Quokka Kicks

Can Virtual Adventure Thrive on the Internet? A Brazen New Web Site Says Yes. But Is This Digital Expedition into the Unknown a Revolutionary Way to Experience Sports, or a Business Disaster in the Making?

After days of rain and sleet forced us to hunker down in a tiny portaledge, the snowflakes scudding along the dry granite rock face are a relief. Nearly a mile above base camp on the Great Trango Tower in Pakistan, 18,500 feet above sea level, we begin heading up a beautiful, soaring dihedral. It's a fantastic pitch, but extremely slow; who'd have thought a wall this huge, with such massive features, could be so sparsely cracked? Jared Ogden is leading this section—his foot is just above my head—and we have a little over 2,000 sheer vertical feet to go. The weather could turn dangerously nasty again any minute. I shiver at the thought, but the views of the Karakoram Range propel me forward. Yet then, shamelessly and without so much as a word to Ogden and the other climbers, I bail out. I'll check in again tomorrow, but right now I'm going to rummage around in the fridge for an Anchor Steam, grab some Tostitos, and watch Rugrats with my kid.

Welcome to the world of virtual adventure, where risk means running your laptop on battery power and stamina is measured by how well you can endure maddeningly long download times. I wasn't up there on that monster wall; I was just patching together the experience from the digital graphics, physiological readouts, maps, uploaded photographs, and daily e-mails supplied to the San Francisco— based Quokka Sports Web site—Quokka.com—by climbers Jared Ogden, Mark Synnott, and Alex Lowe, who were making a dazzling first ascent up the northwest face of Great Trango Tower this past summer. Sadly, it was Lowe's last expedition before he was killed in an avalanche on the Himalayan peak Shishapangma in early October. In a dramatic sign of how extensive the burgeoning ties between adventure and the Internet have become, news of the Lowe tragedy broke on MountainZone.com—a Web site devoted to mountain sports like skiing, climbing, and snowboarding—which was a sponsor of Lowe's Shishapangma climb and had been covering it online with photographs and audio and e-mail dispatches from the climbers. (Seattle-based MountainZone was also one of the sponsors of the Mallory & Irvine Research Expedition, and it broke the news about the discovery of George Mallory's body last May.) In the peculiar new world that links daring climbers to adventure-voyeurs peering at computer screens, even death in an avalanche high on the slopes of a Tibetan peak has become dot-com accessible.

This unsettling immediacy is just one of the many novel phenomena propagated by Internet concerns marketing virtual adventure. Of course, there have been other attempts to lure armchair thrill-seekers with promises of you-are-there digital immediacy in the last few years, notably Microsoft's now defunct Mungo Park, which tried injecting celebrities into the adventure (Lyle Lovett motorcycles in Chile! Dr. Ruth goes to Papua New Guinea's Islands of Love!). Discovery.com, the Web partner of the cable-TV Discovery Channel, has offered digital coverage of events such as the Eco-Challenge adventure race; early next year, ESPN.com is planning to launch an X Games/lifestyle site called, inevitably, EXPN. (This magazine's Web site, Outsidemag.com, offers Q&As, news, event coverage, and forums, along with archived content from its print sibling.) But MountainZone, which went on line in March 1996, is the closest thing to head-to-head competition in the adventure arena that Quokka is facing.

Quokka is making by far the loudest claims to have come up with a way to give Web surfers a rush of synthetic adrenaline and "immersive" excitement. The company, originally conceived as a Web site for hire, splashed onto the scene with its production of the Whitbread Round the World Sailing Race in 1997-98. It evolved into a stand-alone sports entertainment site—Quokka.com, launched just last March—and has covered events ranging from sailing (the 27,000-mile Around Alone Race) and climbing (an expedition to China's Karakoram Range and, of course, Trango) to car racing (the Championship Auto Racing Team competitions). Quokka's self-promotion has been as extreme as the events it presents. "The most freakin' amazing 24-hour live sports coverage available today," blasted its ad campaign, part of a media blitz last spring that cost the company between $5 million and $10 million, according to Advertising Age. "We're first movers in this space," boasts Brian Terkelsen, Quokka's 35-year-old vice-president of sailing and adventure programming, with characteristic Quokka swagger.

