
My Thoughts : Great Concept, Poor Execution
TeamPages is a great concept which allows amateur sports teams to be able to manage all the admin work that goes along with running a team. As many of the coaches are volunteers, I could see the TeamPages tool being a great value add to allow them to focus on having fun and working with their teams instead of being backlogged with admin work. The service allows you to set up a page in under four minutes, easily post schedules, rosters, scores, news, and photos, and send out messages and announcements with one click of a button. Sounds great right? Unfortunately the company isn’t making money.
The company has relied on advertising up until recently and are having a hard time staying afloat. In the past year, advertising rates for social media websites have plummeted. The main reason is that it’s the same people who come back to the site over and over again. They get to know where the ads are and they ignore them. It’s called “banner ad blindness”. If people aren’t clicking on your ads then you’re not going to make money.
The company wisely decided to introduce a premium service to try and charge for additional features. I love the concept! There are two problems with the company’s execution, however.
1. Not Enough Value - The company is giving away so many great features that the extras don’t seem worth it. I already get 50 photos to upload in my free package - do I really need 300? I already have the ability to upload 5 documents to share with my team members - do I really need unlimited documents? Unless you’re a hardcore user of the service, I don’t see the value in going to the pro version. Until they increase the value of the pro offering, they won’t bring in much additional revenue.
2. Not Enough Money - The pro version costs just over $50 / year. If you do the numbers, that would mean that 20,000 teams would need to sign up for the company to make $1 million. 20,000 teams! They would need 200,000 teams to pay them in order to build a $10 million business. If they want to raise the $1.5 million in venture capital they are looking for they will have to show how they can get at least 200,000 teams not only to sign up for the free version but to put down money for the subscription. To make their business more attractive they need to figure out how to charge $50 / month for their service. Keep adding in value until you’re able to charge more.
The company has also raised $650,000 plus another $200,000 for the business which has almost entirely gone into the development of the site. This number blew me away. TeamPages is an online business with no need for overhead or physical costs. It’s just the time of your programmer(s) to create the website and build the tools. Gentlemen, it’s called sweat equity. You need to put in the hours yourself and show you have something people are willing to use and pay for before you go for financing to expand. I’ve run three different software companies and we always put in our own time and effort to get through the startup phase before taking on money and burning through it. There is no excuse for having gone through $850,000 and not having a profitable business to show for it. Work from home, don’t take big salaries, use guerilla marketing, and chase after a profitable business model.
A good company for TeamPages to look at is Takkle.com. While TeamPages is trying to be the Facebook for amateur sports, Takkle.com is already the Facebook for high school sports. They got that way in part due to a partnership with Sports Illustrated. Sports Illustrated is an investor in the business and helps promote the website. TeamPages should save their money and partner up with a big brand who wants to have an online presence and has a sports based brand.
As for the coach of the year suggestion to partner up with Boston Pizza and do a search for the best coach in amateur sports in Canada, it’s a great idea… but it’s already being done. Chunky’s and TSN have already begun their promotion of the Most Valuable Coach contest.
Tune in to watch the show this Saturday at 6:30pm EST on CBC. Check all show times.
