How Startups Can Win In The Crowded Sports Tech Market
TL;DR – Sports tech market is not popular, but it is populated enough to be competitive with each other. You can be anything and anyone in this industry, and still makes profit! 

Photo by NeONBRAND on Unsplash

The sports industry is projected to reach $73.5 billion by 2019. Within the sports industry’s increasing market size are startups utilizing technology to scale solutions to problems in various sectors. These sectors include content & media, eSports, fantasy sports, training & team management, AR/VR and data analytics to name a few. eSports alone is projected to hit $2B by 2020. The increasing market sizing is good for the sports industry. However, the intensity of competitive rivalry is also increasing within each sector which could mean trouble for a lot of up and coming startups.

Startups are beginning to apply more pressure, stealing market share from each other and limiting profit potential. There are a number of winning strategies to apply such as cost leadership and product differentiation. But few are focusing on dissimilar buyer composition.

“Question remains if companies should be targeting teams, leagues, media companies or the consumer.” — Sparsh Agarwal

Using training & team management startups as an example, their target market, teams and leagues, can be small which creates several challenges like profit limitation. Most startups are competing with the same strategies as their competition. How can new entrants slice off a share of the market? One way is with creative business models and identification of new revenue sources.

Image via Catalyst Investors

Sticking with the training and team mangement sector, startups are overwhelmingly competing against horizontal players with indistinguishable offerings focusing on the same customer segment. Competition can either be challenged with feature optimization/innovation or charging someone different than their competitors. GameChanger is a good example of acknowledging the competitive landscape and tapping overlooked buyers.

GameChanger is a mobile app and website that provides scorekeeping, stats, live GameStreams, and recap stories to thousands of baseball, softball and basketball teams and their fans. The amateur level certainly has disadvantages like being limited by travel and budgetary restrictions. The margins are razor thin. In most cases, the only way to scale at this level is by offering a free or close to free business model. The GameChanger platform is free for youth coaches to use because they realized coaches are the most unwilling to pay due to switching costs, technological learning curve and quite frankly time. GameChanger discovered that the highest customer willing to pay for the platform were the fans — players’ parents. GameChanger went where the competition wasn’t. Today, GameChanger is empowering over 200,000 youth sports teams and was acquired by DICK’S Sporting Goods earlier this year.

Another startup targeting an underutilized buyer base is FieldLevel. FieldLevel is a social network connecting high school athletes and their coaches with college teams during the recruiting process. FieldLevel uses a “freemium model” for coaches, when most startups charge, that allows athletes to pay a monthly $40 subscription for premium access to the platform. 4,000 athletes across ten different sports are currently subscribed on the month-to-month model. FieldLevel just raised $2.1M led by the LA Dodgers and envisions new revenue sources from providing athletes with recommendations for training facilities, promoting coaches’ camps and job placement services.

The customers don’t have to just be coaches, teams or leagues anymore. It can be athletes or the fans. It can be videographers, publishers that distribute the content, advertisers or other companies interested in acquiring the data.

Sports tech is broad with many startups serving various parts of the ecosystem. The training & team management sector is just one example of the untapped potential for acquiring new customers in a highly intense and competitive sports tech market. ​The revenue potential for some of the sectors is still unclear and can be a challenge, but there is growing optimism more startups will be successful by implementing creative business models to a wider audience for the unforeseen future.

Source: Starters

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