Selling sports smartly across the globe with an MBA
Selling sports smartly across the globe with an MBA
Once an MBA start up and now the leading sports sponsorship platform in Europe, Sponsoo is expanding further with plans that include the Cambridge Judge community.
Sports sponsorship offers unrivalled opportunities to tell dramatic stories and reach highly engaged audiences. It is a commercial relationship that should work well in sport. But from the muddy grassroots to the Olympic top tier, athletes and sponsors have traditionally struggledto form productive partnerships.
Brands get spammed with requests while sports people are constantly searching for funding to stay in the race.It has been time consuming for both sides, with uncertain outcomes.
Stepping into this fragmented arena with an eye for radical change, Andreas Kitzing (MBA 2013) launched Sponsoo in Hamburg with two friends soon after completing his Cambridge MBA in 2014. Their ambition: to become the trailblazing disruptive matchmaker in a multibillion dollar industry.
“Putting it simply, “says Andreas, Sponsoo’s CEO and Co-founder, “What was needed was an efficient tool, a digital marketplace to bring supply and demand together”.
“The challenge is to make sure our marketplacedelivers for many different types of users, allat the same time. Everyone should have equal access to the professional sports sponsorship market, whether it is an influencer or an advertising manager for a first division Bundesliga club.”
Delivering data-driven expertise
Usingadata and analytic strategy, Sponsoo works like this: a sports project or player can post a free profile and sponsorship offer online. With this information, a matching algorithm helps companies that are searching the database to find the offers that best suit their marketing objectives. Once the deal is done, Sponsoo takes a 20% commission.
“Sponsorship needs to be fully digitised and data based. With our deep insights we can identify target audiences for sponsors better than anyone else. That’s how we provide added value; by finding optimal brand opportunities in a heterogeneous market,” explains Andreas.
“To put it in MBA terms, we are reversing the push process that is still typical in sports sponsorship. So, it is not teams pushing to brands, rather it works on a pull basis from brands to teams and athletes, which is much more convenient for marketing managers.
And of course, the more successful we are, the less time athletes and team managers need to spend on sales and cold calls. They can get on with what they should be doing like training and developing their careers,” adds Andreas.
Number one in Europe and getting ahead of the game
Breaking records in this domain, Sponsoo now connects more than 14,000 athletes, clubs, associations and events with around 3,600 sponsors across 140 countries.
The breadth of Sponsoo’s signings range from amateurs to influencers, from top Esports groups to the Afghan National Women’s Football team. Altogether its players and projects have more than 200 million social media followers.
“Our athletes win medals in the Olympics, and some of our clubs are playing in the Champions League,” says Andreas. In the highly competitive US market where the company is set to expand, more than 500 athletes including college, NFL and MLB professionals have registered so far.
This vast and diverse client list sets Sponsoo apart. “With the largest international portfolio, we can deliver on our promise to identify the perfect sponsorship opportunity for any brand and any marketing objective. This makes us unique in the market. Our US competitors, for example, hardly have any athletes here in Europe,” says Andreas.
Thriving in a competitive landscape and connecting the grassroots to the global
Sports sponsorship is the most commonly preferred form of advertising. BMW, McDonald’s and Red Bull are just some of bluechip companies that Andreas and his team have been facilitating deals with. While targeted sponsorship selection attracts most brands to the platform, McDonald’s chose Sponsoo for another reason.
“It’s the transaction costs. Our mechanism to book and manage sponsorship agreements is extremely efficient and standardised. This helped McDonald’s to partner with 50 amateur clubs in a recent German-wide campaign. They got one invoice and we took care of everything concerning the teams. Without us, the overheads would have been too high to make economic sense with so many suppliers involved.”
“It is rewarding to connect these two worlds together and widen our impact in the community. Amateur clubs are poorly financed, and they have been hit hard in COVID-19 times,” adds Andreas.
Further afield and crossing continents, Sponsoo is supporting other innovative initiatives to sell sports’ unique stories more smartly.
