Hi there,

Old habits die hard. This Japanese textile factory still uses of punch cards and data cassette tapes to produce textiles.

In this Open Letter:

• Money shot: The Evolution of F1 advertising.

• The chocolate klap, YC’s 50 biggest & Vodacom’s solar burn.

• Startup vanity: 6 Metrics to sanity check (if you wanna make it).

• Celebrating 3000+ signups: Share and get free coffee.

TRENDING NOW

The Evolution of F1 Advertising

There’s BIG money spun by the pinnacle of motorsport…

Formula 1, or simply F1, is raced in some of the most affluent places in the world, by some of the highest-paid sportsmen on the planet. From ticket prices, merchandising, broadcasting rights, and sponsorships, it’s a literal money printer.

With 275 sponsors across the 10 F1 teams in the 2023 season, all dropping anywhere between $1 million to $50 million per year, per sponsor, that amount is astronomical. And given its recent rise in popularity due to Netflix’s Drive to Survive bringing the sport to a whole new generation of fans, it’ll only get bigger.

And where there are eyes, sponsors will follow.

F1 & Sponsors

Back in the day, F1 cars had sponsor logos primarily on the sides and rear wings because this was the most prominent place to put it to be seen by fans and TV cameras trackside. Even non-smokers will remember the famous brand on 7-time-world Champion Michael Schumacher’s Ferrari.

Enter Social Media and The Influencers

With the rise of social media, suddenly F1 teams had a direct line to their fans. And with fans came influencers. From updates on social media to full-length shows on YouTube, these people make a living by commentating on sporting events and have a massive influence on the sport.

Folks like:

• YouTuber Benjamin Daly.

• TikTok influencer Sophia Upton.

• Motorsport channel (and meme connoisseurs) What The F1.

Teams would host these social media influencers, giving them an exclusive back garage view of what happens on a race weekend, including meeting the drivers, seeing the teams in action, and, most importantly, posing with the cars for a pic to share.

And these pics, in front of the cars, would feature the nose cone (the front of the car).

And therein is the opportunity.

The humble nose cone, that no one would think of putting any more logos on beyond the manufacturer and perhaps title sponsor (because the amount of airtime was so little during the race), became a piece of advertising space that would now suddenly be seen by millions.

Well, Halo there innovation…

With the culmination of advanced cameras and angles on the cars, the driver’s view helmet cam and of course the introduction of the Halo (curved bar placed to protect the driver's head), you now had another premier place to put a sponsor logo.

In this past weekend’s British Grand Prix, McLaren driver Lando Norris tested a camera pointed at his pedals and driveshaft. It made for a fascinating look into the use of braking and acceleration during the race.

Which was another chance for the sponsorship team to add a sponsor’s logo to the heels of the driver’s shoes.

The Future of Onboard Sponsors

At the start of the 2023 season, McLaren rolled out a digital sponsor panel, visible from the cockpit cam. Weighing less than a can of Red Bull, it offers the team the ability to change sponsor logos throughout the race.

The Opportunity

Technology is known to offer new angles and insights into our favourite sports. Each of these new angles or new views offers more things to look at and ultimately more advertising space to sell. An often less obvious business model for sports fan tech geeks.

If you’re watching Wimbledon right now you will see this in action when a player disputes whether a ball was called out (or in) correctly by a linesperson. The game will pause and everyone will turn their attention to Hawk-eye to see the flight of the ball and the tech-measured bounce — a juicy advertising space.

What’s more, most sports games you watch these days have a “win predictor” that comes up on the screen ever so often. In years gone by, these have been fairly inaccurate but recently with big data and AI, two things have happened – predictions have become way better and AI/big data companies, like AWS, Microsoft or IBM, love to sponsor that slot.

Back home

Take South African-founded Fancam. Back in 2011, they developed a camera that can take high-resolution, 360-degree photos of stadiums for fans to see themselves in a stadium, at the game. Share this on social or print it for your fridge, either way, it will feature a logo of someone who is paying to be there.

Similarly, a few months ago, we ran a story on South African startup Inrange gamifying the golf driving range experience. Introducing tech to make a driving range more fun also came with the opportunity to add advertising real estate to these games.

Find the angle

South Africa is sport mad – find tech that can either improve the game or improve the fan experience, and there might just be a new angle that can feature a sponsor’s logo.

And with the continued rise of AR & VR’s capabilities (we wrote about Apple’s play in this space), who knows what else could be possible?

Building a new angle or tool for sports? We would love to check it out. Hit reply and let us know.

IN SHORT

🍫 Not so Sweet. Chocolate prices are set to soar as high global cocoa prices and the ongoing energy crisis are klapping local chocolate manufacturers.

🌊 Top spot. Wanna work at one of the Top 50 Y Combinator-alumni companies? YC released a list of their 50 highest revenue-generating companies. Unsurprisingly, the list features Airbnb, Coinbase and Webflow, but it also features one startup operating mainly in Africa, Wave.

🇿🇦 Stillknocks. Local MMA fighter Dricuss du Plessis is set to become the Number 1 contender in the UFC Middleweight division after knocking out Robert Whittaker in the second round of their fight at UF290 over the weekend – extending his UFC win streak to six.

🔥 Roof on fire. Vodacom’s Cape Town HQ had to be evacuated on Sunday after a fire broke out. Fortunately, no injuries were reported and the cause is yet to be determined, but initial speculation by eagle-eyed Twitter detectives point to the solar panels installed on the roof.

💊 No pain. Talk about efficiency, scientists have discovered a way to create (previously expensive and labour-intensive) Ibuprofen and other painkillers for way cheaper with paper industry waste.

­BUILDER’S CORNER

6 Metrics to Sanity Check

Meet Jimmy. Jimmy is a startup founder and the media loves him. They write about him weekly and he has 100k+ followers on social media. Jimmy has raised money pre-launching his product and he wins every single pitch competition there is.

Will Jimmy’s startup be successful? It's impossible to tell. Because all we shared are vanity metrics. Metrics that make you feel good but say nothing about the prospects of the business.

Vanity metrics make part of what we like to call “startup theatre” where people (mostly evident at conferences and events) talk about startup stuff, yet not one is building successful businesses.

Now, vanity metrics aren’t useless, they’re simply misleading – giving founders a false sense of progress. Here are some vanity metrics to be cautious about and good sanity metrics to replace them with:

1. Views & impressions

• Vanity Metric: Page Views / Downloads / Impressions

• Sanity Metric: Average Time on Page / User Engagement Rate

2. User numbers & registrations

• Vanity Metric: Total Users / Registrations

• Sanity Metric: Active Users / Daily Active Users / Monthly Active Users

3. App Store rankings

• Vanity Metric: App Store Rankings

• Sanity Metric: User Retention Rate / Daily Active Users

4. Total signups

• Vanity Metric: Signups

• Sanity Metric: Conversion Rate to Paying Customers

5. Pitch competitions

• Vanity Metric: Pitch Competitions Won

• Sanity Metric: Customer Accounts Won

6. Funding rounds

• Vanity Metric: Raising More Funding

• Sanity Metric: Customer Growth Rate

Have you found any particular vanity metric a sticky one? Did we miss something? Hit reply and let us know.