Being first, alas, may not be such a good thing. Virtual adventure is as yet an unproven genre on the Internet, one still desperately trying to work out the kinks, figure out where the profits are going to come from, and find an audience. Quokka has had a fragmented audience profile from the start, given the disparate nature of what it covers and the fact that events like sailing and mountain climbing have generally not been considered spectator sports. Meanwhile, the site is expanding its coverage, having added 500 Grand Prix motorcycle racing and, more important, a joint venture with NBC to cover the Olympics through the year 2004—a move that could either put the company on the map or prove that immersive sports aren't a viable Internet commodity. Its staff has increased from 50 last year to nearly 300. Indeed, Quokka may be in a race with time. An initial public offering of stock fizzled in July, reflecting deep skepticism in a marketplace where successful Web sites tend to hawk sex or shopping, and Quokka's bandwidth-greedy multimedia content is so technologically demanding that successfully providing it to users who lack state-of-the-art Internet connections is sometimes a hit-or-miss business.

And a bigger, more basic question still looms: Can a fledgling Internet company go up against corporate behemoths like the three major networks, ESPN, Fox Sports, and CNN/SI—which Quokka may eventually be vying with for rights—and revolutionize the way we experience sports?

 

Walking through Quokka's Brannan Street offices, I experienced the strong first impression that, at least in one sense, the company lives up to its hype: Its own employees—for the most part a fit-looking crew of tanned, windburned, techno-savvy jocks—represent Quokka's ideal target market. For however long the ride lasts, these are some shiny happy young people, and they've found a place where their two interests, adventure and the Internet, are aligned. The perks are also in place: Many new employees are given cell phones and Palm IIIs, and they are encouraged to make time to get out and play. Describing a quality he calls "Quokka DNA"—good people replicate more good people—CEO Alan Ramadan, 41, says that he looks to hire people who are, among other things, athletes, "because they know how to work on a team" and because they accept that "you have good days and you have bad days."

Ramadan's DNA is pure Quokka. A solidly built six-foot-four and a devoted sailor since childhood, he graduated from Monash University in his native Melbourne, Australia, in 1983, with a dual degree in computer science and applied mathematics. He opened a technology consulting company in 1987 and then founded a telecommunications software startup called OzWare in 1991. The following year, fellow Aussie John Bertrand, hero of Australia's first-ever America's Cup victory (in 1983) and an acquaintance of Ramadan's from local sailing races, asked Ramadan to head up a technology company supporting his next America's Cup bid, in 1995.

The racing yacht oneAustralia II arrived off San Diego for the semifinals touted as the only boat capable of beating the eventual winner, Black Magic, from New Zealand. But then, less than two hours into the trials, in high winds and steep seas, oneAustralia II snapped in half and sank off the California coast in 90 seconds, taking with it 18,000 man-hours of labor. After an interlude of gaping disbelief, Ramadan cooked up design modifications for Bertrand's training yacht that enabled it to compete in the superboat's place. "Dealing with that kind of adversity, although that's on a pretty grand scale—one I hope I never repeat, I might add—is a wonderful lesson in life," says Ramadan, who carries another lesson everywhere he goes: an inch-long vertical gouge above his right eye from a sailing accident in his twenties.

During the '95 America's Cup competition, Ramadan noticed something peculiar. Even though Bertrand and crew were ten miles out to sea while he sat just offshore in a support boat stuffed with computers, Ramadan could survey data displays about oneAustralia II's pitch and yaw and speed, its maneuvers, and the wind direction, and get an almost visceral sense of what Bertrand was experiencing. "It turned out that everyone wanted to be in front of that screen," Ramadan recalls. "It was this realization that—shit!—that's interesting!"

Following the America's Cup, Ramadan attended Stanford University's Executive Program for Growing Companies and caught the Internet bug. "Netscape was about to go public," he says, "and Yahoo was two doors down." Why not start a company marrying his two passions, technology and adventure? After Ramadan enlisted Bertrand's support, the pair moved to San Francisco in 1996 to be near Web talent and signed on Silicon Valley guru Richard Williams, who was head of Illustra Information Technologies at the time. The three men are now in an equal partnership. (Williams has been the driving force behind Quokka's seemingly incongruous involvement in car and motorcycle racing—sports, like sailing, that are heavily reliant on high technology. "He's a petrolhead from way back," says Bertrand.)

Initially, the trio intended to build Web sites for various sports governing bodies. They named the company Quokka, after a rare relative of the kangaroo, and went about securing its first event, the Whitbread. Quokka acquired the rights to the race by agreeing to underwrite the entire cost of production for the site and to share revenues with the Whitbread organizers. The Whitbread site snagged a surprising 1.8 million "unique" or individual users from 177 countries over a period of nine months and generated $9.4 million in revenue from sponsorships. "This thing was smoking, and we had lots of people knocking at the front door," Ramadan says. "We quickly realized that what we needed was a network of programming with our own brand and with its own qualities. Our dream was to become a public company."

