Last November, the Los Angeles Dodgers completed a first-of-its-kind initiative: A startup accelerator program managed and supported by a professional sports team. The Dodgers ran their accelerator program in collaboration with R/GA, an advertising agency involved in similar programs outside of sports.
Such accelerators are common in the world of startups, with small companies gaining access to a mix of support, mentorship and funding that can bring their product or service to the next level. The Dodgers' program featured a twist: It selected 10 companies offering different products and applications within the world of sports, and provided them with three months of support from a professional sports franchise.
Mere acceptance into the Dodgers' accelerator served as an accomplishment in its own right, and a tacit endorsement from a critical source: One of the largest, most valuable franchises in American sports.
The Dodgers selected a variety of companies providing a range of services related to different aspects of the sports experience, including a mobile point-of-sale system for venues, an analytics platform for daily fantasy sports, and a social network designed to help coaches discover recruits and prospects.
It's clear why the Dodgers are involved: Sports tech is in high demand across the industry, and its potential revenues are through the roof. By fostering companies through such an accelerator program, the Dodgers not only earn the opportunity to invest in those products, but they gain early access and insight into how that technology could revolutionize their industry -- not just on the playing field or at the stadium, but every single aspect of sports.
For Kai Sato, co-founder of the sports social network FieldLevel, the Dodgers' accelerator program is just the beginning. Once teams recognize the opportunity in sports tech -- as both consumers of products and investors of startups -- he think they'll be tripping over themselves to get involved.
"It's already happening," Sato said. "We've been approached by several companies that are running similar types of initiatives for pro teams. It comes down to vertical integration. ... No question, everyone in the sports world really wants to take notice."
Sato points out that Cleveland Cavaliers owner Dan Gilbert helped launch Courtside Ventures, a $35 million venture capital fund focused on investments into technology and media, with an emphasis on sports. Other tech billionaires now in the professional sports world, such as Dallas Mavericks owner Mark Cuban, already possess the expertise on both sides of the industry to oversee the merging of sports and tech.
It is fair to compare the upcoming wave of sports tech adoption to the recent tidal force of sabermetrics in sports. While teams might not be able to play their tech strategy as close to the vest as their analytics game -- teams are notoriously secretive about how they quantify players and use next-level data to generate insights -- there are still plenty of benefits for teams to invest in nurturing sports tech themselves, instead of waiting for other teams to develop that tech and make it available to the masses.
For one, the cost of providing funding and support to a startup can be a cheaper means of acquiring tech services than entering into a formal agreement. Teams can use some of their in-house resources to provide valuable support to a startup, and if the company ends up flopping, teams aren't out nearly as much as if they entered a partnership or, worse, outright purchased the entire company.
And, as the Dodgers are demonstrating, there's a fair deal of promotional value in being a team at the forefront of innovation. In total, the Dodgers provided $1.2 million in funding support to the 10 companies selected to its accelerator program. The value of those services, and associations with those up-and-coming products, is likely to prove well worth the investment.
In the case of FieldLevel, the Dodgers didn't even have it apply -- they asked the company to be involved. Sato says that its social networking platform, which connects high school and college coaches, as well as scouts for professional baseball teams, has already been utilized by tens of thousands of coaches and schools around the world. Seven Major League Baseball teams also use FieldLevel to assist in their scouting.
The technology's design is to improve recruiting and scouting so that coaches are able to dig up those diamonds in the rough. He references American Samoa, which churns out NFL athletes at a higher percentage than any other part of the world. Building a presence there is critical for college coaches, but traveling to American Samoa constitutes a lot of time and money.
FieldLevel serves as a platform for building and nurturing those relationships, making the tiny island territory more accessible. Coaches are better able to find recruits, and recruits have a valuable outlet for making themselves findable.
"We saw a pain point where there's millions of kids who want to play college sports," Sato said. "It's a very trying confusing and disappointing process. How do you show up on the right coach's radar?"
Pro baseball teams face the same struggle, particularly when scouting in less-developed countries. As a sports tech tool, it's already improving talent acquisition for college and professional teams, and demonstrating its value to potential partners like the Dodgers. And yet, it's just one niche product among a sea of opportunity.
Sports teams aren't the only ones cashing in; players see where sports tech is headed, too. Carmelo Anthony founded Melo7 Tech Partners to build an investment presence in the tech world, and Stephen Curry is working with his former college roommate to develop their own social startup.
If the world of sports tech is underdeveloped to this point, it's about to change in a big way. The Dodgers' accelerator is just one of many franchise-led efforts fans can expect to see, and the fruits of those new labors will be seen in everything from the players on court, to the way you purchase and exchange tickets, to the way you enter a stadium and set your fantasy lineups for that day.
In the end, though, Kato says all the development -- and the success or failure of any given venture -- all boils down to a simple objective: Gathering and understanding data.
"There's so much data out there," Kato says. "Maybe too much. Then [startups] have to decipher between high- and low-quality data. All that stuff.
"At the end of the day, sports tech is a relationship business. It's a sales process. It's about exchanging information."