How to eat an aeroplane – Automated sports highlights – A new class of psychedelics – Soccer SPAC – CBT for insomnia – XR wellness – Workouts for seniors – Microdrinks – Sustainable activewear
Week 34
Skin In The Game is a weekly newsletter dedicated to investing in sports. We highlight the startups and investors shaping the future of sports and its adjacent markets.
We also run a regulated startup investment club connecting investors with visionary sports, health, and entertainment startups – a platform for investors, founders, and industry experts to collaborate and co-invest.
*** We’re currently raising a pre-seed round to de-risk sports investing by connecting investors with industry experts. Get in touch to find out more. ***
Confessions
The billionaire investor, founder, philosopher, and survivalist Peter Thiel is famous for asking everyone he interviews the same question: “What important truth do very few people agree with you on?” Here’s mine:
Thinking big is easier than thinking small.
That might sound unlikely, even preposterous, but it’s true. And it’s a game-changer for startup founders looking to raise capital, build products, and delight customers.
To prove the assertion, let’s start by disproving its antithesis. Thinking small is not easy. It is hard. It’s exhausting, in fact. It means entering saturated markets with me-too products that surprise and delight nobody. It means spending a fortune on paid distribution because nobody is telling their friends about your product for free. It means toe-curling conversations with investors who need to see a differentiator to invest in your business. It means a hard day – or decade – at the office, chugging away, never gaining enough escape velocity to take off and soar.
Thinking big changes that. Rather than trying to wrestle a small chunk of an existing market from powerful incumbents, you’re inventing a new market that you can lead and monopolise. It’s okay for this market to be tiny – a monopoly of one, even – provided it has the potential to grow, and grow rapidly. Thinking big gives you a new product category, a narrative that sucks people in, and a shot at acquiring the very best talent. Because big people want to work on big ideas.
As Marc Winn has pointed out, thinking big also creates economies of scale – it takes no more physical labour to think big than to think small, but it creates the kind of operational leverage that drives exponential value creation.
There is another key advantage for founders – thinking big makes raising capital to pursue your objective a lot easier, provided you approach the kind of investors who also think big. These “big investors” only invest in big ideas, big markets, and big founders, because they need to know that if an investment comes off, it can carry the losses of an entire portfolio. That might sound cavalier, but it’s how statistical power laws work – and power laws are the remorseless gravity of venture capital.
To extend the metaphor, let’s think about how the size of an idea – it’s “bigness” – affects the people around it. The laws of physics (and common sense) dictate that in order for a planet to gravitationally attract our bodies it must be bigger than us. Otherwise we would float off into space. Similarly, a startup idea must be big enough to attract people – founders, investors, advisors, employees, partners, and above all, customers. The world that a founder builds needs to be big enough to exert a gravitational pull on its people – to make it hard for people to jump off, or float away in pursuit of something bigger.
Where does big come from? It’s a quirk of human nature that the loftiest ambitions come from the deepest depths of the individual. This means they have a long way to travel. Just thinking big doesn’t work. The most effective founders think big, and act small. They have big goals and take tiny, incremental steps to make them happen. It helps if the process is robust, measurable, replicable.
Back in 2011 Google’s SVP of YouTube, Susan Wojcick, wrote a memo that outlined the company’s 8 Pillars Of Innovation. The first two were, “Have a Mission that Matters” and “Think Big but Start Small”. Google is no longer a startup, but vision + action is a killer combo that acts an engine for massive value creation in the hands of startups and incumbents alike.
Jim Collins has written extensively about the difference between companies that think and act big, and those that don’t. He believes that “good is the enemy of great”. He also coined the expression “Big Hairy Audacious Goals” and defined them as 10-to-30-year goals to progress towards an envisioned future. His conclusion – most successful companies have a focus on a single focal point of long-term effort. In other words, they think big and deal with the fallout:
“Far better to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory, nor defeat.”
