Hookit Fuels Sponsorship-Starved Amateur Athletes

If trademark disputes were a sport, Hookit.com might have found a way to win gold—despite dropping out of the race.

The San Diego-based action sports social networking firm, formerly known as Loop’d, surrendered its original name in January to end a costly 18-month trademark battle with Mountain View, CA-based mobile mapping firm Loopt.com. But Hookit’s Olympic feat—boosting its membership base from 200,000 to 500,000 during the dispute and continuing to grow after the moniker change—will likely do more for the company in the long run than winning the trademark case could have done.

“It definitely proved that we had a good model and a valuable service that could continue to attract new members,” said Scott Tilton, CEO and co-founder of Hookit. “It’s still frustrating as a whole because it definitely derailed some of our product initiatives,” Tilton added. Nonetheless, Tilton said the trademark dispute didn’t have a lasting effect on his firm, which used a series of polls and interviews to allow members to choose the new name.

Hookit provides members a free venue to network with other serious action sports athletes, communicate about events and competitions, engage marketers, and purchase equipment, products and apparel. Through the site, users can pursue sponsorships from firms like Corona, CA-based Hansen Natural Corp.’s Monster Energy and from smaller brands like Fuel Clothing.

Tilton and business partner R.J. Kraus, longtime friends and amateur athletes originally formed their vision in Connecticut in 2001. They recognized a need in the marketplace for a site that provided a better way for sponsorship-starved amateur athletes and revenue-seeking brands to connect with each other. Their aim: to create “an online service for amateur athletes to build profiles, showcase their skills, and connect with sponsors,” Tilton said. “It took a long time to get going, mainly because we had no funding at the time. And it started in Connecticut, which is not exactly a hotbed of action sports.”

They eventually realized they needed to take an extreme step to pursue their idea further. The two entrepreneurs set out from Connecticut on a cross-country trip in 2003 with the goal of finding a new home for their site, then called SponsorHouse.com. Tilton said they were aiming for southern California and quickly fell in love with the entrepreneurial approach and action sports atmosphere prevalent in the San Diego region.

To use a sports phrase, they stuck the landing. San Diego is home to legendary skateboarder Tony Hawk and snowboarding sensation Shaun White, not to mention a critical mass of lifestyle apparel companies, online sports ventures and action sports product makers. The sector’s momentum prompted Marco Thompson to form Connect’s Action Sports Innovators group in 2007.

Shortly after becoming part of the region’s action sports sector in 2003, Hookit won the San Diego Venture Group‘s annual PitchFest competition and “parlayed that into our first angel round,” Tilton said.

The company’s original model required members to pay for access. Over time, the site—which officially became Loop’d in 2007—shifted to a hybrid model in which marketing partners pay to maintain a presence on the network. Membership is now free, although a premium option gives users a prominent place on the Hookit network and unlimited access to sponsors and content uploads.

Hookit’s brand partners include some 400 companies such as Monster Energy, which sponsors amateur athletes on Hookit through its MonsterArmy.com initiative. The marketing campaign allows Monster to sponsor serious amateur athletes by lending the prestige of its gear or logo instead of offering financial incentives.

“In turn, they become brand ambassadors for us,” said Sam Pontrelli, vice president of marketing for Monster Energy. “We know it’s working for us.”

U.S. companies invested $716 million in social media marketing in 2009, but that figure will rise to $3.1 billion by 2014, according to data from Forrester Research.

Tilton said Hookit’s commitment to a mix of advertising and branding, coupled with merchandise sales and loyalty programs, has made the firm profitable for more than a year, though he didn’t offer specifics. He said the company adds between 10,000 and 15,000 members a month

Without “explosive, viral growth,” he said, the firm relies on a steady revenue stream to support its operations.

“Our growth has always been 100 percent a year minimum, but it was very linear. We never had an ignition point,” Tilton said. “We just always had a real business. We knew we were monetizing and capitalizing on the brand.”

That revenue stream gave the company runway to survive the global downturn in the economy in 2008 and 2009 and avoid an overreliance on venture capital investment. After raising $800,000 in angel financing in May 2009 from private investors and Southern California’s Tech Coast Angels, Hookit is not in a rush to secure additional venture investment, Tilton said.

Hookit has found the San Diego startup community to be a ready provider of other types of support, though, from the likes of Connect’s Action Sports Innovators group. One of the group’s board members personally invested in Hookit. And the group’s executive chairman, basketball legend and broadcaster Bill Walton, is one of Hookit’s most vocal proponents.

“The Hookit, Scott Tilton story is really what we’re all about here in San Diego,” Walton told Xconomy. “San Diego is the participant sports capital of the world.”

Walton said Hookit’s service of connecting action sports brands to serious athletes was nearly foolproof: “When you have the ability of people to get connected through their peers to get better deals and then the brands able to connect through their targeted [customers], it is really the perfect harmonic convergence.”

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