Friday, June 22, 2007

From stealth to launch to success to stealth

I feel like FanFooty, our fantasy football business, has turned into a stealth startup all over again. As one business partner of ours remarked to me the other day, "You guys should be working out of Soviet Russia!"

The Aussie rules football industry is not very advanced when it comes to Internet technologies. We are at least five years behind the US in most important online aspects of the sport. Thus, people like myself and Tai have become valuable because we bring a level of expertise that the industry has not seen before. Frankly, we are amateurs in Silicon Valley terms, but to the naked savages in certain parts of the local sports sector we are like spacemen descending from a rocket ship.

The problem with this is that FanFooty is not what you would call a reputable business. It is wildly popular with the fans, but we are not an official licensee of the Australian Football League. It could be argued that we are actively undermining certain parts of the businesses of some official licensees with some activities that have brought up questions in meetings with said licensees (though I don't think so). This messy situation makes it dangerous for companies who want to keep in the AFL's good books to have us as a partner or subcontractor.

Nevertheless, we have built one very solid subcontracting relationship out of the aforementioned skills shortage, with several others in the pipeline. Every week seems to bring a new cold call from some potential partner, enemy or co-opetioner. Threats seem to come in at the same rate as opportunities, sometimes in the same call.

Tai and I talk a lot about geese. Golden geese, to be exact. We know that consulting work by its nature means that you're not going to be able to keep a slice of the goose, that's the whole point. You're supposed to get a lump sum in return for building the goose, and someone else gets to keep the eggs. However, in this murky world of non-disclosed, tenuous relationships between casual acquaintances, some of these deals involve waving the ghosts of future geese in our faces, so that we may toil in the present for no reward in the hope of whitemeat equity.

The words of Paul Graham ring though my mind on this issue. Consulting is the long-term enemy of a startup, but also its food at critical points early in its life. As detailed in the outstanding interview Cameron Reilly did with him the other week, Adrian Giles of Hitwise did it right 10 years ago with pioneering white hat SEO consulting outfit Sinewave Interactive. Adrian and co-founder Andrew Barlow treated Sinewave as cashflow, pure and simple, because they could see early doors that it wasn't going to scale. Then they found the product startup hiding inside the consulting business, and the rest is now history.

FanFooty is not quite black hat... our intentions are good. We're just a little naughty, that's all. FanFooty at this stage is not a cash cow of Sinewave proportions, but it's at least starting to generate something to build on. I can only dream of enjoying the success of Adrian and Andrew. (And thanks again Cam for an inspirational interview!)


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