Practical Founders Podcast

#24: Bootstrapped event registration platform for triathlons and running races – Jeff Matlow

Jeff Matlow is a serial entrepreneur and a crazy triathlete and long-distance runner who found a way to put those passions together in a crazy software startup. He saw an opportunity to create a better registration experience for endurance events like 5Ks, marathons, and triathlons. 

In 2008, he sold their first deal to USA Triathlon and set out to build the website and registration platform he envisioned. The company I Am Athlete (now called imATHLETE) went live with their platform and started selling to hundreds, then thousands, of other endurance event managers all over the US. The company grew without big funding and the solution expanded to manage payments, social media promotion, and more.

In 2019 Jeff sold the company to a major endurance event company. Jeff shares the challenges in growing this company and the learnings from trying to grow with a strategic partnership. Like running a marathon or climbing Everest, the journey is hard and how you approach every day is critical.

Best quote from Jeff:

“Whatever your idea is that you’re starting the company with, you’re wrong. It’s not going to work. What it takes is iterating that idea. And that’s what the entrepreneur does.

“It seems obvious, but a lot of people don’t do that. They just think I’ve got a good idea and so everybody’s going to come and buy from me.

“If you’re coming up with an idea for a new company, go talk to your potential customers and see what they want and see if they like it. And if they don’t like it, they’re not going to buy it.”

Edited transcript of Practical Founder Podcast interview with Jeff Matlow, founder and former CEO of I Am Athlete (now imATHLETE).

Greg Head: Hey, Jeff, welcome to the Practical Founders podcast.

Jeff Matlow: Thank you. Great to be here, Greg. Is this the one where you’re going to make me start crying?

Greg Head: There’s no cry here. What we’re trying to do is prevent the tears from practical founders, from all the lessons people like you have learned, Like you and I have been around doing this a long time, and done a bunch of things. If you’ve got a great story with your previous venture and a lot of other things there, so I look forward to the conversation. Why don’t you take us through the I Am Athlete business that you grew and sold, I guess in 2019? We’ll just play around with that. That’s the big thing you did last and we’ll dig around with the many other things you’ve done in the lessons learned from all of it.

Jeff Matlow: So I Am Athlete in a nutshell, is an online platform for endurance races to handle registration and fundraising and ecommerce and data management. The people may know ActiveNetwork networks out there. They were one of our competitors.

Greg Head: How big did it get with employees and races and revenues or whatever you could say?

Jeff Matlow: So, employees, we were 29 people. In terms of processing, we processed about $100 Million a year, though that was not all of our revenue. Our revenue was a percentage of that, thousands of races. I don’t know the numbers.

Greg Head: So these are the triathlons and the marathons and the half marathons and the turkey trots and the 5Ks. And was it running related or cycling or any endurance?

Jeff Matlow: So running cycling, and triathlon, our clients included Detroit Marathon, LA Marathon, Bike New York, which is the largest biking event, single day biking event in the country if not the world. Twin Cities Marathon. Dallas Marathon. US Government, USA Triathlon. We had a whole variety of brand name clients and the 80/20 rule, right? So 20% of our clients were the big ones that people have heard of and 80% were the churches and YMCA and every other little.

Greg Head: And you’re a runner and you’re a triathlete and everything else yourself. I guess one of those crazy people.

Jeff Matlow: I am one of those crazy people. I always say, especially ultra runners are there in the realm of architects. I apologize to all the architects out there, but a little bit left of center. I’m one of those people.

Greg Head: Okay. Right.

Jeff Matlow: So I’m allowed to. To make fun of them.

Greg Head: Yeah. Is that how it works in the endurance sports you pick your endurance at your marathoner and then you make fun of the people who do the longer races than you. The 100 milers are the crazy ones, right? You’re not crazy.

Jeff Matlow: Absolutely. Absolutely. No matter how far I go, the people who go further are crazy.

Greg Head: Well, it’s kind of an entrepreneurial thing or some version of that there. So and that was a software platform that powered these things, you know the register and get your number and get the emails and social media stuff.

Jeff Matlow: We were one of the central hubs for the events outside of the cones and barricades that make up the actual race. Most of the digital elements, the online elements, would come through us. You know, all the registration and payments came through us. Oftentimes sales of any merchandise came through us, some of the fundraisings came through us, and then emails you’d get about the race many times came through us. We’re the company that nobody knows about the races that many people did.

Greg Head: How did you get into that business?

Jeff Matlow: Yeah, so as you mentioned, I’m an athlete now as a caveat, the company is called I Am Athlete. I define an athlete as anybody who gets off the couch and moves like walks somewhere. We all can be athletes.

Greg Head: That’s increasing your TAM, your total available market. If you get off the couch, I could sell something to you!

