Active Mafia Part 4 – GovX

Active Mafia Part 4 – GovX

By Andrea Siedsma

As one of San Diego’s dot-com darlings, Active.com gained traction during the early days of the internet, and it was no small accomplishment to successfully combine SaaS, media, transactional, and membership revenue streams into one cohesive platform, “but somehow, we made it all work together,” remembers Alan Cole, who began as Active’s Senior Director of Business Development in 2006 and was Senior VP of Developing Markets when he left the company in 2012.

From a business standpoint, Active’s model itself was an achievement. The pioneering company not only set the stage for future online registration sites, but it also fueled dozens of homegrown entrepreneurs who continue to grow the tech ecosystem in San Diego and beyond.  Cole is one of them. After Active, Cole moved on to the COO role at TakeLessons and then to GovX as President and CEO. At GovX, Cole joined a few other Active alumni in growing the company’s e-commerce platform, which is specially designed for current and former members of the U.S. Armed Forces and first responder communities.

I recently caught up with Cole and his GovX crew who reminisced about the Active.com days, how it shaped their careers, and how GovX is changing the online retail space.

Active Achievement: From a team standpoint, Active.com’s biggest achievement was providing a platform that allowed thousands to learn how to build a business, Cole said. “There are very few consumer-facing software companies in San Diego that experienced this sort of growth over such a short period of time, and everyone who was at Active prior to the IPO received a master’s degree in venture-funded growth. Active provided us all an education that was unavailable anywhere else locally at the time, and that will pay dividends to San Diego for years to come.”

Alan Cole

Frugal Business: “I don’t think anyone at Active (while I was there) would have considered us a ‘hot internet company.’  We raised a lot of money, provided services over the internet and had an amazing culture – but it wasn’t the stereotypical internet startup.  We didn’t spend lavishly on product launch parties. We didn’t acquire customers at any cost. We were growing fast, but we also had a more conservative mindset – and yes, I was still sharing hotel rooms with our COO when we were a $250 million-plus business.  The most ‘hot internet company’ thing we did was probably allowing Mogl to throw a beer and pizza party on our deck to support one of their customer acquisition programs.”

Dot-Commraderie: “In regards to the local tech scene, we were sharing a building in Sorrento Valley with WebSideStory / Omniture / Adobe and honestly felt somewhat removed from any ‘scene’ that was taking place in San Diego at the time.  Sorrento Valley had tech (i.e. Qualcomm), but it wasn’t startup tech, and during that period there weren’t pronounced tech hubs as much as there are today. I do have great memories of meeting with Scot and Pat (at Classy) and Scott Tilton (at Hookit) and Steven Cox (at TakeLessons) and numerous others who were also living through the same experiences, but there certainly wasn’t as much of a ‘scene’ as there is today.”
 
Active Culture: “The culture (at Active.com) was amazing  It really was. I still bump into people around San Diego and that’s the first place the conversation goes.  Yes, there were cool employee programs in place to keep the team engaged and to underscore the value of an active life, but it was more than that – it was just the right mix of people.  Our industry focus certainly drew folks together with shared interests outside of work, but in the end, Active just hired the right team. It was a group that worked really hard, but we didn’t take ourselves too seriously.  Even when acquiring businesses, we somehow found a way to bring on teams who complemented the existing group and reinforced what we had built. We were able to keep that culture intact until a wave of senior execs joined the team from outside the company – which effectively closed the ‘startup’ chapter (for me) and changed the culture entirely.”

Onward & Upward: “Many of us went on to launch or run other companies by drawing on our experiences at Active,” Cole said. “You can’t learn this stuff without doing it first-hand, day in and day out.  Suffering through the daily grind after the new startup smell wears off is one of the toughest phases to endure. Test, fail, learn, repeat. Through enough cycles, you begin to establish an operational approach that can be applied to any business.  Being considered a great operator was the highest praise. The people who went on to launch other companies in San Diego would likely have done that whether or not they had been at Active – it’s just a reflection of the type of people who were attracted to what we were doing.”

