Key Takeaways from One-Zero (Part 3)
Techstars SportsTech by Indy Demo Day
Introduction
Although delayed, I wanted to present my third and final piece on the 2023 One Zero Sports Tech Conference in Indianapolis. My first two posts (Part 1, Part 2) reviewed the panel discussions along with the keynote speakers and my key takeaways from each respective session.
In this final post, I wanted to mention the 2023 Techstars Indy Cohort startups that pitched their ideas on demo day. I was impressed with the quality of pitches and preparedness of all of the presenting companies, and it was clear to me that Jordan Fliegel, Andrew Hippert, Elliot Mack, and the rest of the Techstars Indy team have done a phenomenal job of building up this accelerator and preparing founders for conversations with investors. I'm excited to continue to stay plugged into this ecosystem in search of investment opportunities.
Before diving into company specifics, I want to add a disclaimer that I have tremendous respect for startup founders and anyone brave enough to attempt to build something from scratch. From an investor's perspective, it's easy to quickly pass judgment on a company when sitting comfortably in the audience. I acknowledge this. I by no means want to dismiss any company that presented as better or worse than the next, but rather share my investor perspective and initial impression of what I took away as the highlights and the obstacles each company could face in the future.
2023 Techstars Indy Sports Tech Accelerator Cohort
Company: Rootnote
One Sentence Description: Rootnote is a SaaS platform that enables content creators to see all their data and engagement metrics in one place.
Highlights: Rootnote has gained exceptional traction and momentum, considering where they are in development. Although subject to a small denominator effect, they are growing at a 40% MoM rate and tracking for 10X revenue by Q1 2024. They established numerous high-value partnerships through the accelerator, which has helped fuel this growth.
Biggest Obstacles: This is a space that I don't know a ton about, but to my understanding, the creator economy is very top-heavy, with the vast majority of wealth being accumulated by only those with a massive reach. The group that would benefit the most from Rootnote's product and have the willingness to pay is probably actually smaller than the TAM may suggest. This isn't to say that they are facing an insurmountable hurdle; instead, they need to keep this key customer profile in mind as they continue product development.
Company: Neatsy.AI
One Sentence Description: Neatsy.AI is a mobile application that evaluates foot, ankle, and spine health through an A.I. application supported by telehealth providers.
Highlights: This is an excellent product that uses a standard smartphone camera to scan a body part and provide feedback to orthopedists, creating an easy path for remote patient monitoring and assessment. If accurate, I foresee broad adoption from the healthcare community and expansion into different healthcare specialties.
Biggest Obstacles: Given its regulatory environment, healthcare is generally tricky. I have not tested the product itself, and I don't know enough about efficacy tests, but for Neatsy.AI to succeed, they will have to prove their concept is as good as, if not better than, the in-person interaction with an orthopedist. If it doesn't deliver on this promise, customers will hesitate to use the technology and may steer away from orthopedists who insist on its use. Significant foot and ankle injuries are highly disruptive in a patient's life, and I imagine something with more inelastic demand for top-quality doctors who deliver results.
Company: SoBet
One Sentence Description: SoBet is a sports betting media platform that aims to deliver proprietary content through partnerships with sports betting personalities.
Highlights: Industry Tailwinds. The widespread legalization of Sports Betting is inevitable, and I think Sports Betting content is an enduring megatrend that will only pick up steam as legalization continues.
Biggest Obstacles: Crowded space. There are numerous platforms for sports betting personalities to produce content that will have a far greater reach than SoBet. The company will need to put together an enticing offering or spend a tremendous amount on personality acquisition to have unique proprietary content.
Company: DaVinci Wearables
One Sentence Description: DaVinci Wearables is a FemTech-focused wearable device company creating a sensor integrated into women's underwear or athleisurewear that tracks important metrics surrounding the menstrual cycle.
Highlights: DaVinci has identified a massive unmet need in the market: wearable technology specifically developed for a female consumer. The fact of the matter is females have unique biological metrics that many mainstream wearable device companies often overlook.
Biggest Obstacle: Proof of Technology. To my understanding, the company is still developing the prototype sensor to track the underlying data. As John Doerr from Kleiner Perkins would say, the "white-hot risk" has not been taken off the table, meaning the company's success hinges on proving the technology's efficacy. If DaVinci can show results, I think this will be an attractive target for FemTech, Health and Wellness, and Sports Tech-focused V.C.s.
Company: Conquer
One Sentence Description: Conquer is a marketplace that connects owners or stewards of sports facilities with individuals and teams looking to utilize them. I.E., they are an AirBnB of empty and underutilized courts/fields/rinks.
Highlights: As AirBnB identified however many years ago, Conquer has identified a use for underutilized assets. This is not only an intelligent business strategy but also has a sustainability angle of better utilization of what we have rather than simply producing more.
Biggest Obstacles: Liability risk was the first issue that popped to mind when hearing this company pitch. If someone gets hurt at a rented-out church gymnasium, who would be at risk? Would it be the church or Conquer or the individual organizing the game? The company may have a solution for this, but I can foresee this creating issues with either scaling or signing on event organizers, depending on who carries the legal burden.
Company: JetSweat
One Sentence Description: JetSweat is a platform and software solution that enables boutique fitness studios to stream content directly to their clients when they can't attend class physically.