Jeff Matlow: Yeah. From an entrepreneurial side, that is exactly what it is in my pitch. I live in California. My family’s all on the East Coast. We are one of those families where, you know, eight of us will go do a triathlon together or 13 of us will do a turkey trot. And so I wanted to figure out a way that I could understand these events that I’m flying to the East Coast to do. And so, just on the side, I had somebody build a Wikipedia for sporting events for me, like anybody with entrepreneurial disease, I suppose people started looking at it, started getting traction.

Greg Head: A list of all the events, all the turkey trots, all the marathons, all the 5Ks, etc.?

Jeff Matlow: Everything. Yes. I got a list of thousands of events we launched with and then areas where people could just come in and write about them and indicate they participated. And then there’s this one event in upstate New York called Survival of Shawangunks. Best event I’ve ever done. A bike, run, swim, run, swim, run. And then one more swim, run. At the bottom of a hill on a bike ride is a pothole and everybody knows who’s done it before that. You’ve got to watch out for that pothole because inevitably three people in that 200-person race are going to end up in an ambulance. I wanted to know where the potholes were. Everywhere. And so we started getting traction. And so I took a step back and I thought, Well, this is working. How can I make money off of it? I took a hard look at the industry. We were in the midst, maybe towards the end of the recession, the 2008 to 2009 ish recession. There weren’t any companies who were combining all the there’s really only about five revenue channels in endurance sports, and people weren’t combining them into one platform. And I saw that this unification of revenue was coming down. And so lo and behold, I found a company in Birmingham, Alabama, that was doing some pretty neat stuff, a very small registration company that was built for some friends. And so I acquired them now as a bootstrap for I had to be creative, right? So I acquired them for no money and a promise. As it turns out, it worked out really well for everybody. So for the company, when I acquired it was making $16,000. What they ended up making from it was well over $100,000.

Greg Head: Yeah. Great.

Jeff Matlow: So huge return for them. And for me, I immediately had credibility.

Greg Head: And so you actually have some entrepreneurial storytelling skills. Someday this will be big. This is the way the industry is going. You can be part of it. And they said, Well, it ain’t going so well. This looks like a better opportunity. Go for it, Jeff.

Jeff Matlow: Right. And so even better with the storytelling skills, you know, people, entrepreneurs who come to me and say, you know, I don’t know, I’m not good enough to beat the big boys or I don’t know what to do. Let me tell you about my first client, USA Triathlon..

Greg Head: The USA Triathlon.

Jeff Matlow: Yeah, right. The USA triathlon, the US Olympic Committee, part of the Olympics. Their contract was ready for renewal with ActiveNetwork, which is a big player in the space. And they were doing an RFP as they had to and so I joined the RFP. It turns out I came down to the last two. It was between me and ActiveNetwork. Now, keep in mind, I did not have a website. I did not have a product in the market yet.

Greg Head: I just was this guy.

Jeff Matlow: Greg Head: Yeah, right. A really good PowerPoint. I wish I still had it. And I’m up against, at the time it was probably valued at $500 million or $800 Million company, whatever Active was. And I won the business and I won it in mid-September. I remember because I had to launch on January 1st.

Greg Head: How did you win the business, Jeff? What was your magic trick there?

Jeff Matlow: It was sales, right? I provided a vision, and I provided a solution. So what I did, instead of pitching a product, I pitched growth for the company and I had an idea and I showed them, Hey, I’ve done some companies before. It didn’t hurt as well. And I am a triathlete. I get your pain. Here’s how you’re going to change and evolve USA Triathlon into a much better organization. I don’t know. They bought into it. . And then I had to go build something. So I had a CTO that I had already hired. He was really he is was really, really talented. A startup dream in terms of CTO. So I was product, I was QA, I was everything he was coding and he built out the site. And again we had a launch at midnight on January 1st. December 31st, I’m on holiday with my family, they’re all skiing for four days. I’m in a room trying to build the site. We launched at 11:45 p.m. on December 31st and I actually got my family together and I’m like, Let’s just have a moment of silence. My career is going to be make or break in 15 minutes. We launched at midnight and our first event was the USA Triathlon National Championships, and it went very well. A year and a half later, we were the largest triathlon registration company in the world.

Greg Head: So you started off with the marquee account and somehow started at the top. Sometimes you march your way up the hill to the big accounts and you start with the small ones, but you actually started with one of the larger ones.

Jeff Matlow: Yeah, and that’s my philosophy. And I talked to a lot of entrepreneurs about this. Listen, you can go one by one in selling people, but why not start with the companies that or go towards the companies that can bring you a lot of business, right? The ones who are influential as long as you can cater to their needs. Now, it was not a very robust site, but it did exactly what they needed.

Greg Head: And you were off and running with revenues and new business and all that. And so you were playing catch up to your revenues from day one, right?

Jeff Matlow: Yeah, we were profitable. I was working like 48 hours a day. Not great on a relationship, but helped grow the company.

Greg Head: Jeff, can I ask you about this CTO relationship? There are a lot of founders out there that have an idea. They sell something now they need to build it. They could hire offshore engineers and play that game or they can hire an engineer. Everybody would love the magic trick of the coding CTO, a senior person who joins as a co-founder and owns a piece of the company. They come on for free or whatever. How did that arrangement work? Just so people can hear an example of how that got done.

