Doug DeAngelis was fresh out of college in 1988, living alone in a rented room in a Boston suburb, working at Honeywell Bull. The job came with a tuition benefit, which he was spending on graduate courses at MIT. Though not a full-time student, he managed to land a seat in a popular course for aspiring entrepreneurs called New Enterprises, offered by the Sloan School. His assignment: Come up with an idea, pitch it to your classmates, and see if you can persuade anyone to join your team.
DeAngelis had lots of ideas. He kept them in a folder he called "my folder of dreams." He had already seen enough of Honeywell to suspect that big corporations were where big ideas went to die. That folder was his escape plan. But DeAngelis was wary. He didn't like talking about his ideas, because he was afraid someone might steal them.
His best idea at the time involved a new kind of camera for capturing photo-finish images in track, cycling, horseracing, and other sports with finish lines, a task more challenging than it sounds. The existing technology was cumbersome, unreliable, and slow. Sometimes race officials had to wait to call the winner until the prints came down from the press box on a clothesline. DeAngelis's concept was digital. It promised instant, accurate results.
His professor, the economist Eric von Hippel, thought that it was a terrific idea, and he believed that DeAngelis--both an athlete and a geek--was uniquely qualified to develop it. He also knew from experience that novices tend to put too much stock in the particulars of their ideas, which will likely change anyway, and too little stock in execution, which demands passion, knowledge, and commitment, qualities he observed in DeAngelis. "Don't worry," von Hippel told DeAngelis, who was still nervous about sharing. "No one gives a shit about your idea."
Or so DeAngelis remembers. "Your idea is your baby" are the words von Hippel chooses now. "Everybody loves their own baby best." The professor was correct. Not only did no one steal DeAngelis's idea; no one else even cared enough about it to join his team. Undeterred, DeAngelis plowed ahead in the spring of 1991. Eventually, he persuaded some smart people to help him (including von Hippel, who remains an adviser). In due time and with great effort, he brought a product to market, FinishLynx, and built a profitable $10 million company around it. Nearly 25 years later, his company, Lynx System Developers of Haverhill, Massachusetts, supplies state-of-the-art photo-finish setups for the Tour de France, the Head of the Charles Regatta, the Kentucky Derby, and the Indianapolis 500, among other marquee events.
But this story isn't over. Another chapter, still unfolding, is about another idea, one DeAngelis conceived and nurtured for more than a decade until it was almost ready to make its way into the world. IsoLynx is a sibling to FinishLynx but vastly more versatile and powerful. It's what the internet of things looks like when applied to the $1.5 trillion global sports industry. Think of it as a way to track assets that happen to be athletes: tagging them with transmitters; capturing their every movement on the field; producing reams of data; and generating next-gen stats for coaches, fans, and fantasy players, plus cool graphics for TV. Thanks to DeAngelis, the NFL is an enthusiastic early adopter. A version of the technology will be on full display at this year's Super Bowl.
Yet Lynx was not chosen as the Official On-Field Player-Tracking Provider of the NFL. That designation went to Lynx's former trusted partner, Zebra Technologies of Lincolnshire, Illinois, the villain in an 83-page complaint Lynx filed last summer in the U.S. District Court in Massachusetts accusing the $4 billion public company of engaging "in calculated and concerted actions to wrongfully obtain and claim as its own what rightfully belongs to Lynx." Maybe now you can taste the bile in DeAngelis's throat. (The NFL would not comment for this article. Zebra rebutted Lynx's claims through emails but declined requests to make its executives available for interviews.)
DeAngelis's story speaks to a primal entrepreneurial fear: the fear of being snookered, of coming up with an idea, developing a concept, taking it from prototype to finished product, lining up customers--only to have a bigger, richer rival steal your reward. Particularly cruel for DeAngelis is that he's living his early nightmare. This time, though, it's not just an idea he's trying to protect; it's the fully realized fruit of his idea, endowed with valuable IP and set to launch in a market he pioneered. But as his case perfectly elucidates, it's not the idea others covet so much as what you make of it. An idea is a spark. No one wants your spark. They want your flame.
