Why Sport Athletes are like Start-ups

The world of elite sport, and the life of an elite athlete can in many ways be likened to the world of a startup. An underlying element of extreme uncertainty, where the slightest false, unfortunate or unlucky move could end in utter devastation is the reality both parties face.This, in combination with numerous other variables align to draw clear synergies between these two career paths, and also help to dictate how these ‘talents’ can be nurtured in order to maximise their lifetime value.As it stands there is another clear synergy that can be drawn in this context, which is the somewhat unfortunate similarity between the behaviours portrayed by public market investors and athlete management tactics often applied within a team environment.For the most part, public market investors optimise for short term or near real time value where an asset is an interchangeable component that exists within a larger portfolio designed to achieve a desired result.Similarly, teams optimise their athletes for short term, or length of contract value where the athlete, or asset, is an interchangeable component that exists within a larger team designed to achieve a desired result.

What this means is that the public market investor takes a portfolio-centric, rather than asset-centric view. This can also be the case within elite sport, where a team-centric rather than athlete-centric view is regularly taken.

This of course isn’t always the case, however is certainly visible in many instances across various sports.

I would argue that rather than optimising for the short-term value of an athlete, the view and tactics applied to athlete management, performance enhancement and injury prevention should be designed to optimise their ‘lifetime value.’

Drawing back to my initial comparison between an athlete and a startup, this is much more similar to the view taken by many venture capitalists, where maximising the lifetime value of an asset is the primary objective.

This is the very reason why athletes are like startups.

An athlete, much like a startup, is a constantly evolving being, and as we’ve often seen, optimising for short-term gain often detracts from the overarching or ‘lifetime objectives’ that should remain the focal point.

Putting it in perspective, the average career of an NFL player is only 3.5 years, for an NBA player it’s 4.8 years and for an EPL player it’s 8 years.

In this context I ponder many questions, but taking a macro-view, the most important is likely; by taking a more athlete-centric rather than team-centric view to performance or career optimisation, would that lead to better career longevity and increased career value for an individual athlete?

The obvious follow on from that surrounds the value-add of this increased athlete-centric focus to the team in question and for that matter, the entire commercial model that’s associated with that athlete and team.

Athletes exist at the very front and centre of sport, just as startups sit at the very front and centre of much of the world’s new value creation. If these ‘assets’ are to achieve their optimal value, they must be nurtured and this support must be delivered in a highly tailored, individual manner, regardless of the environment they operate in.

There is no one size fits all and in the case of a startup, it’s simply not viable for the VC firm to try and optimise a startup to directly align with the objectified internal rate of return. Instead they focus on optimising the unique value potential the startup has, letting it run its course and hopefully culminating in some form of liquidity event.

In team sports, it is likely, however counterintuitive or contradictory it may seem, that the optimisation of individual athletes, within their unique and specified contexts, and constantly driving towards the lifetime value of the athlete will yield the greatest results.

Rather than an interchangeable piece of a puzzle, an athlete is a unique and valuable asset.

Rather than seeking to fit a ‘role,’ an athlete’s unique value and the ‘value potential’ that they exhibit can help forge the exact or evolving role they can play.

For many, this athlete-centric model is nothing new, however generally, it’s far from the norm.