Jeff Matlow: Yeah, it’s a great question and I will fully admit that a lot of growth is luck, right? In fact, I was listening to watching a soccer game recently, a football game recently, and they said, you know, success is 90% luck and 10% skill, but you better have that 10%. A friend of mine knew a guy who was always number two, you know, always the assistant CTO, never the CTO. Right. And he wanted an opportunity to run the game. He and I met and I got lucky, you know.

Greg Head: Did you pay a salary, here’s a little equity, or a little bit of both? Here’s a big chunk of the company or something?

Jeff Matlow: Yeah, a little bit of both. So in the beginning it was just equity and trust and I promised a salary. And then once I acquired that business, then I was able to raise some friends and family money. So we ended up raising, I put some money in, so between mine and the others, we had $335,000 we raised and that was used for his salary.

Greg Head: So you had to sell him as much as you sold USA Triathlon.

Jeff Matlow: Triathlon. Absolutely. Absolutely.

Greg Head: Yeah. Well, there’s a little luck in both of those. And it’s hard to recommend going out and having enough coffees until somebody jumps in. But you had a vision, you had a customer.

Jeff Matlow: And I got to say, passion goes a long way. You know, I was very, very passionate about what I was creating. And I had spent some time trying to figure out who’s the market, how are we going to get that market, how are we going to differentiate ourselves. And I was and I believed in it. So that really helps a lot.

Greg Head: Yeah. Did it just grow from word of mouth from there, or did you have to call up triathlon and events people and say, Hey, you should try your stuff? Or how did that go? Because these are small communities. Everybody knows each other probably, and they travel from event to say, you should be using this, and this one’s better than that– the community sell.

Jeff Matlow: Yeah, so word of mouth partially, but there was a lot of legwork and word of mouth. So what I do is I’d pick a state. I’d find out how many events are in a state that I might be able to work with. I would plan a trip out there and then I’d call people and say, Hey, I happen to be in your neighborhood. I’d love to meet with you. I would then end up, you know, in a week-long trip with 20, 30 meetings and maybe a couple of them closed. And listen, I wasn’t going to Detroit calling the Detroit Marathon. You know, I was going to Florida, calling the local five K eventually, I get people who believe in what I’m doing, who also are connectors. And so this one trip to Florida specifically, you know, one week, 20 meetings. I had no business in Florida before I went. A year later, I had like 80% of the market. Because I got the right people who told everybody else.

Greg Head: And did your vision of transforming their business instead of just automating their registration, did that pitch continue, or was there something new that you offered?

Jeff Matlow: The pitch continued. Loaded question, Greg. Loaded question. So I write a newsletter on the side about leadership. And one of my newsletters today actually talks about how to unexpect the expected. Entrepreneurs often have an expected result that they want an expected goal if they don’t meet that goal. It is easy to feel like a failure and that you went the wrong way. My thing is, just don’t expect that. Like, you have to learn that wherever you end up is a good result. And their success in that, where I ended up kind of shifted a little. So my first pitch, yes, was we’re going to transform it all. But then as we started understanding the market a little better and getting that feedback and then customizing technology to what the market needed, it changed a little bit. In the end, we still did the same thing.

Greg Head: And so in the end, so like skipping forward, you built a team and had a little leadership and you stopped being the lone sales guy traveling there and you had a factory that could deliver all of this and the product got better. Dot, dot, dot. Were there any challenges? Like life and death challenges along the way, or did you stay ahead of profitability and customer satisfaction the whole way?

Jeff Matlow: I’d love to say that it was all sunshine and roses, a straight line. In fact, let’s just end the interview right now. It was perfect. It’s never perfect, right? I mean, you know, as many stories as I do. So there was this one time we would pay our clients every two weeks, and I’m outlaying millions of dollars, in some cases.

Greg Head: Payments passing through.

Jeff Matlow: The payments passing through. One payment cycle we ended up paying the previous cycle again. So all of a sudden I had a million and a half dollars outside of my account that I needed to get back from 400-500 hundred different people. So you get obstacles in your way, right?

Greg Head: Yeah.

Jeff Matlow: Yeah. So, I mean, there were some ups and downs of the whole thing as we started being more successful, more competition comes in. And so, you know, then there’s competitiveness in terms of features and functionality. I never came down on price. I was pretty adamant that as long as you have the product and support and marketing resources, the price really doesn’t matter. You know, it’s always it’s a curve line and it’s a hurricane and it’s a tornado and there are caves and bridges and we scaled them all.

Greg Head: You eventually took a little bit of funding. So this is a practical founder story. You procrastinated funding, you bootstrapped and customer-funded and sold first, and so forth. But you took a little debt and I think a little VC funding towards the end.

