This article originally appeared as the cover story of the November edition of our quarterly magazine. To get the full experience, you can read the issue online here, or subscribe to receive a physical copy here.

When mobile marketing firm Velti bought Mobile Interactive Group (MIG) three years ago for an eventual $60m (£96.4m) figure, it was the culmination of seven years’ hard work for MIG’s Barry Houlihan and co-founders Anthony Nelson, Marcus Kern and Nick Aldridge, who had left O2 with Houlihan in 2004 to start the company.

Starting in Houlihan’s living room, the company quickly established itself as a driving force in the mobile space, securing a contract with ITV in 2005 to manage the broadcaster’s portfolio of mobile services, including the delivery of new mobile technology and apps.
Within the first 12 months, MIG had completed the launch of ITV Mobile in conjunction with ITV, managed the then-biggest text vote in history for the X Factor and oversaw the production of ITV’s entire mobile video content range.

Turnover grew quickly, from £250,000 in 2005, to £22m a year later, rising to £68m by 2009. When it was sold, the company had made $180m in mobile-first revenues from mobile engagement, including ads, payments, voting and software licences. It had several million in the bank and was growing internationally.

It was no surprise, then, that MIG caught Velti’s eye, a company that had just completed an IPO and was one of the world’s largest mobile ad businesses. And for the first year, the logic seemed impeccable. “I maintained full control and we had a great 12 months that fully justified the deal from both sides,” former CEO Houlihan says.

Losing control
It was when he relinquished this control that things started to go wrong. “The problem was a lack of operational leadership, coupled with a very aggressive acquisition strategy that was not balanced out with a strong period of integration, where the new company was absorbed and a new structure created.”

Houlihan now says the deal fell victim to “enormous ambition and fairly significant ego”. But it didn’t help that Velti was also facing a cash crisis as it struggled to collect payments for clients in several countries, including Greece and Cyprus. And that the company had blown most of the $150m it had raised in its IPO on a string of acquisitions. In addition to MIG, it had also spent $50m on mobile ad network, Mobclix, $19m on Indian firm Air2Web and $14.4m on Chinese ad network CASEE.

Houlihan left the business in August 2013 when it was clear that the game was just about up for Velti, but not before he had done all he could to safeguard the interests of himself and his fellow co-founders, plus the 40 or so members of the MIG team that had earned a stake in the company.

“My number one priority was to fight for my shareholders, which I did,” Houlihan explains. “I fought a good, clean fight and got as much as I possibly could in terms of what was owed to us.”

Despite the fallout, he’s immensely proud of what he and his team achieved at MIG. “We created an amazing technology platform, we were Facebook’s first accredited TV voting solution and we broke world records for the amount of money raised through text donations. MIG had a culture where people learned an awful lot in terms of mobile insight and innovation, and eveyone involved has gone on to build fantastic careers for themselves.”

What next?
With Velti behind him, Houlihan found himself with time to think about what to do next. “When I left Velti, I did the usual stuff, took some time out, made some investments, but when I thought about what makes me tick, I realised that what I do best is creating momentum in new businesses, generating incredible enthusiasm and excitement around something that, initially at least, is just an idea. I realised that I’m not suited to the role of an advisor, a non-exec or a chairman, just passing on ideas for other people to execute – I have to be in there doing it myself.”

So his next question then was: doing what? “I spent a lot of time looking at the mobile-first market and at what had been successful, and this is when BreatheSport came to me,” he says. “I was looking to bring something disruptive into an established market and the more I looked at sport, the more I felt the time was right for what we’re doing. If you look at what BT have done with football rights over the past couple of years, it shows that huge organisations can be challenged.”

In BreatheSport’s case, these “huge organisations” are not the broadcasters, but the social media giants, Twitter and Facebook. While it might appear mad to take either of them on, Houlihan believes that his new social media/sports mashup can both challenge and complement the established social players.

He describes it as a “mobile-first, celebrity-led social network”. It takes the form of an iOS app, an Android app and a responsive website that aims to bring live celebrity response to breaking sports news and live sporting events in a “troll-free area” known as the Locker Room. Currently in beta, the network is due to launch at the back end of 2014 but sports fans can pre-register now on the BreatheSport website.

The idea is that past and current sports icons will sign up to the network and engage in discussions, prompted by text alerts they will receive – three or four a day – on their phone. And to encourage them to get on board, Houlihan and his team are giving away a small amount of equity in the business to around 200 of the UK’s top sports celebrities.

“We are diluting ownership of the business in order to give high-net-worth individuals bragging rights to say they are the co-founders of a hot new tech company,” he says, noting that many sporting stars have abandoned their usual social media accounts after being abused by other members, but that many see it as a “necessary evil”.

Troll free
More than 100 sports celebrities are already committed to BreatheSport, though only two – boxer Carl Froch and cricketer Jimmy Anderson – have been named, and this was only done to satisfy the media’s appetite for names, says Houlihan.

The Locker Room is a closed environment, open only to the chosen celebrities, sports journalists and the BreatheSport editorial team, while another part of the network, the Fan Zone, is designed as a place where sports fans can engage in conversation. The celebs can then choose to get involved with these discussions whenever they wish, with ‘moderation technology’ being used to filter out abuse. Fans will also, however, be able to earn the right to get access to the Locker Room, as well as other rewards such as memorabilia and ‘meet and greets’, based on their level of participation.

Houlihan says that BreatheSport aims to provide a more structured, thread-based forum, compared to the linear stream available on Twitter. But the BreatheSport experience will be “interoperable” with both Twitter and Facebook, so a comment posted by a user to a BreatheSport thread can also be posted at the same time to their other social feeds.

He uses a neat analogy to explain how BreatheSport fits into the social media ecosystem. “The current social media scene looks like the last days of analogue TV, where you had just five channels trying to cater for hundreds of different interest groups. Then digital came along, with hundreds of channels dedicated to people with different interests and hobbies.” He says that while you can now follow hundreds of conversations about hundreds of things on Twitter, it’s a very linear, unstructured experience. “We are trying to bring more structure to it, to create an experience for users that complements what they get on Twitter and Facebook,” he says.

The final element to BreatheSport is the Live Lounge, which will offer a second-screen experience around live sporting events, with a real-time data feed from the top of the screen. Users will be encouraged to comment on what they are seeing and there will also be gamification elements to the Live Lounge.

Houlihan’s co-founders include Luke Sutton of Activate Management and former MIG co-founder, Anthony Nelson. An advisory team includes Marc Marot, chairman of Crown Talent, Tim Brooks, MD of Guardian News & Media, and former England footballer and current TV pundit Peter Reid.

Sink or swim?
The company has taken on $1.5m of angel investment for its initial launch and Houlihan says he is not concerned at this stage about where future revenues will come from. “There’s no income stream on our radar in the next two to three years. The investment is all going into the product and the user experience, and the investors are happy with that because they have confidence in my ability to monetise.” He says they will evolve the capabilities of the platform in line with what users tell them they want. “When we have built a huge audience of connected sports fans and celebrities, then we’ll start thinking about how to monetise it.”

As with any new idea, it’s impossible to predict whether it’s going to sink or swim. There’s certainly enough appetite among sports fans to share their thoughts about the issues and games of the day on social media, and the abuse-free environment that BreatheSport seeks to provide for sporting stars past and present, famous and less so, will be a breath of fresh air for professionals and fans alike. One thing’s for sure: BreatheSport stands more chance of being the next big thing with Houlihan at the helm than without him.