• June 14, 2017

Unfiltered Chat on the Rise of Sports Tech

Unfiltered Chat on the Rise of Sports Tech

Over the last few years sports tech investing has skyrocketed – mostly due to the eSports craze and the insane run (read: marketing spend) of daily fantasy companies like DraftKings/FanDuel. But outside of those two examples, I found it hard to come up with a solid definition of the combined industries. So, I had a quick chat with a guy who invests directly in the sports tech world through his fund Fullstack Sports Ventures.

Here’s the unfiltered chat with Reid Snyder. Also, if you’re interested in chatting sports tech, send me an invite and I’ll loop you into our conversation.

Alright Reid, I love sports and I love tech. They’re two of the biggest and most entertaining industries but what does sports tech really mean to you?
1:04 pm
Sports (professional, media, participatory, etc) are a) big business and b) an incredibly powerful platform from a distribution perspective. Over 4B people in the world are considered sports fans. So I believe that all quality startups building scalable technology can benefit from that platform. Sports tech is much broader than what most people initially think. There are three lenses that I look at companies through. 1) Is this company solely focused on sports and that’s a big enough opportunity for them. 2) Sports is the beachhead and there are other market applications (eg. healthcare, insurance, enterprise, etc) 3) Sports may be just one specific revenue channel or growth opportunity for the business (look at how Snap, Twitter, etc built around sports.)
1:15 pm
Ok, massive market opportunity but seems fairly vague. Can you tell me a few specific examples of companies that you’re looking at or have invested in? Are we talking the likes of Draftkings – eSports, Brizi – social photos at stadiums, Fitbit – connected self, etc, etc,
1:18 pm
And where, if at all, do the major sports teams fit in?
1:19 pm
To be honest when I think sports tech, I think in stadium tech for sports teams to capitalize on and then connected self stuff like fitbit.
1:19 pm
We’ve invested across a number of sectors. SidelineSwap is an ecommere marketplace for used sporting goods. Ebay and Amazon do ~1B annually on sporting goods. That’s what they’re going after. A recent one fitting ‘stadium tech’ we backed is Beacons In Space, which has created a marketplace allowing app developers to monetize location data w/o ads. We think this has big application to help sports teams/properties understand their fans both in and out of stadium.
1:22 pm
Then you look at the ‘piping’ around sports business. Advertising and sponsorship are a big part of that. So we backed a company called Block 6 Analytics that is taking a new approach to audience measurement and understanding ROI real-time.
1:23 pm
I often say that if a company is just trying to sell to the ~140 pro sports teams in NA, it’s not that attractive to us. Limits the market size and sports teams generally cry poor (on everything but player salaries). But in the last year or so you’ve seen a lot of teams and ownership groups start to understand that engaging with new technologies is important to their business, specifically when it comes to better understanding the fan
1:24 pm
Speaking of player salaries… startups are the new shiny object (read: fidget spinner, if you will) that everyone is obsessed with. It seems like every day I read about a new actor or professional athlete opening a fund or becoming an LP to invest in startups.
1:27 pm
Do athletes have a place in the sports tech world outside of $$? Maybe more endorsements, promos, etc?
1:28 pm
And does this having staying power or will they move on to the next shiny object when it floats on by?
1:28 pm
It’s definitely in vogue. Anytime a big athlete (see Durant, Kevin) signs for a SF team, the bay area lure is part of the narrative.
1:29 pm
Like anything, some are sophisticated, take a thought-out approach, and add value. But, there is still quite a bit of passive investing that happens, and some money that goes into companies that haven’t really been vetted just bc it’s a rounding error for some athletes.
1:30 pm
Haha, I’d like to get myself a rounding error from some of those folks if that’s the case.
1:31 pm
But, I think it’s here to stay. the NFL players association recently established a group called One Team Collective, which partners with some venture groups and others in the space to do early stage deals. They are motivated to promote all of the NFL athletes and their interests, not just the top players. So you’re seeing some of this be institutionalized as well.
1:32 pm
Ha, yes. It’s nice to have. But seller beware, definitely occasions where an athlete may get a large % of the co for little $ or promotion. Just need to make sure it works for both parties
1:33 pm
Seeing as we’re located in the greatest sports town of all time, not something up for debate here, let’s talk sports tech clusters. And I know you’re primarily out of the west coast, so where are the hot spots for sports tech startups?
1:35 pm
I’m a celtics and C’s guy (don’t need to discuss my football allegiance) so I don’t disagree. Major markets as we see it are Boston, Bay area, New York, and LA.
1:36 pm
Ok seems to mirror the tech industry as a whole then.
1:37 pm
Boston has the combination of a) winning teams + rabid fanbase b) quality startup/tech community c) big brands in the space like New Balance, Converse, Asics + Draft Kings and others that have emerged.
1:38 pm
New York is where all of the leagues are located and media capital. LA is the entertainment hub, and the Bay area dominates tech. So yes, pretty much mirrors the larger tech ecosystem, but for some complementary reasons
1:38 pm
Good context.
1:39 pm
Good chat, thanks Reid.
You bet
1:40 pm