Jeff Matlow: Yeah. So we had a client that was growing very, very quickly. So they started it was, you know, there’s the obstacle med runs. Tough Mudders and Spartans of the world. So before Tough Mudder and Spartan came around, there was a company that was doing extremely well. One of my salespeople brought it in. They had one event and the next year they had 50 and then they were growing dramatically. I needed to support that growth. And so I raised I brought in a little bit of debt, not much, a few hundred thousand, I think. But I needed to support some hiring to stay on top of the growth. Three months after we brought on the debt, that company closed down a little restructuring we survived wasn’t the.

Greg Head: Debt is useful. It’s leaner, it’s less expensive than equity. But if you don’t pay your debt, there first in line, you’re kind of dangling the keys to the company if you don’t pay back the debt. So it’s not to be taken lightly.

Jeff Matlow: And my feeling on debt is you don’t get it unless you know for sure that you’re going to pay it back. I had a contract signed. I knew what was happening.

Greg Head: And so for sure, so for sure?

Jeff Matlow: We did take on debt. We actually Sass Capital which is an awesome company that we used and then I purposely I think we’re going to get into my earlier entrepreneurial history. I had raised some venture capital before so with this company I wanted to make sure that I didn’t raise either at all or until I knew that I had control, meaning my vision and we’re driving towards my vision. I met a guy who owned a venture firm and we became friends. He kept telling me he wanted to invest. And I’m like, I’m good, thanks. And so one day he invited me to lunch and I went down to his office and he brought me into his room. And it turned out to be a board meeting with his limited partners. And he brought me in there. He closed the door and he said, We’re not leaving until you say yes.

Greg Head: Well, that’s very different than the begging that usually happens from desperate founders, cash-starved founders, you know, in the firefight. That’s a different way to play the game is to tell them, No, no, no, no. Until they’re ready to bend the knee to solve it.

Jeff Matlow: Absolutely. And, you know, as the adage goes, and it’s absolutely true, the hardest time to raise money is when you need it. Because people don’t want to give you money if there’s a risk of you going down and when you need it, that’s a problem.

Greg Head: What did you negotiate that other founders couldn’t believe you negotiated? Was there something specific about liquidation preferences or control of the company or something?

Jeff Matlow: What I did, it wasn’t a straight venture investment because I didn’t want to just do venture. So it was half venture and half strategic. A company called FinishLine, which is the second largest shoe manufacturer and shoe retailer in the country. They put in half the money.

Greg Head: And were they part of this network or they were there or they said, if you go get FinishLine, we’ll do this deal, Or how did that happen?

Jeff Matlow: They came in together. Because my vision was this athlete journey where we knew that, listen. When somebody signed up for a marathon, I know that they’re doing a ten K six months out, they’re doing a 5K or a 5K seven months out. They’re doing a half marathon three months out. They’re going to need one pair of shoes, they’re going to need more nutrition every month. They know all this stuff.

Greg Head: You had all the data about their customers.

Jeff Matlow: Absolutely. And that’s why I could go in. And this was actually what the pitch was, is when somebody registers for a race, I know their journey for six months. Depending on how long the race is, three months to 12 months. I know what they’re going to do. And I want to own that journey. I want to own that experience of them. You know, I want to own 364 days of the year. The race can own the race day. I want the other days. So the purpose of FinishLine was they had a distribution facility right there in Indianapolis. They have a lot of product. And so we could plug that product in and start owning more of the transaction and the journey. That worked very well with our venture partner Innovate Partners and they were a great partner.

Greg Head: So looking back and you’ve since sold the company and you had some time with that company and you know, since 2019, you sold it pre-COVID just before COVID, I guess. Yes. Did that bootstrap, to just get funding just on your terms, did that work the way you expected? Was it the leverage you needed?.

Jeff Matlow: Absolutely not. It didn’t work out. Let’s go back to unexpected the expected. We did not hit the vision that I wanted to present. There were challenges with FinishLine. We ended up parting ways with them. After a year.

Greg Head: It’s at the small company meets big company and can’t make the elephant dance and all that?

Jeff Matlow: Yeah, different priorities. And it is really tough to make the elephant dance when the elephant, you know, I want them to tango and they want to samba.

Greg Head: Yeah, yeah.

Jeff Matlow: That became pretty challenging. So in hindsight, would I have done the same deal? No, I wouldn’t have. I think our venture partner was very good, but I think that we still needed a good strategic partner. The people that I did the deal with at FinishLine all magically left the company within six months of the deal being done.

Greg Head: Isn’t that interesting?

Jeff Matlow: Yes. And that is a good lesson that I learned too. I love the people I’m doing the deal with. Are you sticking around? Because if it’s hinging on you being the cheerleader internally if you’re not sticking around, I don’t want to do the deal.

Greg Head: Did you need the money? Were you profitable or you got the money because it gave you fuel to do this strategic uplift?

Jeff Matlow: At the time, we were profitable. We wanted it for strategic uplift. And then we invested and went to not being profitable. We raised in 2016.

Greg Head: Okay. Did you keep growing after that or was there kind of a challenging phase or a growth phase or?