Quality Control: Cole spent most of his time at Active in the ‘Consumer Media’ division – which was the group responsible for Active.com and all of the direct-to-consumer offerings.  “It was just such a great group and we had so much fun,” he said. “It wasn’t ever ‘easy’ and we certainly never had all the answers, and that was one of the most important lessons for me.  It’s not about being perfect. It’s about figuring it out together. It’s about working with great people, people you want to journey through the unknown with. Active shaped my career by really driving me to focus on the WHO as much as the WHAT for all future endeavors.”

TakeLessons: After Active, Cole took on the COO role at TakeLessons, another hot venture-backed tech startup in San Diego at the time. TakeLessons is a marketplace that connects students with private instructors across hundreds of categories for both online and offline lessons.  “There is a massive hill to climb when building a two-sided marketplace, but once you’re on the other side, it’s a fantastic model,” Cole said about the company’s business model. “During my time there we expanded into new categories, opened up online lessons, launched SaaS tools for instructors and really dialed in the economic model.  TakeLessons was located in the heart of the downtown startup hub, close to several incubators and numerous other venture-backed companies. The sense of community that exists among San Diego startups, especially downtown, is dramatically stronger than what I felt during my time at Active – and that community continues to grow as more companies launch and relocate here.  What attracted me to TakeLessons was similar to what kept me at Active – the people and the culture. Steven (Cox) does an amazing job building an environment that people love, and the team was just awesome.  Another San Diego startup cornerstone is Chris Waldron (now in NYC), who was already at TakeLessons when I showed up.  Chris Bohnert from Active (now at GovX) joined me at TakeLessons, along with another Active Alum, Julie Belmonte (now at Lytx).  Similar to Active, we didn’t have all the answers, and it was hard more days than it was easy, but I truly enjoyed the team and believed in the mission.  TakeLessons is still cranking and recently moved into a new space in Little Italy.”

GovX: At the end of 2016, another Active alum, Eric McCue, introduced Cole to GovX. The company’s core business is an ecommerce site open exclusively to the U.S. military and first responder communities.  “We have built an awesome catalog of the best products for on-duty and off-duty needs, with privileged pricing available only to this deserving group,” Cole said. “The site runs on our proprietary e-commerce platform, and access for approved members is controlled by our in-house verification service.  In addition to selling top brands on GovX, we also work with top professional sports teams and entertainers who use our verification service to administer their in-house military discount programs and to drive ticket sales.”

At the end of 2018, GovX launched an e-commerce site for the Department of Veterans Affairs / Veterans Canteen Service, serving over 9 million Veterans enrolled in VA healthcare and their family members. Proceeds from that site directly support important veteran programs across the country.

Competition: “The retail space is obviously challenging,” Cole said. “To compete, we offer the best prices to our members, and deliver an undeniably better shopping experience – all rooted in an appreciation for those who keep our country and communities safe.  Our thesis is that successful e-commerce companies will design an experience that is uniquely relevant to specific customer segments who share beliefs and values. This is not something Amazon or Walmart can do. When we combine the best prices on the coolest brands with psychographic alignment, we see brand loyalty take shape and can successfully compete with anyone.”

Growth: GovX’s growth has been fueled by outside capital ($30 million raised), and the company logged its first profitable year in 2018.  This year, Cole said the company plans to generate over $75 million in gross sales across all business lines with a team of 75 based in UTC. The company is not seeking additional outside capital and will fund future growth with cash generated from core operations. 

Pay it Forward: Each year, GovX hosts a big event for the Raiders Squadron (VMGR-352) at Marine Corps Air Station Miramar and dozens of the brands on GovX donate gear to give to the Marines as another way of showing their appreciation.  The GovX team also serves a traditional Thanksgiving dinner (cooked by spouses and members of the squadron).  

San Diego Building Blocks: When asked if San Diego is a solid place to launch and grow a startup, Cole said, “Absolutely.  I started my first company here in 1996 and endured the challenge of growing a business without outside capital.  At the other end of the spectrum, we raised a ton of money at Active and eventually went public. Somewhere in the middle, at TakeLessons and GovX, we were able to raise enough institutional funding to get beyond product market fit and build a business to address specific needs in the market.  San Diego is a welcome home for each approach and the capital can come from anywhere. The key is that there are so many people in San Diego now with similar experiences, which creates a pool of operators who have been through the grind and know how to build a business. It comes back to having the right team, and San Diego is now stocked with the right talent needed for any new tech startup to successfully staff up with local resources.”

