Strategy and Tactics: How Active Network’s CEO Uses Innovation to Fuel Growth

8/12/11Follow @bvbigelow

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a third-generation SaaS product that allows us to essentially leverage this shared platform of services across products that in the end have very different features and functionalities.”

With most of the Active Network’s customers using most of the company’s shared online services, its software development teams can focus on the specialized needs of small groups of customers. That has allowed the Active Network to expand and diversify its customer base, and to provide services to smaller customers more rapidly.

For example, the Active Network acquired Fellowship Technologies for an undisclosed amount earlier this year. The company, based in Irving, TX, provides SaaS technology needed for church management and ministerial services to more than 1,700 customers.

That’s an acquisition that would not appear on its face to be well-aligned with the Active Network’s core market of sporting events and outdoor activities. However, says Alberga, “If you look at a very large faith-based organization, it actually looks and behaves not unlike a parks and recreation department. They have facilities. They have activities. They have members. They have fees. Really the data management problem is a very similar problem that we’re solving.”

While Fellowship Technologies can share many of the core services that Active Network provides to its customers, Alberga says the company also has been making a huge investment in developing more specialized technologies.

“If you look at anything that’s written about us, everyone wants to know why we’re spending so much on technology,” Alberga says. “Last year we spent 22 or 21 percent of our revenue on technology.” The Active Network’s long-term model calls for spending 15 percent of revenue on new technology development, which is closer to the industry average, he says. “But not until we have the [capabilities] in place that allow us to innovate much more rapidly than anyone else, and to serve our customers much more rapidly and profitably. That’s kind of the big investment that we’re making, which drives a lot of what we’re doing here.”

It’s also an investment that seems to leave room for more buyouts, an assumption that Alberga doesn’t dispute. “It’s reasonable to expect us to build on our organic growth by continuing to look for acquisition opportunities,” he says.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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