Atte “Alejandro” Suominen is the Founder and CEO of PADEL1969 – the premium Padel brand. Padel is from Acapulco since 1969.
Throughout history, the role of patrons has been pivotal, helping fund entire movements that have changed the course of history.
In contemporary business and entertainment, savvy investors and entrepreneurs are constantly on the lookout for the next big thing. For the modern patron—whether in arts, sports or tech—a new paradigm presents itself. While many focus on tech startups, there is a parallel universe of adventurous investors putting their money into emerging sports.
As we delve into the world of emerging industries, I think you’ll see that the principles guiding successful startup investments can be surprisingly applicable to identifying and capitalizing on up-and-coming sports trends.
Recognizing Early Trends And Market Gaps
Currently, the popular spotlight focuses on individuals rather than collectives. In the arts, blockbuster films often rely on the star power of a single actor rather than the chemistry of an ensemble cast. In the tech industry, pioneer entrepreneurs have become as recognizable as their company logos, with investors backing up charismatic personalities, not just ideas. Similarly, in sports, fanatics have moved away from teams to cult followings of individual athletes.
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Capitalizing on the next big thing requires a keen eye for unmet needs in the market combined with a nose for the rising interests of the masses. For example, consider how e-sports emerged from a niche hobby to a billion-dollar industry. Early investors who recognized the potential of competitive gaming hit the jackpot.
Similarly, in the physical sports world, I believe we’re seeing a rise in activities that blend fitness with social interaction and accessibility. This includes padel and pickleball, which both emerged as popular ways to get out and move during the pandemic and filled a market gap thanks to intuitive investors who helped facilitate them.
Assess Scalability And Growth Potential
Successful investments, regardless of the sector, are often built on the foundation of robust networks. These networks serve as conduits for discovering opportunities, accessing expertise, and securing funding through various channels, including different types of business angels.
The quality and extent of an investor’s network directly impact the volume and caliber of opportunities. Simply put, better connections lead to better investment opportunities. However, the nature of these networks and the investment strategies they can facilitate vary significantly between sectors.
Investors tend to look for high scalability and societal impact. In the tech world, this is achieved by leveraging network effects; the more people use the product, the more popular it is and the bigger the societal impact it has.
On the other hand, sports rely on building communities around the activity, which happens only if the sport can be easily spread across demographics and geographies. Take, for example, skateboarding and martial arts. Both share low barriers to entry for participants, minimal equipment or space requirements, potential for casual and competitive play and adaptability to various age groups and skill levels. These are the same things that can be found in padel, and it’s these qualities we largely have to thank for its rise in popularity. Therefore, I recommend you look for things like accessibility, versatility and broad appeal as key indicators for potential sports investments.
Invest In Infrastructure And Ecosystem Development
In the tech startup ecosystem, geographic location can play a crucial role in a company’s potential for success. Silicon Valley, for instance, remains the epicenter of tech innovation, offering unparalleled access to venture capital, talent and industry connections.
However, other tech hubs have emerged globally, each with its unique strengths. Estonia, for example, has garnered attention for its high rate of unicorns (privately-owned startup companies valued at over $1 billion) relative to its population size, showcasing how ecosystems are conducive to innovation, i.e., how supportive government policies and a digital-first culture can foster innovation.
Emerging sports, on the other hand, may not be as geographically constrained. Their success often depends more on identifying markets with the right combination of disposable income, cultural fit and available space for facilities. This difference allows for more flexibility in choosing locations for investment, but it also requires a keen understanding of local market dynamics. For example, padel did well in Spain because of its relative cheapness and social elements.
Funding Models And Capital Requirements
The funding models for tech startups and emerging sports differ significantly. Tech startups often require continuous, large-scale investments to fuel rapid growth and development. Funding typically comes in stages (seed, series A, series B, etc.) from venture capital firms, angel investors and, eventually, public markets. The goal is often to achieve rapid scale and market dominance, which requires significant ongoing capital infusion.
Emerging sports, on the other hand, generally require a substantial initial investment for equipment, facilities and land acquisition. Once established, though, companies can become self-funded, focusing on maintenance and gradual organic expansion rather than rapid scaling. Funding models can be more diverse, including banks and debt financing, crowdfunding and partnerships with existing sports or leisure facilities.
Investment Strategies And Risk Profiles
Given these differences, investment strategies must be tailored to the specific needs and characteristics of each sector. For tech startups, investors often spread risk across a portfolio of companies, expecting a few big winners to offset losses. They focus on scalability, market size and potential for disruptive innovation. Exit strategies typically involve acquisitions or IPOs.
For emerging sports, investment may focus more on specific projects or facilities. Success is often measured by steady growth in participation and revenue rather than exponential scaling. Exit strategies might involve mergers and acquisitions and selling franchises or facilities.
Conclusion
The ability to identify and capitalize on growth areas, build communities and scale operations efficiently are skills that translate across industries. As you consider your next venture or investment, keep an eye on the world of emerging sports—you might just discover the next unicorn hiding on a local padel court.
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