The Exchanges

Q Well, we can, we can't bury the lead. If people heard that bio, they're going, wait a second. What's TeamSnap doing today if sports teams are not meeting?

A Well, surprisingly, we're doing better than expected. So TeamSnap, you would expect us given the fact that we are right in the middle. We provide communication and coordination services To sports organizations. So we're right in the middle of sports activity, and when activity goes to zero, you kind of expect us to, to suffer. And we did to a limited extent. We saw a quick decrease in activity in mid-March, and it flattened out and has climbed ever since. So we think part of the reason is that Our member organizations are still using TeamSnap to communicate with their members, even if practices and games aren't taking place, and they are starting to come back. But that's been the secret to us actually retaining, retaining a pretty healthy, uh, activity, uh, set and also a revenue stream.

AI assessment note: “Our member organizations are still using TeamSnap to communicate with their members”

Q Yeah, I mean, that's not easy, Dave. How'd you do that?

A Yeah, so, um, it's not easy at all, but, you know, I've, As you can tell, I've been in business for a while. And as I told the team, I say, guys, I've seen this movie before. It's not going to get, it's not going to get better right away. And we can hope it will, but we have to count on things taking a while to recover. So let's cut once and once only to your point earlier. And that means it's going to be painful. And I really salute the team because in other companies, big companies like you at a Packard, what I've seen is that functional leaders, Will often try to protect their people. So you end up with, um, essentially turf war discussions. Um, and the team was not like that at all. It was extremely collaborative. We decided I, I, I remember that I think it was March 13th that it became clear we had to do something. I grieved over the weekend and had the conversation I just described on Monday. And what was that? The 16th and nine days later we furloughed, um, a good portion of our company.

AI assessment note: “nine days later we furloughed, um, a good portion of our company.”

Q That's amazing. And who is, so who are you selling? So let's say the Bravo's Little League baseball team in Boulder is using you with 30 players, you know, 49 parents, and three coaches. Is the coach paying? Is the parent paying? Is the player paying? Who's paying?

A Yeah, it's typically the coach, or many teams have a manager, an assistant coach, so one of those two individuals sets up TeamSnap and typically pays. Sometimes they're reimbursed by the participants or parents, sometimes not. And our pricing is between, we have annual and monthly plans, but just for simplicity, I'll say our pricing is between 10 and 20 bucks a month for the entire team. So the great majority of folks on TeamSnap, the players and the parents you were referring to just a second ago, they don't pay directly TeamSnap. Now that's the original model for us, and it's still a significant portion of our revenue, but it's not the main part of our revenue. Um, increasingly, we're selling Team Snap to the club or league. They adopt it for all the teams, the Bravos, the Astros, et cetera, in your example, uh, of a local sports league, and, uh, the coaches and managers and players and parents don't pay at all. The organization pays for all of those organizations to be using Team Snap, and we provide a whole range of services in addition to the ones we originally provided for teams, For clubs, leagues, and associations. I see. Things like, you know, like registration for the upcoming season, or scheduling games. Teams don't schedule games. Clubs and leagues do.

AI assessment note: “Yeah, it's typically the coach, or many teams have a manager”

Q or minus a hundred K on around 250,000 active folks paying, but they have a really unique model in terms of freemium where they've got a million and kind of an onboarding conversion rate. That's very, very high. Did I get that right? All right. Tell me about acquisition, Dave. How are you, how are you finding new customers? What's kind of the weirdest thing you've done to onboard folks?

A The weirdest thing we've done. Um, I'm not sure. Nothing weird comes to mind. So first of all, um, we benefit from having a consumer application and enterprise applications. So we've got both. So we actually have two modes of acquisition. One is consumer, and that has two components itself. And the other is enterprise, and that's got a number of components that I'll get to in a second. So on the consumer side, people, we, we have about a 30%, 30% of our new customers come through, come to us through referrals. You're the, you're the coach of a team, or you're a player, or a parent on a team that uses TeamSnap, and you tell other people about it, and they use it. So that, that is the only way we were acquiring customers in the early days. And now that we have money to spend on marketing, we've augmented that with mostly paid internet marketing. So Google, Facebook, et cetera.

AI assessment note: “we actually have two modes of acquisition. One is consumer... and the other is enterprise”

Q Okay. And where are you guys all based?

