Gatorade, Hyperice, & Whoop.
What do they have in common?
Besides the fact they’re all billion-dollar companies — they cleverly used sports as a wedge to capture larger market sizes.
Let’s Dive In 👇
Start Niche, Win Big
I’ve talked about this before so I won’t go too deep…
- The biggest and most successful sports companies started small.
- They then aggressively raised money to scale into more niches.
- From there they typically started making acquisitions and/or partially cashed out by taking PE money.
- A handful have then had the honor of the IPO process.
Consumer (B2C) have their differences compared to business-to-business (B2B).
But all of them…used sports as a wedge into other adjacent verticals.
Some Examples
- Streaming: MLBAM
- Entertainment: TopGolf
- Agencies: CAA, Wasserman
- Fitness gear: Hyperice, Whoop, Oakley
- Apparel: Nike, Under Armour, Adidas, Puma
- Beverages: Gatorade, RedBull, Powerade, Bodyarmor
We’ll save this for another day…but the military/defense industry ➔ sports has a ton of examples as well.
B2B to B2C Using Sports
Whoop set the blueprint for building a $1B+ ‘sports tech’ company.
They focused relentlessly on creating the best possible product then brought on golfer Rory McIlroy as an investor and brand ambassador when they were finally ready.
He would wear the wrist brace on tour and post his heart rate data after tournaments.
This did a few things:
- allowed Rory to test out the technology and have equity upside
- created awareness for the brand
- enabled scaling from sports to the general population
Whoop did the same thing with Patrick Mahomes in football, Kevin Durant in basketball, and Virgil van Dijk in soccer.
The result?
Whoop is now a multi-billion dollar company (and the use of wearables to track biometric data has become normalized).
This model is now replicated everywhere — with heavy use of marketing costs (and even equity) on professional athletes from startups to scaleups.
Sports Adjacent Verticals
The intersection of sports with adjacent verticals presents limitless potential for innovation and growth (with massive market sizes available).
🏆 𝗖𝗼𝗹𝗹𝗲𝗰𝘁𝗶𝗯𝗹𝗲𝘀: Trading cards, NFTs, and other memorabilia have become a booming market.
💪 𝗪𝗲𝗹𝗹𝗻𝗲𝘀𝘀/𝗙𝗶𝘁𝗻𝗲𝘀𝘀: Athletes inspire millions to adopt healthier lifestyles, creating a natural bridge to products and services.
🏥 𝗛𝗲𝗮𝗹𝘁𝗵𝗰𝗮𝗿𝗲: Cutting-edge sports medicine leaks to general healthcare.
🎥 𝗖𝗿𝗲𝗮𝘁𝗼𝗿 𝗘𝗰𝗼𝗻𝗼𝗺𝘆: From personal brands to digital platforms, sports engage audiences in authentic and impactful ways.
🎮 𝗘𝘀𝗽𝗼𝗿𝘁𝘀/𝗚𝗮𝗺𝗶𝗻𝗴: Engages a younger and tech-savvy audience.
👟 𝗙𝗮𝘀𝗵𝗶𝗼𝗻/𝗔𝗽𝗽𝗮𝗿𝗲𝗹: Sportswear and athleisure are significant segments in the fashion industry, driven by the influence of athletes and sports culture.
🎬 𝗠𝗲𝗱𝗶𝗮/𝗘𝗻𝘁𝗲𝗿𝘁𝗮𝗶𝗻𝗺𝗲𝗻𝘁: Sports media is the last form of live content.
✈️ 𝗧𝗿𝗮𝘃𝗲𝗹/𝗧𝗼𝘂𝗿𝗶𝘀𝗺: Sporting events draw millions of tourists worldwide, contributing significantly to local economies and the travel industry.
📈 𝗦𝗽𝗼𝗻𝘀𝗼𝗿𝘀𝗵𝗶𝗽: Brands leverage sports sponsorships and endorsements to reach wide audiences, which creates the need for products & services.
🌍 𝗦𝗼𝗰𝗶𝗮𝗹 𝗜𝗺𝗽𝗮𝗰𝘁: Sports initiatives often focus on community development, social inclusion, and charitable activities.
📅 𝗘𝘃𝗲𝗻𝘁 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁: The organization of sporting events involves a specialized industry that covers logistics, planning, and execution.
“SPORTS” is a broad industry when you break down everything that it touches.
Looking Ahead
Sports provide fertile ground for building strong brand recognition and exploring new business opportunities:
- Media and Content
- Innovation and R&D
- Brand Recognition and Loyalty
Even better…
As the industry grows, it is attracting top talent…helping push it forward to unprecedented heights.
Exciting times ahead!
