The entrance of technology startups into the sports industry has accelerated transformation and modernization trends. By working with startups, sports organizations can rely on faster innovation, development & deployment of solutions. From their side, startups can access ecosystems composed of assets such as players, matches, venues and others. This generates value for both actors.
However, even with such a clear theoretical fit, the two stakeholders face issues in working with each other due different constraints. By understanding the context of sports organizations, startups can better approach their prospective clients and achieve long term relationships.
Below, we share a few of the key lessons for the how, when and why for tech companies looking to work with sports organizations. These lessons come directly from the work we do with our clients across Olympic & professional sports in over 10 countries around the world.
1. Tech and innovation ownership is not structured. In many sports organizations, there is a confusion about what department should be responsible for tech and innovation. Is it the marketing department, the commercial one, or the media rights? According to McKinsey, 80% of companies say their digital transformation efforts involve multiple business units or the entire company.
2. The fluency of digital & tech is low. Through the work we do with our clients, we have identified that many sports organizations have a willingness to transform digitally but lack the necessary language, ways of working and culture to do so. In a previous article, we identified 4 ways to accelerate a sport organization’s digital acumen. One way is through a pedagogical approach that resonates with the language and pulse of the sports organization.
3. Budget cycles differ between sports and between countries. It is important to know how budget cycles work and how these new budgets get allocated. We regularly see startups approach sports organizations in the middle of their busiest corporate event of the year; or right in the middle of the Olympic Games for an International Federation or the peak of the football season for a club. Like any organization, there is an ebb and flow to sports organizations that follows the sports, corporate and budget calendars.
4. Sports calendar dictates decision making timelines. Right before a big event, many sports organizations switch to operational mode and only focus on delivering the event. Understanding when the World Cup is happening is important. Equally important are the data of the Congress, the Finance Committee and the Member Association annual event.
5. Broadcasters and media rights holders are potential gateways. This group of stakeholders is always investing in new technology, and they are usually much quicker when it comes to having conversations with tech companies and startups. We are now seeing a lot of initiatives by broadcasters such as Comcast launching its own accelerator for startups. Engaging with this group of stakeholders can be a way to enter the sports industry.
6. Sponsors spend up to 3x to activate their sponsorship. Think about how your solution can help sponsors to activate. Researching what other properties the sponsor supports can yield opportunities. The commercial department of a sports organization is always looking for ways to bring value to its commercial partners. Guiding them to add value to their sponsors, agencies, and broadcasters, can open doors for startups.
7. Decision-makers in sports must innovate, but they are not able to do it as quickly as they need or want to. Startups need to approach decision makers at sports organizations with stories that can convince leaders to invest in innovation. Having an understanding about who their competitors are and what sports organizations they consider to be their benchmark can help the startup’s sales process.
8. The data flows & digital architecture is built on legacy systems. The way sports organizations operate digitally is an important factor to take into consideration. In many cases, custom softwares and solutions make up the operating system of a sports organization. Startups must land the sports organization in a more mature step of the digital transformation journey instead of making their systems more complex.
Sports organizations are bombarded with offers from startups that blur together in terms of their value proposition. The size of IT or technology teams at these organizations makes it difficult to add the responsibility of engaging with startups solely within their remit. That is why we find it useful to prioritize the business outcomes of our clients, and then seek the technology solutions that fit their needs. Many times, we see the opposite happening. A technology is sourced or identified, and then a business pain point is identified. Digital transformation should be at the behest of the business strategy.
If you are facing some of these difficulties in accelerating your digital transformation journey, do get in touch.
Fill out the form below to download the N3XT Sports’ BREAKING DOWN BUYING HABITS presentation.