Teamworks Makes the Dream Work

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Happy Monday, folks.

You know when you neglect to change the oil in your car, and then you put off refilling your windshield wiper fluid, and then next thing you know, every light in on your dashboard is flashing and all sorts of alarms are sounding off telling you that your vehicle is at risk of exploding?

That's pretty much how I imagine everyone at Alphabet, the owner of Google, is feeling right now as the bad news just keeps on keepin' on. There has already been growing concern over threats to the company's search engine dominance, chief among them Bing with the integration of ChatGPT. Many believe that this tool will be able to provide superior search results for users after Google's Bama-like dynasty in the industry. rip Internet Explorer...

The heat is being felt in the kitchen, too. Reports are that CEO Sundar Pichai issued a company-wide code red and called in retired founders Sergey Brin and Larry Page. The two must've been pretty irritated to be disturbed from their relaxation on whatever island in the Bahamas they were sipping coconuts on.

The result of this hardcore brainstorm sesh? It seems that rather than just produce their own AI solution (which they're at least trying to do), they're going full tattle tale and scaring politicians and convincing the media that ChatGPT is going to destroy everyone's jobs and prolly society as we know it. At least we have time to research how to survive thanks to The Last of Us getting renewed for a season 2.

Last week, the company succumbed to the illness plaguing all big tech companies these days as it laid off 12k employees. Unfortunately, the drama goes from PG-13 to R as we add "getting sued" to Google's tough month.

The Department of Justice and eight US states are accusing Google of abusing its digital ad business advantage, claiming that its dominance (for now😈) are allowing it to force ad buyers and sellers into accepting less than favorable terms on its platform as the search engine takes a 30% cut from these deals.

The same behavior is what prompted lawsuits against Apple and its App Store policies as it also takes a 30% cut of all app transactions, inspiring a Big Brother accusation from Fortnite creator Epic Games.

Most of Google's $169 billion in revenue comes from ad money, and the proposal from the DOJ to require the company to split off its digital ad business will prove devastating to that large, Elon-approved number.

These lawsuits are not an anomaly for Alphabet. In the latter half of last year, the company was fined nearly $400 million for violating consumer privacy location data policies, and the EU launched its own series of antitrust suits against the company. Not cool, man.

On the note of Generative AI,  it seems like investors are getting caught up in the hype, too. VC funding numbers from last year came in, and they're pretty [ask ChatGPT for synonym for astounding]:

• $1.3 billion was raised last year through November, a 15% YoY increase

• This was actually a smaller increase than for the year before, where total deal count got our dyslexic friends all kinds of mixed up and increased from 48 to 84 investments. The total value of deals between 2020 and '21 was up 400%

To be completely honest, I think the Generative AI speculation is this year's crypto craze. I'm bullish on its long-term potential, but even though some people are experimenting with its use case in their professional work or elsewhere, I fear that too few people actually have much use for it, and until this is the case, I'm thinking there might be a harsh down cycle following the boom in investor interest🤷‍♀️

The rest of this newsletter dives into a company I came across in my other newsletter, Pigskin Economics, the emails bringing you the latest news and analysis in the business of college football. If you're interested in checking it out, just hit the button to below to get it in your inbox every Friday.

When I'm not talking startups, chances are I'm bent over in agony watching my Texas A&M Aggies lose another game or drinking the maroon kool-aid and trying to convince myself that this next year is different.

I'm a big college football guy. Like huge. Like follow high school recruiting and closely decipher prospects' obscure tweets for hidden hints ginormous.

However, it's not often that I come across a startup that is operating in this space, allowing me to really mix my interests in perfect harmony like pickles and peanut butter. However, if you're a Pigskin Economics subscriber, you know just how complex the business behind the sport really is, making it ripe for companies looking to streamline or improve some of the behind-the-scenes wheeling and dealing.

Teamworks is the go-to solution for improving operations for college athletes and athletic programs. The platform truly is comprehensive, supporting everything from basic scheduling and communication to the more involved nutrition planning, performance optimization, and academic monitoring and support.

With the introduction of legalized NIL (Name, Image, Likeness) which now allows college (and some lucky high schoolers in 30 states) athletes to profit off of marketing and endorsement deals, the platform has even launched a feature for brand-building and compliance for athletes, and there's even a community feature allowing players and fans to really embrace the possibilities of content and compensation for athletes for this more involved access.