Thinking big sets in motion a powerful chain of forces. One of them is the infamous Reality Distortion Field, a phenomenon first described by Bud Tribble of Apple Computer in 1981 to describe Steve Jobs' charisma and its effect on developers working on the Macintosh project. Jobs was able to convince people to believe almost anything with a mix of charm, charisma, bravado, hyperbole, marketing, appeasement, and persistence. He could distort his co-workers' sense of proportion and scales of difficulty and to make them believe that whatever impossible task he had at hand was possible.
The RDF is an important part of the successful startup’s operating system – but crucially, it can only function outside the founder. OpenAI CEO and former head of Y Combinator Sam Altman has said that:
“It’s important that you distort reality for others but not yourself. You have to convince people that your company is primed to be the most important startup of the decade, but you yourself should be paranoid about everything that could go wrong.”
This reminds me of a passage in Heidi Grant Halvorson’s book Succeed, in which she reveals the counter-intuitive secret sauce of success:
“Women who imagined that the path to weight loss would be easy lost an average of twenty-four pounds less than those who imagined themselves having a hard time resisting temptation. Oettingen and her colleagues have found the same pattern when looking at students in search of high-paying jobs after college, at single individuals looking to form lasting romantic relationships, and at seniors recovering from hip replacement surgery. No matter who they are and what they are trying to do, we find that successful people not only have confidence that they will eventually succeed, but are equally confident that they will have a tough time getting there.”
Thinking big doesn’t mean deluding yourself. Quite the opposite. It means being honest about what you need to make big happen. Reality can be distorted for others – but the founder must learn to live in the eye of the hurricane. At times that can be a desolate, lonely, humbling place.
Thinking big, acting small involves soberly recognising challenges, breaking them up into little pieces, and creating a process for digesting them. Like this chap, who ate an entire aeroplane. Eating an aeroplane is obviously a terrifying prospect. So is building a tech unicorn. Both require irrational levels of self-belief. Both require huge sacrifice, and have long-term consequences for you and your family.
In his essay Frighteningly Ambitious Startup Ideas, Paul Graham (himself a frighteningly great writer and invaluable source of wisdom for founders and investors) says that, “The biggest startup ideas are terrifying.” He goes onto explain that, “You'd expect big startup ideas to be attractive, but actually they tend to repel you.” Fear repels us from building big things, investing in big things, doing big things. And the antidote to fear is action. He concludes that,“Empirically, the way to do really big things seems to be to start with deceptively small things.”
For some time now, I’ve been trying to get my head around a big idea and how I could make it happen. At times it felt impossible. Now, with the help of others, I’m breaking it down into digestible pieces. I’m eating the aeroplane. Next week I’ll give you a tour of that flying machine – and where I think it can take us.
Deal flow
📺 A.I. Highlights Startup Lands $100M to Fuel Global Growth – Automated highlights startup WSC Sports is expanding its ambitions after raising a $100M Series D round. The Tel Aviv-founded company currently helps 200 clients around the world– including the NBA, ESPN and YouTube TV – generate game recap videos and shorter clips using software that automatically identifies exciting action. WSC’s tech was used to create 3.4M highlights in 2021.
📹 Tom Brady's Religion of Sports Seeks $50M – Tom Brady’s production company, Religion of Sports, is reportedly looking to raise $50M, which would value the company at $100M. Religion of Sports was founded four years ago and has already produced the Brady documentary “Man in the Arena,” along with the Simone Biles doc “Simone vs. Herself.”
🧠 Y Combinator startup that's creating a new class of psychedelics raises $11.5M from big Silicon Valley investors – Mindstate Design Labs, a preclinical biotech company focused on developing "the next generation of psychedelic-inspired therapeutics", raised an $11.5M seed round to grow its team, develop its platform, and advance its lead MDMA-based compound through clinical trials. The round was led by Initialized Capital and also included investments from Metaplanet Holdings, Negev Capital, Day One Ventures, K50 Ventures, and Page One Ventures. Its angel investors include Max Hodak, who cofounded the neurotechnology company Neuralink with Elon Musk, AngelList's former CEO Naval Ravikant, the cryptocurrency investment firm Paradigm's cofounder Fred Ehrsam, and the Instacart founder Apoorva Mehta, among others.
