To start…
A sports startup can be defined as a “business that innovates within the sports industry, offering unique solutions, products, or services that enhance the experience for participants such as athletes, fans, or organizations.”
The most successful ones have filled gaps in the sports ecosystem and eventually bridged to other adjacent industries.
While sports startups can be challenging to launch, the rewards are substantial.
Examples of Successful Sports Companies
Strava ($1.5B valuation)
Mark Gainey and Michael Horvath were avid cyclists who wanted a way to track their rides and connect with other athletes.
They created Strava as a social fitness network that allows users to track their activities via GPS and share them with a community.
DraftKings ($20B valuation)
Jason Robins, Matt Kalish, and Paul Liberman were sports enthusiasts who saw a gap in the market for daily fantasy sports.
They created DraftKings, allowing fans to participate in daily and weekly fantasy sports contests.
Fanatics ($31B valuation)
Michael Rubin saw an opportunity to create a centralized platform for sports merchandise by partnering directly with major sports leagues and teams.
Fanatics has since become the go-to platform for fans looking for official sports gear.
Whoop ($3.6B valuation)
Will Ahmed was a Harvard athlete frustrated by the lack of data on his body’s performance.
He founded Whoop to provide athletes with a wearable device that tracks physiological data to improve performance and recovery.
Hudl (~$1B valuation)
David Graff, Brian Kaiser, and John Wirtz wanted to help football coaches review game footage more efficiently.
They founded Hudl, a platform that provides video analysis tools for sports teams.
We go through more successful sports company examples in the full course.
Sports Tech
What makes sports startups attractive is the ability to build them quickly with relatively low upfront investment, start generating revenue, and have scalable business models.
The following are the most common revenue models used by sports companies:
- Ads
- Affiliate
- Subscriptions
- B2B (Contracts)
- B2C (Hardware)
- Commission models
Sports startups often benefit from increased efficiency with scale, network effects, and unique value propositions that create barriers to entry for competitors.
However, this doesn’t come easily…
Whether developing a niche sports solution or raising capital to build a venture-scale sports company, sports startups can be some of the most challenging (and dynamic) types of startups.
Main reasons why:
- the need to start niche
- a lot of similar-looking ideas
- not many early-stage investors
- unique demands and nuance of sports
The best sports startup founders put a unique spin on an idea that can hit large total addressable markets (and are relentless in their pursuit).
Sports Company Categories
Some of the main verticals that have resulted in large companies.
Performance Enhancement – improving performance through equipment, training programs, or health and wellness solutions (Catapult, Whoop).
Fan Engagement – enhancing the experience for sports fans, offering ways to interact, consume content, and participate in the sports ecosystem (Bleacher Report, DraftKings, FanDuel).
Sports Management – tools and platforms for managing teams, leagues, events, and facilities streamlining operations and improving efficiency (TeamSnap, WSC Sports).
E-commerce/Merchandising – selling sports-related products, gear, and merchandise directly to consumers through online platforms (Fanatics, StockX, GOAT).
Leagues – creating new IP in emerging sports (League of Play, NWSL, Professional Lacrosse League).
Fitness and Wellness – physical activity, health, and well-being, often integrating technology to provide personalized experiences (Peloton, Mirror, Zwift).
Sports Analytics – advanced tech to analyze performance, strategy, outcomes, and provide data/insights to teams, athletes, and fans (Hudl, Stats Perform, Sportradar).
Social and Community Platforms – share experiences, find like-minded individuals, and build communities around their favorite sports (Strava, PlaySports Network).
Wearable Technology – track and analyze physical activity, providing real-time data to improve performance and health (Fitbit, Garmin).
Sports Events – organizing, promoting, and enhancing sports events, whether live or virtual, offering unique experiences to participants and spectators (Tough Mudder, RacquetX).
Esports – tournaments, teams, streaming, and community engagement in the gaming industry (Twitch, FaZe Clan).
Takeaways
Sports companies are constantly evolving, and new opportunities are always emerging…
And this is cool because sports companies are shaping larger macro ecosystem trends beyond the immediate industry:
- Strava has led to new consumer behaviors, where athletes turn to online platforms to discover and share workout routines, join virtual challenges, and connect with local fitness communities.
- Fanatics has influenced how fans purchase and engage with sports merchandise, paving the way for more personalized and interactive shopping experiences.
So, how do you come up with the next great sports company?
A few things that make a sports company idea suitable:
- You’re solving a real problem.
- You’re picking a market that ideally has a large (and growing) total addressable market.
- Economies of Scale line up to ultimately be profitable on a transaction level.
Too many sports startups try to solve a lot of problems at once (that can also include solving a similar problem for too many sports early on).
Narrowing down is a great strategy.
Why?
Focusing on a specific location or category can help you better understand and address your target audience’s unique needs and pain — making acquiring and engaging users easier and leading to more effective word-of-mouth/organic growth.
Successful Narrowing Down Examples
Nearly all of the largest sports companies started niche and slowly expanded over time.
Strava 📳
Strava started by focusing solely on cyclists before expanding to other sports like running and swimming.
This initial focus allowed them to build a strong community and refine their product to meet cyclists’ specific needs.
TeamSnap 🏟️
TeamSnap initially targeted youth sports teams in Colorado, providing essential team management and communication tools.
By focusing on this specific category, they addressed a clear need and built a strong user base.
Peloton 🚴♂
Peloton began by focusing on indoor cycling before expanding to other fitness categories, such as running and strength training.
This focus helped them build a loyal customer base and perfect their product offering.
I hope you enjoyed this free preview of the Sports Startup Course.
You can take the entire course in the Profluence+ Community, which is currently discounted for only $49 — plus you’ll get all the other amazing benefits and resources there.
The full startup course:
- goes deeper on everything above
- whole section on building your initial product
- finding first users and the top monetization strategies
- plus much more!