Friday Night Lights in Andover, Massachusetts. The Golden Warriors versus the visiting Chelmsford Lions. Up here in the auxiliary press box, the only weapon against the damp October cold is a space heater, and the cold is winning. DeAngelis is present, hands in pockets, bouncing lightly from side to side. At 49, he's built like a runner, elfin and contained, with squinty brown eyes, thick gray hair, a salt beard and a pepper mustache. Also there are Ed Evansen, 55, Lynx's voluble CEO, the Santa to DeAngelis's elf; and Brian Rhodes, an IsoLynx engineer, who's hunched down over a keyboard in the corner.
Nobody's watching the game. Everyone's focused instead on a digital representation of the game, unfolding on Rhodes's computer screen. It's a demo, nothing fancy. Not all the players are tagged (coin-size transmitters, one beneath each shoulder pad), and the graphics are crude--more Space Invaders than Call of Duty. But it's enough to convey a sense of the system's capabilities, and the engineering that went into it. The X's glide smoothly across the display, in perfect concert with the action on the field; click on one and the IsoLynx camera follows, locked in on that player step for step. When the action is still, so are the X's--the image is "quiet," a technological feat that Evansen says took years to perfect.
It was in this same press box in 2011 that a visiting delegation of NFL executives got their first glimpse of what IsoLynx could do. Impressed, they requested a full trial under game conditions at the East-West Shrine Game in Tampa, in early 2012. That test did not go as well--too much signal interference from wireless TV cameras and tens of thousands of cell phones in the stands. But Lynx engineers worked through the problem, and by the spring of 2013, DeAngelis and his team were scrambling to get ready for a full, leaguewide rollout, tentatively planned for the fall. "The golden ring," as Evansen describes the coveted customer, was almost in their grasp.
DeAngelis grew up in tiny Orrington, Maine, the youngest of five, the family digit head. He's a tinkerer, a problem solver. Not a businessman, unless you count selling summer blueberries as a kid, but he latched on to computers early and talked his sixth-grade principal into buying a TRS-80. It was for the school, technically, but DeAngelis was the only one who played with it.
He went out for cross country during his freshman year at Brewer High. He made the team but didn't contribute. "I was awful, really bad," he says, because he didn't try hard. DeAngelis gets it now, but that insight had to wait until summer after sophomore year, when, bored and lonely, he went running every day. The more he ran, the better he got. Effort equals achievement, the fundamental equation. A useful lesson for athletes and entrepreneurs.
At the University of Maine, DeAngelis studied electrical engineering on a full academic scholarship. He walked on to the track team that winter and won his first race ever--at any distance, on any level--in the half mile. "It gave me a whole new identity," he says now. He wasn't just a digit head anymore; he was also a college athlete. And when graduation day arrived, and he was honored as No. 2 in his class, his teammates were shocked: "We didn't know you were smart!"
After DeAngelis moved to Boston, he kept up the pace. One weekend at a meet in Dedham, Massachusetts, the race director asked him for a favor: Could he handle the photo-finish camera in the 5K? DeAngelis was willing, but the equipment was not. He got precise results for the top three or four finishers but not the rest. Sorry, he said; he didn't know what happened. Yet the race director wasn't mad. To be expected, he explained. Sometimes the film is too short. Sometimes it jams. Sometimes the optical pickup misses the flash of the starter's gun. Not perfect; good enough.
But not good enough for DeAngelis. He thought hard on the problem. Soon he became the photo-finish expert in Boston. Between shifts at Honeywell, he started working on a digital alternative. There were no digital cameras on the market yet; the closest thing was a fax machine. The technology was available, though. All that was lacking was someone with DeAngelis's specific attributes--tech skills, direct experience with the problem, and a deep understanding of the customer. "Because he was one!" says von Hippel.
DeAngelis went to work. He pulled in a coder from MIT to do the interface and hired a kid from the MIT robotics lab to build the hardware. DeAngelis took care of the firmware. He had $30,000, thanks to his free ride at the University of Maine--enough to get started. But he got a scare when he learned that he wasn't the only one to have this idea. Seiko had tried out a similar product at the 1991 World Championships in Athletics in Tokyo. DeAngelis was crushed. "A disaster of epic proportions," he was sure. But von Hippel was ecstatic. If Seiko was doing it, it was real. Proof of concept, the best news.
