SAN FRANCISCO (01/04/2000) - Eighteen months ago John Elway didn't even own a personal computer. Now the retired National Football League star is chairman and founder of MVP.com, an e-commerce startup backed by VC powerhouse Benchmark Capital.
To bolster his team, Elway has recruited fellow MVPs - Michael Jordan and Wayne Gretzky for starters - to invest time and money in the sporting-goods venture, which has raised $65 million so far and is set to launch later this month.
In the old days, over-the-hill athletes tried their hand as salesmen, broadcasters or as product pitchmen, if their names carried enough weight. A few had success in real estate and politics. Now that they've discovered the Internet Economy, board seats and dot-com options packages are proving a far more enticing lure than press boxes or beer commercials.
"I knew I wasn't going to be happy being a [product] endorser my whole life," Elway says. He points out that the Net affords a rare business opportunity for former sports stars, whose age and relative career inexperience put them at a disadvantage when they enter the rat race. "Because the Web is so young," he says, "it's really enabled us to get involved right away."
Elway, Gretzky and Jordan are true partners in MVP.com. They've invested their own money (sharing an undisclosed equity position of under 20 percent), and they've all promised to provide commentary for the site - tips on choosing the right skates, for instance, or how to throw a tighter spiral. "We're going to want to be involved in this as much as we can," says Elway.
A graduate in economics from Stanford University, Elway is no stranger to business. Last year he sold his Colorado-based chain of car dealerships to AutoNation for $82.5 million. He sat in on the initial strategy sessions with Benchmark this fall, and he says he's positioning the firm for an eventual IPO.
His partners have also gotten into the game, says John Costello, CEO of MVP.com. Jordan and Elway have joined in marketing and advertising strategy sessions. Jordan has passed along suggestions to Costello for management candidates.
Of course, what the three principals bring to MVP.com is more than cash and contacts: These famous athletes are household names.
"If you look at the cumulative media awareness that went into building [the public personae of] these athletes, it's probably [worth] over a billion dollars," says Larry Marcus, an analyst for BT Alex. Brown.
Still, celebrity status doesn't guarantee success in the business world. Marcus thinks MVP.com has already goofed once: introducing itself to the public before it had products to sell. "What good is a media-branding event if you can't leverage it?" he asks.
Name recognition alone won't capture the $150 billion sporting-goods retail market. A host of companies are now duking it out in the up-for-grabs category - from Fogdog Sports, a Mountain View, Calif.-based startup that counts Nike as a partner, to Global Sports Interactive, the firm that handles e-commerce operations for six top sporting-goods chains including the Sports Authority and the Athlete's Foot.
To boost its position, MVP.com has invested heavily in marketing. It's parceled out more than $200 million in cash and equity to SportsLine and to SportsLine's broadcast partner, CBS, in exchange for online and on-air promotions. As part of the deal, MVP.com will also take over SportsLine's $16 million e-commerce business.
It remains to be seen whether kids will someday look up to John Elway, the entrepreneur. In the meantime, though, it's unlikely MVP.com will have any trouble scoring additional funding from starstruck investors. As Marcus says:
"It's going to be easy for John Elway to put meetings together."