In the era of oversaturation, overconsumption and information overload, soul searching has become all about spending our time pursuing meaningful endeavors. I wrote an essay for Forbes Business about a “New Age of Patronage”, reflecting on patronage of past and of present, all while giving a sneak peak of the behind the scenes of how funding and investments work nowadays in two very prominent domains, start-ups and emerging sports.
For the curious and most adventurous of us, emerging industries have been most satisfactory to the parts of us who crave meaningfulness and originality. In such endeavors, you find yourself faced with high highs and low lows, a place not many want to be but it sculpts and transforms you.
Market Gaps
Capitalising on the next big thing reqires a keen eye for unmet needs in the market combined with a nose for rising interests of the masses. In the early 18 hundreds, the people at the forefront of investing in technological inventions and development are today’s household names, a technique that has been proven to work time and time again. Take as an example how esports emerged from the depths of the internet to a sport with its own Olympic Esport Games, those who hopped on the esports train early, are driving the wagons now. Inaugural Esport Olympics will be held in Saudi Arabia in 2025.
Early investors who are able to recognize the pattern of a successful start up or an emerging sport like Padel, are the one who hit the jackpot. Padel has been standing out for its blend of socialisation and physical activity, as well as low entry bar, all of which people have been desperate to find during and after the covid19 Pandemic. The sport has successfully garnered enough attention to draw out investors from the four corners of the globe.
Growth Potential
Successful investments often hinge on robust networks that facilitate opportunity discovery, expertise access, and funding. While the quality of these networks directly influences deal flow and investment opportunities, their nature and associated strategies can differ significantly between sectors like tech startups and emerging sports. Investors seek high scalability and societal impact, achieved through network effects in tech and community-building in sports. Sports with low barriers to entry, minimal requirements, and adaptability to various demographics, like skateboarding, martial arts, and padel, have shown significant growth potential. Padel, in particular, has leveraged these characteristics to become the fastest-growing sport of the decade.
Ecosystem Development
In the tech startup world, geographic location significantly influences success, with Silicon Valley leading as the innovation hub due to its access to venture capital, talent, and industry connections. Other global tech centers have emerged, like Estonia, known for its high unicorn-to-population ratio, demonstrating how supportive policies and a digital-first culture can drive innovation. Conversely, emerging sports aren’t as geographically limited; their success depends more on identifying markets with the right mix of disposable income, cultural fit, available space, and cost considerations. This flexibility in location allows for diverse investment opportunities but requires a deep understanding of local market dynamics, as exemplified by Padel’s success in Spain.
Funding Models: Start ups V.S. Emerging Sports
Tech startups and emerging sports employ distinct funding models. Tech startups typically require continuous, large-scale investments to fuel rapid growth, with funding coming in stages from venture capital firms, angel investors, and eventually public markets, aiming for rapid scale and market dominance. In contrast, emerging sports generally need substantial initial investment for equipment, facilities, and land acquisition. Once established, these sports ventures can often become self-funding, focusing on maintenance and gradual organic expansion rather than rapid scaling. Their funding sources are more diverse, including traditional bank loans, debt financing, crowdfunding (as exemplified by Smash Padel), and partnerships with existing sports or leisure facilities.
Atte “Alejandro” Suominen is the Founder and CEO of PADEL1969 – the premium Padel brand. Padel is from Acapulco since 1969.
Click here to read the conclusion and more on Forbes.com
