By speaking to lots of small sports clubs, we realized there was a digital revolution happening in sports technology but most of the providers didn’t have the skills or time to build their own online presence. We started to think about how we could help them to manage their visibility, reduce administration, attract new customers and members and offer more to existing ones.
Sports is a booming and high growth industry and existing software providers have weaknesses in multiple areas; Mindbodyonline (NASDAQ:MB, ~$1B) is expensive, not optimised for mobile and doesn’t provide much more than a B2B booking platform; Zingfit is a much smaller US provider with a much less mature offering. Bookingbug is a UK provider and very general purpose, so not focused on providing an integrated service for activities – and is also a pure B2B platform.
We founded Makesweat in October 2016 and it is now in use by over 10 amateur & commercial providers in the UK, including events running in Australia and the US. Makesweat powers the growing sports startup ‘Rabble’ (joinrabble.com) and has just been selected by Badminton England (beating BookingBug) to provide service at their Milton Keynes base and as an offering to their national clubs. It is also proven and in-use with a complimentary therapy centre, running clubs and triathlon clubs.
Makesweat’s central service is a very easy to setup and use booking system, which integrates easily with a provider’s website. It earns a fee of 2-3% of all card payment through the platform. We’ve done everything possible to reduce friction and barriers to entry onto the platform, such as removing up-front and monthly costs. Makesweat provides a number of complimentary services; membership services including plastic membership card printing; a one-stop, fixed fee website development package; a B2C private social platform for club members to encourage retention; various value-add feature such as high-scores and kudos (giving ‘thumbs up’).
Makesweat has grown by word of mouth and within the networks around the London startup scene, and Makesweat is now resident in the London Sport – House of Sport tech incubator and supported by London Sport. The sales strategy for the first 12-24 months will involve simultaneous direct targeted outbound contact with potential customers in the following segments and specific sales materials per segment, customisable for the particular activity.
- Existing community sports clubs; badminton, running, potentially squash, tennis, zumba etc. These clubs tend to have similar challenges & drivers; a committee with limited time to enact changes; a lack of new capital funding; relatively high money turnover. There are no other technology providers actively targeting this segment for session & facility booking. This segment includes working directly with NGBs. Makesweat has multiple customers in this segment.
- New & existing commercial providers in the ‘wellness’ segment; this is a direct challenge to Mindbodyonline’s customer base. There is a high churn of instructors in wellness and many existing providers that are yet to have a solid online presence. Makesweat is already working with The Healthworks, a wellness provider in Walthamstow.
- Sports startups; innovative providers such as Rabble and Queen of the Mountain are already using Makesweat (Rabble having moved away from Zingfit.)
Other segments to not target directly (but monitor and adapt strategy if effective)
- School and under 18 clubs that require a safe service and payment by parents and guardians.
- Gyms, spin studios, leisure centres; there are other providers targetting this sector.
Sales structure will be between 2-5 sales agents focused on cold calling and visiting customers. We’ve identified the market and customer profiles for the food tech startup Zenchef are very similar to Makesweat, so we intend to adopt a similar strategy.
Makesweat currently has a projected turnover of £300,000 of with gross profit (after card processing fees) of £4,500 per year. This figure is lower than the intended 2% as discounts were necessary to attract initial large providers.
- Most sports clubs & providers have turnovers of 10 – 150k, so we’ll use a median figure of 50k turnover leading to a likely gross profit per customer of £1,000 per year.
- Junior & graduate sales agents will cost around £25,000 per year
- 2 sales agents in year 1. 5 sales agents in year 2. 10 sales agents in year 3.
- Agents will make around 15 calls per day (1 per 30 minutes)
- Each call has a 5% conversion rate to a paying customer
- There will be a six month lag from calling a customer to receiving revenue from them
- Sales agents will be home or incubator based
We anticipate that once the product is more widely known, clubs will ‘self-adopt’ and the platform is optimised to help clubs on-board by themselves.
- First year profit of £2,290 after card cost & pay for sales agents (company turnover of £2.6M)
- Second year profit of £614,000 after staff costs on £33.2M turnover
- Third year profit of £1.8M after staff costs on £90.4M turnover