Highlights: I believe the growth in boutique fitness is here to stay, and JetSweat provides a solution that many studios would pay for to engage with their clientele digitally.
Biggest Obstacles: The appeal of so many boutique fitness offerings is the intimate nature of instructor access and the in-person community atmosphere. A digital channel erodes much of this value. Many holding companies are also already acquiring boutique chains and integrating uniform streaming software (Xponential Fitness, FitLab). This would leave primarily smaller, regional boutique studios as the primary customers of JetSweat.
Company: Ganance
One Sentence Description: Ganance is a sensor that can be attached to any watch to turn it into a fitness-tracking "smartwatch."
Highlights: The design of this product is genius, and it really does seamlessly integrate with any watch interface.
Biggest Obstacles: Depth of technology. I understand the tracker can only currently track steps and some basic heart rate data. So, although this is an excellent product for someone looking to wear a classic, non-smartwatch, I don't know if it provides enough value as a health/fitness product to move the needle. With smartphones being able to track a lot of this data from our pocket, I think the company will need to accelerate the technology to incorporate more of the health metrics consumers of wearables seek (HRV, Oxygen saturation, respiration rate, etc.)
Company: SIQ
One Sentence Summary: SIQ is a tech-enabled basketball and accompanying application that can track shots and shooting performance.
Highlights: I had a chance to test the technology on a court at the NCAA headquarters, and I was impressed by its accuracy and gamified element. When shooting, I could hear the iPad tracking shots in the corner ping with a made or missed shot indicator, giving me a sense of excitement to get more shots up.
Biggest Obstacles: Market Size. To Joel Van Essen circa 2009, this product would be a no-brainer. To most people who play basketball, I'm guessing that tracking shot statistics is not the primary objective of going out to play. There is a market for this product, but I think it could be pretty niche with the most avid basketball and data enthusiasts.
Company: Magpie
One Sentence Summary: Magpie is a SaaS tool that automates pricing, inventory, and sales for sports collectible dealers and sellers.
Highlights: In the words of one of my V.C. mentors, Steve Plume, they are solving an actual business problem, not a manufactured one. Collectible shop owners and dealers have antiquated systems for inventory management, and I see Magpie as a perfect solution to streamline operations.
Biggest Obstacles: Timing: I believe the collectible industry peaked during the COVID-19 pandemic stay-at-home orders when people had time to dig into the old shoeboxes containing their basketball card collection. If this company were raising in 2020, it would have gained significant interest from capital providers. There is still a market, but probably not as inflated or looking at the same growth rates as previously expected.
Company: Wiistream
One Sentence Summary: Wiistream is an OTT technology provider that enables easier streaming for sports teams and leagues.
Highlights: Albeit an eclectic mix of paying customers, Wiistream does have traction with legitimate sports teams and leagues, including the World Baseball Softball Confederation, The Big3, World Dodgeball Federation, Toronto Wolfpack, British Ice Skating, and PaircTV.
Biggest Obstacles: Competition: Wiistream will face off against behemoth incumbents in the streaming space that will have deep pockets to replicate any true technology differentiation. It will be necessary for Wiistream to prove value through its technology development and I.P.
Company: Scout
One Sentence Summary: Scout is a digital family office solution for college and professional athletes that tailors its financial advice to their unique needs.
Highlights: Scout has gained significant traction with household names on the angel investor and partner front. These include Chris Paul, Vernon Davis, Jimmer Fredette, the University of Kentucky, Texas A&M, the University of Iowa, the Las Vegas Raiders, and the NBA G League.
Biggest Obstacles: I know firsthand how competitive the financial advisory space is, increasingly so in digital advisory/FinTech solutions. I believe Scout will need to go above and beyond standard financial advice and continue to tailor its offering to the unique financial needs of athletes. This dramatically reduces the market size but will be the only viable go-to-market strategy.
Company: Highlights App
One Sentence Summary: The Highlights App is a sports content aggregator that lets fans quickly find the highlights of their favorite team or athlete in one place.
Highlights: The team has correctly identified a need for short-form sports content, particularly among younger generations that consume all sports content through short clips rather than watching the games themselves.
Biggest Obstacles: Licensing rights. I'm not sure how they are addressing this, but they will need authority for the legitimate use of the highlights produced on third-party applications. This can be costly and limiting if content acquisition costs are too burdensome.
Company: Crosscourt
One Sentence Summary: Crosscourt is a social club centered around organized, officiated pickup basketball.
Highlights: This team has done a great job identifying the underlying pain point with the existing pickup basketball experience. The lack of organization and officiating is auxiliary to the lack of community, which I think many former high school and college athletes are searching for. Crosscourt gives space for community development and emphasizes this in its marketing materials, which I think has been a similar emphasis for successful fitness brands such as CrossFit and F45.
Biggest Obstacles: Scalability. This is a great business idea but difficult to scale if Crosscourt maintains control of the real estate in which they build their social clubs. The more scalable solution would be a franchise model, but it is tricky to pursue without risking the atmosphere and reputation they have created in their flagship locations. They need to continue to build value above and beyond what a sports league organizer or existing gym location would be able to provide to someone looking for a way to socialize through pickups basketball.
Thanks as always for reading. Stay tuned to this blog for upcoming posts on a deep dive into the Continuous Glucose Monitoring landscape and a part 2 on Emerging Sports Leagues and Properties (See Part One Here).