Chris Bohnert, VP Product, GovX & former General Manager, Active Network

The Active Days: Bohnert first started at Active as a marketing intern while he was finishing up his MBA. “The sister of a friend of mine from college moved to San Diego to take a job at Active and crashed on my couch while finding her own place. She ended up making the introduction that lead to the internship,” he said. “I had never explicitly considered tech as a career during my MBA, but after several weeks at Active I was hooked. Unfortunately, when my internship was finished, Active didn’t have an opening for me. I stuck around for the summer doing project work until they finally found a place for me.”

As GM, Bohnert was focused on building Active’s portfolio of e-commerce products and services, which the company sold alongside registrations, and guided the product strategy of Active.com, which was the leading online destination to find activities and events. “Our goal with Active.com was to broaden the footprint beyond the sports vertical (where Active started) and support diverse revenue streams; from advertising to commerce to registration.”

Paving a Path:  Bohnert said from a business perspective, Active was one of the first companies to bring the event registration and payment process online. “Our biggest competition online was converting race directors off paper forms. Being the first mover in such a fragmented market required a lot of vision and perseverance – and all the credit there goes to our leadership team. Active really paved the way for companies like EventBrite.”

However, the most lasting achievement might be the number of talented people Active developed and grew, he said.  “The network of Active alumni is amazing, and it reaches far beyond San Diego. There are strong former Active contingents in San Francisco, Seattle, and all across the country.”

Work-Life Balance: Active very much had a culture of ‘work hard, play hard’ – especially early on. When I first started, our office was in La Jolla Village and it wasn’t uncommon for groups of people to head to the Cove for a half-mile swim at lunch. People were always training for something – walking the halls in spandex cycling gear didn’t get a second look. I grew up playing team sports where running was a punishment after practice. However, within two years of working at Active, I ran my first marathon. It was hard not to get sucked up in that lifestyle. The culture did evolve and mature as we grew, but I think that focus on a healthy, balanced lifestyle remained throughout.”

Chris Bohnert (left), climbed Mt. Whitney with Active co-workers in 2007.

Talent Pool: Bohnert believes Active developed great talent because it gave people the opportunity to develop early in their careers. “The Active leadership team – Dave Alberga, Jon Belmonte and Matt Landa – put a lot of trust in smart but inexperienced people. You were given a general direction and then room to figure it out. You learned fast! A lot of the really talented people that ‘graduated’ from Active started there early in their careers, sometimes as their first job out of college.”

Love Connection: “What you should really write a story about is the number of Active marriages and babies,” Bohnert said. “The number of people that met at Active, got married, and now have kids is easily into the double digits – my wife and I included.”

Fast Forward: After Active, Bohnert moved to companies like Porch, TakeLessons.com, and most recently, GovX.  “I was at TakeLessons and contemplating a new challenge. I mentioned that I was ‘looking’ for a fellow Active alum. That sort of information has a funny way of getting around the network. Before I knew it, I got a call from Eric McCue, then the CEO of GovX and another former Active co-worker. One thing lead to another and soon I was working at GovX. I think all the core Active alums keep tabs on one another. When someone makes a career change, you find out about it pretty quickly.”

GovX: GovX has grown a lot, not only in terms of revenue, but also in maturity and talent, Bohnert said. “We’re much more sophisticated in how we run the business than we were four years ago. Online retail is a crowded space with a 10,000-pound gorilla (Amazon). Having great prices, selection and technology is table-stakes. What differentiates GovX is the brand we’ve built. We are here to serve those that serve. We speak the same language as our military and first responder members. You can’t fake it with those groups and we’ve been able to build great brand loyalty by being authentic. That’s not something Amazon can replicate.”

San Diego Tech Scene:  “I would say the tech scene in San Diego has developed a lot in the last 10 years. A big part of that is the success of home-grown companies like Active, WebSideStory, and ServiceNow. It’s also being accelerated by larger tech companies opening offices in the San Diego area – like Amazon, Walmart, and Google.”