"You might want to consider doing this," one professor told DeAngelis. For real--not as a thesis project. So he put the degree on hold and took his prototype to the Indoor Track & Field Championships at New York's Madison Square Garden, in February 1992. He drove from Boston, rented a conference room. In walked Tom Jennings, a big-time agent, the guy who did more than anyone else to professionalize track and field in the U.S., and Howard Schmertz, the director of the Millrose Games. After the demo, Jennings handed him a check for $1,000. "When can I get mine?" he said.
DeAngelis was in business. Not a huge market, but not a lot of competition. FinishLynx quickly grabbed the lead and has held it ever since. He kept the focus tight. "If we do the whole solution," DeAngelis figured--meaning not just the camera but also the scoreboard, the display, everything--"we'll always be coming up against things the customers already like." So stick to the part you know well, and let your partners do the rest.
He also insisted on getting paid for his technology. Believe it or not, that's rare in DeAngelis's world. Bose pays the NFL at least $50 million a year for the privilege of supplying all its coaches with headsets, and Microsoft is paying $400 million over five years to keep them in tablets. It's a strange way to do business, writing off potential big customers as marketing expenses. Lynx wanted no part of it. You'll never see the FinishLynx name at the Tour de France. The Tour buys timing tech from Lynx, but sells timing rights to the highest bidder. DeAngelis charged the going rate for film cameras, and used his performance advantage to dictate terms. That got him a 50 percent down payment from his first dozen customers, including Louisiana State University and the U.S. Olympic Training Center in Lake Placid, New York, covering his initial production run.
Do what you do best and partner with others for the rest; don't give your product away; trust the market to reward superior value--Lynx would go a long way with that simple philosophy. Until it met Zebra.
This was the problem with FinishLynx: cool technology, yes; certain market, yes; but very limited application. Useful only on the day of competition. IsoLynx was DeAngelis's plan to break out of that box. "It takes us to sports that don't have finish lines," he says, "and it takes us to all week long. But it does that in a way that retains our market relationships."
Development began in 2004. Rather than start from scratch, Lynx bought an off-the-shelf system that tracks objects tagged with little radio transmitters from a company called Multispectral Solutions. The technology had been around for years. Ports use it to keep track of shipping containers, and farmers to keep track of cows. Lynx's challenge was to make the system work for sprinting, colliding athletes.
Four years later, Lynx was getting close to a prototype when Zebra swooped in and bought Multispectral. Zebra made the world's first barcode printer in 1982, and lately was developing an asset-tracking business, but it had no background in sports. Even so, Lynx and Zebra were now partners. Relations were fine for the longest time. Under various nondisclosure agreements, Lynx engineers worked closely with their counterparts at Zebra, perfecting the technology, until few secrets remained between them.
Lynx could have been more careful. The company had spent so many years trolling in small, overlooked markets that it failed to see how quickly the market for sports tracking had matured. "We miscalculated the size of the opportunity we were helping our partner with," DeAngelis says now. His focus at this critical moment was elsewhere--on courting the customer he coveted most. "The NFL is using them" is how DeAngelis was scripting the decision-making tree for his future customers. "Therefore I'm gonna buy them." Imagine the world market for soccer.
The embarrassment at the East-West Shrine Game was a serious setback. Zebra's suggested fix was to remove the "interferers" from the venue--the cameras, the cell phones. Not an option. Instead, according to the complaint, Lynx engineered a proprietary fix that allowed the faint signals of the player tags to be detected amid all the radio-frequency interference common in NFL stadiums on game day. Testing and development continued throughout the summer and into the fall, culminating in what the complaint describes as a "hugely successful" demonstration at a Patriots-Dolphins game in Miami on December 2, 2012--the first in which all players on both teams were tagged.