Armed with their Whitbread numbers, the partners began planning the launch of Quokka.com and went hunting for more funding. Media Technology Ventures, Trinity Ventures, and other corporations soon kicked in undisclosed amounts of money; Accel Partners and MediaOne Interactive Services, among others, followed. More support poured in this past June, just after the site launched, when the company raised $40.7 million from private and other corporate investors, including Hearst Communications, British Telecom, and Excite@Home, bringing the total amount of equity it had raised to $78.2 million.

With the money in place, all Quokka needed was the requisite boatload of buzz that Internet startups must have if they're going to attract the all-important IPO investors down the road. But the company relied too much on its track record in the Whitbread event, which is still its only major success. (According to a Quokka survey, those visitors were primarily between 25 and 34 years old, 64 percent were college graduates, and their average household income was $75,000—impressive, but then these are people with a keen interest in yachting.) The Whitbread success only proved that Quokka would make a great Web site producer-for-hire, not a stand-alone sports entertainment company. It had fueled almost uniformly enthusiastic media coverage—not the same thing as powerful buzz, as it turned out.

Everybody at Quokka "expected [the IPO] to go out the door and go nuts," Ramadan recalls. But investors had serious doubts about projections touting Quokka's future revenue stream—a sentiment apparently widespread in the marketplace given that the IPO, on July 28, quickly went sour. It was initially priced at $12, closed at $11-3/8, and over the next few months would drop as low as $6. The IPO "seemed almost disastrous," observed the online affiliate of the tech-business magazine Red Herring. (Also on July 28, shares in another much-anticipated Internet IPO, Drugstore.com, were initially priced at $18 and closed above $50.) Quokka's IPO debacle prompted a wave of schadenfreude among rivals, who had gotten a bellyful of the company's perceived arrogance. Recalling its underwhelming production titled "First Ascent" in China's Karakoram Range last spring, when a team of world-class climbers failed to find a route up a mountain known as Hidden Peak, detractors began gleefully referring to the IPO as Quokka's First Descent. In mid-October, as this article went to press, Quokka's stock was listed at $8-1/8 per share.

Like most Internet ventures, Quokka is taking a leap of faith. The first article of its belief system is in "immersion," the site's promise to make a user feel as if he is actually adventuring. To that end, Quokka provides a mind-boggling amount of information, like "biometrics" (heart rates and O2 levels), e-mails, videos, audio transmissions, and photos—all filed by the athlete. For those who loved the Great Trango production, a primary immersive attraction was how the main characters in the drama told their story. Lowe in particular wrote thousands of words in his updates and in lengthy replies to e-mails from around the world, making himself accessible to his admirers and presenting a vivid portrait of the climb. Most climbers, however, are not as articulate as Lowe was.

Terkelsen maintains that he's not concerned about the wild fluctuations in the quality of competitors' self-chronicles. "They're themselves," he says. "This is a voyeuristic medium. You're going to discover that this guy's crafty, that guy's good, this guy's bad, or you like him, you dislike him—whatever. We're going to be as authentic about the experience as possible." Terkelsen himself combines good Quokka DNA and authenticity: He's a former investment banker who ditched that career and cofounded the Eco-Challenge adventure race in 1993 before joining Quokka in June 1998.

The problem is, with no controlling narrator to guide the viewer, Quokka events often feel fragmented and disjointed, like being forced to watch your next-door neighbor's slide show about his recent trek in Nepal—and you're the one manning the projector. And that's if your computer has a fast enough modem to navigate the site without crashing. "They created this whole illusion around this immersive experience that is largely hype," says an executive at another Internet sports company, who asked not to be identified. "It doesn't provide what we call a great user experience." In July, a reporter from the Boston Herald tried out the site and wrote that it was "loaded with bells and whistles that should have been rethought" and was "selling sizzle, not steak."

"HTML just doesn't convey the fullness of an experience the way a video or a great picture spread can," says Geoff Reiss, vice president of production and programming at ESPN Internet Ventures. "Right now, this medium is still relatively crude compared to where it's going to be in the near future."

Nonetheless, people seem to be biting: Quokka.com claims to have had 366,000 unique visitors in June, and each stayed a respectable 16 minutes. An appreciable number like what they're getting: "Chris H" was one of about 2,000 Great Trango viewers who e-mailed the climbers at the summit. "Congratulations Alex, Mark and Jared for cranking off the biggest rock climb in the world," he wrote, adding, "Quokka, you've truly set a new standard for how things will be done in the next millennium."

