Active.com Mafia Part 2 – Survival of the Fittest

Active.com Mafia Part 2 – Survival of the Fittest

By Andrea Siedsma

In a 1999 Forbes article, young San Diego entrepreneur and athlete Mitch Thrower compared founding an Internet startup to competing in the Ironman. “First, you are swimming, surrounded by thousands of other dreamers elbowing to get funded. Then, on your bike, you pedal as fast as you can to launch your business. Once you have established your position in the race or the market, you start on a long, hot 26.2-mile run for revenue and profit. And trust me, the run is always the hardest part.”

That interview was centered around RaceGate.com, an online endurance sports registration company based in San Diego that Thrower formed with Scott Kyle. That company soon merged with ActiveUSA by acquiring ActiveUSA in a 50/50 equity deal. In May 2001, the name was changed to The Active Network, Inc., which was acquired for $1.05 billion in 2013 by Vista Equity Partners, which then sold the community and sports divisions to Global Payments for $1.2 billion in 2017. Did you get all that?

It certainly has been a wild ride the past two decades, and Thrower is still racing to the next gate, in the form of his latest venture, San Diego-based Events.com, which has created a mobile-first event management platform.

But first, let’s go back to the late 1990’s when Thrower and his team were first pioneering online race registration. “It’s been 21 years – doesn’t it go by in a blink?” he said. “It’s hard to imagine now, but in 1998, event organizers were operating with paper registration forms, printed in newsletters and on entry forms you could pick up at your running store. I remember the movie Something About Mary came out that year, our physical mailboxes were filled with AOL CD Roms, and some of us were wearing short shorts.”

Thrower then takes a deeper dive into the pre-Active.com days.

“I fell in love with triathlons after recovering from four knee surgeries and having my run-Forrest-run experience. While finding fitness again, I liked that the balanced elements of triathlon avoided overuse injuries and soon I found myself fully recovered and competing in the swim-bike-run arena.  I even made it to the Ironman World Championships a few times. But there was one specific moment that inspired me to combine my passion with a business innovation.  When I received a paper registration form in the mail from the Coronado Roughwater Swim inviting me – “Mitten Thravavin,” or something like that – to come and swim again, it hit me. What an inefficient process it was to register with a pen and ink the same way people painted caves over 40,000 years ago. I remember filling out the long form, multi-page Ironman application by hand and how time consuming it was. I was an early adopter of tech, and I had recently sold a firm I created that built online ordering systems for Eurail passes. It seemed so obvious this was a pain point for athletes trying to register for events. So why not fix it?”

“At that time, my business partner Scott Kyle and I were immersed in the sport, racing in local and regional events. Thus inspired, we started a multi-year leveraged buyout of Triathlete Magazine while concurrently launching RaceGate. We created a business plan and sought funding from local angels and ultimately acquired venture capital backing. Scott also led the company as Co-Founder and CFO and contributed an enormous amount financially and intellectually to the creation of Active (adding to the San Diego success stories, Scott has since launched a high-end, award winning independent money management firm).  Tyler Polan, a local San Diego investor, wrote the first outside investment check for Active. Tyler was very close to our former Triathlete Magazine intern and the first real employee of Active.com, Chris Kittler, a Brazilian triathlete and entrepreneur who later went on to create and become the CEO of Ativo.com in Brazil which he ultimately sold. Chris was an innovative team member and helped to create many of the early concepts, including a race training journal called RacePlanner to promote the consumer site – before we named the whole enterprise RaceGate, and long before it became Active.com. Chris also sourced a team that created our first database, by manually typing event listings from event calendars published in magazines and newspapers on the roof of my apartment on Prospect Street in La Jolla (we climbed up a ladder).  He recently moved back to San Diego from Brazil and continues to create cool companies here in town. He’s just built a niche travel company called 7 Sherpas, which offers tours around the world for amazing sporting activities.  And coming full circle, Tim Scott, the Chief Marketing Officer for Racegate/Active, was just named Chairman of CONNECT, after several successful exits.”

Financing Fitness: While seeking larger financing, Thrower and his team sent around their business plan and received a ‘Dear John’ letter from Enterprise Partners, then one of Southern California’s largest venture capital firms. “They were not interested in the business plan we sent them,” he said. “However, we subsequently met one of their principals, Ron Taylor, at a CONNECT Springboard event where we were presenting our business plan and Ron was a judge.  Soon thereafter, Ron led a $5 million investment round for what ultimately became the Active Network, starting us rolling down a very large hill like a snowball, picking up some sizable investments, companies, and people along the way.”