A We have a remote model, so we have about 25 or so people in, maybe 30 at this point, in Colorado in general. We have somewhere around 20 people that show up in the office in most days, and our model is, um, we don't really care where people work, but we found that, um, on the sales side, we, we benefit from putting junior sales reps together in a pool, bullpen kind of deal, so they all learn from each other, and they kind of compete and have a good camaraderie, and then as they develop, They are free to not come in the office if, as long as they're, and they're meeting their quotas. When it comes to software developers and designers and others, many of them are attracted to TeamSnap because of our remote model. It's actually worked well for us. And then there are a couple folks, um, uh, that happen to live in Boulder and like seeing people. So they come in office all days. Uh, I happen to have had a doctor's appointment, so I'm home a little, a little early, but, but I'm in the office most days. Our finance guys are traditionalists as well. There are a couple other people who are there most days.

AI assessment note: “We have a remote model, so we have about 25 or so people in, maybe 30”

Q in 2017, you have raised capital. You've been creative with it. You haven't just gone and raised heaps and heaps of VC. I think you've used some debt strategically, but I think you'd raised, what was it, like forty three million as of two years ago? How much have you raised today, and how do you manage that story of sort of flat even during COVID at the board meeting?

A Oh, um, So we've raised forty eight million to date and our, our, uh, investors are investors in other companies too, and they see what's happening in the world around them. And frankly, they're delighted with, uh, our performance and, uh, you know, many people, many of our existing shareholders thought we were done, you know, to, to your point, uh, at the beginning of this broadcast, uh, you know, how are you managing to survive when sports activity is really decreased? And The reality is we weren't as affected as we feared from a market standpoint, and also we took action to make sure that we were financially prudent moving forward. That part wasn't fun, but we did cut expenses as soon as we realized that Is going to take a while for us to, uh, see the end of this crisis.

AI assessment note: “So we've raised forty eight million to date and our, our, uh, investors”

Q months of runway do we want to have? And every CEO is sort of taking a different approach. Some are planning for really long time, 36 month sort of timeframes. Others are planning for sort of 18 months. So when you sit down with your team before you decided what to cut and announce it to the team, how many months of runway did you want to have post cut?

A We didn't think about it that way, Nathan. We thought it more from the standpoint of what do we think is going to happen and with the crisis and, uh, what kind of position do we want to be in? So in March, the assumption we had was that our business would decrease on the order of, let me just think of the numbers here, on the order of 50%, um, through the summer. We'd see a slight trickle in the summer, and then we thought that we'd see a gradual return during the fall to, uh, to 70%. Participation. So only 30% down in the fall. And, um, I'm not sure whether that forecast will hold out, um, but we actually have exceeded it so far. Significantly. Very significantly.

AI assessment note: “We didn't think about it that way, Nathan.”

Q Now you launched this tool back in 2009. I assume you've done a lot of pricing tests since then. How are you priced today?

A So, uh, we've, we've had lots of changes since we Introduced TeamSnap in May of 2009. We started off as just a team communication and coordination solution. So our pricing was focused on, on that feature set, a freemium model and a kind of classic, uh, freemium internet model. And we've tested that for more than a decade now. Um, but increasingly, um, we have expanded our business into larger organizations. So when we got started, you as a coach or manager would find out about TeamSnap somehow, often just through friends, and sign up for it, and invite it, invite everyone on your team. And we had a freemium model, so if you hadn't used TeamSnap before, we still have it, by the way, you can use our premium version for 21 days, and then afterwards you decide which version you want. And one of the versions is free. So that still exists.

AI assessment note: “you can use our premium version for 21 days, and then afterwards you decide”

Q Okay. Um, I am just ignorant here. I don't know what most companies are. Can you give us a big range? I know you don't want to say the specific one.

A So, so yeah. So with freemium models, most companies are lucky. And in fact, this allows me to tell a story. Um, I had a conversation with a VC friend of mine early in the history of the company. And he said, uh, I think Fremia models don't make any sense. And I said, well, why is that? And he says, well, let's just take an example. Let's imagine that you make, you know, X dollars and your conversion rate is Y. Okay. Let's just say 10 bucks a month. And the conversion is Y. And, um, I said, actually, our conversion is, um, more than three Y. I don't want to get to the exact number, but he's like, oh, forget everything I was about to say then. So what we find is when people use TeamSnap, they love it and they use it.

AI assessment note: “our conversion is, um, more than three Y. I don't want to get to the exact number”