I think we can all agree on this…
The sports market will continue to grow (and the industry as a whole is attractive).
However, there is catching up to do on the innovation side of things.
I want to explore that today.
Let’s Dive In 👇
Creating One-Stop Shops in Sports
Something you may have studied in college is concentrated vs. fragmented markets.
A concentrated market is dominated by one or two major players, which makes it very difficult for new companies to attract customers.
The more highly concentrated a market is, the less competitive it is.
This is true across a bunch of sports verticals.
Here are some of them:
- E-Commerce: Fanatics
- Web3 Fan Tokens: Sorare
- Youth Management: TeamSnap
- Ticketing: SeatGeek & Ticketmaster
- Sports Betting: Fanduel & DraftKings
- AI Sports Cameras: Hudl, Spiideo, Pixellot, Veo
A market with low concentration is not dominated by any large players and is considered competitive.
Markets with extremely low concentrations are said to be fragmented.
Here are a few examples:
- Sports Media: 100+ companies
- Betting Analysis: multiple brands
- NIL Marketplaces: multiple startups
With rapid innovation hitting sports…
Concentrated markets are even starting to fragment, opening up additional opportunities for entrepreneurs and investors in sports.
Win the Niche, Then Niches
If you want to win in sports…
You have to win A NICHE first.
Look at where these companies started:
- Hudl: Nebraska football
- Gatorade: Florida football
- Opendorse: a few athletes
- Fanatics: NASCAR’s e-commerce
- Under Armour: Maryland athletics
When entering sports, the biggest mistake founders make is trying to cover too many niches at the start.
Let’s say you’re building a data company in sports…
I would urge you to narrow it down even further at the start:
- Data company for basketball (good)
- Injury prevention data company for youth basketball (great)
The formula looks like this:
Once you prove and win over the market in one niche…you can take those case studies and head to new niches + the broader ecosystem (verticalization).
Google for Sports
A multi-billion dollar opportunity I see is creating the “Google” for youth sports.
Right now, the landscape is fragmented. You have to go to multiple spots to accomplish synergistic tasks.
- Want recruiting help? Tool A
- Need tickets or parking? Tool B
- Looking for sponsorship? Tool C
- Need to register for an event? Tool D
- Want to watch training videos? Tool E
Whoever can take these separate businesses and merge them into ONE easy-to-use place will have created a behemoth.
This won’t be without difficulty…
To grow a company in youth sports there are gatekeepers you’ll need to go through them sooner or later (especially if you’re doing anything B2B).
Naming a few:
- NCSA
- 3 STEP
- Endeavor
- Shoe Leagues
However, I believe innovation is starting to outpace the archaic distribution system currently in place.
Through the use of NIL + strategic athletes and investors you can acquire users in a new way (and also enter rooms that were typically pay-to-play).
Other Opportunities In Sports
I think a sports-centered social media would be amazing — although I’m not sure it’s entirely reasonable.
Huge sports media companies have been built off the backs of platforms like Apple, Microsoft, Meta, Tiktok, and other content avenues.
Anything that infuses AI to speed up processes is interesting:
- Scouting
- Content Creation
- Managerial Decisions
I think media platforms within NIL & youth sports are a big opportunity. Last Chance U was a huge hit — I have no reason to believe people wouldn’t watch college or high school documentaries.
Emerging leagues for massive global sports are primed for growth. I’m curious to see how padel and cricket do in the United States.
