Friday, April 24, 2015
How ScoreStream Is Crowdsourcing Its Way Into High School Sports Media
Story by Benjamin F. Kuo
In the world of sports, getting high school sports scores have always been an issue for local media, such as newspapers and television stations. In the age of the smartphone and social sharing, San Diego-based ScoreStream (www.scorestream.com) thinks it has figured out how to tap into that new world, and connect all that social activity with the media. We caught up with serial entrepreneur Derrick Oien, who is CEO of the company, to learn more.
Tell us a little bit about this new startup?
Derrick Oien: We started ScoreStream three years ago. I was at MP3.com, and then Intercasting. We sold both of those. Chumby was a bit of a slog, trying to figure out a way to fix it. After Chumby, I was EIR for Avalon Ventures, and was looking at a couple of different opportunities, ranging from 3D printing, to Machine-to-Machine communications, medical IT, and sports there. While there, I was approached by a guy with an idea around sports statistics, and we spent about two months to figure out what was interesting about the sports market. We came up with several things that were characteristics of the sports market, number one being that it was a place that venture capitalists were just not excited about. That was actually good for us, because we did not want to be in a place like photo sharing, where they are hundreds of startups being started by lots of people. It's actually nice that there is a shortage of capital for sports startups. The next thing was our exit partners on my prior firms had all been media companies, and I had worked with those media companies for many years, and know how they work. The last one, is that most sports companies were founded by former athletes, and not by technical people. So, that means that the technology from those companies is not very strong, whereas our technical team has been working together for fifteen years.
We started the company three years ago, with our first season of football, and we scored 2,000 games in real time across the season. That's not much, since there are 7,000 football games every week, but it enabled us to take a look at the market. At the end of the season, we sat down, and said--should we keep doing this, and does it make sense? It did, and so we sat down and built a bunch of technology, and the next season we scored 20,000 games. At the end of that season, we looked at it again, said--should we keep doing this? And then we signed a deal with Gannett to power scores to their newspapers and TV and websites, and we also signed a deal with Yahoo's Rivals. At that point, is when we ended up raising a convertible note from NEA and Avalon, to prepare for the football season. We staffed up, and we ended up working with two dozen Tribune TV stations, Fox Sports West, Comcast in four cities, and Clear Channel Radio Stations, scoring 5500 to 6000 of those weekly games in real time. That went relaly well for us, and we came out of the football season excited about what we were doing.
What's so interesting about what you are doing for the media outlets?
Derrick Oien: If you think about the local sports market, people have traditionally gotten their sports scores from the newspapers. However, those local newspapers have a really hard time getting those scores, because they just don't have the resources to cover all those games. Our approach, which I describe as Waze for sports score, is the way they can cover the market. We have a number of other strategic media companies investing in this, as well, and we're now gearing up for next fall. Right now, we're in baseball, scoring 4,000 games a week, and we'll be in softball and have other deals working. In fall, we'll be announcing a bunch of news that magnifies what we're doing.
What's the magic to how your system works?
Derrick Oien: Scores come in three different ways, and we have a whole content management system to manage the process before its gets posted to the papers and powers the scoreboards for the newspapers and television stations. One part of it is an app, which is available to fans in the stands. The magic of that has been, we've been real focused on providing scores, photos, and chat, offering up real time communications to fans. If you think about sports, many people have tried to do high school, but they've tried to treat high school like they are pro or college. Pro and college teams have lots of stats, and are very focused on granular details. We don't do those stats, we just do the scores, but we also do photos and let people chat around the game. Another part of this, is we do some interesting data mining on social media. For example, last fall, during the Florida high shool football playoffs, we found that routinely 25 to 50 percent of people were submitting their scores in real time. We were able to rank users by accuracy and how good they were doing. We were also able to go to social media, and cross reference the data. We're able to take in a whole bunch of different data sources in real time, and rank those users. It's similar what we did at MP3.com, where our core engineers come from, which was trying to track the songs that got the most plays. We had to invent a lot of software to deal with fraud and tracking, and we are doing the same thing here.
As an EIR, you looked at a lot of companies--how did you decide this was the one to focus on?
Derrick Oien: It's funny, but there were two pieces to this. There are 500 million people who attend high school sporting events each year. That's 2.5 times the size of the people who attend professional events, a uge audience. The challenge is, that has been very fragmented. Although I might care about my own team, I really don't care about a team 60 miles away, and definitely don't care about a team in another state. That's a very fragmented market to capture. How people had tried to do that in the past, was they had thrown a lot of money at the problem, and hired teams to cover all of those games. We don't need to do that, because we're leveraging the crowd, which allows us to capture that fragmented market without hiring. What we're most excited about, and which is very comparable to what we did at MP3.com and in the GarageBand, user-generate kind of world, is if you give a good tool to the crowd and share it, the information coming from it will be accurate at scale. That's the only way to cover a fragmented market like this, and once you get your head around that, you see how great of an opportunity it is.
Derrick Oien: I have a couple of quotes from VCs, and my favorite one is that, for venture capital, sports is a $0 billion dollar industry. That's primarily because you just can't point to any big exits. That may be true, but economically, media around sports is a gigantic industry. There just hadn't been the opportunity or companies, at least until reecntly, when Huddle got their $75 million Series A. We were very excited about that, as it was some validation for the opportunity here. The other thing we find, is that many VCs just don't get it, and don't understand the importance of sports. We raised money from a San Diego venture capitalist, Baltimore VCs, and strategic and angel investors in Baltimore and Los Angeles. We didn't have any investors from San Francisco in our company. I think that's because a lot of people there just don't understand sports. They tend to be more technical, and it's just not a part of the tradition of that market. However, if you look in Los Angeles, in New York, or anywhere in the South, there's a very visceral appeal to sports. There's a huge audience. There's an impression that sports are like Hollywood, and very hits driven, but that's only true if you're betting on a specific team, and not the audience, which is gigantic.
What's the biggest challenge you see around this business?
Derrick Oien: I think the toughest part is figuring out the righ engagement framework. We're seeing some great engagement and anecdotal opportunities. For example, inside our app right now, we have a "cheer" button which lets you cheer for your team. One hand might be red, another might be blue, and you can see that hand move when people cheer for their team. In Florida, at some games, we were seeing fans click on that hand 83,000 times in five hours. For us, it's figuring out how to capture that kind of viral engagement. We can't go in and use your address book like many apps do. I have an address book with 2,000 people, but how many of those people actually care about my high school team? Maybe three. So, it's working through ideas and trying to create that social experience around a sporting event, where the commonality is being a fan of the team, and not necessarily the same kind of people you are connected with traditionally on Facebook and other social apps.