Active Mafia Part 7 – The Starting Line

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By Andrea Siedsma

Today, online race registration is a routine part of life.  However, 20 years ago it was a true “blue ocean” strategy, said San Diego executive Tim Scott.

“Technically, it wasn’t difficult, but it made things wildly more convenient for millions of people,” he said. “And these were active people, ages 18-to-45, a marketers’ dream demographic.  Online registration, gear and equipment sales, and sponsorships were all real revenue.”

Scott is referring to Active Network, a San Diego dot-com darling and online race registration pioneer that launched in 1999 as a result of multiple players coming together.  Active, which is still going today (in Dallas), spawned dozens of serial entrepreneurs who are running companies in San Diego today, including Scott.

Below, he chronicles the beginning of Active, which includes a who’s who of the San Diego tech ecosystem, as well as his strong passion for biotech, which led him to start and/or advise several San Diego biotechs, including most recently, TEGA Therapeutics.

The Starting Line:  “Not a lot of people know it, but The Active Network, aka Active.com, started off as the shotgun marriage of RaceGate.com, EnterOnline, GetSetGo, ActiveUSA.com, and LeagueLink,” Scott began. 

“I came to RaceGate through a circuitous path of UCSD biochemistry, USD law school, Amylin Pharmaceuticals, Lucid Strategies Consulting, and the strategic marketing firm Mentus.  I was straddling the biotech and high tech worlds supporting startups and starting companies of my own. At Mentus, I worked with a company called PersonaLogic whose CEO Steve Tomlin sold the company to AOL and then joined San Diego’s Avalon Ventures with my friend Kevin Kinsella.  The COO of PersonaLogic was Rob Rackowski, who had been brought in by RaceGate founders, Mitch Thrower and Scott Kyle, to be CEO.  In fact, the initial team at RaceGate was Kyle, Thrower, Rackowski, tech guru George Plsek, and me.  We also had super-intern Chris Kittler (founder of 7sherpas), who would go on to become a successful endurance athlete and entrepreneur in his own right.  I was hired as Senior Vice President of Corporate Development and Marketing.”

RaceGate: “The five of us came together within a few months in early 1999.  We worked out of Mitch’s apartment on Prospect Street in La Jolla. The apartment was directly above a restaurant called Forever Fondue, and every afternoon the smell of melting cheese wafted up to our 2nd floor offices,” Scott recalled.  “The offices were tight. Mitch and I shared an office, and if either of us leaned back in our chair, we would be in the lap of the other. And we were soon joined by other Active notables such as marketing maven Toby Harbaugh, and the Voice of Triathlon and super salesman Mike Reilly.  When Ron Taylor and Enterprise Partners provided RaceGate.com with $5 million in venture funding, we had nothing more than an idea and a website with pictures of triathletes that bordered on soft porn.  We were the team that, today, could legitimately say that we started Active.com – except that there were others out there who were simultaneously having the same ideas about online registration and participatory sports.”

The Marriage: “In the Bay Area, Scott Curry at EnterOnline.com was also passionate about participatory sports and felt that online registration would be the next big thing to utilize the Internet. In Atlanta, Emily Richman and her brother Benjamin had a similar idea and started GetSetGo.com. Over the next 18 months, we merged with four other companies to create the core of the startup Active.com.  With $5 million in the bank, we proceeded to enter into equity mergers with Curry and EnterOnline, and with the Richmans and GetSetGo. Rackowski left the company soon after that. So going into the mergers with Jim Woodman and ActiveUSA, and Jon Belmonte at LeagueLink, we were essentially a Frankenstein of a company with no CEO and a bunch of alpha dogs running the company by committee.  What we had in common was a passion for participatory sports and the ability to sell the vision of online registration.”

Old School: “Marketing to event directors was also old school.  We had to build mail lists and mail them postcards and flyers announcing our conferences and services,” Scott said. “I realized that we could save time with a new technology called fax broadcasts.  We would send a flyer to this group in Texas that would blast fax lists in the middle of the night for $0.02 a fax number. It would automatically redial the fax until it went through. After the first fax broadcast campaign, I received 50 calls from event directors.  As it turned out, most of them had their combination fax/phone/printer in their bedroom so the fax woke them in the middle of the night. After they were awakened and hung up on the fax, the fax broadcast system would automatically call them back. It would continue calling them until the fax was received.”

