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Investing in SportsTech
3 takeaways from my conversation with SportsTech expert Geoffrey Cheng, (Comcast SportsTech)
Whether it's local talent, whether it's international talent, the fact is that folks love to watch sports.
Today, I’m breaking down 3 takeaways from my discussion with Geoffrey Cheng, Investment Manager at Comcast Sportstech.
Check out our full conversation + how to connect with Geoffrey here.
The Observer Express
Don’t have time to read the entire post right now? No worries, here are today’s 3 takeaways:
There are Two Basic GTM Strategies: Pro or Not Pro. If a company in this space is targeting the professional sports market, it’s important to ask “Do they have the right connections?” If they’re not, ask “What are your ambitions outside the states?”
The Rise of Entrepreneurship Through Partnership. Builders in this space can’t do it alone. Asking an entrepreneur “What's your plan to establish key partnerships in this space?” reveals their approach to these critical relationships.
Trend to Watch: Gaming Goes Mainstream. The sports market is taking cues from the gaming market, in part because gamers (like sports fans) tend to be highly engaged, loyal, and community-oriented. Over the next few years, keep an eye out for gaming-native tech being deployed in the sports media world.
1. There are Two Basic GTM Strategies: Pro or Not Pro
If a startup is targeting the professional American sports market, one of the most important questions for an investor to consider becomes: “What is their go-to-market strategy? Do they have the right connections?”
You're looking at a total market where your max number of clients is around 150, and you can add minor leagues and maybe developmental youth leagues, but the number of teams in this space is relatively small.
And so when folks are building for the pro sports space, the first question that I really have is do they have the right connections?
Alternatively, if an entrepreneur is NOT targeting pro US teams, it’s critical to understand their global ambitions (or lack thereof).
And so the second question that I would add is: ‘What are your ambitions within the States, but then also outside the States?’
There's a whole world outside of American pro sports that is equally, if not perhaps more valuable, where you can make a lot of money, that I think sometimes folks don't always pay as much attention to.
2. The Rise of Entrepreneurship Through Partnership
Given the importance of relationships in this space, a great follow-up question Geoffrey left me with was…
What's your plan to establish key partnerships in this space? Not just go-to-market strategy in terms of how to boost your top line, but really thinking about who are the partners you're going to build with to get there.
What we have been seeing and what you're probably going to see more of is this idea of entrepreneurship through partnership. In this world, if you're able to partner with, let's say NASCAR or PGA tour or Sky or Peacock for building your product or establishing those key PLCs or pilots, I think … it really starts with some of these cornerstone clients.
3. Trend to Watch: Gaming Goes Mainstream
One of the most compelling insights Geoffrey shared was how gaming concepts are migrating into the mainstream market.
He highlighted 3 features of the gaming community that are of particular interest to sports and media providers more broadly: they tend to be highly engaged, loyal, and community-oriented.
I think in the next five to 10 years, sports, media and gaming are going to be a lot more hand in hand than they might be right now.
Gamers are Highly Engaged
There's a difference between a game that I'm playing and a TV show that I'm watching. When I'm watching Shrek on Netflix I could be on my phone. I could be doing the dishes. I could be taking a nap. I could be reading a book. And Netflix or whatever group that's putting on an ad, they wouldn't ever really know the difference.
Whereas if I'm gaming I'm probably like running around, trying to hide, trying to do whatever activities you do in video games. But the idea is that my attention, my focus is there.
Gamers are Highly Loyal
The other thing that comes to mind is loyalty. Whether it's a battle pass system or just this idea of leveling up broadly defined. This idea of a loyalty program is second nature for a video game, but it's something that we're starting to explore a lot more in ways that aren't just tacky.
I think airlines have done a fantastic job of loyalty and attaching that to tangible value. I think sports and media organizations are trying to crack the code in terms of what that looks like.
Gamers are Highly Community-oriented
The other thing that, when I think of gaming is the idea of community... Nowadays you have Discord, you have Twitch, you have YouTube, you have all these streaming platforms. You can argue how ‘real’ or not that community is, but the fact of the matter is… these are very legitimate connectors of human experiences. And I think what the gaming world does very well is it starts from a place of community.
Final Thoughts
Shortly after my conversation with Geoffrey, the Summer Olympics kicked off in Paris. Talk about timing.
Thanks to Peacock’s streaming design (which feels suspiciously similar to the Twitch streaming experience) my family watched the US women’s soccer team led by Emma Hayes defeat Brazil 1-0 to bring home gold. We saw Noah Lyles win the title of “fastest man in the world” by just a whisker (five-thousandths of a second, to be precise) in the 100m sprint. And we stood in awe as Simone Biles cemented her position as one of the greatest female gymnasts of all time.
All the while, thanks to Geoffrey, I’ve been conscious of how powerful the human connection these events created was.
Geoffrey’s perspective will certainly be helpful for evaluating the next SportsTech deal, and I’ll be paying close attention to the (shrinking?) differences between the sports and gaming worlds.
What Do You Think?
Where do you see the greatest opportunity in this space? What follow-up questions would you ask Geoffrey?
*I include this section in every post because I’m genuinely curious to hear what you think. I answer every response, so please, don’t be shy!
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3 Lessons Learned
Scaling a content strategy is addictive, and it’s stupid hard to stay focused.📱Nowadays, all I want to do all the time - always - is check my notifications. It’s so addicting. Do people like our stuff? Are we getting engagement? What are they saying? The dopamine rush is crazy - I’m learning it’s important mandatory to NOT have these apps on my phone and to be incredibly strict with how much time I spend tracking and checking on the latest updates.
The hardest part of being a podcast host is shutting your mouth.🎙️🤐After recording 6 podcast episodes, I’ve realized being a great host is not as easy as it seems. It basically boils down to making the guest feel comfortable, asking thoughtful questions, and listening with vigor. That last part is the hardest - it’s easy to come in with a list of questions and an agenda. But I’m noticing that the best, most interesting content tends to surface when I throw away my notes, pay close attention to what someone is actually saying, and pull on the threads that stick out.
Slow ≠ no.🐢About 6 weeks after completing our first job for a new client, we were finally able to connect to discuss their feedback & next steps. I was disappointed with how slow things moved, but their feedback was glowing and we now have clear next steps in place. Lesson learned - slow does not mean no.
3 Interesting Links
Tune in next week for a breakdown of my conversation with an accomplished energy executive on angel investing in the energy transition.
Until then, thanks for reading - have a great week.
-Andrew
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About Me
I cultivate flourishing.
I'm also the CEO of PitchFact, where our mission is to cultivate flourishing specifically through efficient and collaborative early-stage diligence. I'm a proud husband, grateful father, and honest friend. My love languages include brisket, bourbon, and espresso.