An Excerpt from the Book:
“I really know I am onto something when everyone else thinks I’m crazy”
Brian Matthews worked for twelve years at McDonnell Douglas before starting his first company, CDM Fantasy Sports. A strong believer in the strength of technology and software, Brian has shared his depth of knowledge with dozens of companies, acting as both an advisor as well as financial backer. These include many early-stage companies with board seats on LockerDome, Aisle411, SixThirty, and Friends of T-REX
I’ve started and sold four different companies. Each has had its own challenges, but if I’ve learned anything, it’s that success is a combination of talent, capital, and timing – and, as often as not, a big part of timing is luck.
In my twelve-year career at McDonnell, I was active in several of their Advanced Design programs. It was a great place to work, and for a while, I thought I might be a lifer – but the reality is that I was something of a fish out of water. They had some amazing cutting-edge programs, but they had become this behemoth in the aerospace business: entrepreneurship is the opposite of what is necessary to win large government defense contracts. By the late 1980s, the company started contracting in a big way, and I knew that my future was elsewhere.
At the time, I had a very serious hobby that combined my knowledge of software with the gamification of professional sports: the term “fantasy sports” was really not much more than a name and a dial-up line through a Las Vegas statistics service. With my wife, who was also a software engineer at McDonnell, I developed one of the first commercially viable software products for fantasy sports. We used the business model that I found in the AT&T Stock Market Challenge to develop our product, which was primitive by today’s standards, but it was the best we had at that time.
In 1992, I made a decision to leave McDonnell to pursue this interest full time. People thought I was nuts for leaving aerospace to start a fantasy sports gaming company, It was that new. But it was very clear to me that there was an untapped market for this. I really know I am onto something when everyone else thinks I’m crazy. Our first major client was The Sporting News: the platform we developed for them became the foundation for CDM Fantasy. We started to grow at a very rapid pace, in both revenue and adoption of the software. There was a second fantasy sports company that had a national presence which was very similar to ours; we put them out of business within two years, and by 1998, we were recognized as the leader in the field.
In hindsight, my biggest mistake was not selling to CBS Sports in 1999, who made a purchase offer of $100 million in stock. At the time, CDM was highly profitable, and I was focused on our second business, Primary network, as it was growing faster than CDM. There was no reason to sell. CBS Sports went on to create their own platform, as did Yahoo and ESPN.
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