How SportsMate Mobile started an app studio – but ended up with a publishing business

The app industry is only less than five years old, but so many success stories and giants have emerged it’s hard to believe it’s only been that long. Daniel Kagan and Patrick Fitzgerald are two of Australia’s most successful developers, having built their company SportsMate Mobile into a powerhouse with revenue of more than $1 million.

The company’s sports-themed apps are some of the most popular in Australia, including the Footy Live app.

But the app market has changed. While the pair started out just developing apps, the business has transformed – and now they finds themselves selling advertising space within the apps most of the time.

Kagan and Fitzgerald spoke with SmartCompany about the company, how the app market has changed, and where they see it going next.

We released FootyLive in 2009. For that first year we had no idea what was going to happen with the app store. We had a really positive response, and so we thought, is this a sustainable model? Are people going to want to spend this money to access scores and statistics?

We had a chat to some media players. We were actually subletting from a media company at that point. They asked if we had tried mobile ads – and at the time we had no idea what mobile ads were.

But we explored it. We were introduced to some CarSales.com.au people at the time, and we managed to get a deal across the table.

From that point onwards, we started seeing the benefit. We had the confidence to increase the number of sports we covered, so we moved into League, Union and the A-League, and recently we did the English Premier League as well.

That was all on the back of advertising. We felt confident there was enough play in that market.

We made a decision with our ads to target the pages where the main activity was happening. We only make decisions to put ads on pages if they actually fit. If we have a long page with information on it, we won’t put an ad on there.

It was a little strange. We started with mobile apps and then all of a sudden I’m talking to a company like CarSales about the benefit of mobile advertising. But you just have to pivot to the nature of whatever you’re trying to achieve.

What’s changed now is that apps are an entire industry. When we started five years ago, there was just a twinkle in your eye about success. It wasn’t the Wild West, but anyone in their garage with a mate could create an app and be successful.

That doesn’t happen as much anymore. The big corporates have come into the market, there are a lot more licensing arguments, a lot more red tape you have to get through. It’s become a lot harder to get into this space as a small business.

This year we’ve had some issues with the Premier League body about licensing their content. That would never have happened last year or the year before.

But it’s not like we woke up one day and this happened. This is five years of solid work, and through that we’ve developed an understanding of the marketplace.

We’re definitely keen on challenging sports outside Australia. We started with Premier League last year, and this year we have about 200,000 active users a month. So we’re keen on that.

Within Australia we’re always looking for interesting ways to do things, with new platforms and so on. We always look at things like Google Glass and try to determine if those things produce any benefit for this … if Apple were to introduce a watch, we’d be in the office the next day, working on something for sure.