What sport can learn from the big tech firms
The opening statements by the CEOs of Apple, Facebook, Google, Microsoft and Amazon to the US House Committee on the Judiciary may not be the most obvious of page turners for the summer, but I think they are very valuable reading, especially the statement by Jeff Bezos.
All the companies predictably talked about their products, what those products had enabled people to achieve and how their innovations would not have been possible outside of the US. However, Bezos’ statement in particular stands out for two main reasons. I think it is useful to see how it can be applied to the sports & media industry, where Amazon is increasingly becoming an important player and also how it relates to what we are building at Sports Loft:
Firstly, Bezos’ statement puts an interesting slant on the often-heard notion of being customer focused. In particular, how Amazon’s version of customer focus means identifying what consumers need before they even realise they need it. This could be seen with AWS: “no one asked for AWS. It turned out the world was ready and hungry for cloud computing but didn’t know it yet.” And Amazon Prime: “no customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it”. As Bezos put it “by focusing obsessively on customers, we are internally driven to improve our services, add benefits and features, invent new products, lower prices, and speed up shipping times—before we have to”. It is the last part of that sentence that is key – “before we have to”. Amazon could have continued to make $millions from its customers but they found new ways to bring new services to customers and to deliver value to them.
Contrast that to the many conversations that are heard in the sports and media industry – “we’ve been doing it like this and it’s been working, why change?” Or “we can keep milking this for a few more years yet”. The prime example of this may be reluctance to adopt direct to consumer content channels but it can just be as easily applied to ticketing, where fans have been buying season tickets in the same way for years, but what if they were able to have greater flexibility in the games they attend, who they attend with and how they pay? In sponsorship, despite its shortcomings, many brands have continued to accept equivalent media metrics to evaluate it, but what if they could genuinely start to value a partnership’s impact on their business? How do teams grow new fan bases? Fans aren’t demanding that their clubs get involved in their kid’s football skills, fitness and education, but what would be the impact on building loyalty with young fans if they did?
For investors this is risky stuff. How can you be expected to evaluate something that customers don’t even know they want yet? But isn’t this part of what early-stage investing is all about? At Sports Loft, we have the same debates about which companies we should work with. It’s easy to concentrate on companies that are getting traction in an area that is predictable but the real value is trying to find the companies that are identifying what the industry needs before the industry realises it. How many performance directors knew that they needed an algorithm to help identify players at risk of injury until Zone7 came along? How many content managers were asking for a better way of sharing content with the players until they saw Greenfly? How many broadcast managers were wanting to have commentary done remotely until they saw Spalk and then Covid hit? How many marketing managers were thinking about the exact times to send individual pieces of content to consumers, and at what length, before they saw Covatic.
The second part of Bezos’ statement that stood out is the storytelling. Now some of the style is a bit folksy for my liking but he really manages to convey the company’s origins and rationale, often in very personal ways that people can relate to and easily understand. From his personal desire to build a company: “most of our regrets are acts of omission—the things we didn’t try, the paths untraveled. Those are the things that haunt us. And I decided that if I didn’t at least give it my best shot, I was going to regret not trying to participate in this thing called the internet that I thought was going to be a big deal.” This continues to how he portrayed the threat to Amazon from established competitors: “smart analysts predicted Barnes & Noble would steamroll us, and branded us “Amazon.toast.” Finally, his defence of big companies: “just like the world needs small companies, it also needs large ones. There are things small companies simply can’t do. I don’t care how good an entrepreneur you are, you’re not going to build an all-fiber Boeing 787 in your garage.”
Ironically, in an industry such as sports that is full of emotive stories, the technology companies that serve it rarely do a great job of telling their own stories. A great product and technology are vital but will only get you so far. You have to be able to tell the story of why the product is so useful and in many cases it is the personal stories that really resonate. Why did the company get founded? What challenges did the company face along the way? What went wrong and what did you learn? Rightly or wrongly, the companies that often attract funding are the ones that are the best storytellers, painting a picture for investors of a world that has benefitted from their product. Investors and customers are often looking for a narrative that they can buy into.
At Sports Loft, part of our role is to help our member companies tell their stories to our audience of investors and senior industry execs through our podcasts, newsletters, social channels and website. These are great companies with fascinating stories to tell from Donny White searching for bacon on a stick at Citi Field that led to the founding of Satisfi, to the insights from the My Kicks app that led to the thinking behind Formalytics and seeing the opportunities with first party data that led to the creation of Pumpjack. We will continue to do more to bring out the personal stories that really give an insight into the companies at Sports Loft and the people who are building them.
By focusing obsessively on customers, we are internally driven to improve our services, add benefits and features, invent new products, lower prices, and speed up shipping times—before we have to."