💰 Esportudo, a Sports Media Startup for Latin Fans, Raises $1.6M – Latino sports media company Esportudo has closed a $1.6M seed round led by Vice Ventures. The round brings Esportudo’s total funding to more than $2.3M.
🔥 Lover App Is The First Sex Therapy App To Be Granted Approval From The U.S Food And Drugs Administration – This news comes on the heels of Lover also closing its latest round of funding, a bridge totaling $2M led by investors including Lerer Hippeau, Manta Ray, Global Founders Capital and FJ Labs.
🕶 TRIPP Acquires Largest VR Meditation Community EvolVR – TRIPP, the fastest-growing XR wellness platform, acquired EvolVR, the world’s first and largest VR live meditation community with over 40,000 participants.
🇳🇿 Silver Lake closes in on deal to take stake in New Zealand All Blacks – The stake is thought to be smaller than the 15% envisaged when the deal was initially mooted just over a year ago (apparently it could involve a stake of not much more than 5%). A deal would be likely to value the All Blacks' commercial rights at more than £1.5B.
⚽️ Soccer-Seeking SPAC With MLB Owner Raises $75M IPO – Counter Press Acquisition, a SPAC seeking a soccer team or other sports business, priced its IPO on the Nasdaq, raising $75M. The blank check business was formed by Hollywood financier Paul Conway and one-time Tampa Bay Rays executive Michael Kalt.
👴 Balanced Secures $6.5M To Modernize Workouts for Older Adults – Balanced, a digital fitness app for older adults, raised $6.5M in a seed round co-led by Founders Fund and Primary Venture Partners. The startup stands to disrupt a market of at-home fitness platforms that often overlooks seniors.
💧 Waterdrop raises 60M euros – Micro-drinks business Waterdrop received 60M euros in capital in a Series B financing round. Lead investor in the round was Temasek, a Singaporean sovereign wealth fund. Existing investors Founders Future and Bitburger Ventures also invested again.
🍳 Zero Acre Farms Raises $37M to Bring an End to Destructive Vegetable Oils – Zero Acre Farms seeks to bring an end to the era of destructive vegetable oils, which have been linked to widespread chronic disease and deforestation. To usher in the day when food around the world is prepared with healthy, more sustainable oils and fats, the company has raised $37M in funding from leading climate and food investors.
⚖️ Nestlé Health Science to acquire PronoKal, expanding its weight management portfolio – Nestlé Health Science has agreed to acquire PronoKal, a leading provider of weight loss and weight management services, from Abac Capital.
👚 Activewear brand TALA raises £4.2m as it woos shoppers fed up with fast fashion – Gen Z-orientated sustainable activewear brand TALA has raised £4.2m in funding with Active Partners and Venrex. Founded by social media influencer Grave Beverley, TALA aims to offer consciousness gym goers an affordable alternative to fast fashion rivals.
👩⚕️ Getlabs Raises $20M to Expand At-Home Lab Appointments Nationwide and Launches API – Getlabs, the leader in providing nationwide infrastructure for remote healthcare delivery, raised $20M in Series A funding. The round was led by Emerson Collective and the Minderoo Foundation, with participation from Tusk Venture Partners, Labcorp, Healthworx, Byers Capital, Anne Wojcicki (co-founder and CEO of 23andMe), Susan Wojcicki (CEO of YouTube), Eric Kinariwala (founder and CEO of Capsule), and Mattieu Gamache-Asselin (founder of Alto Pharmacy).
👨💼 Numan raises $20M debt funding from Kreos Capital, completing its $60.1M Series B – Numan, the leading digital platform for men’s health in Europe, has raised $20M in growth debt to fuel its expansion and meet the growing demand for digital health services in the UK and beyond. The financing was provided by growth debt investor, Kreos Capital. It completes a $60.1M Series B round, which was led by White Star Capital, with participation from Novator, VNV Global, and Anthemis Exponential. It places the company in a leading position in the rapidly growing digital health market, which is expected to reach $657B by 2026.
