That Championship Start-up

A celebrity investor, a hot technology, a seasoned founder: Home Team Advantage looks as if it has everything going for it -- except customers

Some start-ups are predicated on simple ideas. Not long ago Home Team Advantage Inc. was one of them. Then reality took hold.

Three-year-old HTA, based in Los Altos Hills, Calif., is serial entrepreneur Glenn DeKraker's newest and fifth company. He founded it with a two-part plan for creating and then exploiting an opportunity. First, HTA would equip college athletic departments with the technology they needed to digitize videotapes of their sports events. (Digitizing the tapes makes it easier for coaches who are reviewing games to jump from play to play or from player to player, and for a college's development department to create highlight tapes to sell to alumni or to use to impress potential donors.) Then, once HTA had a sufficient number of schools digitizing their sports tapes, DeKraker planned to help them sell the material in the on-line world -- ultimately to fans who wanted to customize their own sports programming. HTA would give them access to huge data banks of material such as nontelevised college football games, last season's Final Four basketball play-offs, and small-audience events like college volleyball meets and tennis matches that are difficult or impossible to find on TV.

That was the idea, and HTA is gambling that some day such a market will exist.

However, in the short term, there are hurdles to get over. The first is that HTA needs money. It has already burned through more than $2 million in capital invested by DeKraker and others, losing $1.1 million on revenues of $82,000 in 1994 and another $1 million on sales of $175,000 in 1995.

The losses are a consequence of hurdle number two: greater-than-anticipated technical challenges. DeKraker's dream was to equip schools with the college market's first networked digital storage system and to do it for as little as $45,000. The system he envisioned would allow coaches to call up, from coaching stations all across campus, video replays of any part of any game. But storing and retrieving hours of digital video images inexpensively has turned out to be more difficult than DeKraker imagined.

As a result, the company's still-evolving products are as yet unnetworked. One, called Touch 'n Go, was scheduled to be delivered during the last month of 1995. It combines HTA's software with off-the-shelf microcomputer hardware to give coaches the ability to use a touch screen at their desks to view recorded material. The second product, called At the Game, is ready for market. It lets coaches record and replay practice-session segments while the session is still happening.

"This is an industry where the rate of change is incredible," says Richard Miller, an HTA board member and former vice-president of software company General Magic. "In five years this may be an extremely different company."

Glenn DeKraker must be hoping so, because at the moment this company is not performing as he hoped it would.

HTA began the way a lot of young companies do. DeKraker, 69, saw what he thought was a long-term market potential, wrapped his mind around the idea that someone was going to make money on it, and figured he might as well be the one. As DeKraker himself puts it, "There's unmined entertainment out there, and we want to structure it."

He's done something similar before. His first two businesses, which he started in the 1970s, never succeeded, but the third and fourth flourished. Media Management Plus (MMP) and AIM 21 both brought personal-computer-based technology into the advertising industry. They gave small firms inexpensive access to market analysis and helped them convert their commercials to digital format for easier archiving and retrieval. Written up as a case study for Stanford Business School, MMP was bought by U.S. West in 1988 for $31 million. AIM 21 is currently being acquired by Reuters NewMedia, which paid $2 million for a minority share just last spring. DeKraker also sits on the boards of eight start-ups, including Chicago-based Peapod, a grocery home-delivery company, and Instill, a developer of restaurant inventory technology.

While technology has been DeKraker's career, Stanford University sports have been his passion. He played football for Stanford in the 1940s and has been a major financial contributor and athletic-board member for years. It was that connection that gave him the kernel of the idea for HTA. In 1992 DeKraker and his wife, Pauline, attended a board luncheon at which they heard football coaches complain about how labor-intensive and time-consuming it was to prepare and use videotapes to scout out other teams. The coaches would get another team's game tapes and then search for every, say, fourth-and-goal play and dub it onto a separate tape. They'd make another tape containing, for instance, just passing plays. Once they got the play tapes made, there was a lot of fast-forwarding and rewinding as they went through them. In other words, conventional videotape was a cumbersome medium.

DeKraker immediately imagined a technical solution to the coaches' gripes. If they could convert their videotapes to a digital medium, they could "tag" each play; then user-friendly software could find plays according to their tags almost immediately. The change for coaches would resemble the difference between playing recorded music on a tape deck and on a compact-disc machine. A number of companies already made digital conversion systems for the sports market, but they started at $100,000 and were targeted at pro teams and rich college programs. DeKraker thought he could make a system that cost a lot less. He figured the whole college market would open up to him, and even part of the pro market, as well.