🔥Upside: 12 Most Common Mistakes Made by Sports Tech Startups
In the past 10 years we have worked with a large number of sports tech startups across various sports tech subsectors (GPS, AMS, Biomarkers, AR, VR, NFT, Metaverse..). We have worked with startups that had amazing technologies with great founders, but for the most part there is no perfect startups out there. In this analysis we discussed the most common mistakes made by sports tech startups.
1. The startup’s product does not solve a real problem.
This is probably one of the biggest mistakes I have seen sports tech startups made in the past 10 years. In fact I have seen startups spend millions of dollars and hours building a sports tech product that does not really address any particular issues. That’s a non starter for me and for the teams. So my advice to those sports tech startups is this: Do your homework. Get on the phone with potential customers (teams, leagues..) and interview them so that you can understand their pain points, and what types of problems they are trying to solve whether it is to prevent injuries, fasten the recovery process, improve athletes’ sleep, or the fans experience. At the end of the day there is nothing more discouraging to build a product that nobody wants.
2. The product is not backed by any studies/scientific research.
Now this one is especially critical in Europe where the vast majority of pro teams want to see scientific evidence and studies that back up a sports tech product. You would be surprised by how many times we see sports performance startups that are not backed by any studies or research papers. Why? Because the startup does not think that this is important. Or maybe simply because the management team does not come from the world of elite sports. I would say that 70% of the sports performance startups out there do not publish research papers at all to back up their product which is shocking but that’s the reality today. So my advice to all these sports performance startups: Take the time to do some studies and research. Reach out to some pro teams, and universities and come up with some legit studies to be published in reputable research papers or journals. Now you may ask: Why is that important? It is important because it will give you lots of credibility and it will increase your chance of landing new customers, especially teams in Europe.
3. The product is too expensive and does not offer tiered pricing with free trials
Ultimately, even though a startup might have built one of the best products in the world, if the price if off, it is a non starter. I have come across some great sports performance startups with great vision, or product…but where the pricing structure was way off. Here is the problem with that: Let’s assume that startup A is reaching out to a pro team but has no idea what the team’s overall sports performance budget is. Now startup A offers its sports data product for $100k per year without any other pricing options to a pro teams that has an annual sports performance budget of $150k. There is no chance that the pro team will buy its product. I see this happen too many times. Instead what the startup should do is to offer various price tiered options with lower price points. Unfortunately some startups are convinced that their premium pricing is the right way to go. So to those startups I say: Would you rather have 50 customers who can buy your product for $50k per year ($2.5M in revenue) or just 10 customers who are willing to buy your product for $100k ($1M in revenue). You have to choose your battle. Don’t try to be greedy but try to get the customer in the door. You can always upsell your customers with additional options and features over time.
And the last point there is for startups to offer free trials for at least 1 month. Why does it matter? Because that way startups get a foot in the door which increases their chance of success and it allows teams to get a feel for the product. And quite frankly that’s the best way to build a long term relationship between the startup and the team. Too many times I have seen startups that do not offer free trials and even ask teams to pay for the trial. So my advice to those startups: If you are asking teams, who get free products all the time, to pay for a trial, you might upset a number of teams doing that. The last option would be to offer “A 30 days money back guarantee program” where the teams pays a small fee for the pilot but if the team decides not to buy the product they can get a refund. That works well too and I have seen many startups adopt such strategy.
4. The product does not fit the team’s workflow.
Another big mistake that I see sports tech startup founders do is to build a product that totally disrupts the teams’ and athletes’ workflow. For example I have seen startups come up with product that requires for the teams or athletes to change the way they train, or do their rehab…That goes back to the fundamental question: Did this startup do its homework and try to understand the teams’ workflow? Most of the time the answer is “No”. When you are building a product you always have to make sure to (1) “Understand your customers’ workflow”, (2) “Understand who your user personas (Athletics trainers, performance directors..) are”, (3) “Understand your customers’ requirements”. Ultimately, if a product, as great as it might be, disrupt an athlete or teams’ workflow, it is going to be DOA (Dead On Arrival). So to all these sports tech startups out there, make sure to understand your customers’ workflow. It will save you lots of time and headaches down the road.
5. The product disrupts the workflow with constant flagging of players.
Now this one is interesting and it goes back to the issue with the workflow. Sometimes I have seen startups that have come up with great sports performance technologies. The only problem there is that those technologies end up disrupting and flagging players constantly. For example the system would constantly tell an athletic trainer to go check on a large number of players on a daily basis. Now that quickly becomes a real headache when the system tells the athletic trainer that 10 athletes have a potential risk of injury for the next game. It adds time and complexity to a sports performance staff that is already very busy. So my advice to those startups building such products: Keep that in mind when you are building your product. Make your product less automated and more intelligent so it does not disrupt the teams’ and athletes’ workflow. It will increase your chance of success with teams over time.
6. Startup is run by some tech or VC execs but not by former sports execs.
Sometimes I have come across some sports tech startups that are run by tech and VC executives. The issue there is that those executives do not come from the world of elite sports. Why is that important? Because they do not understand what the real paint points are, what it is like to be part of a team’s performance staff, what the performance staff does every day. As a result of that things get lost in translation. Those executives try to take shortcuts or simply do not fully understand the needs of pro teams and what they have to go through everyday and end up building products that don’t fit the teams’ requirements. To be honest I see this type of mistake happen more and more every day. So my advice to those startups is this: Hire people from the sports industry, people who understand the requirements in the world of elite sports. Rely on their experience to build a product that teams want.
