We had just moved into a glass fronted, split level office from the cosy but cramped space we’d called home since the early days of Fantasy League.
It was July 2009, and turnover had grown every year of the decade. Our headcount was pushing 40, we were running fantasy football games for Sky Sports and The Sun, along with dozens of others for publishers, rights holders and brands around the world.
We operated a suite of our own B2C games including football, golf and F1 plus a hugely successful Schools Fantasy League played in thousands of schools.
But what I didn’t realise was that the business was in crisis and time was running out.
The important numbers behind the numbers were that the subscriptions from our B2C products had dropped for the fourth year in a row and the cost of our team had increased by 50% over the same period, servicing our growing B2B partnerships.
We had operated a twin approach of consumer subscription games alongside white label partnerships since our early newspaper days of the 1990s. But the tipping point came when revenues from partnerships overtook subscription revenues the previous year.
This was a critical indicator, especially as they were heading in opposite directions.
The partnership business was more about vanity than value. Contracts were becoming harder to win, more technically challenging and more expensive to build and run. Yet the average deal fee was reducing, as were contract terms, now typically a single year.
To ensure stability and quality we’d built in-house sales, account management and tech teams, so our annual targets became about covering these overheads.
And crucially, winning and sustaining partnerships was intensive on my own time, so compromised my ability to lead the business from a strategic, wide-angle perspective.
With this perspective I may have been able to see that instead of creating any of our own IP or assets in the last decade, we were simply creating new ways of earning revenue.
Or I could have recognised that the twin approach of B2C and B2B was becoming increasingly unsustainable. On the consumer side, the bar for apps was being raised by well-funded start-ups, whereas partners expected more of a full-service digital agency approach.
The business had done really well to evolve since 1991, but the seismic shifts of the 2000’s were finally catching up with us. We had been investing in a new tech platform to service the partner games, but the longer it took to deliver, the less relevant it was becoming.
And perhaps we were investing in the wrong platform anyway.
Perhaps we should have been thinking harder - about our DNA, what we were best at, where the gold in the business lay.
These are the important questions that every business needs to be asking itself as often as possible; perhaps most of all when it is growing - especially when the growth is in the wrong direction.
If we had really thought about it, we may have concluded that our original, flagship auction-based fantasy football game was where we were distinctive and where we excelled. A solid base of subscribers playing in close-knit leagues, 95% retention, average lifetime value of 15+ years.
With the increase in free-to-play games this product did face challenges, but if we had applied the same investment, resources and management focus as we had on partnership games, we would probably have succeeded, not just by growing revenues but in building true asset value in the business.
And in a small owner-managed business as Fantasy League, when thinking about DNA, it’s worth being conscious of the founder’s DNA. Where the idea came from, where the founder’s talent and energy is the strongest.
In my own case, it was always the auction-based game, the game that launched Fantasy League. Which if you think about it, isn’t really a surprise. The spark and quality of the initial idea is usually what gets a business noticed: in our case it took a few small ads in football magazines to create a small but passionate audience which provided the catalyst to get on BBC radio, then BBC TV and the Daily Telegraph.
Everything after that was a derivative - diluted and unexceptional.
So, when I look back at this period with hindsight, it seems clear we had set the business on a path that meant we were growing in the wrong direction.
Our focus became about feeding a short-term cycle between selling games to partners and covering the costs to fulfil them. Initially driven by growing this part of the business, we then switched to a defensive strategy that felt more about recouping the resources we’d sunk into it. With cost-covering as the driving force, we ended up taking on more and more unprofitable contracts, so feeding this viscous cycle.
The signs may have been subtle at first, but it only took a couple of years for the damage to be done. So, I’m offering this is a cautionary tale.
I can’t go back in time, but I’m now in a position to help by providing that wide-angle perspective which I recognise is often hard to find as a CEO.
If you are a CEO or founder, and you’re riding a wave of growth it can be a great feeling. But it’s also important to take some time out to look at the big picture, and ask yourself some probing questions about your situation:
What are the numbers behind the numbers? Is your growth in the wrong direction?
What is your core value proposition? Where is the gold in the business? How does this fit with the talents and energy within your leadership team? Are you investing in the right areas? Where are the trends heading in your sector?
How often are you asking yourselves these questions? Do you have the right structure in place to ask them?
Are you worried? Should you be?
My experience tells me that it’s about getting the right mix of internal and external perspective on addressing these important questions.
Internally there has to be a structure that provides time and space for leadership to hold strategy meetings that are regular, prioritised and meaningful. Coaching to ensure that key people are excited and contributing purposefully, and that teams are functioning and delivering to their potential.
Externally your focus might be on engaging with experienced professionals who can offer objective insights, carving out time for reading, podcasts, events; interacting with peers from different businesses whose distance can provide fresh and valuable perspective.
I know, from decades of first-hand experience, how much you have to think about to keep a business on track day-to-day, month-to-month, year-to-year. But it’s even more important to provide yourself with the structure and resources to help you think about what isn’t right in front of you.
It’s not easy – and certainly not possible - to do this on your own. But with the right support, rather than worrying about what’s around the corner, you’ll be dealing with it.
Andrew Wainstein introduced fantasy football to the UK in the 1990’s, founding and leading Fantasy League through seismic changes in the media and technology landscape. He is now sharing the experience from his journey as a coach for founders and CEOs. He has also launched a new venture called Campfire which is about creating slower conversations to get to what’s important in our work and our lives. https://campfire.cc/about-andrew