Jeff Matlow: Yeah, we kept growing. It became more competitive in the market, so our growth trajectory wasn’t as much as it was before. And honestly, looking at hindsight, that’s why I was going for this strategic move to really get beyond just the registration. And so that falling through definitely hurt the opportunity that I was expecting.

Greg Head: And then you saw the company in 2019. Can you briefly talk us through that? Did somebody come after you? Did you say, I got to sell this thing, Let’s run a process? Generally, how did that come about?

Jeff Matlow: Yeah, I did run a process. You know, here are some juicy tidbits for people, too. So what I was doing, there were four companies in the space, four registration companies, that represented 85% of all the revenue in endurance sports. I decided, let me put them together or put a few of them together and try.

Greg Head: To let’s consolidate.

Jeff Matlow: Yeah, I hired a banker. We signed a term sheet with a PE firm. Me and one other company. After they the firm met with the other company, they decided they didn’t want to do the deal. So that fell apart. Then we were able to sign another term sheet with an even bigger PE firm. And again, the other company that they were buying was new to the sales process, so they walked away. It was odd. There’s more to that, but we’ll need a whiskey to get through it. I stopped working with the bankers. They did a good job, but we’d just run our course. Right? And I met the Gannett folks randomly and we clicked. And at the end of the first meeting, they’re like, We want to buy you. And that was in May of 2019. And so we started these conversations, and each conversation got better and better. And little did I know that they are the largest owner of endurance events in the country, maybe the world. And they had a registration company and they had a few other things. And so it just fit in. We started talking to May. We signed the deal in November 2019. I’d like to say I’m really super brilliant at knowing that there was going to be a pandemic and all events were going to shut down.

Greg Head: Oh, right. That was lucky.

Jeff Matlow: Let’s just stop. Let’s just say I’m brilliant.

Greg Head: And so it’s funny how your expectations about what you could do with bringing companies together and getting a big private equity backer to finance all of this and put them all together didn’t work out. And this other thing did. Can you tell us briefly about the exit? Was it a life-changing exit that paid back your friendly investors and your employees? And the CTO co-founder did great? I mean, you probably can’t tell the number. This is very typical for practical founders, but how could you get us in the neighborhood of what the scale of that acquisition was?

Jeff Matlow: We did it based on EBITDA, but I think when you look at revenue, we were about 3X revenue in valuation. It was not life-changing for me, partially thanks to the pandemic and earn-outs and things like that.

Greg Head: Oh, so some of the deal didn’t realize.

Jeff Matlow: Rarely do you see a contract that talks about pandemics and pre-pandemics. So a bunch of people got paid back. Did well, but I can’t say it was life-changing for me.

Greg Head: Okay, so, you know, there are some ups and downs there. When you hear that straight-line story of there was this triathlete and then I knocked on the door and then we created one of the largest companies in endurance sports registration. There was a big luck and some hard knocks and some ups and downs. And eventually, COVID got a piece of you in that one.

Jeff Matlow: Yeah, yeah. Listen, there is also opportunity, of course, we raised money for the early investors, so many early investors cashed in. And they did very well. So there are all sorts of opportunities there.

Greg Head: Jeff, would you call this a software company or a payments company? So did you give away the software to get the payments or give away the payments to get the SaaS recurring revenue? Or how does that mix go? There are a lot of mixy fintech companies out there.

Jeff Matlow: Yeah. So just from the legal aspect of it, we were not a payments company because I see we actually outsourced the processing. So we were a technology company.

Greg Head: Did you get a piece of that payments revenue along the way?

Jeff Matlow: Yes, we did. We were a merchant of record, which is what our technical title is.

Greg Head: Well, that’s really exciting. What a journey. And you know, you can laugh about it and you know, usually these, you know, founders getting into the climb, they, you know, it’s like climbing Everest at first everybody is saying, this is awesome. You’ve got to do it. It’s so cool. And the first two weeks are just going up to where the adventure begins. But climbing Everest, most people don’t make it. A lot of people die. It’s really hard.

Jeff Matlow: Yeah, I have an analogy for everything for the most part, but Everest I think is a great analogy because everybody wants to be on the top, right? But you can’t get to the top until you spend all that time climbing. And it’s not like there’s nothing to do on the top except for stand and look, right? And it’s all the climbing where there’s a lot of stuff to do and that you’ve got to roll up your sleeves and then most people die on the way down.

Greg Head: Isn’t that interesting?

Jeff Matlow: Yeah, like 80% of the deaths or something is on the way down because people get complacent, right? And talking about founders, it’s easy to think, On a smaller scale, it’s like I Am Athlete. All right, we got USA Triathlon. We became the largest triathlon registration company. Awesome. Great. This is going to be easy, but it’s not. That’s where the hard stuff begins. And so you can’t be complacent. I feel like an entrepreneur isn’t really an entrepreneur unless they have an Everest analogy. I feel like that should be required. So there’s something.

