CoachUp: Developing Athletes of Tomorrow

“Actions Speak Louder Than Words.” We have all heard that saying many times over the years and likely seen it used in during relationships, in a professional setting, with friends…but what about in sports?

 

Before anything else, please watch this ad featuring Stephen Curry ball handling on an empty basketball court as he reads what others said about him during his 2009 NBA draft. It is inspiring to know that you can beat the odds with determination and perseverance.

 

CoachUp is a multi-sided platform that connects athletes with private coaches. You simply go to their website, fill out your desired sport, purpose of hiring a coach and then select one from the multitude available. The coaches are listed with their average response time, hourly rate, experience level and user ratings. Please check out a sample here.

 

Formed in 2011, the Company has raised ~$9.4M to date post Series A. They have recently signed deals with Stephen Curry, NBA 2015 MVP and Golden State Warriors point guard, and Julian Edelman, Super Bowl 2015 winner and Patriots wide receiver and punt returner as endorsements and brand ambassadors. This adds to the 13,000+ coaches nationwide (all 50 states) making it the largest private coaching network. They are passionate about connecting people to help young kids (serious athletes and novices alike) take their skills to the next level. However, this is not just limited to kids. It is also for the tennis mom looking to improve her skills or the basketball player who is past his prime but just wants to improve in the rec league.

 

Currently pricing is set up with a finder’s fee of $15 and a 6% transaction fee for players that is included in the hourly rate set by coaches in order to continue supporting the community of vetted coaches. On the coaching side, the initial transaction fee is 25% on the first appointment followed by a range of 3-8% on repeat sessions, decreasing based on user’s feedback of coaching. The goal is to allow both sides to stay on the platform. Indirect network effects are in play as the more coaches available the more players are drawn to the platform and the more players there are, the more inclined the best coaches are to join to platform. Coaches are encouraged to stay on the platform with user reviews. The hope is that after a few visits, you find a coach you like and stick with him/her for a multitude of sessions. However, this company’s largest risk is having players and coaches meet on the site and then continue private sessions off the platform in order to avoid transaction fees.

 

To continue to capture value, CoachUp must scale the player side up as quickly as possible by eliminating future transaction fees but perhaps maintain the small finder’s fee after the second or third private coaching session. In addition, I would encourage CoachUp to offer the first session free or perhaps at a steep discount to ensure you find the coach that you like. The players are what is needed to grow the network while monetizing the payment received from the coaches.

 

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5 thoughts on “CoachUp: Developing Athletes of Tomorrow

  1. Interesting company! While reading your post, my mind immediate went to what you addressed in your final paragraph around retention and defensibility. What keeps coaches and players on the platform when they can easily meet off the platform and avoid transaction fees. Without the proper barriers in place, CoachUp starts to feel like more of a dating site to find the best coach for you and then participants move off the platform when they’ve found their “match.” If this ends up being the trend, I think the platform still has immense value, but they may have to restructure the fees and revenue model in order to capture as much revenue as possible up front. Or, I could also see a world where CoachUp become a place where players can come for very specialized coaches (e.g., someone highly skilled in teaching the tennis serve) – a service that may be more likely to have an end time period (and thus eliminating some risk of going off platform) and would also encourage players to come back to find a new coach for their next specific issue (e.g., tennis backhand).

    1. Great post and a very interesting company. I think Elizabeth brings up a very good point, moving off-platform is quite a danger in this model. Although I might not care if the same uber driver picks me up, I would want to see the same coach for tennis to make sure I go up my learning curve. High-end option that Elizabeth brought up is definitely a viable solution. One other alternative is that CoachUp would be a craiglist for coaches and athletes to find each other, rather than a service where you book each class. The demand can still be high, especially in the US where people move quite a lot. One other potential I see is to connect with communities of athletes interested in a particular sport (or apps, software dedicated to a particular sport) and collect revenues based on those connections. Maybe CoachUp can advise users who became fans of running to download “Strava”?

  2. Thank you for the post! I am wondering whether it makes sense to pick your customer segment and focus. Would the true great coaches aspiring to train future sportstars want to be listed side-by-side to a new-mom-hobby coaches? I have a feeling that there may be markets for both, but I would probably position the products differently (super-premium product vs. easy-access, “impulse buy” platform). What do you think?

  3. Great post and interesting company! I’d be very interested to understand how (if at all) the company’s operating model has been adjusted due to network effects. Specifically, as it scales in a geographic market, do they offer discounts, reduced transaction fees, etc. to encourage the best trainers and coaches to sign up? The current model seems particularly steep… especially compared to other, relatively frictionless options, in different markets like training centers, gyms, youth leagues, etc.

  4. I worry about the sustainability of both sides of this two sided network. Is there a risk that the kids would leave the platform when they become semi-pro athletes i.e. they join a school or college team? Or if they don’t go pro, how long will they stay on before switching to a regular gym? I don’t think the market for hobbyists and sports enthusiasts, that hire and pay private coaches, is large.
    On the coaching side, doesn’t this feel like a “stop gap”/ part time job? Will the coaches leave the platform when they find a full time job that satisfies them? e.g. coaching a high school team? For the adult customer there is significant competition from gyms and neighborhood sports clubs that play a social role in addition to providing the desired exercise. I think this company will remain small

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