“Attorney Kevin Turner, a great friend from my business school at the University of San Diego, offered to incorporate the entity on our behalf in 1998 and we were off and running. The original name was RaceInteraction, then we changed it to RaceGate, which begat ActiveUSA via a 50/50 merger with Jim Woodman’s company. Ultimately, it became Active.com when we acquired the domain name.”

Thrower remembers a few other companies that were also incorporated in 1998, most notably Google, PayPal, and Ask.com.

“Jim and I don’t agree which came first, Racegate or ActiveUSA, but I remember when I called Jim for the first time, I mentioned we’d be interested in a purchase, and he said ‘How much?’ thinking we wanted to sell RaceGate. I replied, ‘Actually we’re interested in purchasing ActiveUSA.’ We laugh about that call back in the Jurassic period of online registration,” Thrower said.

He continued, “RaceGate had already purchased some other entities and we were looking to expand through acquisition, but it was apparent Jim had built something substantial as well.  RaceGate and ActiveUSA were the two biggest companies in the target market, so we were a natural fit. I’ll never forget when I asked Jim if he’d race Ironman again with me. He said, ‘No thanks, I’m cured.’ We became friends and business partners. What an adventure and learning experience it was.”

Ticket to Ride: “A few months before contacting Jim, I attended a conference in Los Angeles where John Pleasants, the superstar CEO of Ticketmaster CitySearch was speaking. I told him the immense opportunity we were working on – the market of people doing things is twice as big as people watching things,” Thrower said. “From that point, we merged Racegate and ActiveUSA with a Ticketmaster investment to expand our venture.  Later, Jim negotiated to acquire the domain Active.com. Over the years, Active purchased a host of companies, grew, struggled, grew again, then went public and was later sold.”

The early Active team working on Prospect Street in La Jolla, Calif.

From Paper to Pen: “One of the challenges entrepreneurs have in starting companies is that their product might arrive before its time,” Thrower said. “Initially, we were on modems and transacted at dial up speeds in an environment where only a small portion of the population was transacting online. Perhaps Active’s great achievement was to change people’s behavior from paper and pen, stamp and envelope, to an online entry process. We also made the world a lot more active – that’s pretty cool.”

“Out of respect for the current owners and stakeholders of Active, and because I’m with Events.com now, I won’t comment on the state of their current business or their opportunities. But I wish them well in their pursuits under their latest ownership group, Global Payments, which is one of the biggest companies in the payments realm. We have a great deal of respect for what they are doing.”

Mitch Thrower, Co-Founder of Active.com migrating behavior from the pen to the mouse.

The Roaring 90’s: “Ahh, I warmly recall the end of the 90’s and the days of the magazine called the Industry Standard, it’s fantastic rooftop and other tech events around the world,” Thrower said. “The 90’s really were the ‘Roaring 20s of tech expansion’, though the recent years have certainly given that era a run for its money. Living through the dot com explosion and the dot com implosion was a white knuckle adventure. Active.com was initially backed by Enterprise Partners. Under the later stage leadership of Dave Alberga, Matt Landa, Jim Woodman, and Jon Belmonte, Active did some very smart recruiting that helped steer the company through rough waters. Many top investors supported Active along the way.  It also helped that most rivals were not generating revenue. In contrast, Active.com was generating revenue from the get-go.”

Culture Club: “Active’s early culture was amazing,” Thrower said. “The office was in the Village of La Jolla, and it benefited from San Diego’s world renowned work/life balance. The climate is unsurpassed and our crew took full advantage to swim, bike, run, and practice water sports. The office later moved north and west in San Diego where it had large rooftop workouts during lunch. After the IPO and its first sale, the state of Texas offered a large financial incentive to move the company headquarters to Dallas. Now, it’s a global organization.”

Propelling Passion: Thrower’s current venture, Events.com, emerged out of a set of incubated efforts and combined companies. “Changing the world is addictive,” he said. “Given my passion for the event industry, the mission was to bring several companies together to solve the cold start problem – so that’s what we did. Initially, we were looking at the automotive, registration, government and membership sectors and we had prototype technology or discussions going in each area.”

Stephen Partridge, the co-founder and president of Events.com and I had discussed what we could do in the larger event world for quite some time, and we had determined that bringing several companies together, including the company he had scaled up, Events Online, was the way to go. After decades of experience in the event industry it is apparent that event organizers have been sold multiple disparate and incongruous solutions and as the event industry matured, more people have become comfortable using technologies to interact with the events they power and attend. These combined forces present the larger opportunity.  Our mission is to help people experience the most meaningful moments of their lives – and to support those who are making this happen with great, simplified, mobile first technology.”