Surf’s Up: “The obvious draw is that San Diego is one of the most beautiful places in the world with probably the best weather in the world. Professionally, the network of connections I have in San Diego – largely through Active – is hard to replicate anywhere else. I also really enjoy the tech scene here in San Diego. It’s less of an echo-chamber than San Francisco. People in the San Diego tech community tend to be very down-to-earth. You have engineers that are also surfers. It’s a nice mix.”

Amber Miller, SVP eCommerce, GovX & Former Conversion Analyst, Active.com

Miller first joined Active.com right out of college in 2005 after a friend, who was a receptionist at the company, helped get her foot in the door.

“When I started at Active it was still a challenge to get runners to register online instead of the typical method of mailing in your entry with a check,” Miller recalled. “It was my job to increase the online conversion rate across major marathons in the U.S., so that 35% of registrations would register online. We quickly realized that online conversion could be increased more by online marketing than small web buttons and removal of mail in forms from individual race websites. With my boss at the time (Julie Woolf), we built a marketing business where we sold ads on Active.com to races, which created a high margin revenue stream and helped drive the original goal of increased online conversions.”

Miller spent nine years growing the business to $16 million with an 85% gross margin. “In the end, we became a huge marketing channel for our events and helped to increase race registration for thousands of races across the country,” she said.

Core Community: Miller was attracted to promoting an active lifestyle, the drive of the employees that Active.com attracted, and the growth trajectory of the company. “Active does not get enough credit for helping to support the Mud Run, Obstacle Racing community that attracted racers that had never worn a race bib in the past,” she said. “Through marketing efforts and our Active Exchange program, we helped to promote and fund many of those types of events, including Color Runs, Spartan Races, and Foam Fest.  Additionally, I was a runner my whole life, and Active was infectious. In addition to what I worked with co-workers to build during my time at Active, I ran 11 marathons and over 30 half marathons, many with my co-workers.”

Amber Miller at the Ragnar Relay Race during the Active days.

Team Building: It was a work hard / play hard culture, though that sounds cliché. Most of the employees at Active were training for some sort of race, but also driving incredible growth in the business. My favorite outside-of-work experience with co-workers at Active was running the Odyssey Relay from Reno, around Lake Tahoe, back through Virginia City, Nevada and finishing in Reno. To be with six coworkers in a Ford Excursion with the Active logo on the side running 20+ miles each in 24 hours was a great way to get to know co-workers that I had not worked in a close capacity with, as they were on other teams.”

“In addition, the executives really supported your growth,” Miller added.  “Dave Alberga and Eric McCue helped me with my letters of recommendation for business school, and my managers supported me in getting my MBA at night while still increasing responsibility at Active and providing me a path to grow my career.”

 

On a Mission: Miller was attracted to GovX based on the size of the company, her ability to drive a large impact from day one, and the mission of serving those who serve. “Work is fun when you believe in the mission. At Active, I enjoyed promoting an active lifestyle, and at GovX, working for a larger purpose of providing great products that can sometimes save the member’s life on the job is something I strongly believe in. That makes coming to work everyday and working hard worth it.”

All in the Family: My start date at GovX was the start date of a new President (Eric McCue) who also came from Active. Over the next year, he did a great job of recruiting additional talent from Active, and I have enjoyed building another business with co-workers I greatly respected from Active. Working closely with Eric and Aaron Pelander to develop a plan that allowed GovX to grow and scale was what we spent much of the first two years here doing. Additionally, I was very excited to have Alan added to the team, as he was the VP over my business for part of the time I was at Active. He has driven great growth and focus here at GovX.

Meaningful Growth: Miller’s primary role at GovX is driving margin and engagement through our e-commerce channel. “We have had incredible growth since I arrived. It has been such a great trajectory to be a part of. We are getting more product in the hands of our members at a great value, which is driving engagements with our brands. Additionally, we have positioned ourselves as a leading marketing channel that helps brands reach military, law enforcement, and first responders. Brands trust us to tell their story in a meaningful way to our community and bring them new customers they have not had in the past. …The community is very tribal, and most members work in teams, so a member getting a great value and having a great experience is the largest driver in increasing our member base through word-of-mouth.”

