When DeKraker reworked HTA's business plan in 1995 to bring its video consultancy front and center, he also began talking about forming partnerships with existing video management companies that provide clips of major-league sports to television-news clients. "We probably need to overcome the 'HTA who?' hurdle," says DeKraker. "I think we need a relationship with someone bigger." No such partner has yet materialized, however.
Last year was an expensive one for HTA. While DeKraker was shifting the company's gears, development work continued on its two products. So he spent much of 1995 seeking cash to fund the deficit. During the summer HTA borrowed $500,000 from DeKraker and others in a bridge loan. At the end of the year the founder was still looking for equity investors with $1.8 million. And significantly, he had split the company up.
In October, DeKraker created a division tentatively called Power Wave, which will investigate the possibility of adapting HTA's digital callback technology to uses in medical, legal, and other nonsports applications. The existing sports-oriented operation is now HTA Marketing, and both divisions share the same eight staffers.
Eleven schools -- comprising 20 programs in all -- so far have said they will contract with HTA Marketing to help the company develop "Heritage" programs -- the name HTA gave to the sports-highlights shows schools will use to impress alumni and potential contributors. Those same schools have said they'll try the At the Game systems. Instead of selling them at $35,000 each (the original plan), the company is leasing them to customers for five years beginning at $500 a month and at an increasing rate in subsequent years. Likewise, the more sophisticated Touch 'n Go systems will lease for $500 a month initially for "tier one" sports like basketball, and for $200 to $300 a month for "tier-two" sports like volleyball and tennis.
In light of all those changes, DeKraker's existing revenue forecasts, by his own admission, are little more than hopeful guesses. "There's no question that when you run the projections out, they get fuzzy, especially with the question of when the information highway will be here," he says. "But in any case, we can be cash break-even by the second quarter of 1996, and then we'll grow in profitability pretty handsomely." Even if the on-line market never materializes, DeKraker thinks HTA can still be viable with revenues earned from leasing equipment to schools and other users. Just don't press him for specific breakdowns right now.
Advisory-board chairman Bill Walsh, who is now a consultant to the National Football League, continues to be sanguine. "It takes a complete organization and a complete person to handle a start-up company. Glenn is a class person, a dignified, established, reputable, credible person, and I think that gives him a real edge. Over the years I've invested in a lot of companies, with mixed results. But they didn't have a Glenn DeKraker heading them." HTA has shifted gears several times in the past three years, but that kind of experimentation may be the only way for the company to find the product mix that will sustain it for the long run.
"When Glenn came up with this idea, I had absolutely no idea what the technology was or what it could do," says Stanford's Leland. "Still, I know he felt good about it. The company is probably going in a different direction than he anticipated on that day when the light first went on in his head, but the folklore around here is about Hewlett-Packard. Their first five inventions didn't work, but Hewlett-Packard, the company, did. They kept trying things and trying things; finally they hit, and away it went."
EXECUTIVE SUMMARY
Company: Home Team Advantage Inc., in Los Altos Hills, Calif., founded by serial entrepreneur Glenn DeKraker
Concept: Develop digital video-editing systems and sell them to college athletic departments, making it easier for them to use and edit tapes of their sports events -- and eventually, to sell the digital content, possibly over the information superhighway. The company began marketing to college and pro teams last fall.
Projections: Revenues of $2.9 million in 1996 and $34 million in 1999, up from $175,000 last year
Competitive Advantage: (1) Products the company says are easier to use -- and cheaper -- than competitors' and (2) the potential HTA offers schools for selling their recorded sports images on-line
Hurdles: Raising the capital to fund up-front development costs, locking in contracts with schools before better-funded competitors do, convincing athletic directors that digital technology can help fund the sports budget
THE FOUNDER
Glenn DeKraker, age 69
Family: Married 49 years to Pauline, "my wife, my partner, my lover"; five children, nine grandchildren
Entrepreneurial History: On his fifth start-up. Media Management Plus, founded in 1982, sold to U.S. West in 1988 for $31 million. (DeKraker family's share: more than $18 million.) AIM 21, founded 1991, sale to Reuters NewMedia pending; DeKraker is (inactive) chairman. Investor or board member of eight other start-ups.
