In terms of opportunity, it is the sector that appears to have everything. Billions of dollars in revenue, global reach, a common language and a customer base that defines the word “fanatical”.
Sport, in all its many forms, is huge business. Globally, the sports industry is estimated to worth €275bn to €350bn annually.
In Ireland, the latest figures say sport contributes between €1.4bn and €2.4bn to our GDP and supports in excess of 40,000 jobs. And in popular culture, the media and the online world, sport dominates in a way that few other activities or sectors can match.
But while the potential is obvious and there have been some major success stories, it remains one of the toughest nuts to crack in terms of tech and startups.
As Nigel Eccles, the Irish entrepreneur behind successful fantasy sports site fanduel.com puts it: “you’ll come across a tonne of ideas for sports startups. And most of them will be basically the same idea, a Facebook or Twitter for sports. And that’s great. But how are you going to get people to pay for that?”
It is on the tech side of sports business that two Irish companies in particular have jumped out to establish a global lead.
And their CEOs will be amongst four leading voices talking at the upcoming Dublin Web Summit, setting out the smart way to approach the business of sport.
STATSports, an Irish company, is now a world-leading provider of GPS performance analysis equipment, designing and providing wearable “black-boxes” and software that allows professional sports teams to minutely analyse performance.
Now with offices in Ireland, London, Chicago and Florida (and with plans to open four more in the coming months), STATSports is working with some of the biggest teams in soccer, American Football, basketball, rugby and athletics.
Sean O’Connor (who has a background in sports science) and his partner, Alan Clarke, started working together in Dundalk in 2007.
“When we started, the plan was to offer a sports science service to Gaelic and Rugby teams in Ireland initially,” says O’Connor.
“But it turned out that a lot of what we had to offer hadn’t even hit the Premiership in England yet.
“Our first major client was Leinster Rugby in 2009. And when they won the Heineken Cup, the spotlight was shone on them. Other organisations wanted to see what it was that they had done differently.
“So working with Leinster and Ireland that year, led to us then teaming up with the likes of England and Leicester Tigers.
“We quickly realised that there was a big gap in the UK. And although we were then a distributor for other people’s products, we were not interested in just selling this to teams and then walking away.
“We wanted a business model that would build on our expertise, our knowledge and the good relationships we were building with key clients in the UK, like Arsenal, Manchester United and the England rugby team.
“The key fork in the road came for us in 2010-2011, when we realised there was only a certain lifespan in using products developed by other people, and we wanted to have our future in our own hands and develop our own products”.
What StatSports came up with was its Viper system, which is now about to enter a new generation, in terms of the hardware (the wearable GPS pod) and the software to use it.
The product was focused-grouped and developed with key partners, including the fitness and conditioning coaches from Manchester United and Arsenal, as well as Leinster.
“We got them in a room, and we told them about the hardware we were developing. But we wanted to know, from them, how they wanted the software to look, to perform, to feel. What we do has always been customer driven, it’s our core element,” says O’Connor.
The Viper System is now used by 15 of the 20 Premier League teams in England. It’s also used by Barcelona and Juventus in Europe and has expanded into American Football, basketball and athletics leagues.
Over 90pc of STATSports customers are now service clients, involved in a long-term partnership with the company.
But O’Connor says its focus now, and what he will be talking about at the Web Summit, is “taking what we are doing with elite sportspeople and bringing it to the consumer market”.
This will involve wearable GPS and performance analysis technology for weekend marathon and triathlon competitors and other amateur sportspeople who want to train and perform like the pros.
Tyrone-man Nigel Eccles is the co-founder and CEO of FanDuel, an online fantasy sports gaming company that offers an accelerated experience, the chance to pit your fantasy sports team against others over a day or a week, rather than the season-long commitment offered by most fantasy leagues.
The company has raised over $88m in investment to date and has over half a million paying, active customers worldwide. FanDuel pay out around $10m per week to customers who put together virtual teams competing in US sports such as basketball and the NFL.
“The big difference with us is that games resolve every day. You talk to a lot of sports fans about fantasy sports and they won’t do it because it takes up a lot of time over a whole season,” says Eccles.
His own background was in online betting with Betfair. But the five co-founders of FanDuel actually met up at a startup summit in Edinburgh several years ago.
“They already had a startup that wasn’t really scaling, I was at a large company and I was getting a little bored, so we came up with some ideas, connected and found we had a team which complemented each other.”
“We launched in 2009. We raised about $50,000 as seed capital and a year later we raised a further $1.5m. In total, we have now raised around $88m.”
The CEO says their initial problem with investors was explaining the business model and its potential.
“I think a lot of entrepreneurs have this problem initially, when you are creating a market, investors don’t have a reference point, they want to know how big the market is going to be, but you can’t really tell them with any great accuracy because the market does not really exist,” says Eccles.
“And then they will ask you how many other successful sports startups there are. And you have to tell them that it’s next to none, because it is a very difficult sector to pull off a big success in”.
“There have been a lot of failures in the US. And that has made it harder for anybody who has a really good idea.”
“The big question is, without broadcast rights to the sport, can you create something that it going to be very attractive for the fan, and something they will pay for?”
“That is where a lot of ideas have fallen down. Yes, they can produce something that’s fun and fans will engage with, but they won’t pay for it.”
FanDuel is now looking to expand further in the US and Eccles believes their customer base is not anywhere near its potential.
Leland Melvin has something of a unique skill-set and list of achievements. He is a former American Football pro with the Dallas Cowboys who flew missions in space with NASA and is now involved in education and research.
Melvin will be one of the speakers at the Dublin Web Summit, combining his experience in pro sports with lessons learnt as an astronaut working on the International Space Station.
And while his talk will cover a lot of ground (given his eclectic background in sports and space), he says that he is excited by the opportunities offered by events like the Web Summit.
“What I find really exciting is the chance to meet interesting people, to talk about the possibilities and the connections that people can make,” says Melvin.
“Technology is now allowing us to establish personal relationships with people all over the world, to share our experiences and our ideas to talk about the future.
“And at an event like the Web Summit, it’s the conversations that people have around the different talks and events that can be really exciting. They can spark ideas, send people off in directions they may never have considered or imagined.”