This B2B2C software platform serves up flexible features and complementary services while growing its customer base of sports businesses 125 percent YoY.
According to a 2017 TIME magazine article, WinterGreen Research values the U.S. youth sports market at $15.3 billion. Kevin MacCauley found himself in the market around 2008. Then the EVP of a start-up, he spent his free time volunteering as a Little League coach. Parents would occasionally ask him to give their kids private training. “I’ll never forget the end of the first training session. I met the parents in the parking lot, and they handed me a paper check with their kid right next to me,” he recalls. “It was an entirely awkward exchange with a child there. We should have been talking about how well the kid was progressing and areas we needed to work on. I started to think there had to be a better way to do business in sports.”
That better way was software — specifically the kind of software Upper Hand develops. MacCauley, along with cofounder Myles Grote, launched the company in 2011. Seven years, 23 employees, two product acquisitions, and $4.4 million in funding later, this sports and fitness business management software company has come a long way.
Upper Hand has solutions for both franchises and individual trainers/coaches, with features like scheduling, member management, payments, facility management, contact marketing, and a video analysis tool. That video tool includes APEX, an analysis platform for any sport, and the APEX Save Review System (SRS), which is for training hockey goalies (including NHL-caliber customers). The software is adaptable, with features, functionality, and pricing to serve this diverse customer base.
“We looked at market comps and tried to price appropriately,” says MacCauley. “But one sports business may not operate the way a fitness club operates. Price elasticity is extremely important, especially having those different markets.”
The core software platform comes in four tiers, with plans starting at $75 per month. The APEX video analysis tool can be added for $25 per license, while the SRS video option is $350 per license. “Our philosophy with price is, if our product can help grow somebody’s business, then price is really just a matter of fitting it to the budget of the prospect,” MacCauley says.
Upper Hand offers paid training packages that start at a one-time fee of $300 and range from 3-, 4-, 8- and 12-week plans. About 60 to 75 percent of customers take advantage of a training package. “We see a dramatic increase in the success of a customer who pays for training and implementation,” he says. “But at the end of the day, it’s like any product or service — there has to be real value. You can’t just say, ‘We’re going to train you and then turn an account on.’ That doesn’t count.”
Upper Hand’s in-house web development adds another important paid service. MacCauley says customers were regularly clamoring for help building or improving their websites, so what started as an ad hoc project has flourished into a key revenue booster in the past two years. “The services side is extremely important, not just because it supplements the software’s recurring revenue, but also because of how it can make consumers successful.”
WHAT’S NEXT FOR UPPER HAND
When MacCauley started raising a seed round six years ago, some investors questioned whether the software platform was a B2B or a B2C offering. It’s both: a B2B2C solution where coaches and business owners can help their clients improve. Upper Hand’s customer’s customers might go to a batting cage facility to improve their swing or to a yoga class to improve their flexibility, but instructors don’t deliver data-driven results that can be tracked over time. Delivering that data, plus harnessing the power of archived data and machine learning capabilities that otherwise aren’t available in this market, are part of Upper Hand’s future road map.
“I’m a marketing major with a sales background, and one of the things that is so frustrating as a consumer is when you work with a business and it doesn’t really feel like you’re working with that business,” MacCauley says. “When we started building Upper Hand, our biggest focus was making sure businesses using our platform are expanding their brand because of it. That mindset really transcends how we build software.”
Headquarters: Indianapolis, IN Year Founded: 2011
Total Funding: $4.4 million Investors: Park Ten Capital, Elevate Ventures