Dot-Com Craze: “In the beginning it was great fun.  When Ron Taylor and Enterprise Partners provided RaceGate.com with $5 million in venture funding, we had nothing more than an idea and a website with pictures of triathletes that bordered on soft porn.  And that was the model for Internet start-ups, invest in cornering a particular niche through roll-up, build-up, or both. And do it very quickly. Later, during the dot-com bomb period, we were still very focused on driving growth and there was news daily about the most recent spectacular Internet implosion.  It was a real distraction for a company that was seeing success. Everyone was always calling to get a comment on recent failures and get some insight into Active.”

Competition: The core group of alpha dogs – Scott Curry, Mitch Thrower, Scott Kyle, Jim Woodman, Emily Richman, and myself – had a few things in common.  We all loved to sell the vision of running events online and doing deals. And we did a lot of deals,” said Scott, Active’s Senior Vice President from 1999-2001. We didn’t celebrate the deals so much as we competed with each other to see who could put the best deal together.  It was the wild west of Internet growth. I was working on a large deal with Runner’s World whose publisher at the time, George Hirsch, was located in New York. I worked on that deal for months, and each week, I would take the red-eye from SAN to JFK, cab into the city, check in to a hotel, shower, dress, check out of the hotel, have a day’s worth of meetings and catch the 5:00 p.m. flight back to San Diego.  The airplanes used to have those phones mounted into the back of the headrests. They were so expensive that you never saw anyone actually use them. But at Active, there was so much work to be done, and you didn’t want to miss anything happening back at the office, we actually used those ridiculous airplane phones as we crossed the country.”

Deals for Days: By the middle of 2000, we were doing deals, signing up new events, and creating content at an incredible rate.  We would come up with an idea for a new web feature in the morning and it would be up on the site by the afternoon collecting data.  There was no strategizing. It was a massive land grab with everyone competing to see who could sign up events faster. We were smart and creative, we had attitude and people in the industry loved our brand.  We were a disorganized mess moving forward at high speed.”  

Details, Details, Details: “It wasn’t that we weren’t thoughtful about what we were doing.  We were very focused on the details and getting it right, though we likely all had a different idea of what that was.  I remember arguing with Jim Woodman over the use of the Oxford Comma in an article that I was writing. It was a knock-down drag-out battle over a comma!  But that’s how passionate we were about the business. By this time, we all knew that Active was going to be big, and we were all driven to succeed; we just didn’t always agree on what a fully grown Active should look like.  

New Strategy: “The next period we entered, for me, was one of strategic growth, or at least more strategic than what I had experienced over the previous 18 months.  This started when we hired Dave Alberga as CEO and Matt Landa as President.  After 18 months of frenetic business activity, we made some changes that began to settle the company down a bit, or at least as much as a new Internet company could slow down in those days, which is not much.  Our management team stabilized with the addition of Dave and Matt. We really began to focus on a finite number of key initiatives. This was also a great learning opportunity for me, both in my own experiences at Active and by working with people that had different skill sets.   Matt Landa has a terrific mind for business. He began to look at how we could use the assets we had created to generate new revenue lines. This is when the Active Marketing Group was started. As a former Army Infantry Officer, Dave Alberga was the one Alpha Dog that could manage the rest of the alpha dogs on the management team.  We had a dozen or so people on our team that had the right stuff to run a company, so we needed someone to come in and manage those egos and personalities. I should add that the third person that came into his own then was Jon Belmonte as COO. Jon was willing to log in the long hours, essentially living in the La Jolla office for the next few years in order to stay on top of the operations, budgets, and personnel.  These three may not have been the ones to take Active from zero to one, but they were exactly the right team to take Active to the next level and beyond.”

Fodder: “I met Tom Clancy, longtime local tech investor and entrepreneur, recently.  Tom was a member of the Board of Directors at The Active Network from 2003 to 2013.  When we met, I told him that I helped start Active back in 1999. His response was, ‘I hear that claim from a lot of people,’” Scott said. “It wasn’t surprising that he might be suspicious of my involvement. He joined the company two years after I left.  Also, there were a lot of people who could make that claim – that’s what happens when five companies come together in a wild ride of a roll-up in just two short years.”

Career Path: “When we started Active, I had already realized that my passion was in entrepreneurism.  I like starting companies. When you find something that you’re good at, you should do it in a hot industry.  Active was an opportunity to veer away from my life science interests and help start up an Internet company. With all of the money pouring into the space, this was a chance to build something very quickly and learn a lot in the process.” 

