When Harold Hughes entered the first quarter of 2020, he had big plans. His audience-analytics company was rolling out to additional live-events venues, and he was projecting $1 million in sales for the year.
Then Covid came, and anything related to live events went into a hard pause. It was time, he decided, to pivot.
Bandwagon Fan Club had already been through one major pivot since its launch in 2014. It sold a product to ensure the right tickets got into the right hands on the secondary market, helping sports teams protect home-team advantage by making sure fans had a good time. By the end of 2017, the company had found limitations to that model in selling strictly to a sports market, and expanded to general live events by using data and analytics to help venues understand the fans who bought tickets on the secondary market, so that the venues could sell sponsorships targeting their audiences.
That live-events tool had grown steadily over three years: $53,000 in sales in 2018, $138,000 in 2019, and in the first quarter of 2020 alone, $431,000. But then the world-changing event happened, and the business built around live events suddenly couldn't make money in the same way. "With the pandemic, we really needed to figure out how to make better experiences even when people aren't there," Hughes explains.
It took months before Hughes, who had a toddler to care for during the various Covid shutdowns, came upon what would be his business-defining pivot (he and his wife welcomed a second child this August). Hughes emphasizes that he wasn't trying to pretend he could manage both family life in the pandemic and quickly pulling off a pivot that would be difficult under even normal circumstances. Within Bandwagon, "we don't necessarily talk about work-life balance," Hughes says, but rather, "we talk about work-life prioritization." For Hughes, that meant leaning back from some amount of active work as he figured out his pivot plan, while he took care of his family amid the pandemic.
His moment of inspiration came when comparing what he saw of the virtual sports collectibles market in the NBA's Top Shot non-fungible tokens, with a commercial for the NFL's Green Bay Packers. When he first checked out NBA Top Shot last November, he says, he was disappointed to see how indistinct the items in it were. Looking at a video clip for sale of a particularly impressive slam dunk he'd recently seen, "When I got there, I said wait, there are 10,000 versions of this clip." The idea of collecting something that was merely one in 10,000 held little appeal for Hughes. But then he recalled a commercial for the Green Bay Packers that showed the vantage points of many different fans all watching the same play in footage aggregated from fans who'd shot it on their phones. "It struck me," he says, "that each of those vantage points, each of those experiences -- that was non-fungible. That's truly non-fungible."
And so Hughes started digging deeper into a cryptocurrency concept that could work for live events. In the crypto space, "proof of" is a frequent term, used to describe the linkage of the blockchain and its meaning: "Proof of stake," "proof of work," and "proof of funds" are all frequently used to describe the "proof" that is available in a public ledger. At Bandwagon, Hughes says, "We trademarked the phrase, 'proof of experience.'"
He describes the idea in terms of a common retort on social media: "Pics or it didn't happen." Today, Hughes asserts, one could tweet, "Oh, I just saw Tom Hanks in the airport" and a response might be "pics or it didn't happen." So for ticketed live events, Bandwagon would be helping event producers "lean into using user-generated content, minting them as NFTs, and using them as proof of their experience." He imagines his customers creating many videos similar in nature to that Green Bay Packers promotion; they would license the fans' videos and pictures taken in the stands, which would be registered on the blockchain created by his company for that event. The event producer can now have access to all the fans' footage, while giving appropriate credit and compensation to the fans. And fans get to know and show what they were a part of.
For fans, the NFTs are virtual experiences that they can have in addition to the live events. From the other side of that exchange, a live-event team could rely on that proof of experience, and a platform in which they can easily pay the creator of the footage, to generate promotional or other videos with licenses to the user-generated content.
This actually wasn't the first time Hughes had thought of going this route. "I first thought of this idea of connecting fans to their teams in 2016," he says, talking of a plan he drew up, and, Doc Brown-like, recalling the exact date: "December 27, 2016." At the time, though, "I thought to myself, this is too early, so I shelved it. When I had that idea come back to me ... I took that old drawing and dusted it off."
Hughes approached investors and got them behind the new vision of being an outsourced NFT producer, raising a $1.3 million seed round led by Backstage Capital. The round included angel investors like the Arizona Cardinals' Kelvin Beachum, a former CTO and CPO at Roblox, Keith Lucas, and Eileen Long, a machine learning leader at YouTube.
And then Hughes got to work selling the new vision to customers. "I came back from parental leave the day after Labor Day, and signed Chicago State University before the end of September," Hughes recalls. He wouldn't name his next deals, but says they include "an MLS team, a notable podcaster, and an NFL player."
The deal with Chicago State University has already produced multiple NFTs related to experiences. Elliott Charles, director of intercollegiate athletics, notes that the school had "created some collectibles relating to our giving campaign," including "a spinning token graphic that says some unique things that we do." For attendees at midnight madness, "they got a midnight madness token."
Charles sees the NFT market as a way to "create things for the families of student-athletes, our student-athletes, and season-ticket holders to give them something to memorialize their experience," within a limited promotional items budget that precludes much experimentation with physical items. In the future, he also hopes it's a way to get money in players' hands, selling player-specific collectibles, amid the change in rules this year that allows student-athletes to receive endorsement funds while maintaining their college-athletics eligibility.
What lessons is Hughes taking from his pivot? "I think the biggest thing for me has been not trying to prove people wrong, and more just finding people who believe the same things you do, and collaborating with them," he says, adding that the NFT space has plenty of doubters. "If I'd been saying, 'Oh, I'm going to prove you wrong,' I would've been stuck in business models that didn't work."
It's a pivot on which he's gone all in. The pre-pandemic analytics business isn't a focus anymore, and Bandwagon has already passed 2020 sales with its NFT products in just the fourth quarter of 2021. For Hughes, the future of his live-events business is on the blockchain.