Hi there,

We’re spicing things up by moving our Thursday newsletter to Fridays – you likey? Speaking of spice, Mr Beast is suing his own burger company and Uber’s CEO has no idea what a trip costs. World’s gone mad.

In this Open Letter:

• The game: Unlocking opportunities in local sports.

• A new VC, glasses for the deaf & SA’s big tech crackdown.

• The sound: Building local niche streaming solutions.

• Poll results: The future of farming.

TRENDING NOW

Carving Out a Slice of Your Local Sports Scene

With or without the Messi…

Sport’s big business. And, despite what we’re told, it’s nowhere near fully capitalised on yet. Seriously, just when you thought it’s all cornered you see something new…

Like when the EU’s Argentinian golden boy moves to America. Sure it makes for great headlines – Lionel Messi moves to David Beckham’s Major League team, Inter Miami, scores two goals in his first match, drawing amazing crowds that include the likes of LeBron, Serena Williams, DJ Khaled and Kim you-know-who.

Even before Messi touched a ball, the marketing and media storm around this was just staggering…

Kind of makes you want to ask why? What’s in this for Messi? Sure Inter Miami and American Soccer in general all benefit hugely from his presence. Think increased kit sales (you all want that Messi jersey, right?) and Apple TV deals. But why does Messi need them?

Obviously, there’s the pay – his $150 million, 2.5-year deal is a slight increase from his old $41m annual at PSG. But that’s not where the big money is. Since his singing, ticket prices have increased by 500%, with some resellers saying they’re selling 28 times more Inter Miami tickets since July.

The big thing is, Messi owns equity in Inter Miami.

And it’s valued at $600m today, but they look pretty much on track to double in the year to come.

The big idea: There’s still so much to leverage in sport

Owning a sports team is more than a status symbol or nice tax write-off. It’s big business, with a whole lot of big brands and egos involved that move slowly and probably miss way more opportunities than they create. The question is, are there opportunities for savvy startups and smaller players to capitalise on?

Sports teams have the following value:

• A captive audience of supporters

• A following during the season

• Big personalities with major influence

• Teams and players that amplify impact if they perform well

And all of these can be leveraged to varying degrees to unlock revenue.

It’s happening locally already

South Africans are football mad. The Soweto Derby draws over 90’000 fans. And tickets to a Kaizer Chiefs’ 94’000-seat stadium go for around R100 each – that’s a cool R9m per match day. Not to mention the 6.5 million who tune in via radio and TV – more sponsorship opportunities.

So big money, yes, but things aren’t always what they seem…

Let’s stick with our Kaizer Chiefs example. Arguably SA’s most famous football club (who else got a random English indie rock band named after them?) and, with 40m fans worldwide, definitely the most supported club in Southern Africa.

But, funny enough, Chiefs is only worth R283 million, roughly half the value of Mamelodi Sundowns’ R544m. So even there is a case for refining and better capitalising on opportunities.

Source: Daily Investor, Wikipedia, club websites.

The local plays

These sports teams and this industry offer an array of opportunities and some less obvious than others.

🎟️ Getting value from the audience: With fanatical supporters, the opportunity is huge to offer ancillary products (backed by existing corporates) leveraging the power of the club’s brand. Examples like Kaizer Chiefs Funeral Cover with Hollard, SIM cards/Mobile offerings with Vodacom, the club magazine, Amakhosi etc. and their counterparts at some of the other big clubs are all great plays.

It’s worth noting that some of these products come and go, suggesting there’s room to really refine and capitalise on this massive opportunity.

🤸‍♂️ Helping the players perform: In professional sports, the difference between winning and losing often comes down to margins. Dr Sherrylle Calder is world-renowned for helping Ernie Els putt better and the likes of Bryan Habana and F1 driver Valtteri Bottas react faster. She put her science into an online platform called EyeGym, and now it's used by sports teams across the world to improve player performance.

Imagine collab-ing with a domain expert to zero in on a niche – physical performance, the mental game or even teamwork and co-op – and packaging that to teams, clubs and eventually even the amateur market.

📻️ Team communication and organisation: Former Springboks Seven’s coach, Paul Treu, is behind the startup Phaseplay. A solution to help sports teams better communicate and organise. Pitch up for training on time, report an injury or niggle, see your training program and chat with the team – say goodbye to disorganised Whatsapp groups!