“I remember walking down Prospect Street in La Jolla when we were trying to determine the name for the new company, and Stephen said, ‘It’s easy – the name is Events.com. It’s the biggest name in the event world. It’s where every event will ultimately have to be.’ In that moment, we realized we had to acquire the domain. So we set out to acquire the domain from CBS Interactive, and voila! After a very long negotiation, Events.com was born.”

Growth Curve: “Events.com has grown through several cycles and a handful of acquisitions in the natural process of starting something worthwhile,” Thrower said. “We’ve scaled up, fine tuned the team to the right size, and are now we are in the process of scaling up again with a great product. We’re planning a full marketing launch this year, and we’ve already grown around the world by offering a powerful suite of technology for event organizers and participants. Sticking to our San Diego roots, we’ve recruited locally and have several people working for us who once worked at other San Diego-based tech firms, though we’ve got folks working with us from all over the world now.  The best part about Events.com is most certainly the team. It’s a group that really cares about the product and customers – that’s rare.”

Thrower also mentioned that Events.com is actively hiring developers and sales professionals in San Diego and will be increasing hiring over the next few quarters as the company prepares a few major product announcements.

“We just moved our headquarters back to the Village of La Jolla where Events.com was founded to once again support a work-really-hard-in-a-really-nice-place culture, and to provide the team with the amenities – being near the water, walking distance to local restaurants and, of course, La Jolla Cove,” he said.

The Market Then & Now: Thrower said the event technology sector is a very interesting place to be now. “We’re excited to disrupt it and provide event organizers a platform that increases their revenue and saves them a bunch of time. The sector is attracting a great deal of investment and new ventures because we’re living in the ‘experience economy.’ People want to do stuff, not buy stuff, and as a result, events are popping up everywhere.  Events are saving entire industries like music and media.  Part of the reason is that millennials are scheduled to inherit $24 trillion over the next 12 years and they are spending it on events.”

“Revenue from just the software powering the ‘experience economy’ has grown 11% year over year and is projected to hit $14 billion by 2022,” he added. “Events.com gives event organizers new tools to grab a much bigger piece of that trillion dollar pie. We’re much more than just ticketing; we’ve built an open API event software platform to power streamlined sponsorship management, ticket processing, merchandise sales, email deployment, social media marketing campaigns and more. Our team has built the technology with a multilingual and multi-currency platform from the start.

“With respectable competitors in the space such as TicketSauce, Eventbrite, DoubleDutch and Cvent, the event management software industry has become more and more fragmented with organizers often using five-to-15 different technologies and most of them do not easily connect to each other. We’re working to solve that problem.”

Innovation: “We also see that the event industry has not really had the level of innovation and sophistication that you see in the rental sector with AirBnB, or the ecommerce space with Shopify, or the taxi space with Uber.  We need to make it easy for people to interact and make money,” Thrower said.  “The event industry has several legacy players, operating different silos of event software and services: apps for events, digital event marketing, event ticketing, event lead generation, and an excel sheet managed by some guy that knows a guy who knows another guy who sponsors stuff. Events.com will continue to bring these things together under one mobile-first brand.”

Work in Paradise:  “Having started my first venture in Connecticut and moving to San Diego in 1993, I became reliant on the support as an entrepreneur here and the friendly people, the smiles, the beautiful weather and of course, the convenience of living and working in a city where people often save up for a year just to be able to spend one week here,” Thrower said. “San Diego is a very friendly environment to entrepreneurs willing to roll their sleeves up and stick with it. Creating value as an entrepreneur requires a high level of commitment and very long hours; it helps to do it in paradise, so that when you do have a moment outside of work, it’s always perfect.”

Got Lessons? Thrower said it’s fun to reminisce about the the San Diego tech scene’s history, and share what’s next, but perhaps more importantly, he wanted to share a few things about what he’s learned.

“Do not give up when people say ‘No’ or turn down your idea; get out there and share your story and idea; travel everywhere in this country (and Europe, Asia, and South America if need be) to find capital; character changes when large sums of money are at stake, so pick your partners carefully; invite people, partners, investors, and clients to San Diego to do business with you in the sunshine, especially in the winter; ask for help; find a mentor and, most importantly, remember to play the long game – entrepreneurship is an endurance sport.”

Editor’s Note: This is part 2 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 3, part 4, 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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