🏆 Now is the time for sports tech disruption
Here’s why, plus how and where to innovate.
Identifying the proper product, feature, and innovation roadmap is always a nuanced equation. Add on the complexities of an uncertain economic outlook, and things get even more complicated. In this edition of The Feed, we analyze how this type of uncertainty can actually present an opportunity for startups to build innovative solutions that are grounded in data, customer research, and individual engagement, and will end up sticking for a long time to come.
A targeted and methodical innovation strategy is key to navigating uncertain economic times. We see an opportunity to focus on the individual and how we interact with the games we love.
The Story: Lean into innovation around personal consumption and engagement
In the historic top-down model of professional sports where leagues, teams, and media giants make the industry go round, many used to consider sports “recession-proof” given the monumental spending power of these institutions.
Today, the way that fans and consumers interact with sports is much less dependent on the actual properties themselves, and more reliant on the subsidiary players in the industry that are controlled by independent companies and influential business leaders. Fantasy and betting platforms, data providers, new wearable technologies, and social media platforms are just a few examples of these ancillary players that dictate the way people consume professional sports, but are not directly controlled by the institutions themselves. While this more open market presents enormous opportunities, it also creates a wider swath of professionals and downstream consumers that are prone to the effects of a down market. With another downturn potentially looming, an incredible opportunity presents itself for startups.
The 2008 financial crisis established a blueprint for how creative platforms and ideas can come out of a recession – think Airbnb, WhatsApp, Groupon, Venmo, or Uber. This also affected the sports industry as a whole. Around 2008:
Clubs began to explore dynamic pricing models in their ticket sales to strategically reach a broader range of socio economic consumers. This is now a staple of the industry across every major organization, and has led to numerous successful companies burgeoning in the space.
Athletic recovery and rehabilitation became far more advanced and accessible, with companies like Hyperice and Therabody coming onto the scene. These recovery tools can now be seen on NBA and NFL sidelines via massive league partnerships, as well as countless athletes leaning into the space.
As current economic conditions begin to ripple across different categories, the environment necessary to stimulate a new form of innovation is also coming to life. Here are areas we see ripe for value creation:
New fan engagement tools and platforms that allow teams to more effectively monetize their audiences.
Brand partnerships focused on providing the average fan with unique ways to engage with their favorite teams, including making the in-arena experience as special as possible.
Socialized gaming platforms intended to keep individuals engaged day in and day out.
Cost effective sponsorship models that allow brands to authentically reach their fans through an exchange of goods and services as opposed to relying on massive checks.
These trends are all focused on the individual, and how we interact with the games we love. This focus is not only destined to continue, but will also eventually make us question how we ever functioned without them.
The Take: A blueprint for agile innovation
As purse strings are tightened, making the case for investing in new ideas becomes harder. However, validating an idea doesn’t have to cost a significant amount of time or money. There’s a nimble way to go about it that helps you justify greater expenditures. Here’s how:
1. Draft a hypothesis. Your idea is merely a theory. Prove that your assumption is true, before you invest further. Start with a testable statement that explains the relationship between your idea and your customer.
Here’s an example based on the DoorDash x Golden State Warriors partnership: As Warriors fans become increasingly more cognizant of dietary restrictions, the stadium needs a scalable way to offer a wide variety of food options to keep fans coming back and spending money during games.
2. Talk to your customer to understand the problem. Conduct audience discovery interviews with 10-15 individuals in your target audience. Ask each of them the same open-ended questions that get them to describe pain points they face that are tied to the problem you are thinking about solving. Refrain from asking about solutions. In some cases, you may have 2 different audiences. In the Golden State Warriors example, you’d want to talk to fans as well as stadium operators.
3. Identify a solution to the problem. Look at your interview notes and pinpoint similar statements made by multiple individuals. Draw insights based on these and use them to design one – or more – solutions.
4. Design and deploy an MVP. Craft a solution that is as barebones as possible so you can get market feedback quickly. Keep it simple — we’re only testing intent here. An MVP doesn’t need to be an actual product. It can be as simple as a landing page that explains the product and allows someone to checkout or signup. You can refund someone instantly upon purchase or explain on the last signup screen that you are building the beta and will notify them when you’re ready to launch.
Deploy your MVP using channels where you think your customer lives on and offline. Taking the Golden State Warriors example, you would hand out signup cards outside the stadium before a game. Set KPIs that you’ll use to measure the success of your test.
5. Analyze your KPIs and check in with your hypothesis. After deploying your MVP, look at the results and see if it proves or disprove your theory. If the solution has traction, make the case for an investment. If it didn’t, test another solution or rethink your hypothesis altogether.
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