San Diego’s Tech Evolution: I believe that change in the San Diego tech scene has driven innovation and created even more opportunities,” Miller said. “With some changes in the larger organizations such as Active, Websense, and even Petco and Qualcomm, talent has moved and created more startups and additional business opportunities within the community. It is fun to work within the community and run into so many Active alumni doing big things.”

Aaron Pelander, VP Marketing, GovX & former General Manager, Active.com

Pelander first joined Active Network in 2007 as an intern while getting his MBA at San Diego State University. He ended up rising through the ranks and becoming one of Active’s General Manager.

“One requirement of the grad program was to complete an internship, and it worked out that there was one available right when I needed it within Active’s Marketing Group,” he said. “I really enjoyed that initial experience, was able to get more exposure within that area of the company, and then as the internship was coming to an end, a full-time position still within the consumer marketing side of the business became available. I was hired for that position by Chris Bohnert, who I now work with again at GovX. From there, I spent the following years working with Chris and the rest of our team to grow our membership program and other consumer product revenue streams. As the company expanded, our part of the business grew, as did our team. That allowed me to keep progressing in terms of responsibilities (and title), and when Chris moved on from Active, I was able to move in to the position of General Manager to oversee those consumer product programs.”

“There were a lot of things I loved about working there, but two that stick out are the people I got to know and work with in those years, and everything I got to learn in those years,” he added. “It was an exciting time to be a part of the company and I really valued the relationships and experiences that it provided.”

Going Vertical: “From a business perspective, being a company that grew to the point of being able to sell for $1 billion is pretty incredible,” Pelander said about Active. As a part of that, what was fascinating while I was there was how the company was able to expand in to so many different markets – communities, outdoors, camps, business events, etc. There were certainly some aches and pains with that expansion, but it was exciting to be involved with it.”

Blossoming Career: After active, Pelander moved on to ProFlowers (another OG San Diego e-commerce firm) and then to GovX, where he was recruited by fellow Active alumna Eric McCue.

“The four-and-a-half years that I’ve been at GovX have been exciting and some of the most enjoyable of my career,” Pelander said. “Much of that stems from the growth we’ve experienced (organizationally and financially) and the ability to directly contribute to the growth. The size of the company when I started (less than 40 people), and even still today (about 75 people), has allowed everyone here to have a direct hand in the company’s success. As the company has added more members, more brand partners, more ticket/travel partners over these years, brand awareness in the marketplace has increased, which has been fun to watch and be a part of. The best part is that there is still a ton of runway in front of us.”

Tools of the Trade: Beyond just GovX.com, the company is also able to leverage its verification platform and backend e-commerce capabilities to extend military/first responder benefits through other channels.

“One example is in our partnership with Major League Baseball – this season more than 20 teams are using GovX to power their military/first responder ticketing programs, which we also help them market through GovX.com,” Pelander said. “These types of relationships and integrations are something that truly differentiates us from other e-commerce companies.”

Giving Back: “One additional component that has been a staple of GovX for years is our focus on giving back to nonprofits that also support the military and first responder communities,” Pelander said. “Through our GovX Gives Back program, we’ve been able to donate nearly $250,000 to NPOs that support the same community of people that we do.”

Keep it Classy San Diego:  “I think the tech scene in San Diego has a lot of future potential, but I don’t know if it feels like it’s thriving yet,” Pelander said. “I think there is a lot of talent here and I hope that opportunities continue to develop as big companies bring offices here and companies like GovX continue to grow. I do think it’s the best city in the world and fortunately for me, I’ve had interesting job opportunities that have allowed me to stay here.”

Editor’s Note: This is part four in a series about the early pioneers of online race and activity registration, the subsequent companies they went on to create and run, and how they are still “active” in the San Diego tech ecosystem. Read Part 1, Part 2, Part 3, Part 5, Part 6 & Part 7.

Andrea Siedsma

Andrea Siedsma

I've had a flair for tech, science and business writing for more than 25 years. Surfing keeps my creative juices flowing. I also get an adrenalin rush by hunting for sea glass. Flip flops and fish tacos are my jam. Drop me a line at andrea@freshbrewedtech.com.

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