Delane Parnell was the oldest child of a single mom and grew up in a poor neighborhood near Detroit's Seven Mile Road. A few months before his birth, his father was killed. As she moved between jobs, his mother took him home from one place to the next. The young Parnell still had a flair for business. He was 17 when he started his first job as a mop floor at MetroPCS. This led to him co-owning three Detroit-area cellphone shops.
Parnell moved to Los Angeles seven years later after a chance encounter with a venture capitalist. Although his company was named PlayVS, he had little other than office space at Science Inc. Still, he had no funding, no employees. His goal was to bring e-sports into the lucrative, but largely untapped high school market.
He was close to fulfilling his lifelong dream, or failing miserably.
Delane Parnell walked into Science's Santa Monica office in June 2017. He was greeted by a small wooden desk on the second floor and a stack post-it notes. He would use this desk to begin work on his new venture which he called PlayVS (as it means "play against"). Parnell customized his workspace by installing the large monitor he brought along. He then printed some photos and taped them to his desk. One of them was a screenshot from the original Google homepage, a reminder of the $700 million company's humble beginnings. Another photo was of Jay-Z, Sean "Diddy", Combs. Parnell had grown up listening to their music, and he had hung their pictures on the wall in his Detroit bedroom. Both had been raised in drug-ridden homes and struggled to achieve great success. They were reminders that anything was possible.
Talia Rosenthal, an asset manager at Science, was assigned to Parnell's daily contact. Before returning to the States, the Oregon native had previously worked as a venture capitalist in Singapore for several years. Rosenthal was responsible for the management of Science's startup companies through fundraising, business strategies and day-to-day operations. Parnell and Rosenthal were given a crucial first task: to determine the best entry point for high school esports.
Parnell learned from the failure of a previous gaming startup and decided to focus less on the product early on and more on building business relationships. Parnell reached out to Boy & Girl Clubs of America in the hope of forming an alliance that would allow PlayVS's still-hypothetical product to reach students after school. He reached out to universities and colleges that have created e-sports programs to find out about their scholarship opportunities and whether they could be used for high school teams. He reached out to game publishers and got an informed opinion about youth e-sports. He was a night-shift worker, living almost entirely in the office. He would take visitors to Science through the second floor and lead them into a conference area. He would then say, "My team is over there," and gesture towards his desk which was located near several employees from other startups. Technically, it was true, but the guests didn't know that Parnell was the "team".
Rosenthal and Parnell knew from the beginning that the best way to break into the high school gaming industry was through the National Federation of State High School Associations (NFHS). It was the high school equivalent to the NCAA. The organization could declare e-sports a sanctioned sport and recommend states' governing bodies do so. It was the real world equivalent to a cheat code. PlayVS would have access to the desired demographic through a partnership with the NFHS. This partnership would give the startup leverage over publishers and protect it against potential competitors.
Parnell and Rosenthal were unaware that the century-old organisation had been discussing esports internally for the past year and a quarter. Pew's study of teenagers at that time showed that 72 percent played video games, with 84 percent being boys. The NFHS found that more children were engaging in video games than traditional sports. Over the past 18 months, the NFHS had spoken to a few gaming companies about creating the online infrastructure for high-school competitions. However, nothing was permanent.
"How about you give me a demo in Atlanta next week?" They asked. Parnell replied, "I would love that." The problem was that PlayVS's product didn’t exist.
Parnell sent emails to Robert Rothberg and David Rudolph, two NFHS executives. He decided to take his shot and asked if they could talk about his high school esports platform. They agreed. Parnell was joined by Science CEO Mike Jones and Rosenthal a few days later as he presented, via speakerphone, the NFHS with his startup's essential gaming infrastructure.
"How far is PlayVS with its software?" The NFHS executives were asked. "Do you have a product ready right now?"
"We do," said Parnell. "We have a demo ready for you." Let me fly there to show you.
"How about at our Atlanta headquarters next month?" The execs suggested.
Parnell said, "I would love that."
But there was one problem. PlayVS's product didn’t exist. Rosenthal says: "I looked at Delane after the call ended and asked, 'What are your talking about? We have a pitch deck. We know our strategy. Is this the demo you are referring to? He said, "Just don't worry about that." He was like, 'Just don't worry about it.'
It was game on. Parnell began to create a wireframe, which is basically a blueprint for the platform's design using design software. Parnell asked engineers and designers he had worked with to help him bring the mockup to reality. Parnell and Parnell collaborated to create a product demo. They worked together for the next few weeks, working under contract. Parnell and Science's Peter Pham flew from November to Atlanta with the demo. Rudolph Rothberg, Mark Koski and another executive from the NFHS joined them in a conference room.