Greg Head: About practical founders. It’s kind of a hardcore thing if you’ve been doing it, that they’ve had triathlon-level pain and suffering and endurance. You know there’s something in it. I’m still waiting for the person who said it was easy and got there faster than I thought and it all worked out without any hiccups. So speaking of hiccups and lessons learned, thank you for sharing your story of I Am Athlete, which is imathlete.com.

Jeff Matlow: The official name is I Am Athlete. There’s a podcast NFL podcast. Right. So I get all their mail now.

Greg Head: So you’ve had a long career starting way back when. Can we pick off a couple of these? Your experience in the record business, which it’s a little bit like the startup business and funding, right? And finding deals and blockbusters and all that kind of stuff. That’s how you got your start, which is really interesting. I guess that’s kind of a deal-making world or something and talent.

Jeff Matlow: And by the way, I like how you snuck in, how old I am with the You’ve been in this for a long time.

Greg Head: Yeah, I’m with you, man.

Jeff Matlow: So, yeah, when I graduated college, I was I played music as a kid. I was a classically trained pianist. I realized that you can’t bring pianos to parties, so I picked up guitar, because girls liked guitars, and I was a DJ and manager and a bunch of other things. And then in college, I realized I had no talent and I was not going to be a rock star, and that I’d be better off on the business side. And I knew I come from a family of entrepreneurs, and so I knew I wanted to start my own company, but I wanted some experience. I lived on the East Coast. I packed up my VW Rabbit and drove to Los Angeles because I wrote a letter to the CEO of Geffen Records at the time, which was the hottest label. Yeah. And I got an interview with the CEO and it went terribly. I didn’t get a job, but I was in LA and finally was able to get into the music business. I worked for EMI and then I worked for A&M and some other companies. Most of my work was around A&R, which is talent search and making the record. So I was lucky to work with James Brown for a bunch of years and Everclear and some bands that are neat. A lot of stories there. Again, bourbon stories. But I found this one band that I really liked, the record label I was at didn’t want to sign them. There was a band from Kansas. Nobody knew them. And so I went to other record labels and they didn’t want to sign them either. So I, with one of my coworkers, we decided we were going to put out the record ourselves. And so we did that.

Greg Head: It’s a little bit like being an investor, right? You’re trying to find something to invest in. You put up some money, you help them get to commercial revenue.

Jeff Matlow: Absolutely. Yeah, we invested some money. We put out the record and all of a sudden people liked it. And I listen, I knew people in the industry, so I was working it. I was trying to build hype. The next thing I know, I’m getting interest from every record label that they want to sign the band or do a deal with my record label, it’s the same band. I was shopping them six months a year before, right? Hype. It was my first lesson in realizing that people will invest where there’s noise, where there’s hype. In my A&R days, you know, there’s there were two types of people. And this I equate very much to venture capital as well. So there’s the type of A&R people who are out there looking for bands, trying to find the hit thing. One year I was out 350 nights a year in a year looking for bands. And then there are the other people.

Greg Head: Around, when they play at the nightclub with the business card that says, Hey, I want to talk about doing a record.

Jeff Matlow: Absolutely. I was the guy that was me. Yeah, but I’m also the guy that walks in and knows within eight bars whether you suck or not. So I’ll walk in, I’ll stand by the door. I hear it. It’s not good. I’m going to the next place where I’m going home. You know, I’ll spend 30 minutes driving to a club to stay in there for 3 minutes. But if they’re great, I want to make sure I’m there. And then there are the other A&R people who just wait for the hype and then they invest in the hype. You know, I found this very much similar to venture capital, right? There are people who are going to look for the companies that they believe in, they believe the people. They believe in the model. They believe it can go. And then there’s a whole bunch of them that are waiting for the hype, and then they’ll throw money at the hype.

Greg Head: So like early-stage investors versus series A now later-stage investors wait until it’s up and running. The flywheels going. Looks safer.

Jeff Matlow: Yeah, let’s take my buddy. This may not be the best example in the world, but I’m going to use it anyway. My buddy Eric Futoran, he was one of the founders, one of the co-founders of a company called Scopely, which does mobile games. They were at one point the second fastest growing company in the country, 19,000% growth. They’re a unicorn. He left to start a different company. I’m pretty sure he didn’t have a business model before he was getting offers to invest. And once he started getting revenue, you don’t have a ton of revenue. But you have far less revenue. It was like maybe 15% of the revenue my company had. And he’s getting like serious money in. Yeah, he’s the guy you follow. And granted he’s going to do well because he’s a super smart guy. I equate that to the like, Weezer. There was a lot of hype around Weezer before they signed. Everybody was after them. Started my own record label. I got lucky with the first band. I got lucky with a second band. I got lucky with a third band. All of a sudden, I launch 1994 my record label. In 1994. I played the whole David and Goliath game.

Greg Head: He was a little guy that was going to do the extra mile work for these guys.