The NFL was not the only party paying extra close attention now. Three weeks later, on December 23, Lynx performed a final test, at a Bills-Dolphins game. This time Zebra sent a delegation of three, including lead engineer Belinda Turner. They sat with Evansen and two NFL executives in the control room, monitoring the system throughout the game. Turner was "extremely impressed" at how well it worked, according to Lynx's attorney, David Sheikh. In retrospect, it was a critical moment. The spark had caught, and the flame was rising.
January 11, 2013. Big meeting at Zebra's East Coast office in Germantown, Maryland. Fifteen people in the room: DeAngelis and Evansen; also Mike Jakob from Sportvision, IsoLynx's graphics partner, best known for inventing the virtual yellow first-down line; a large posse from Zebra, led by new division VP Jill Stelfox; and five NFL bigwigs. Decision makers all, together for the first time to discuss the imminent deployment of the IsoLynx system.
Or so DeAngelis naively assumed. Later, he and Evansen would reconsider the wisdom of bringing its biggest partner, Zebra, together with its biggest potential customer, the NFL. But Lynx had been courting the NFL for years--testing at the league's request, refining to meet league specs, and sharing proprietary IP (protected by a nondisclosure agreement). True, Lynx still had not closed the deal with the NFL--a fact that would later haunt DeAngelis--but time was short. "We were totally convinced that we were going to have to install at all 31 stadiums between then and when the teams started practicing" for the 2013 season, DeAngelis says now. Evansen adds: "As the NFL told me a couple of times, 'We kick off at 1:00, with or without you.'"
How'd that meeting go? All these months later, Evansen sighs, pauses, and looks at DeAngelis. "It was kind of like an NFL and Zebra lovefest," he says finally. "If you've ever been to a party where it's clear that these people want to go off and hang out together, and you're kind of in the way--I don't know. I can't put a word on it, but it was a sense, right? We were no longer...," and his voice trails off.
Then came a series of confusing but ominous maneuvers by Zebra. A month after the NFL meeting, Evansen's phone rang back at the Haverhill office. It was Stelfox, calling from Zebra to convey Zebra's interest in acquiring IsoLynx.
Unexpected, but hardly shocking. Lynx had been fending off suitors for years. "You don't want to sell your business until you've proven the value in what you're doing," says DeAngelis. Any founder in his position might have felt the same, especially with the payoff in sight. Lynx went through the motions of countering Zebra's offer (neither party would disclose numbers), but the deal was never going to happen. "We gave them a sense of how far off they were," says DeAngelis, shrugging.
Dennis Ceru, founder of the CEOs Group executive leadership program and an adjunct professor at Babson College, won't accuse Lynx of making a fatal mistake, but, he says, "it's not at all uncommon for entrepreneurs to have a conception of value that's not correlated to the market value." They also ignore the nuisance factor, which comes into play when a potential buyer is big enough to enter the market without you. "If buying you is more of a nuisance," Ceru warns, "the value calculation changes," to your disadvantage.
Zebra's response to Lynx's rebuttal was indeed swift: a hostile email from Stelfox on March 8, saying that Zebra's review of IsoLynx's collaboration agreement with Sportvision, Lynx's graphics partner, "can be read to evidence" that Lynx had disclosed confidential Zebra technology to Sportvision. In other words: You spilled our secrets. Which constitutes a breach of our existing agreement, the letter continued. Which means we are no longer bound by its terms. So long, Lynx.
Or maybe not. Three days later, according to the Lynx complaint, Stelfox called Evansen again to say, essentially, we're still friends--that her March 8 email was part of a plan to force a termination of the IsoLynx-Sportvision collaboration agreement, clearing the way for Zebra and Lynx to work with the NFL on their own. (Sportvision declined to comment.)
Evansen summarizes: "Out of nowhere, a friendly call from Miss Wonderful," offering to buy Lynx, "and then, all of a sudden, a termination. And then another call that says, 'Oh, don't worry, it's not what you think it means.'" Evansen says he told Stelfox that Lynx wanted no part of "Zebra's proposed subterfuge," and ended the call.
