What are the values of a sports tech startup accelerator or business incubator compared to boot strapping?
The Sports Techie community blog has a new featured Q&A Series with Ishveen Anand, CEO of OpenSponsorship, the marketplace for sports sponsorship. The focus is the business of sports. In this first program, we ask the question whether one should launch a boot strapped sports tech company, or go the route of a startup accelerator or business incubator. The concept behind this Sports Techie Q&A Series is for readers, followers and the public to receive valuable feedback from entrepreneurs, founders, executives, and business-minded professionals, and then be able to ask followup questions. Should you be involved with a sports technology or digital startup in the sports space, and are keen on learning about validation, proof of concept (poc), planning, pitching, demos, networking, funding, and execution, as well as other related topics, this is your go-to online resource.
Please submit any questions or comments for this inaugural Q&A in the comment section at the bottom of this blog webpage. Or, you can ask me through our company social media handles listed below and via hashtags #FutureofSponsorship and #SportsTechie. Also, feel free to email directly me at [email protected] and I will provide answers.
Question: What are the values of a sports tech startup accelerator or business incubator compared to boot strapping?
Answer: “The biggest difference between the two is actually the starting point. You leave an accelerator wiser and more connected for sure, but the % increase definitely comes from where you were before and where you want to get to.
For me as a first time tech entrepreneur, going through an accelerator (500 startups) was invaluable, and I would highly recommend it to any first timers out there. What if you are not a newbie in the tech world, there are still definitely benefits, its just really up to the founder to decide how valuable they are:
– validation. If 90% of startups fail to deliver good value, then any signs you can give that you are in the other 10% go a long way. Being admitted into an accelerator delivers that, and similar to the ivy league system, you want to go for a good one. 500 startups, Y-Combinator, Techstars are solid names across all industries and then you have top ones in each vertical, such as Stadia ventures and LA Dodgers for sport.
– pitching. A bit part of accelerators is preparing you for demo day. Similar to how schools are judged by graduating class salaries, accelerators are judged by the amount their portfolio companies raise. Being able to focus on what is really interesting about your company and get that across in 2 minutes is absolutely key. Too many CEOs don’t know what they should be talking about, what makes them fundable and interesting – a fatal mistake.
– network. I liken accelerators to MBA’s because the network is global, the friendships real and the memories awesome. Being thrown together with 40 other companies for 16 weeks to learn and grow as a business and an entrepreneur makes for some very special moments.
– investment. Apart from the founder and staff network, accelerators give you access to top investors, angels and previous founders who have raised investment previously. Some people in my class only joined the accelerator for the access to Silicon Valley capital; not a crazy idea given the majority of seed funding still comes from the Valley.
– learning. Most entrepreneurs don’t realize how little they don’t know until they get into an accelerator. I remember thinking that if I had known xyz when starting out, things could have been very different. This immense learning curve made me realize they investors prefer to back second time entrepreneurs, why so many founders go on to do a second startup, and why accelerators are really made for first timers.
– POCs. This was a game changer for me. Advisors, mentors, friends are all great, but their time is limited, interest in the business of course is high, but not nearly enough for you to get as much as you need. Having a network of experienced staff to mentor, guide + consult was amazing (POC system). You know they are in your corner, will give you advice right for the business, and be on your side when things get tough.
– funding. Apart from the potential investment from demo day and other investors, most accelerators also give you around $100K for about 5%. Yes, giving up a % of the company is not fun, but getting that first money in the bank is. It’s not a huge amount, but it’s validation, extra runway and enough to add 1 or 2 more hires. And it should lead to a lot more.
So sports tech vs general?
I studied Economics at Oxford, there are better schools for Econ, but would I change it, no. Rarely do I get asked what I studied. I no longer work in anything related to Econ, and rankings in subject often change. The top titles tend to stay. It’s similar for accelerators. We had 7 sports startups in our batch and I’m sure many of us were thankful to be in 500 over a sports specific one. If next time I start or join a non-sports startup, the 500 brand still stands.
The benefit of a sports accelerator is the heavy focus on sports networking. If your business relies on partnerships with teams, leagues and only sports brands, then for sure a sports accelerator is better. For us OpenSponsorship.com just did not need this.