At the time, the NFHS was evaluating around a half-dozen potential e-sports partner companies. These included upstarts like Electronic Gaming Federation and publishers like Riot Games or Activision Blizzard. All of them were bigger and more established than PlayVS. Parnell and Pham walked in the room fresh from a meeting with Super League Gaming. This three-year-old company was backed by almost $30 million in VC funding. The proposal impressed the group, which Rothberg made sure Rothberg communicated to Parnells and Pham immediately they sat down. Tension was high in the air. Parnell reached for his laptop and began to watch his demonstration.
He began by saying, "So here's how a student logs in to view their schedule and see the roster of the opposing team. Click here to go to a lobby. Once all students have logged in, the match starts. The relevant data is sent to PlayVS after the match ends. We'll then present it to players in the following manner. The NFHS staff seemed open to the idea. Parnell was able to detail even the most intricate aspects. The meeting was scheduled to last an hour but ended up lasting three hours.
Koski said, "We expect our decision to be made in approximately a year" towards the end of the conversation.
Parnell felt defeated as Uber's Parnell and Pham weaved through traffic to catch their return flight. It was long to wait for a positive outcome, and it was far from certain that one would be delivered.
In the meantime, Rudolph and Koski discussed their findings. They appreciated that PlayVS did not see high schools as an additional revenue stream, but was focused on the academic level. Parnell's extensive knowledge of the industry impressed them. They also liked the fact that Parnell shared their fundamental beliefs, including not offering first-person shooter games and making a sport open to all students who want to play. Although they knew that the startup was small, Science supported it, which is the same firm behind DogVacay and Dollar Shave Club.
Koski states that the NFHS takes things slow and vets thoroughly. "We will be rubber stamping something for 20,000 high school students, 16 million coaches, and a million-and-a half coaches. Through talking with Delane, Peter and others, we knew they were in it together. This made the process much easier than I could have imagined.
Koski called Parnell two weeks later after the meeting. He told Parnell that the NFHS was interested in partnering up with PlayVS.
Parnell was thrilled. This was just the first step. The NFHS was able to approve high school activities and sports, but the decision to adopt them was made by the state's athletic associations. Each January, the NFHS hosted its winter meeting. This was a four-day event in which athletic directors and administrators from all over the country met. The conference will be held in Scottsdale, Arizona, this year. Parnell would have to attend and present the idea of e-sports adoption to all 50 states.
Soon after, Laz Alberto, a young videogame enthusiast, began to work at Science. Parnell was one of his first duties. Talia Rosenthal was on vacation with her husband in Morocco so Science organized for James Hicks to be the pinch-hitter. Hicks had not been involved with PlayVS until that point so he spent much December learning about high school esports. Alberto, Parnell, Hicks, and Alberto spent weeks studying the structure of the NFHS, as well as the politics, and developing the messages Parnell would send to the association and the state athletic associations.
The trio flew to Arizona the day after New Years. The trio arrived at a Western-themed resort with palm trees, fountains, cacti and life-sized statues of Native American warriors and cowboys. Many high school athletes, many of them former teachers, crowded the grounds as though they were about to play 18-holes at a country course.
Hicks and his family retired in their room. Alberto and Parnell went to the outdoor hot tub in an attempt to unwind before the big day ahead. While their interactions had centered on tech, esports and PlayVS, they didn't know much about one another. Alberto had heard of Parnell's journey, including the single mother in Detroit and the cell phone stores, but hadn't known how they connected.
Alberto states, "I believed Delane would succeed from the first time that I met him." "But, when we discussed his history and how it influenced what he was doing that was when I realized he was a generational founder and that his story was worthwhile knowing and, in my situation, worth being part of in some manner."
The conference's first full day of activities was held the next day. Alberto, Hicks and Parnell mingled vigorously, noting the names of anyone who was interested in following up later. Hicks says that the median age was about 65. He pictured ex-gym teachers and wrestling coaches. He found himself talking with a younger female director of athletics at one point. She said, "I'm looking forward. There have been challenges in the past with controversial sports and getting them certified. Hicks says, "In my mind, was this like skeleton-luge? Or something extremely dangerous?" I asked her for an example. I asked her for an example. She replied, "We had the most trouble with boys' soccer." I was like, "Boys' soccer!" She says, "Yeah." A lot of state athletic directors believed that all-American boys should only play football. I remember thinking, "We're fucked." The most popular sport worldwide is men's soccer. Boys' soccer is a problem, so they won't be playing video games.
