Navigating Challenges Sports Tech Companies Faces
Why is it so complicated for a sports tech companies to work with sports organizations?
Start-ups struggle to get visibility and access to sports organisations
You can develop a great product, but if you don’t have a way in or a good strategy to attract some of the attention, it will be very complicated to get access to decision makers in sports organizations.
For decades, the sports industry has remained in a closed circle with a diameter hard to extend. Not because it is small, but probably because it has been relying on the same sources of growth which will remain dominant for the years to come (TV rights and ticketing for clubs, subscriptions for Broadcasters etc…). And while a lot of great startups are creating great products (there is a huge appetite to work in sport holistically), most of the big organisations such as clubs, leagues & federations do not have the time internally to analyze and evaluate the value of every request/proposal/solution they receive.
Sports organisations don’t have the resources to identify and operationalise relevant startups
If sports organisations do not have the time to address what is proposed to them, it’s mainly because they do not have enough resources to do so, they are not structured for it. Driving innovative projects and integrating new technologies is not something that is finalized in one pitch. This should be the result of a strategy with key objectives to develop the organisation’s activities and revenues on one side, and a global shift in internal culture to deploy successfully on the other. To summarize, here are a few suggested steps to successfully innovate :
Will to create new sources of growth
Analyse the pain points in the organization
Define a strategy to address it
Find the right tech partners to help solve those problems
Onboard and train the different internal members required to successfully execute the tech
Deploy, assess and iterate on the way to successfully use the technology
Monetize on the value created
Being able to drive such a process does not happen overnight and most organizations can not afford such a process. Which is why technologies have to be significantly impactful in one of the following three ways : Create a Wow effect, Create easy revenue, Significantly reduce costs.
Sports organizations are starting to staff up and more and more organizations are realizing they need to change and not rely only on their old sources of revenue streams only. But there are still a few years to go before sports organizations strategize more effectively and don’t let themselves be driven mainly by the next game or the next sales cycle only.
Sports organizations’ traditional business models is outdated and fail to capture maximum upside
The sports industry has historically been pretty static and relied on a few sources of revenue. It has been slower than most other major industries to respond to broader technological shifts, mainly because of a business model that relies on a centralized source of revenue : TV Rights. Adding to that the usual pillars or sponsorships, ticketing and merchandising + generous owners that don’t hesitate to fill up the holes, there wasn’t a big need for change.
Now that the price of TV Rights are slowing down and that younger generations are starting to give more attention to other forms of entertainment, a change of approach and diversification of revenue streams have become a must for sports to remain so popular and undisputed.
Start-ups and sports organisations do NOT speak the same language
Startups and sports organizations are not progressing at the same speed, the essence of their activities is what separates them in every way. Looking at sports organizations, the majority of them strive to deliver in the best manner their core activity: sporting events. Consequently, day-to-day activities slow down significantly, their reactivity and innovation process. It’s even more true for football clubs, playing games almost every 3 days. On the startup side, reactivity and versatility are central to their business: every day counts. So, it’s no coincidence that both organizations are struggling to understand each other, as these distinctions contrast the nature and needs of their business. Startups must have to find the right advocates within sports organization to integrate a new solution into an existing and established workflow.