Apologies to Olivia Newton-John and her bandana might be in order here for taking such license with this post’s title, but I’ve been getting pretty excited–nay, worked up–about the evolution of the broad social networking/social media meme in the past year. Ever since the promise of social networking platforms began to bear fruit with the growth of MySpace and its followers, a nagging issue among investors in the space has been around (a) long-term, sustainable monetization of the social web and related platforms; and, (b) stickiness. Some time back I took issue in a post with a then-$15B valuation for Facebook imputed by a Microsoft investment and pointed out some of my rationale for why that lofty valuation, at least at that time, seemed wholly unhinged to reality. Yes, I took some flack. That valuation has now floated down to a more palatable $10B range based upon more recent financings and other matters, but the arguments made in that post related to my concerns about long-term utility of most social networking platforms remain fairly relevant today.
Rather than rehash those arguments here, let me point to a company that I suspect might best represent the direction of where a good piece of what we call the social web is actually going–namely, vertically. Briefly, Citron Capital portfolio company Athleon is a web-based team management platform that delivers a suite of elite sports team management applications, previously reserved for professional teams, to the mass market of coaches. These coaches manage some 535,000 high school sports teams and more than 2 million club, youth and intramural teams across the country. Not included in that number are the tens of thousands of junior- and full-time college sports programs that don’t have the budgets of Big Conference universities and, hence, can’t avail themselves of the many point solutions offered to NCAA and professional teams.
Like many start-ups nibbling at the margins of social media, Athleon began life as a social communications platform of sorts focused upon the affinity group of prep school athletes. The usual suite of applications around messaging, calendaring, pix and postings followed. As the applications rolled out by the development team became more robust and customized to the needs of amateur and prep sports teams, however, the market began to take notice. Athleon had begun to win the ‘value’ argument and, in so doing, win over the toughest and most critical decision maker in its ecosystem–namely, coaches.
While we are very excited with what Athleon has built and with the clear value proposition that they are delivering to their users–better communication, integration, greater time efficiency for coaches, cost-savings, information and media sharing– that all lead to improved team performance on the field, we are also excited about the impact that these solutions will have on the greater social web. Our view is that vertical markets have unique and idiosyncratic needs that broad-based social networking platforms are ill-suited to address. Athleon founders Brent Lamphier and Ryan Kosai have built a potentially game-changing company at the edge of a new wave of social media platforms that we feel has tremendous promise and we are privileged that they have invited us to take this ride with them.