The trio met again to discuss Parnell’s pitch for the following day. They had gathered information from educators about e-sports. They honed their presentation by laying out their notebooks and laptops on a coffee table in the lobby. Parnell and Alberto continued to work into the night after Hicks went to bed. The table was stuffed with soda cans and bottles of water, as well as bags of vending machine chip bags and Styrofoam containers containing hotel-bar chicken wings. Parnell was rehearsing the presentation, headphones on, at 2:20 a.m. He had an unsettling thought. What if the associations wanted details about PlayVS's pricing structure? And projections of the product's potential scale? Parnell didn't know the answer because PlayVS hadn't yet set a fee and had not mapped out growth goals. Parnell reached for his phone and scrolled to Rosenthal's face. Then he tapped the FaceTime button.
Rosenthal, a hotel guest halfway around the globe, was getting ready to leave for Casablanca when she saw the missed calls on her mobile phone. Parnell sent a follow up text in all caps. Rosenthal FaceTimed with him.
"Yes!" she replied. She asked.
Parnell frantically stated, "The NFHS will want to understand our architecture, to determine if this thing actually scales." Do I give them numbers up front? Do I tell them what they are going to make now?
She replied, "No, absolutely not," her husband watching. We haven't yet modeled it. We aren't going to tell them anything we might have to change."
Parnell stated, "We must figure this out immediately."
She said, "I believe that you can get around this," You should not give them all the information at once. We'll discuss it later. We don't want to sign a contract with the NFHS only to find out that we have not kept our promises. This relationship should be long-term.
Parnell calmed down and reassured Rosenthal, an expert on early-stage businesses, that he thought it acceptable to work around the question. Parnell hung up, and the couple went to breakfast.
The sky began to lighten quickly over southern Arizona. Hicks arrived downstairs to find Parnell and Alberto waiting in the lobby. They were finishing the presentation. The attendees soon began to make their way into the ballroom.
It was the right time.
Hicks, Alberto and Parnell took their places. Parnell spoke to the over 100 administrators and athletic directors who were in attendance when it was his turn. The screen showed clips of thousands of people watching League of Legends tournaments. He showed the demo of PlayVS's software to show how easy it would be to launch e-sports for any school who wanted.
The audience burst into cheers when he was done. The first phase was completed. Next was to attend a more intimate meeting, which included a second pitch and a question-and answer period with NFHS executives. They were the most influential; their opinions would be crucial in deciding whether or not to adopt esports and if PlayVS is the right company.
She was half-way around the globe when she noticed Parnell's missed calls and sent Parnell a follow up text in all caps: I NEED to TALK TO You NOW.
Alberto and Hicks were facing the audience. The rest of the desks formed a U-shape around them. Parnell then gave another presentation on how the software would work, and what states would need in order to get started. After he was done, there was a flood of questions from the floor about everything, including creating season schedules and whether or not the sports would become coed. The administrators blocked the men from rising when the time expired. They were not done with them yet. Alberto, Hicks and Parnell stood just feet apart. They each received inquiries from educators around them, while keeping an ear open for their fellow classmates. He would jump in if he heard the other get stuck.
"One hundred million viewers last...
"No publisher has yet signed a deal, but we anticipate doing so soon...
The attendees parted ways after what seemed like an endless stream of questions and answers. They had made it through.
Alberto and Parnell walked out onto the patio, where they sat at the fire pit and talked under the desert sky. Parnell's phone rang just before midnight. Parnell's cellphone rang at midnight. The NFHS executives wanted to speak with him. Each one of them came out to join Parnell, Alberto and others on the patio. The group announced the good news to everyone after they had arrived. The NFHS was keen to partner with PlayVS, and was willing to sign the paperwork. The agreement would be exclusive. The NFHS could not partner with any other e-sports startup in the next five years.
The wine flowed that night in a rented villa. Alberto, Parnell, and the NFHS people celebrated their partnership to provide officially sanctioned esports to high school students. Parnell told Hicks the good news when he arrived at breakfast to find Parnell, Alberto eating eggs and hashbrows.
Hicks recalls that Parnell was "psyched." Hicks recalls that Parnell was "psyched" and had been "shot out of a cannon."
Parnell and Alberto fell asleep on the plane to home, having run for four days and three consecutive nights on adrenaline. The excitement from the deal was beginning to fade. They had passed the first level. Their energy levels were low. They knew they needed rest, even though they didn't realize it yet.
Parnell's perseverance in finding the ideal partner would pay dividends in a big way. PlayVS had received funding of $106 million and a valuation in excess of $400 million by the end 2020. It was used in every state of the United States. PlayVS has hosted more than half of the NFHS-approved schools in the United States since its launch.