7. The Startup overpromised in terms of what their product can do.
Many times I have seen startups that will oversell the capabilities of their product. They will say “Yes we can predict the risk of injury with 95% accuracy” or “Our device can help your athletes gain 2 hours of sleep every night”. So unless it is backed by some solid scientific evidence, this could become a real challenge for those startups. And let me say this: You never want to overpromise what your product can do. Why? Because ultimately if you cannot deliver on your promises, those same customers will most likely not renew. And because the world of elite sports is quite small the words goes around very quickly and the startup’s reputation can be tarnished in a short period of time. So my advice to those startups: Take 2 steps back. Be honest about what your product can and cannot do. Just tell the truth.
8. The startups only has a prototype but not a commercial product.
Having worked with pro teams and leagues for the past 10 years I can tell you that if there is one thing that turns off pro teams is to have to deal with a sports tech startup that only has a prototype but does not have a real commercial product. Most teams want to use products that have been fully vetted, tested and are ready to go. Now there are some teams that are willing to experiment, try early prototypes but 90% of the teams do not. Why? Because those teams could end up spending lots of time helping startups improve their product and in the end the startup ends up shutting down or not being able to cross the finish line. So my advice to startups with an early prototype: Take the time to build a solid product, get as many feedback as possible, reach out to the teams that are friendly to you and willing to do pilots with you to test your product. Then and only then reach out to a large number of teams once you have a commercial product. Remember! Most of the time you only have “one” shot with teams. So don’t rush things and burn the bridges with a clunky prototype.
9. The Startup relies too much on the technology.
This goes back to my point earlier about building products that end up flagging players all the time. The point here is that there is only so much technologies can do. When you look at an athlete you have to factor in various elements such as internal load, external load, mental health, sleep quality…so if you rely too much on technologies (algorithms, AI..) you might run the risk of building a product that relies too much on technologies without fully understanding the context impacting the athlete’s health and performance.
What I mean by that is that I have come across some teams that were relying too much on technologies but that were overlooking the environment of the athletes. One time I was talking to an Olympic team. They were dealing with an athlete that had trouble with his sleep. He was sleeping 8 hours per day and yet was getting up “tired” in the morning. They made the athlete use a sleep tracker but they still could not figure out why he was always tired. Then they decided to do a sleep study and look at his sleep environment. And then what they discovered was that the athlete’s snoring ended up disrupting his sleep. He did not have enough deep sleep which is why he was waking up tired in the morning. The point here is that sometimes you have to look beyond technologies and fully understand the context and the environment of the athlete to get the full picture and a 360 view of what’s going on with an athlete. Don’t just rely on technologies to figure things out.
10. The startup is not patient and expect a deal with teams to be done in 3 months.
Here is another big mistake that I have seen startups do. Many times I see startups that expect to make deals with pro teams within 3 months. Here is the problem: 99% of the time it does not happen. Why? Sports is not the same as other industries like entertainment for example. Executives from pro teams are extremely busy. They might be dealing with other big projects and deliverables. Working for a pro team can be very demanding. The other thing to consider is that there are certain times of the year when it is best to approach teams. Trying to approach a team during the playoffs limit your chance of success and getting a deal done. So you need to know when is the best time to approach a team. Sports leagues have more time off during the off seasons. So do your homework, don’t expect a deal to be done in 3 months and do not add unnecessary stress to yourself and don’t give up too quickly if you don’t a deal within 3 months. Be patient. Follow up with teams. It will increase your chance of success. 6 months or 9 months from now you could end up landing a deal with the team of your choice.
11. The startup does not let its customers do the talking and provide testimonials for them.
Here is the question: Who do you think a team would trust more when considering buying a new sports tech product (wearables, AMS, GPS, NFT/Metaverse..)? A team using a particular product or the startup trying to sell them a product? Well the answer is: 99% of the time the team would trust the other team using a particular product. Why? Because they know that the team using the product will provide honest feedback on the product.
Now too many times I have seen many startups make this mistake. Most startups do not bring their customers on a call with a prospect (e.g. team). Now I guarantee you one thing: If you bring one of your customers on a call with another team looking to potentially buy your product your chance of closing the deal with that team grows exponentially. Unfortunately too many times startups do not think that bringing one of their customers on a call makes a big difference. But the truth is. It makes a huge difference. So bring one of your customers on calls, and let them do the talking and promote your products. It will make a big difference and you will be surprised how much more successful you become with teams and how many more deals you end up closing. I have seen sports tech startups adopt this strategy and they have been very successful.
12. Startup is not stable financially.
That one is one of the most obvious mistakes. I have seen many startups going out of business. Why? Because they ran out of money. Simple as that. Now why did they run out of money? There could be many reasons: One reason could be that the founders did not know how to raise money, or did not have a strong network of investors. Another reason might have been that the startup overspent, or made mistakes while building the product. That goes back to getting the right management team in place, and building the right product. Sometimes you might have a great team but if the product is not right and does not solve any real problems then it will most likely fail. So make sure to raise enough capital initially, do not overspend, and listen to your potential customers to build sometimes they really want and would pay for.
Bottom line: Building a successful startup with a good product is hard. It takes patience and humility. Statically speaking 90% of startups fail, so if you want to be part of the 10% remaining sports tech startups that hit a homerun, make sure to build a product that solve a real problem, is backed by scientific evidence, is available at a reasonable price and that does not disrupt the teams’ workflow. And make sure not to overpromise what your product can do. Take your time to build a solid commercial product. And build an experience management team that knows how to raise money, fully understand the world of elite sports and do not build a product that solely relies on technologies. And lastly don’t forget to have fun along the way. Entrepreneurship is a journey so you might as well try to have fun and enjoy the ride as much as you can.
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