Frantic efforts by Lynx over the next few weeks to repair the relationship with Zebra failed. On April 18, Stelfox sent a final letter to Evansen, formally terminating the Zebra-Lynx relationship. Without access to Zebra's components, IsoLynx could not deploy. And the golden ring slipped from Lynx's grasp.
"Lawsuits in technology are an unfortunate part of doing business," Zebra spokeswoman Therese Van Ryne wrote in an email to Inc. "[I]t is Zebra's strong belief that Lynx's claims are without merit." This particular lawsuit may not be resolved for years. Zebra has filed a motion to dismiss Lynx's suit (Lynx has moved to quash) and filed a lawsuit in California seeking a judgment that it did none of the wrongful acts alleged by Lynx. (Lynx says it will move to dismiss that suit.) If this story seems to favor Lynx's side, that doesn't mean Lynx will prevail in court.
While Zebra has yet to respond substantively to Lynx's complaint, Van Ryne did provide a sketch of Zebra's defense. She wrote that after the January 2013 meeting with the NFL, Zebra was surprised to learn of the extent of Lynx's agreement with Sportvision; that in light of that agreement, Zebra's partnership with Lynx was "not feasible"; and that after Zebra and Lynx had parted ways, Zebra "independently developed" its own player-tracking technology, MotionWorks, which later prevailed in an open competition run by the NFL.
Lynx strenuously refutes the claim that Zebra developed MotionWorks on its own. "It will be fun seeing them put that into longhand in front of a court of law," says Evansen. Meanwhile, Lynx will continue perfecting IsoLynx, this time using its own, internally developed electronic tags. The company still believes there's a big market for tracking technology.
Unfortunately for Lynx, Zebra understands that now too; and what is more, exactly as Lynx had hoped to do, Zebra is using the NFL--"a great customer of ours," Zebra CEO Anders Gustafsson told an interviewer for TheStreet TV in November--to exploit the potential. On November 19, IBM formed a consortium to deliver data to teams and multimedia thrills to fans in stadiums around the world. Among the founding members: Zebra Technologies.
Halftime in Andover. The demo's done, the game's a rout, and the space heater is falling further behind. Time to go home. This whole saga, DeAngelis observes, reminds him of the internet bubble. "People were getting absurdly wealthy without actually adding real value," he says. "From my perspective, in an efficient capitalist system, you get back the value you add in."
Value is money. DeAngelis wants the payoff. But just as much, he wants credit--for the spark he and Evansen kindled, the flame it became, and the blaze now burning brightly, far from the drafty press box at Andover High. "It would be nice," DeAngelis says finally, "if the market understood."
Have a Precious Idea? Learn to Defend It
Trying to divine lessons for an entrepreneur based on what happened to Lynx, says CEO Ed Evansen, "would be like telling a person on a small island how to prepare for a tsunami." Founder Doug DeAngelis mostly agrees: "If you spent your whole career preparing for something this far outside the norm, you'd never get anywhere." But startups and small companies looking to partner with bigger companies would do well to consider the following.
- Patent Early and Often--Evansen insists Lynx did so, "judiciously and expeditiously." But the fact remains, Zebra now holds several patents on IP that Lynx asserts it developed. Lynx might have avoided that fight with more aggressive patenting.
- Protect Your Supply Chain--Lynx ran a high risk when it chose to buy critical technology from a potential competitor rather than make it on its own. Nothing wrong with that--if you protect yourself with a long-term contract or develop alternative sources.
- Know Your Market--Lynx was slow to realize just how much its once-sleepy niche had matured, and how attractive it might now be to others. In retrospect, says DeAngelis, "we were offering our partner entrée into a very significant market."
- Keep Your Customers Close, and Your Partners Closer--DeAngelis felt sandbagged when his biggest customer and his most important partner decided they didn't need little Lynx anymore. Take care whom you invite to critical meetings, especially before you ink a deal.
- Don't Kid Yourself--What's your creation worth? Only, always, and forever this: what somebody else is willing to pay for it. That calculation changed dramatically for Lynx the moment Zebra realized it had two options going forward, and one no longer involved Lynx.