#051: LeagueApps - The OS For Youth Sports, Focus Areas At Each Stage Of Building, Customer Success Tip

One vSaaS breakdown. One biz story. One 'how to'. In your inbox once a week.

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One Biz Story:

League Apps: The Operating System Of Youth Sports

A software company that builds "free" tools for youth sports recently surpassed $1 BILLION in GMV & $20 MILLION in revenue.

Let's dig into LeagueApps, a beautiful "boring" business:

LeagueApps was founded in 2010 by Brian Litvack and Evan Brandoff. Through their passion of sports, they aimed to simplify and improve the administrative aspects of managing leagues. They've built a beautiful vertical SaaS business in the process...

LeagueApps acquires customers through a big inside sales team. They leverage that, plus a combination of digital marketing efforts, referrals, and industry events.

Inside sales led. Digital Marketing & industry events + referrals supported.

They give away their platform for free up front and take a piece of the transaction on registrations. Classic "land & expand" strategy.Today, their customer base exceeding 10,000 leagues and clubs across various sports.

Their product suite includes:

• Websites

• Registration

• Communication Tools

• Program Management

• Payments

• Analytics

These tools simplify the complexities of league and team administration, providing a user-friendly interface for organizers, coaches, parents, and student athletes.

They aren't the only ones fighting to win the space. NBC Sports recently jumped in, acquiring SportsEngine. But LeagueApps focuses on an all-in-one solution with no adds that primarily monetizes through transaction fees.

Their revenue has been on a steady upward trajectory, surpassing $20 million annually. With an estimated year-over-year revenue increase of ~30%, their demonstrating their ability to capture a significant market share in the sports management tech space.

According to TechCrunch, LeagueApps has raised $35M to date. Contour Venture Partners has tripled down on the business, leading their Seed, Series A and B. They've also brought on some celebrity and sports investors include Major League Baseball, Swin Cash, and Derrick Dockery.

But it hasn't all been sunshine and rainbows. It never is. During COVID-19, LeagueApps, like many sports-related businesses, faced challenges due to the widespread cancellation or postponement of sports activities.

Their revenue went to ZERO basically overnight.

But they adapted swiftly and became a pillar of support in the youth sports community during such a tough time.They made all their products free for a period of time, providing communication tools, community webinars on safety, and symptom reporting tools.

This helped revenue come roaring back as the pandemic moved into the rearview mirror. It also helped them establish their brand as a partner their customers could trust, and a company that they knew had their back.

LeagueApps remains committed to making sports more accessible, enjoyable, and organized for everyone involved, from grassroots leagues to professional organizations.

They've built one of the market leaders and I'm excited to watch Brian and his team build a behemoth!

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One vSaaS Breakdown:

Focus Areas At Each Stage Of Building Your vSaaS

Each stage of growing a SaaS business is wildly different.

Here are a few areas of focus to hone in throughout the journey:

• Chapter 1: 0 - $100K

• Chapter 2: $100K - $1M

• Chapter 3: $1M - $5M

• Chapter 4: $5M - $10M

• Chapter 5: $10M - $20M

Let’s dig in…

***Scaling from 0 to $100K***

1. Find a problem that’s a “need to have” (revenue generating, churn reduction, compliance) not a “nice to have” (saving time, building something “cool” or “trendy”, etc.)

2. If you’re a seller, partner with a builder, if you’re a builder, partner with a seller. If you’re neither, become one of these.

3. Build an MVP, partner with first few customers who have a problem so significant they're wiling to take the leap with you.

4. Eat ramen, don't spend money, figure out how to make it work.

This phase is NOT raising money, press releases, startup awards, pitch competitions, etc.

***Scaling from $100k to $1M***

1. Ensure that problem is a pandemic - it’s wide spread within the industry that you are aiming to serve.

2. Build commercial version v1.

3. Sell your way to $1M.

4. Establish the customer success & support function.

5. Raise a tiny amount of capital if you can’t self fund it to secure a few really good / talented folks. Pay up in equity.

This phase is NOT branding, Forbes 30 under 30, hiring a bunch of people or trying to get a TechCrunch article

***Scaling from $1M to $5M***

1. Raise your first institutional round (if you need to / if it makes sense)

2. Build out a team of key department leaders / VP’s who have already successfully done this stage in their respective role.

3. Ensure 2 sales people are hitting quota before you start ramping the team

4. Obsess over customer retention and product joy.

5. Find your second “need to have” problem and begin going multi-product.

This phase is NOT “momma we made it and I’m a paper millionaire”, let’s ramp burn like mad men prematurely because we promised the VCs we’d hit some massive number next year

***Scaling from $5M to $10M***

1. Scale product one

2. Begin expanding product two into product one base and broader market

3. Begin on product 3

4. Maniacal focus on getting sellers efficient, ramped, and achieving a healthy CAC

5. Maniacal focus on NRR

6. Fire that one VP that you just f’d up on (wherever your spending way too much time / have little trust in)

This phase is NOT let’s test the m&a market with our massive burn and just see what happens or let’s go look at another industry to serve.

***Scaling from $10M to $20M***

1. Hopefully you can now see the operating system / end to end industry solution is in sight.

2. Layer in payments or fintech and get a chokehold on payments. Watch revenue really ramp now.

3. Fire that second VP that you just f’d up on ( your spending way too much time / have little trust in)

4. Get even more obsessed with customer delight initatives, you’ve built something worthwhile and have a target on your back. The little guy you once were are coming for you.

5. Depending on your growth rate, TAM, and general numbers, look at doing a big VC round and going for it OR look at a growth/private equity option by growing through acquisition.

6. You’ve got some options, but don’t forget to protect the castle you’ve built. Take some chips off the table.

This phase is NOT it’s all good now, time to be comfortable.

This is a zero sum game. Someone’s coming for your lunch!

This is not all encompassing.

But a few of the "right things" to hone in on.

Distraction / chasing rabbits is deadly. Be careful.

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One ‘How To’:

Customer Success Tip

Very few folks working in customer success / software implementation actually ask the most IMPORTANT question up front:

"How would you define success?" (quantitative and qualitatively)

Ask that question.

Report back on it to their management QoQ.

Watch churn decrease.

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