Beyond the bootstraps

Nine years ago, Michael Prendergast and Ben Reynolds could be found on the side of a squash court or at a football match, streaming the games with a camcorder while providing comedic, alternative commentary. 

It started as a form of weekend entertainment for their collection of friends, but the pair soon noticed business potential. 

“There were the initial market pull things you wanted to see that inspired us to ask what a business around this idea could look like,” Reynolds says, who, by then, had interned at the Icehouse and worked at venture capital fund GD1 and Sparkbox Ventures.

A decade later, the answer to that question is Spalk, an online platform offering three services. 

The first is a live broadcast platform that eliminates geographical barriers, allowing sports commentators to work from home. It also facilitates multilingual broadcasts of sports events, allowing them to reach new audiences.

“It is really powerful for commentators who want to have a family life, or broadcasters who can’t afford, or don’t want, to spend the dollars and carbon moving commentators around the world,” says Prendergast. 

The second platform service is a talent marketplace that links a global network of professional journalists available for hire.

The third service bundles all of Spalk’s offerings, including live broadcast technicians, to ensure seamless, high-quality streaming on event days.

Last year, the platform produced over 30,000 live broadcasts in 35 languages on more than 30 different sports. The venture has been on a steady revenue march in the last few years, growing at about 75 to 100 percent annually. 

So, how did the young cofounders successfully disrupt the television industry?

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Listen to the customer

Bootstrapping their early years, Prendergast and Reynolds hustled their way to their first few customers to gain proof points.

They believed that building trust would be a bit like a “snowball rolling down a hill,” and they could keep accumulating slightly more prestigious brands. 

“It was all about knocking on as many doors as possible and trusting that some people – the early adopters – were going to see what we were doing and throw us some scraps,” says Reynolds. 

With lots of travel and living in hostels, getting face-time was not the cheapest approach, but the cofounders considered it the only way. 

This is when it helped to be young; they were used to going without and “living on ramen the entire time,” Prendergast says. 

They found an early ally in Mike Rehu, former head of content at Māori Television. Rehu would go on to be an advisor and later chair of Spalk’s board of directors. 

Maori Television had the rights to the New Zealand high school basketball championships, and Spalk offered an opportunity to engage with tamariki around New Zealand through demographic-focused commentary.

The early contract helped the Spalk cofounders flesh out the idea of multilingual use cases, allowing brands, sports leagues, and broadcasters to save costs and grow their audience.

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Prove yourself

As Spalk built its New Zealand network, Reynolds and Prendergast faced their next challenge: scaling into Australia, Europe and North America. Once more, they went for the ‘get a foot in the door’ approach. 

In London, with the help of Māori Television, the pair applied for the Broadcast Tech Innovation Awards and won. “It’s like the Oscars for sports TV production,” says Reynolds. 

That award led to their first international customer, a domestic European basketball league, that had its under-19 world championships coming up. The league, with a projected 20 million viewers, was facing issues getting commentators on site and wanted to see what Spalk could do. 

A week later, Reynolds and Prendergast found themselves at the Icehouse at 3am, waiting to go live. They watched as the viewer numbers climbed from 100 to 1,000 to 25,000. Success. 

At about the same time, they signed an international league, and the startup faced a new challenge: the product was to be sold through a usage-based model, but what should the cost be? 

The cofounders settled on providing the two customers with different business models and prices reflecting the size of their different leagues. Looking back, they recommend considering pricing before heading into the market as it is challenging to put unreasonable price adjustments on customers down the line.   

As it grew, Spalk caught the attention of investor Icehouse Ventures – in part because of Reynolds’ time at the company, but also because Icehouse recognised a gap in the market. 

Spalk raised $4.3 million in a Series A round in 2021. Since then, the company has raised about US$7 million over “four and a half” capital raises. Investors include sporting personalities such as basketballer Steven Adams and retired golfer Greg Norman.

When it comes to raising, the Spalk cofounders have always gone for the minimum amount to reach the next stage of growth. 

“Having funding announcements is sexy and makes you look great in the market, but in actuality, you’re trading away future enterprise value for near-term cash,” Reynolds says. 

As the company has scaled, the philosophy of being as efficient as possible – something both founders are aligned on – has imbued much of what they do. “There has to be a good reason to spend each dollar,” Prendergast says. 

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Be there

Like athletes, Spalk is only as good as its last game. With renewals and net revenue an easier way to make money than finding new customers, customer retention is a priority. For that the company’s approach is urgency and sense of responsibility, which has meant investing in customer support operations.

Initially, the cofounders monitored everything themselves, but with the company now global and running 24/7, it has grown to a global workforce of 18 full-time staff and 10 part-timers. 

“Other organisations might be okay with a 15- or 60-minute ticket time; we’re sub-60 seconds. Customers love that. They know we take their content very seriously,” Reynolds says. 

But even with the extra support, Prendergast and Reynolds make themselves and senior team members visible to the customers: “It’s not a case of them buying the software and us sending an invoice,” Reynolds says. 

No matter who the customer is, Spalk treats them as a priority and listens to them, says Icehouse Ventures partner Jack McQuire. With customers now across the sporting spectrum, from ultimate frisbee and luge to NFL and FIFA, it seems to have paid off.

McQuire credits the “grow over time” philosophy and prioritisation of long-term customer value over immediate profitability.

“One of the phenomenal things about Spalk’s business is how much growth comes from existing customers,” McQuire says. 

“They get a TV network that spends maybe tens of thousands dollars the first year, they see the impact it has on their business, and the next year they’re spending hundreds of thousands.” 

And the cofounders plan to continue owning their niche. 

“It’s always funny when someone texts me and says, ‘Is Spalk covering this game?’ When we’re not, it just adds another lead to the pipeline,” Reynolds says. 

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This, the third story of six in The Young Founder series, was supported by Icehouse Ventures

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