Shaquille O’Neal’s retirement assists startup

By Guest Contributor
June 3, 2011

– Connie Loizos is a contributor to PE Hub, a Thomson Reuters publication. This story originally appeared here. –

When the manager of basketball star Shaquille O’Neal called Michael Downing one month ago out of the blue, the San Francisco entrepreneur was overcome with elation – and dread.

O’Neal is a savvy social media adopter with nearly 4 million Twitter followers and more than 2 million Facebook fans. He also reads tech press, and he’d noticed a short piece about Downing’s 10-month-old company, Tout. The maker of an iPhone application that will be available on Android phones next month, Tout allows users to film 15-second-long videos, then blast them over Facebook or Twitter accounts, email or SMS with the click of a button.

O’Neal wanted to announce his retirement from the NBA in as immediately impactful a way possible – without first alerting his Boston Celtics teammates. He thought Tout looked ideal, so a call was made. “His manager wanted to let us know he was going to announce his retirement using Tout so we wouldn’t get crushed by the traffic,” said Downing.

Downing quickly offered to make O’Neal an adviser, a role that provides O’Neal with a bit of equity. The six-person company also set about how to improve the service in a hurry. (O’Neal’s camp had reached out just two weeks after Tout’s beta launch.)

Fast forward four weeks and O’Neal’s announcement this week couldn’t have gone better for either party. Downing said 400,000 new visitors flocked to Tout in the hour-and-a-half after O’Neal’s Tout-hosted video was shot out to the social media ecosystem. Perhaps more meaningfully for the company, dozens of media outlets wrote stories in the immediate aftermath, asking: what’s Tout?

Invariably, the attention has also brought comparisons to Twitter, which had a big announcement of its own this week: that photo and videos will soon be directly connected to tweets.

Asked whether the news poses a threat to Downing’s fledgling business, Downing seems to welcome the comparison. He talks up Tout’s two patents from Stanford Research Institute that enable it to attach “key relevant data,” including “contextual, geo, social, and commercial” to each video. He said Tout has also created technology that “will allow people to dialogue back and forth” in “real-time, true video messaging.” (Downing claims that Tout’s first priority is “seeing how people want to use the product.”)

Twitter’s news also seemingly gives Downing an opening to point out what O’Neal saw early on: that there’s still plenty of room for companies that are willing to bridge the walled gardens of Facebook and Twitter — and to think beyond them.

“Twitter is Twitter,” said Downing, who has so far raised $1.9 million in seed funding for Tout, led by Li Ka-Shing’s investment company, Horizons Ventures. “But it’s clumsy, and a lot of people don’t use it. In San Francisco, Twitter seems to us (ubiquitous), but there’s a pretty big drop off the farther out you go.”

Downing meanwhile sees Tout as “real-time messaging for everyone who doesn’t use Twitter.” And he has at least one true believer.

Telling an ESPN reporter yesterday why he delivered his news as he did, O’Neal answered with a smile, “Once a businessman, always a businessman…why text when you can Tout?”

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