(WEB HOST INDUSTRY REVIEW) — Marc Mandt started LeagueUSA, a niche web hosting and software business focused on serving sports league websites, almost by accident, based on a piece of software for managing sports leagues that he wrote back in college as a pet project.
The software was a tool that helped schedule games for youth sports leagues. Mandt wasn’t particularly involved with sports leagues at the time, he says. He was more interested in solving a particular mathematical problem.
It was many years later (and about 10 years ago) that he discovered, in a computer science algorithms book, that the problem his tool solved was not considered solvable, or practical to solve. He packaged his tool as shareware, and it quickly became more popular than he expected.
Recognizing how difficult it would be to make a living from shareware sales, he investigated the market and identified the opportunity in providing web hosting for sports league websites. Today the company provides five solutions to more than 7,000 sports leagues.
Niche web hosting can be an excellent way for a hosting service provider to gain a competitive advantage, in Gartner’s managed hosting Magic Quadrant, the research firm sets niche web hosting players apart as a distinct category.
Understanding the Customer: Amateur Sports Leagues
“At the time,” says Mandt, “less than 50 percent of these sports organizations had websites. They were mostly volunteer run, and didn’t have budgets for this stuff. But I had the built-in customer base with the game scheduler. I thought it would be a great idea to bundle a website management product targeted at sports leagues. There were a few out there already, but we did it as well. We learned a lot about hosting.”
The IT Needs of Sports League Websites
Mandt says the back-end IT requirements of sports league websites aren’t any more specialized than those of an average hosting customer, though the ability to receive payments is often a requirement. LeagueUSA does see a very predictable pattern of traffic volume, with the big spikes coming at the beginning of the spring and fall sports seasons.
The key needs of sports league websites, says Mandt, have more to do with the specific league management software tools the company delivers and hosts.
Delivering Tools for Building and Managing Sports Leagues
The company’s set of sports league management tools includes a pair of scheduling tools, League Scheduler 2009 (the product that has evolved from the original shareware tool) and Tournament Scheduler 2005, as well as an online registration tool and the Vicid Website Manager.
Mandt says early on, LeagueUSA built a basic website building tool in-house that integrated with its league scheduler. It offered the tool for about two years, doing integration work around customer billing with ModernBill, which has since been acquired by hosting software firm Parallels.
The integration put the company in a position to make an offer on a competing sports league website tool. The previously-mentioned Vicid Website Manager was a more sophisticated tool for building sports league websites, but because it lacked the automation and billing integration work, the manual work of billing and activating accounts made it a pretty unprofitable venture. LeagueUSA was able to acquire it via a bank loan, and build in the billing integration and automation.
Along with the website builder and manager, the company offers a design-and-build package (ranging from $500 to $1,000) that will set a league up with a good looking, working website.
Identifying the Challenges
One of the difficulty in serving the amateur sports league business, says Mandt, is actually making contact with the leagues. He says a lot of providers in the space take the “if you build it, they will come” approach to the tools they’ve developed. But sports leagues can be hard to find.
“They’re all small non-profits,” he says. “They don’t even have phone numbers. They rotate volunteers constantly, so the contacts are not the same from year to year. Reaching out is tough, if you want to go after them. You need some leverage, or something they really want, and they’ll find you for.”
Word of Mouth Sales
For LeagueUSA, that leverage was originally the game scheduler, a tool that gave the company an existing customer base when it got into the web hosting part of the business, and a unique feature that set the company apart from the competition. It gave customers a reason to seek out the company.
These days, there are a few similar products on the market, but Mandt says LeagueUSA has reached a kind of critical mass where its website tool is out there enough that the company has established a state of ongoing organic growth. Word of mouth is critical in this business, he says. Generally, the company’s sales process doesn’t involve a human being. Most of its new business comes from leagues discovering that their closest competition has a better website than they do.
“Most of our sales come from that exact scenario,” says Mandt. “Somebody in an area sees a site they like, and we have a tag down at the bottom of the site that says ‘powered by LeagueUSA.’ They’ll click on that powered-by tag and sign up, and bam, we’ve got a new customer.”
The Advantages of a Specialist
One of the great things about niche web hosting offerings is that each customer implementation is like a case study in the effectiveness of the service, and can be a direct driver for that word of mouth business.
“There’s a league right down the street from me, where I got involved and donated a website and donated our online registration product and our game scheduler and tournament scheduler,” says Mandt.
He doesn’t take all the credit, but he says the league’s current spring season is the first, in 45 years of operation, in which it has reached capacity at every age group. It doesn’t have room for even one more kid. It also has too many volunteers for the first time.
“Obviously a lot of good things are going on in the league,” he says, “but the visibility that the website gives to players and coaches, and the transparency that we bring to the league are definitely main factors.”
Meeting the Competition
There are a lot of competitors in the space, says Mandt, and two or three that LeagueUSA goes toe-to-toe with over and over again for the more high-revenue products. But what would the sports league business be without a little competition?
“The truth is, this sector really is so wide open that even if we don’t win every time, we don’t sweat it,” he says. “A lot of times, we’ll have a big account leave us for a competitor. You could get upset. But you could have another big accounts sign on next month. It’s a very wide open marketplace. There’s still a lot of room to play.”
Talk back: have you had experiences working with the sports league website market? Do you see any similarities to a niche web hosting market that your company serves? Would you consider applying some niche web hosting tactics to your services? Planning to go after sports league websites? Let us know in the comments.
Little league baseball stock image provided by BigStock.com
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