Arguably the bane of athletic programs' existence is the paperwork. Staffers have to distribute docs for academic requirements and eligibility, healthcare and medical plans, and now constantly changing rules around athletes' abilities to make money and how to pay their taxes with hundreds of players. Luckily, we all know that we can count on 18 year olds to keep up with these Moby Dick's worth of important docs and get them turned in on time...

With Teamworks, all of the compliance and administrative paperwork processes are streamlined through an easy-to-use central platform. The app has with integrations like DocuSign meaning that paperwork is made digital, saving the Amazon and allowing the staff to hound players to fill it out like the people reaching out about your car's extended warranty in the process.

Easy to monitor dashboards keep track of all NIL activities for both the player and the administration to ensure compliance with NCAA rules and guidance and support. Teams can also add academic support like professors and tutors to allow communication within the app to make sure that athletes are turning in all of their work and getting any additional support that they might require.

A testament to Teamwork's product-market fit and rapid acceptance among athletic programs, most of these features weren't even originally part of the platform.

Instead, the company has been on heavy spending spree with its influx of capital over the last few months, acquiring four companies providing services which could be incorporated into the central platform. Most recently, it was announced that the company had acquired Grafted, Retain Technologies, NextPlay Careers, and Smartabase for many of the NIL, compliance, and career planning features. Notemeal, the product's nutritional planning feature, was acquired a couple years before this.

With users including the San Francisco 49ers, the Alabama Crimson Tide, and even the Chelsea Football Club, the platform has managed to assemble a customer roster even more impressive than the individual team rosters each of its clients boasts. In total, the site claims to support more than 300 D1 Athletic Departments, 5,000 NCAA teams, 150 pro organizations, and even 50 national teams.

Last year, revenue was estimated to be around $31 million, a 34 inch vertical jump from the $5.5 million estimation for the year before. The company is older (founded in 2006), but the team is finally experiencing rapid growth, and the growing market for this product even despite having reached such a large number of organizations already makes it likely that the company will continue to grow its top line while finding innovative ways to introduce new features to the platform.

When the company was first launched, few athletic programs were investing in the sorts of competitive advantages that Teamworks offers, but the entire sports industry has undergone a transformation as organizations have begun to realize that they must do everything they can to get a step ahead of the competition and maximize the potential of the product they are putting on the field.

To date, the company has already raised $103.3 million, its Series D round which closed last summer making up $50 million of that at a valuation estimated to be between $200 and $300 million. Early backers include Seaport Capital and General Catalyst, and each of its last two rounds were led by Delta-v Capital. These institutional investors have been joined by the likes of NBA Hall of Famer David Robinson, Professional Soccer Player Jessica McDonald, and Heisman Trophy winner Marcus Mariota.

The ongoing belief of the early investors in the form of follow-up funding as well as the participation from sports icons like those mentioned (among dozens of others) all point to the potential which still remains.

The market for sports management software was just north of $4.5 billion last year and is expected to grow to just under $18 B by the end of 2029, a CAGR of more than 14%. While this market alone is massive, the growing markets for some of Teamworks' newer features (like the NIL market which is expected to increase from <$1B to nearly $5B by the end of 2025) mean that there is still ample opportunity to increase the company's slice of the sports pie with new products for its existing customers.

Teamworks might be one of the largest names in the athletics operations software space, but they're not alone with competition including 360Player, Arms, and Basepath. None of these competitors offers the full suite of tools that Teamworks does, and even more importantly, none has the backing and support of such a large roster of clients and the approval of major sports media sites like On3.

The team demonstrates a clear example of founder-market fit, too. CEO and founder Zach Maurides was a football player at Duke dealing with the exact issues Teamworks now solves. The deep understanding provided by experiencing the issue so personally, and his impressive academic track record allowed him to quickly ship a product that solves a real issue for athletes and athletic departments alike, and the team has since expanded to more than 300 members across 10 countries.

Among the new hires are tech experts, sports scientists, and even former athletic department administrators, a combination allowing the team to successfully maneuver the sports operations space and continue to innovate on a great product that is helping hundreds of thousands of people and helping to ensure the on-field product is entertaining for hundreds of millions more.

TLDR: Teamworks is a sports operations management platform providing athletic departments and athletes with every tool they need to manage their programs in an ever-changing ecosystem, including scheduling, recruiting, nutrition and training plans, compliance, and even NIL and brand-building features. With a strong team and even stronger roster of existing customers, the team appears poised for huge further growth as the sports industry's importance in the economy only continues to rocket.

Cheers to another day,

Trey

P.S. Interested in the business of college football? Make sure to check out Pigskin Economics, a once-per-week breakdown of the biggest topics going from the sideline to the executive suite.