😴 Dawn Health leverages cognitive behavioral therapy for insomnia to help you sleep better – Dawn Health raised $1.8M in a pre-seed round, led by Kindred Ventures, with Bragiel Brothers, OnDeck’s Runway Fund and individual investors including Lin, Segment co-founder Ilya Volodarsky and Intercom co-founder Eoghan McCabe. That growth will also include expanding the team and rolling out new products.
🧠 Marigold Health Closes $6m in Funding – Digital health startup Marigold Health raised $6m in seed funding led by KdT Ventures and Felicis Ventures. Marigold’s virtual program specializes in using peers, trained individuals in recovery from a substance use or mental health condition, to support others on a similar journey.
💻 League Raises $95M in Series C to Build World’s Leading Health OS Platform – League, the leader in healthcare platform technology, announced that TDM Growth Partners, a global platform investor, led their $95M round, with participation from Workday Ventures and existing investors.
🇪🇸 Spain’s Rosita Longevity, an app that helps seniors be more active, is headed to Florida – Hearts Radiant, a Spanish startup that’s building a “longevity coach” for seniors – with the goal of extending quality of life through app-based personalised coaching designed to combat and even prevent frailty – has closed a seed round of funding as it gears up to launch in the US, eyeing Florida’s 4M+ over 65s.
🇺🇸 The Breakaway, a California-based fitness platform, closes $2.9M in seed funding – Backers includedm among others, General Catalyst, Norwest Venture Partners and Zone 5 Ventures.
📱 Withings acquires health and fitness app 8fit – Withings, the leader in at-home connected health, acquired 8fit, a worldwide health, fitness, and wellness app with more than 40m downloads.
⌗ HealthRhythms and UC Health partner to grow AI-based predictive mental health platform – HealthRhythms closed an oversubscribed $11M seed round led by GSR Ventures and investor Brook Byers, founding member of Kleiner Perkins Caufield & Byers. The syndicate comprised 44 health tech leaders.
📱 Tripledot Studios Raises $116M, Focuses On Acquisitions – Mobile game developer Tripledot Studios raised $116M at a reported $1.4B valuation. The Series B funding round was led by 20VC and included Access Industries, Lightspeed Venture Partners, and Eldridge.
⛓ KKR Eyes Blockchain Gaming with Potential Animoca Investment – Metaverse-focused gaming and investment firm Animoca Brands is closing in on a major boost from private equity firm KKR. The PE firm is in talks to lift Animoca’s latest funding round to $500M from $359M at a $5.4B valuation.
🇪🇸 Gerard Piqué’s launches new sports projects investment company – Investment firm Kosmos is focusing on sports projects.
🇸🇬 MindFi gets $2M seed to create localised mental wellness programs for APAC markets – The Singapore-based company closed an oversubscribed $2M seed round, with participation from returning investors M Venture Partners and Global Founders Capital. Angel investors included Carousell co-founder Marcus Tan, Carro executive Kenji Narushima and Spin co-founder Derrick Ko.
🇬🇧 Sports Loft Invests in Satisfi Labs, Fevo and Slate – London-based sports technology investor Sports Loft announced new investments in AI chatbot provider Satisfi Labs, soccer commerce platform Fevo and content management app Slate. Sports Loft was founded in 2019 by Charlie Greenwood, the former head of strategic planning for Nike’s UK operations.
Some tweets
Good to have the Champions League back… Although last night I sat through 93 minutes of football before doing the couch-potato equivalent of leaving the stadium early to beat the traffic and missing Mbappe’s wonder-strike because I was loading the dishwasher 🤦♂️
Yours in sports,
Ed
—
Ed Rhys
Founder / Skin In The Game
www.skininthegamegroup.com
A favour
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