Tips on How to Start a Sports Start-up
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India is at the cusp of a major revolution with a number of first-time entrepreneurs coming up with innovative business models for new products and services.
Under these circumstances it becomes imperative to understand the nuances of launching a start-up and sustaining the business, especially if the service offerings are related to niche products, such as sports and arts.
Growth of a category such as sports (and/or) fitness is directly dependent on the growth of economy of a country. With the rising per capita income and rising awareness, Indians are increasingly adopting lifestyles around sports and fitness. Also, with the government drive to make India a sporting nation, schools and academies are working towards involving children from the grassroots level in sporting activities.
Hence, there are a host of opportunities for entrepreneurs both for sports-related products and services to evolve their business model at different levels such as B2B and B2C.
Typically, a sports start-up will also go through the same market cycle as any other start-up in an early stage/ growing industry with some differences as outlined below:
- Determine Your Core Business
With the number of options available in the market, it is important to understand your niche or core business, whether you would want to start a company that is into action sports, sports lounge, sports marketing or management, sports league, among others.
- Leverage the Right Kind of Statistics
The professional sports sector is still evolving – which means there are hordes of entrepreneurs out there testing out their business models from the perspective of profitability & scalability.
A standard market-research may not work, as relevant data may not be available. Reaching out to existing sports entrepreneurs in the area/ segment of interest can help in better understanding of the market. You could look at sectors like sports property/ league, sports marketing, sports education, academies, talent management, sports infrastructure, retail sports products & services or a technology/ online led mode - to name a few.
- Talent and Resources Play a Crucial Role
Unlike many other larger industries, sport in India is still at a nascent stage. This means that the journey is likely to be far more turbulent, and much longer. Besides, the passion for the space, what might be required is loads of stamina and ability to operate under continuous change. Early stage investors typically invest in a ‘founding team’ with a right mix ofoperating experience, beyond just the idea or the business, as these might change drastically in the early stages of the business.
- Focus on Wat is Relevant: The Product and Paying Customers
It’s important that your initial idea of the ‘product’ or a service is focussed on a class of customers – that are likely to pay for your product. In sports, there could be a number of revenue models viz. subscriptions/ end-user payments, sponsorships, advertisers, corporates or private institutions, CSR/ NGO funds, government schemes etc. There is no better validation of a product or a service than a ‘paying customer’ – especially in nascent sports space - as discovering sustainable revenue stream may prove to be very tricky.
- Strive to Become a Platform of Choice
So you are profitable now at a certain scale. If you reach this stage – give yourself a big pat! Unless you have chosen to play the valuation game with the investors — to make money on a sustainable basis at scale (regional/ national) in sports is a great accomplishment indeed.
If you are planning to build a B2B model, a sophisticated business network should be in place to ensure that you are insulated from systematic failures. Alternatively, if you are building a B2C model, like starting a business of supplying goods or equipment, source it from a right logistics partner or brands. Goods from reliable and credible vendors are paramount because even one small issue can ruin the reputation of your start-up.
- Market Your Business Using Right Channels
With hundreds of start-ups in operation, your voice must be heard through the right platforms and channels to reach your potential customers. Sports businesses will need to continually redefine their scope and market to stay relevant in the market place and curate interest with the customers and investors.
However, one must conclude that it is no cakewalk establishing a business and creating a customer base, which readily subscribes to our services or buys our products. If we imbibe this “challenge” in our approach, it becomes easy to establish the business with the right perspectives. Once you are convinced that you can make an impact in the market with the right product or service, you should be well-prepared to play a longer game. And true passion for sports is certainly not a handicap!