Moral of the story: Help the team perform better or capitalise on that captive audience, and you might have a proper business on your hands.

Come across a cool SportTech startup? Hit reply and let us know… we are watching this space.

OVER TO YOU

IN SHORT

☀️ Going Solar. Not satisfied with just investing in Sundowns, local billionaire Patrice Motsepe is also investing in sunrises as his investment company African Rainbow Capital (ARC) acquired a minority stake in solar energy company GoSolr.

🐝 Busy Bee. The Competition Commission has been busy these last couple weeks handing down judgements on Apple’s App Store and Google’s Play Store, travel platform Booking.com, online property classified platforms Private Property and Property24, eCommerce leader Takealot, aaaaand UberEats and Mr D (Mr Delivery).

🤑 PropTech Investment. Looks like somebody reads the Open Letter. Back in Jan we wrote about PropTech 2.0. Recently a R200 million VC fund was launched by REdimension Capital to invest in early-stage, innovative PropTech companies that improve how property is developed, managed and engaged with.

🤓 Subtitle Glasses. An Augmented Reality (AR) startup is changing the game for deaf people with their device, TranscribeGlass, which shows subtitles in real-time. The device attaches to a regular pair of glasses and transcribes what it hears onto the wearer's right-hand lens.

🪪 Noah guy? Dreading the queues to renew your driver’s licence? Well, good news might be just down the road. Pending cabinet approval, the validity of SA driver’s licenses could be extended to 8 years. This due in part to the single machine meant to print 120’000 driver’s licence cards per week constantly breaking. So, if you know someone in the cabinet…

­THE THREAD

3 Lyrical Founder Thoughts for Your AI Brain

If your week’s feeling a bit empty it’s probably because you haven’t watched the latest episode of How Would You Build it yet. No, seriously, we got serial builder Catherine Lückhoff from 20fifty talking about everything from localised music streaming to the existentialism of AI. So do yourself a favour and check this out…

Our fave highlights

1. Cracking niche local music streaming
   Remember when we talked about tackling global giants with hyper-local sharing economy solutions? Well, Catherine recounts building a “hair-brained” Afrikaans streaming product in the face of Spotify that was probably just a bit ahead of its time, because today there are players around the world trying to do the same thing.
   
   It makes sense because a high-performing local musician struggles to find value in a pool as big as say Spotify’s, yet they make a decent living with their content at home. One example is a reported millions of Nigerians that exclusively listen to Nigerian gospel, and would struggle to find a home on something like Spotify.

   It’s a tough and often expensive gig. But there’s reason to believe the big distributors are more open to the idea now – think how Netflix’s expansion plan is basically all local content.
   
   Catch that discussion here.
   

2. Blockchain could help solve a lot of those music woes
   Since the big thing to solve around music and content is delivering it to people – record companies in the 70s–90s, the Spotifys of today – Blockchain can be a handy solution for finding new ways to trade and deliver content (get the insights here).
   
   Especially, as Catherine suggests here, if Blockchain can help usher in a new way of tracking engagement – the current algorithms’ focus on total plays is actually a bit broken, and definitely part of the reason the local/niche muso battles to unlock value on major platforms.
   

3. AI unlocks a lot of potential for creatives
   In an industry so fueled by passion – people recording themselves in front of makeshift green screens with a dream of sharing their vision with the world – Ai tools can really help redistribute a lot of creative power – get the AI insights here.

There’s also some killer advice for non-technical founders and some predictions on what’s next for AI.

Building something in music, content, blockchain or AI? Hit reply so we can share…

Or if podcast app is your vibe, catch them here:

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THE RESULTS

Well, whaddya know… We asked earlier this week what you think the future of farming is. And 53% of us want to “bring the farm into the city” and literally no one wants an AI to make any decisions on their little patch of heaven.

🟨🟨⬜️⬜️⬜️⬜️ 🚁 Spraying drones. (20%)
⬜️⬜️⬜️⬜️⬜️⬜️ 🌾 Robot harvesters (Edward Scissorhands style). (7%) ⬜️⬜️⬜️⬜️⬜️⬜️ 🤖 AI for decision making. (0%)
🟨🟨⬜️⬜️⬜️⬜️ 🛰️ Drought-control satellites. (20%)
🟩🟩🟩🟩🟩🟩 🏙️ Bringing the farm into the city (53%)