Biotech Beach: “I had been working in the high tech and biotech worlds for a few years before Active,” Scott said. “I had started Pharmatek with a partner in 1999 during the Active years, so I was still engaged, though not full time.  I spent my vacation time going to trade shows and helping out with the early development of Pharmatek (which was sold to Catalent in 2016) while I was at Active.  I had also started a biotech company about that time called Diakron with some technology that we licensed from the Indian government.  So when I left Active, I was pretty comfortable stepping back into the pharma world. To me, regardless of the type of technology, it is always about positioning new tech in the marketplace, differentiating yourself, and then competing for business.”TEGA: “One of the nice things about starting a drug development services company, like Pharmatek, is that you get to meet a lot of pharma startups and you get exposed to a lot of different technologies.  Over the 17 years that we ran Pharmatek, I got involved in a number of small pharmas as an investor, board member, or advisor. One of those companies was Zacharon. I was really attracted to the emerging field of glycobiology and its involvement in various cellular interactions and diseases.  I was asked to serve on the Board of Zacharon which eventually received funding from Avalon Ventures. We sold the company to BioMarin in 2013. Soon after that I founded TEGA with some of the original founders of Zacharon. It was like getting the band back together but with a new focus.”

Incubation: “I incubated the TEGA team at Pharmatek for two years.  It saved us a lot of money while we established our two scientific programs.  After we sold Pharmatek, we moved TEGA to a lab on campus at UC San Diego. We were the first biotech company to lease space on campus.  It was a remarkable experience. We set up a dozen or so collaborations on campus. We advised grad students, postdocs, and professors on their start-up ideas, we shared equipment with other labs, we sponsored talks on campus, and generally became a citizen of the community. During that time we raised $2.2 million in seed funding and another $1.5 million in grants.  We moved off campus to a larger lab this year and the science continues.”

Unique Platform: “TEGA is focused on glycans, which is the least understood of the major macromolecules, the others being DNA/RNA, proteins, and fatty acids.  And yet glycans are implicated in all kinds of cellular interactions and diseases. We have a drug program focused on enzyme replacement therapy for a rare disease called lysosomal storage disorder, and a second program to develop recombinant heparin and heparan sulfates.  I really love this area of science and the scientists that I get to work with. We have a drug moving into preclinical testing and we are raising a Series A to move it into the clinic.”

Tech Ecosystem: Scott’s continuous involvement in the local tech ecosystem also includes serving on the Board of Directors at Biocom and as Board Chair of CONNECT.

“RaceGate went through CONNECT’s Springboard program in 1999,” he said. “When I meet with the entrepreneurs coming through Springboard these days, I like to tell them that we also went through Springboard, but it was during the previous century. RaceGate.com received its initial funding from Enterprise Partners after our presentation at CONNECT’s Financial Forum.  The next year, as Active.com, we applied for and won CONNECT’s Most Innovative Product award. We were a poster child for the organization. And thus began my 20 year relationship with CONNECT. I’ve been a fan and supporter ever since.”

“While CONNECT is tech agnostic, supporting all entrepreneurs, Biocom is exquisitely focused on supporting the California biotech/pharma industry,” Scott added.  “Biocom supports all pharma with a purchasing group, state and federal policy, health benefits, capital formation, partnering, and events.”

Regional Growth & Support: “When CONNECT was founded in 1985, there was not a lot of support for entrepreneurs, especially those that were spinning technologies out of the local academic institutions,” Scott said.  “Today, there are over 130 incubators, accelerators, mentoring programs, and funding programs in San Diego. And remarkably, there are around 400 new tech start-ups founded each year. No one group can support all these start-ups.  We need to work together. CONNECT is in a unique position to now support both entrepreneurs as well as the ecosystem that supports entrepreneurs. By any metric, as a community, we’ve achieved phenomenal growth in the San Diego tech industries, led by companies like Qualcomm, Linkabit, and Hybritech.” 

“If we want to keep growing, we need to work together to support even more start-ups,” he added. “That will require significant investment in the real estate, funding sources and workforce development required to support these companies.  This will lead to further growth in the service provider sector as well. And that means lots of new jobs.”  

San Diego: Scott, who attended UC San Diego for his undergrad and the University of San Diego for law school, lived and worked in between in Boston, Los Angeles, Baltimore, and Philadelphia.  “When I had the opportunity to move back to San Diego, I jumped at it,” he said. “There is no better place to raise a family or start a company.”

Editor’s Note: This is part seven 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 4, Part 5  & Part 6.