Unlike MountainZone, Quokka has not had to deal with the strange form of success that accompanies the coverage of expeditions that result in disaster and death. Of course, the pressure and responsibility that a wired event puts on an athlete to succeed is not a brand-new phenomenon. "I know that every time I've climbed and there've been cameras around, I've made decisions that I wouldn't have made otherwise," says Marc Twight, a former climbing partner of Lowe's. "If I'm by myself, where failure doesn't matter, I don't make those decisions. It's a kind of low-level pressure that's hard to deal with." And one that may yet push adventure athletes to rebel against wired expeditions.

Whatever the case, for Quokka's sake the future had better arrive sooner rather than later. Even network television is jumping into the virtual-expedition realm; CBS recently announced a forthcoming show called Survivor, in which 16 volunteers will be marooned on a desert island off Borneo and filmed as they cope with danger, privation, and one another. In the meantime, "many of the sports Quokka broadcasts are less than mainstream," says Gail Bronson, senior analyst for IPO Monitor, an Internet news service based in Palo Alto, California. Quokka's fate, she says, "could be a question of delivering large enough audiences to support the sense of a big momentum play to propel the stock higher." Sports on the Internet "will do extremely well," she predicts, once broad-band access—a huge leap forward in the amount of information the Internet can provide—becomes widely available. As it is, she concludes, Quokka "may be slightly ahead of its time."

No wonder Quokka is considering new tacks. The company has been retrenching under its new COO Alvaro Saralegui, 43, who was hired eight months ago to bring some big-media experience and to update a business plan that many in the Internet world have viewed as seriously flawed. Saralegui spent a decade and a half working on the business side at Sports Illustrated; he has pledged to make Quokka "more customer friendly" and so far has expanded Quokka's two-person sales staff to 16. He has also attacked spending, targeting the practicality of the company's approach to adventure-sports events such as the "First Ascent" expedition, which was entirely funded by Quokka. "A media company is not an event-creation company," says Saralegui. "Those are two very different things, and for people who came from a technology background"—essentially the entire Quokka hierarchy—"that subtlety, I think, was lost."

The creative side, led almost since the company's inception by Chief Creative Officer Michael Gough, 43, an architect and virtual-reality enthusiast, initially resisted making compromises in its elaborate user interface and complex design. Gough says that the debate—"that's a nice word"—is ongoing. Saralegui diplomatically says that the company remains "intrigued" by adventure programming and that "it could turn into a nice little business," but Quokka will only commit to events with partners who will share the costs. "We're not writing checks like we used to," he adds. In the six months before the IPO, Quokka covered three adventure events; in the six months after, it had none on the schedule. What you find instead is plenty of auto racing (one of the most popular spectator sports in America) and motorcycle racing (huge in Europe), the already proven sailing coverage, and previews of what could be either a watershed event or Quokka's last gasp—the Olympics.

Quokka's joint venture with NBC includes the Summer Games in Sydney in 2000, the 2002 games in Salt Lake City, and Athens in 2004. It also means that Quokka will be writing some very big checks to show off its wares and wave the corporate logo. Having won over NBC with a prototype of what it could do (the site will provide coverage of all Olympic events, including less-popular ones that NBC may not have air time for), Quokka is responsible for 100 percent of the cost of operating the site and will spend between $15 million and $20 million. The sum is justified, in part, because of the hope that its Olympic coverage will generate a large audience, and higher user numbers could mean more sponsors and more revenue. The Olympics deal may also be Quokka's best hope of survival. Ramadan's pitch: "The traditional media companies are looking at ways to extend their programming in this new space. They've got two decisions they can make: They can build it themselves, or they can buy the expertise. Our belief is that by partnering with us, we actually deliver more value than they can internally." Other plans call for adding immersion-style breaking sports news, e-commerce, pay-per-view, and fantasy gaming to the mix.

Perhaps fittingly, Quokka's namesake, the cat-size Setonix brachyurus found primarily on the Australian island Rottnest, is tough. Marketing prose on the site itself boasts, "In a hostile desert environment, the quokka has not merely survived, it has thrived." On the other hand, there is the alarming Australian pastime called "quokka soccer," which means just what you'd think: having fun kicking the crap out of the cute little fellas. Needless to say, they don't always survive.

Quokka has been kicked, too, but Ramadan scarcely acknowledges the possibility of defeat, even as he cheerfully admits that with the Internet's future uncharted, "we're sailing in the fog." If Quokka can reinvent itself every six months, Ramadan seems to think, success will take care of itself. "Let's roll it forward ten years," he says. "We're not even debating whether broad-band is going to happen. We're all going to be living in a world where there is an entertainment appliance connected to a high-speed network. That is for sure where the endgame is here. What we will be is a channel on that network."

 


Mark Lasswell is a freelance writer based in New York. This is his first article for Outside.

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