Jeff Matlow: And yeah, I pitched the LA Times on that. They like my pitch. I ended up on the cover of the business section and then next thing you know, ’97, ’98, I’m being flown around the country meeting with Clive Davis, top Jimmy Iovine, and all the top people because of the hype, right? I mean, we had good music. And so I was able to sell that to Interscope Records.

Greg Head: So would you say that these record companies and bands are analogous to investors, venture investors, and startups? I know it’s not the same thing, but like there’s a blockbuster game. You don’t go for somebody that’s going to get modest success. You you have to win by getting a few that get blockbusters in that game and everybody’s out scouring, trying to find the next cool thing. And then when they get the hype and the credibility moving, everybody swarms.

Jeff Matlow: Essentially I was a seed and Series A investor, right in the bands, and hope that they become a unicorn.

Greg Head: So you’re a chronic entrepreneur, serial entrepreneur

Chronic indeed. If there’s a rehab facility, I would like to check myself in.

Greg Head: Well, the rehab is never to go sell your company to a big company and then go work there because chronic entrepreneurs get expelled in about 20 minutes.

Jeff Matlow: Now, you tell me.

Greg Head: Yeah, people are a little bit fanatic, you might be a little bit fanatic about this. Triathletes tend to be a little fanatic more than the average person who just gets off the couch. Tend to go do it again and play the luck. And they’re going to get through the hard things and do that thing. So you had a couple of adventures in there. Now you work with leaders, you work with entrepreneurs, and you coach them on leadership and growing the company. You’ve got a lot to offer there. What are some of the topics that you’re working with entrepreneurs and business leaders that you’re working with right now? What lessons are you imparting that you can tease the audience with who might want to follow up with you?

Jeff Matlow: Let me just give briefly two sides of this. One is the solopreneur, the small, the starting entrepreneur. Yeah, there are a lot of those these days and some have good ideas. They don’t need to be new ideas to be good ideas. It really requires an understanding of the market and what people want and what they’re going to respond to. It seems obvious, but a lot of people don’t do that. They just think I’ve got a good idea and so everybody’s going to come and buy from me. The world right now, everybody can have a say in everything. So if you’re coming up with an idea for a new company, talk to your potential customers and see what they want and see if they like it. And if they don’t like it, they’re not going to buy it. Listen, what I’ll say is, whatever your idea is that you’re starting the company with, you’re wrong. It’s not going to work. What it takes is iterating that idea. And that’s what the entrepreneur does, right? That Wikipedia page, that Wikipedia site, was going to kill. It was going to change the industry. It’s gone. I can’t even find it anymore.

Greg Head: But that was the key to you finding the next opportunity.

Jeff Matlow: Yeah, right. Thinking, How can I make money off of this? And that continued to iterate as we got feedback. So I think there are two things that I would say. So there’s a record company called Epitaph Records, and this guy Brett Gurewitz, he was one of my idols going into this and going into my record company, and I asked him about should I start a record company. And his answer was, No, it’s a terrible time. Don’t do it. I said, I’m going to do it anyway. And he said, Yeah, that’s why you should do it, because my opinion does matter. So when new entrepreneurs or people come to me and say, Should I be an entrepreneur, my answer is No, you shouldn’t. Now, if you’re going to do it anyway, then you’re an entrepreneur, right? Like if you’re going to poke yourself with the needles, it’s not an easy ride. And secondly, you have to be able to iterate. You have to hear what people are saying to you. Learn how to read between the lines, right? Because if they can tell you what the problem is, somebody’s already solved it.

Jeff Matlow: The other place is with bigger companies. The problem is leadership, right? So whether it’s growth, revenue, whatever. It’s really looking at, we’re in a new environment now in terms of making sure people have a sense of purpose and value and. And it is very important for leaders to start flexing that muscle of what it means to create value, to create purpose, to reward people, to incentivize, to inspire people. And not every leader has that muscle flexed. So what I do is I help with those processes.

Greg Head:

Jeff Matlow: Strengthen.

Greg Head: So is that–All business problems or leadership problems? It’s kind of a people issue. It isn’t that the machine isn’t doing it? Big companies have enough money and have enough product that it’s the people that are the problem in there.

Jeff Matlow: Absolutely. Listen, what I pitch is, I work with companies where revenue has flattened or maybe culture has waned. And that’s why I’m brought in to help jumpstart revenue, to help with the culture. That’s the symptom. The disease is the leadership.

Greg Head: So this is interesting for entrepreneurs. They’re growing companies. Eventually, the company takes on a momentum of itself. But in the beginning, it’s all about the people. You and the CTO did all the work and you were the only people-powered right? And then we have this excuse when they’re large and there’s a lot of momentum in divisions and multinational and so forth that there’s something else going on. But in the end, it’s still about the people.

Jeff Matlow: Goodwill with clients can override technology issues.

Greg Head: You’re still active. Are you going to do another adventure? If you found another adventure that tickled your fancy, would you do another entrepreneurial game?