Being part of an accelerator is not to stop you bootstrapping. The lean methodology still applies, and even after the above, you are still very much a poor, entrepreneur on a long journey. It’s just that you are not alone on this journey anymore – you have other founders to lean on, mentors to learn from, and a larger pool of investors to hopefully raise from. The equity given up is well worth these benefits.
So unless you are a second time entrepreneur with previous experience in tech, an existing network, access to funds, a well piled pitch and no need to learning, apply to an accelerator today, I’d recommend 500.” 🙂
500 STARTUPS DEMO DAY 2016 BATCH 16, OpenSponsorship
OpenSponsorship is the #1 marketplace connecting brands to athletes, teams and events. Through better algorithms and increased data points we aim to solve the inefficiencies in sponsorship, the backbone of all sports. With over 2000 athletes and 900 brands, OpenSponsorship is the largest network and is on its way to being the global solution for sports sponsorship. OpenSponsorship was named a finalist in the Sports Technology Awards, category of best technology facilitating commercial returns. OpenSponsorship was included in the highly coveted 500 startups accelerator in San Francisco in Jan 2016.
Ishveen Anand is the CEO of OpenSponsorship. She is an Alumni of Oxford University, where she studied Economics & Management while playing sports, namely cricket and netball. After a stint in management consultancy in London, she became a sports agent in India representing top teams and brands such as Mumbai Indians, ICC and Hero MotoCorp. She started OpenSponsorship after seeing a need to make the matchmaking process more efficient and partnership opportunities more accessible. She was included in the Forbes 30under30 sports list.
OpenSponsorship Tagline – “Our ever growing network spans 40 countries, 50 sports, 2,000 athletes, teams and events.”
Sports Techie, in the 500 Startups YouTube video, Anand states, “14 percent of all marketing spend in North America goes to sponsorship, that’s a whopping $60 billion industry, and its all offline.” Her goal is to bring this spend online through OpenSponsorship.
Along the way, she shared her valuable startup perspectives on bootstrapping versus joining accelerators for startups and incubators for businesses.
No doubt about it, incubators and accelerators are hot opportunities for investment right now. All the reasons Ishveen discusses are a major part of this worldwide trend for founders to receive value back. I would add that is it becoming tougher and tougher for investors to earn huge ROI for shareholders because the old standbys such as gold, property and even oil are not such a sure thing anymore. If ten companies are invested in by a single accelerator and one of these startups becomes the next ESPN as an example, the other nine that might fail are not money lost when considering the money gained with the grand slam investment. Or, if three investments out of ten are financially successful, much like a Major League Baseball player batting .300, millions of dollars will be made.
This is my second startup. I founded SportsTandT, Sports Technology and Training, together with the founders of WizBang Software, experts of games and simulations, and publishers of Microsoft Baseball 2000 and 2001 for the PC. Our focus was online sports training aimed at amateur athletics. Together we built a business plan and professional presentation. I single-handedly pulled in an impressive group of professional athletes and business people to be on our board of advisers and then managed to attract an array of bankers, angels and other potential investors and venture capital funds, to whom we pitched our plan. Unfortunately our timing was off. That was the start of the .com bust.
Since Sports Techie is technically my second startup, I may not be the best candidate according to Anand’s view for participation with an accelerator or incubator. This makes sense since I have bootstrapped this venture since launching six years ago and also have any extensive network I am now leaning on for financial support. I’m currently attempting to execute an eBook project through my first Kickstarter crowdfunding campaign you can learn more about and pledge via the link, THESportsTechie.
One fact that should be noted is that Anand is a woman, leading a successful sportsbiz startup through initial vision, to execution and now, operations. All this was done with the support of a startup accelerator making her business opportunity truly a win-win-win for her company, Startup 500 and early investors.
Sports Techie Q&A Follow Up
Please submit your questions and comments for this Q&A with Anand in the comment section at the bottom of this blog webpage. You can also ask me through our company social media handles listed below, and via hashtags #FutureofSponsorship and #SportsTechie. Finally, feel free to email your question directly at [email protected] so I can provide answers.
Our gratitude goes out to Ishveen and OpenSponsorship for adding value to the Sports Techie Q&A on sports tech, you won’t find anywhere else.
See y’all later in Seattle, Atlanta and around the world.
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