“Take Polytan for example, a German manufacturer of sports surfaces which has made a strategic decision to work with us. We have been able to find a Kenyan sprinter, a British rugby player and a French decathlete so that Polytan can tell its international story in a creative way. Rather than just relying on conventional sponsorship like putting logos in a stadium, Polytan is using new formats to increase consumer recognition.”
A disruptor emerges during the MBA year
Of all the business ideas he had considered during his MBA year, Andreas says Sponsoo certainly wasn’t the easiest to implement, but it had “the most compelling market potential”. He had applied to the Cambridge Judge Business School in order to kickstart a career change from management consultancy to entrepreneurship.
“I love building businesses and projects from scratch,” says Andreas who describes himself as an “entrepreneur first” and “sports enthusiast second.”
Plans for this new venture emerged from brainstorming sessions with friends from different industries, during a home visit to Hamburg.
By this stage Andreas was already taking the Entrepreneurship Concentration and he used the Cambridge MBA Summer Project in the fourth term, to further research the feasibility of this, his most successful start up so far.
“I had already founded two ventures and I was looking to start another. I really enjoyed the entrepreneurial atmosphere and Entrepreneurship Concentration at the Cambridge Judge, not quite realising at the time just how valuable it would turn out to be. Our setup is so much more professional this time and we benefit from those MBA lessons every single day.”
Changing the rules and answers to early challenges
Working first out of his kitchen and then a former storeroom near Hamburg’s red-light district, Andreas paints a scene of ‘Red Bull fuelled hackathons’ during the ‘tough’ early years.
“It was the classic chicken and egg problem. In the beginning you don’t have any teams and you don’t have any sponsors. It is really challenging to try to scale up both sides at the same time.”
With athletes easier to recruit, Sponsoo first started building its wide marketplace with interesting amateur teams. It took longer to overcome some of “the scepticism of the traditional mindset” and secure deals with the likes of Bundesliga clubs, which have made Sponsoo the major disruptor it is today.
“Sheer stamina got us through,” says Andreas.“There were several years of networking and feeding the marketplace before we had enough supply and demand to be really successful. As you grow it gets easier and easier.”
EU grants together with prize money won in business competitions brought in essential financial resources, totalling a six-figure sum, that supported Sponsoo’s initial lift off.
“This equity meant we were able to survive the first phase. When you look at why similar businesses fail at this stage it comes back to funding and how efficiently the money is spent. We always made sure our software developers had reasonable salaries before we paid ourselves, for example.”
“Once the core business started yielding promising results, we got in our first angel investors for the next steps and the steps after that,” Andreas explains. “The learnings from the Venture Capital and Start up Financing courses during the Cambridge MBA certainly helped to impress key investors and put us on the road to success.”
“Also, the CJBS network is awesome. One of my Cambridge classmates, Samuel Harrison, a venture capitalist in Silicon Valley, still serves as an adviser and he invested in the company from the outset. The wider Cambridge Judge alumni community have also been supportive, and I look forward to them playing a role in our future.”
Investing for the future
After celebrating its seventh anniversary this year, Sponsoo is now moving ahead with its next expansion plans. First up is a major funding round which offers the Cambridge MBA community, together with family, sports celebrities and other friends a chance to invest in Sponsoo.
“This is not really about the money,” says Andreas. “It is more about my MBA peers and our sports network becoming more personally involved in the company. We hope they will serve as brand ambassadors, evangelists who open doors and motivate many more decision makers and those in the sports sector to join our platform.”
“It is going to be a lot of fun. We are already talking to a dozen sports people, including some world champions and professionals from different countries. We are bringing in the second component of venture capital companies during a larger official round sometime in the first quarter of 2022.”
The money raised will drive Sponsoo’s “international efforts for faster expansion and commitment in relevant markets,” like the US, UK, Spain, Italy and France.
“We will definitely be looking to hire graduates from the Cambridge Judge community to run these international markets once we have the funding.”
“After all,” adds Andreas “these are super qualified, well educated people from all around the world who are always highly motivated”.