Jeff Matlow: Well, my wife won’t listen to this, so she would not like me to. I’m really excited about helping other companies. I do have an idea that the world needs. There are some small apps that will enhance productivity. I’m very, very interested in, especially with today’s environment, Right, remote work.

Jeff Matlow: There’s actually a triangle I put together that I’m about to post on LinkedIn. As a matter of fact, the three points of the triangle are business success, personal success, and work-life balance, and you can only have one of them, right? You can only focus on one of them. It’s challenging for an entrepreneurial startup where you want that business success. Something’s got to give because you can’t go full force on that and have balance.

Greg Head: It’s so how do you balance? For an entrepreneur, that’s in the chute, right? Bootstrapped or funded or whatever with a vision, can you be balanced?

Jeff Matlow: I would argue that you can’t maintain balance with a growing new company, at least in the US. I think it’s different in Europe and the United States environment is Always On. So if you’re raising money, that venture firm is going to be. Yeah, that’s Saturday at 9 p.m., answer it.

Greg Head: Balance wasn’t a word in the ’90s for entrepreneurs, right? We can say it now and it’s still hard.

Jeff Matlow: I think it’s important. I was just going to say I think it’s important to, if not balance, maintain sanity. That’s part of it. So for me, running is my therapy and if I don’t run or I don’t exercise for a week or two, my relationship goes south at home.

Greg Head: Jeff, is there anything else you’d like to share while you’ve got a moment with these practical founders who are growing businesses? They’re up and running, or they’re thinking about how to start their company, or their in phase three or phase four of their growth game, that they aren’t likely to hear when they go to software conferences in their ecosystem or read the tech news and so forth.

Jeff Matlow: You know, I think first let me really share all the things I screwed up or some of them. One is really reach out to a network of others and not just people that you can ask them, Should I spend $3000 or $5000 on the software? But people that you can be vulnerable with to share your fears because there is umpteen number of people, thousands that have been through the same fears, the same hesitations that you have. I wish I did that and I didn’t. I kept it all inside. And so it is really, that is not nice to have. That’s a must-have in growth, I believe, because it gives you emotional clarity and mental clarity.

Jeff Matlow: The second I would say the answer is oftentimes in the mirror, if you feel like you are not getting especially the response from your employees that you want, look at how you are doing that, look in the mirror and assess how you’re enabling. Everybody makes mistakes, as I said earlier on, to un-expect the expected. You have expectations don’t live and die on those expectations learn to to unexpected. The journey is climbing Everest again. Even Nike had a great ad. There’s no money at the top of the mountain. There’s no fame at the top of the mountain. Nothing is at the top of the mountain except for the top of the mountain. The joy is going up there. And don’t forget that even when it’s painful.

Greg Head: Is that how triathletes think?

Jeff Matlow: Without question. I do long-distance triathlons. I have done long distance and it’s one step at a time. Listen, you don’t swim two and a half 2.4 miles bike 112, and run a marathon. Like I run from one aid station to the next and I stop when they tell me to stop. If you start thinking that it’s too hard, you’re thinking too far down the road. Think of your next steps and what you got to do.

Greg Head: Well, there’s a lot of wisdom in that. Thanks for sharing your story of the journey of I Am Athlete and some of the other ventures and these wisdom gems. Jeff, how can people reach you if they want to have a conversation about some of the topics you talked about today or if they’re hearing something in your adventure that applies to their adventure?

Jeff Matlow: You can find me on LinkedIn. Jeff Matlow You can go to my newsletter is bytitleonly.substack.com. That’s about leadership. I think we have 7000 plus subscribers right now.

Greg Head: Thanks for sharing your story and your wisdom, Jeff, with practical founders today on the podcast. I appreciate it

Jeff Matlow: Thank you, Greg It’s been a pleasure. I didn’t cry!

In this episode, Jeff explains:

  • How his experience as a marathoner and triathlete let him to the opportunity to create a better event registration platform
  • How he sold his first big customer before he had a product and a website
  • Why he didn’t raise any outside money until I Am Athlete was an established market leader
  • Why growing a company is like climbing Everest or running a marathon
  • His experience selling the company and what worked and didn’t work
  • How the modern software startup and investor game is like his first career finding new bands in the music business

I Am Athlete (now imATHLETE) Company Facts

  • Founded: 2008
  • Description: imATHLETE blends registration, coaching, and e-commerce technology with the social communities inherent in running, triathlon, cycling, and all participatory sports. 
  • Number of Employees: 39 before being acquired in 2019
  • Funding: Bootstrapped with a little angel funding, then customer-funded with revenues and a small loan for 9 years before raising a small equity round in 2017
  • Acquisition: Sold to a division of Gannett in 2019 for some cash and founder earnouts
  • Location: Santa Monica, California

Links

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies—without big funding.

Subscribe to the Practical Founders Podcast using your favorite podcast app.

Get weekly Practical Founders newsletter and podcast updates.

200

Greg Head recorded this on episode on December 9, 2022 for the Practical Founders Podcast see all of the episodes.

Share Practical Founders