Finding the right business model and leveraging networks Assessment Answer

Part 1

How do Hawkins’ and Bignell’s business models differ now from when they started their companies in 2003 and 2007 respectively?

The initial phase of Hawkin’s business was affected by market conditions. The main emphasis was on paying the agencies, there were two changes in the business model. The first change was to own products like selling sponsorship, selling tickets and selling IP. The second big change was due to the 2008 banking crisis (Duginan, 2023), where the fee-based model was shifted to self-generating income.

Initially, the business of Bignell followed a fixed monthly fee. Earlier the company was more focused on what the client was asking to do. The change which has been adopted by the company is the use of service-level agreements. Furthermore, the attention has been shifted more to price strategies.

What are Hawkins’ and Bignell’s views on cash flow, revenue and profit? Which was most important to them at the start of their businesses and has this importance shifted?

Hawkin believes that cash flow for a start-up company is difficult to generate in a very short period. The cash flow is regarded as important for the business. Profit becomes important when the business starts maturing the primary focus of Hawkin is on personal development.

The opinion of Bignell was that the cashflow and profit were the two most important elements of the business. In the consideration of revenue, it was regarded as less important. The cash flow is important for survival whereas the profit is necessary to continue the business. Cash flow is known as the strongest financial measure (Boxstorm, 2023).

How would you summarise Hawkins’ and Bignell’s thoughts around the owner of a start-up paying themselves versus reinvesting back into their businesses?

According to the interview conducted, it can be identified that Hawkin recognised investment in the business as an investment in one's own well-being. The salary which an owner withdraws should be necessary for one's survival. The contribution should be made in the form of hard work to grow the business.

The owner of XL Communication agrees with the statement, Bignell suggests a balance between paying the owner and reinvesting the amount in business. The basic reason defined by Bignell is that the owner is not doing a charity and the business needs funds to grow

How did Hawkins manage to cut costs while capitalising on the buzz around the hosting of the London 2012 Olympic and Paralympic Games?

The costs for London 2012 Olympics were managed through the use of a hybrid model, the income was generated through a subscription-based model and a fee-based model. The fee-based model included events, conferences and networking. On the other hand, the subscription-based model included intelligence services (Olympics, 2012)

Hawkins talks about the CPD (continuing professional development) aspect of her working life. What do you think the advantages or disadvantages of such an approach are, and can you envisage wanting or being able to do that within your own new sports venture (or within a venture, you are familiar with?) If so, what would your ideal CPD activity be?

CPD stands for Continuing professional development. The improvement which takes place in one's professional conduct is known as CPD. The main focus of CPD is that it develops the capability of the professional. The benefits which are provided by CPD help the professionals to be up to date. It improves skills and knowledge. It also increases the confidence level. It enhances the ability to deal with new challenges (CIPD, 2023).

The disadvantages of CPD that the professionals might experience are payment concerns and time constraints. The payment concerns are regarding the affordability of CPD. The training event of CPD is not affordable for all the employees of the business, thus it becomes a disadvantage of CPD. A person who enrols in its training is obligated to complete a few hours of CPD. The time requirement may not be fulfilled (Janneh, 2022). The application of CPD should be executed in a start-up business as a new business requires to grow, and CPD will provide the right strength required.

PART 2

Now that you’ve watched and considered the point of view of two experts we’ve provided for you, we’d like you to find your own. Search for interviews (text or video) with sports industry professionals from your local context, where they consider how they monetised their own start-up. Share your findings

An interview with Blake Lawerence, who is the co-founder and CEO of Opendorse. It is a company which serves as a support to the lifecycle of athletes. It is the company which helps the athletes to build their brand and provide access to their photos and videos. It first got popular among students. Now it is a premium brand which is partnered with Pepsi, Coca-cola, Velveeta, Toyota etc (Fortune, 2023). The CEO was himself a student-athlete so he was able to convert the idea into a business. The competitiveness within him, lead him so far in this business. The CEO of the company explained how he was able to make Opendorse company such a big brand. Another important point which is described by him is the ability to recognise opportunities which no other competitor can recognise. In his opinion, the start-up is a mental exercise where the entrepreneur can imagine those things which others can not see. The CEO is very passionate about including those people who have a mindset of creative thinking. The CEO gives huge importance to the change which might occur in the business market. The business should focus on such changes and all attempts should be made to address those changes. In view of the CEO, the sports industry is a difficult sector. A lot of effort is required to be successful in this industry. The CEO explained the importance of partnership. For any start-up sports company, it is important to build a partnership with a recognised company as it might provide some validation and credibility. The partnership is also beneficial at the time of making decisions. The hurdles which are faced by many of the firms were not faced by his company as the company had the ability to solve their problems. The CEO encourages others to have good relationships in the industry because, in the time of difficult situations, these relationships will be a good help (Mears, 2023).

 In another interview, Blake Lawrence defines that the main focus of the company is on providing what the athlete wants. The needs of customers should be the baseline of the business. He believes that the understanding of his customer's requirements is somewhere driven by his own understanding as an athlete. In his opinion, the company is not made within a year, it needs decades of time. His company has spent a decade building what the company is today. The has given importance to the use of new technologies and has stated that they use the Saas-enabled marketplace business model (SBJ, 2021).

 Blake Lawrence knew the needs and wants of the athletes so he was able to make such a company which served the right purpose in the market. According to the experience of the CEO, the first attempt may not be that much successful but it may provide some learning and those learning can provide new opportunities for the growth of the business. One should be encouraged in all phases of the business (Weiner, 2020). 

Discussion: Revenue streams

Some of the specific revenue streams for drone racing that are mentioned or implied based on the four articles are:

Content Creation and Online Streaming: The article in The New Yorker mentions that drone racing events can be streamed online and used to create engaging content about the sport, which can bring in money through sponsorships, subscriptions, and advertisements (Chapman, 2016).

Live Events and Ticket Sales: One article takes note of the fact that live drone racing occasions can draw in enormous groups and create income through ticket deals, stock deals, and other related exercises.

Sponsorship and advertising: According to another article, drone racing has the potential to attract sponsors, and firms such as Red Bull have previously sponsored drone racing events. Advertising may also be included in drone racing events, for example, by branding the drones themselves.

Licensing and franchising: Establishing a professional drone racing league or tournament may lead to licensing and franchising prospects. Revenue can be generated by licensing the brand and format to regional or worldwide companies through licensing fees and royalties.

Media rights and broadcasting: Drone racing has signed a deal with Sky to be broadcast on UK television, according to the Independent article (Frazier, 2018). This demonstrates the potential for income through permitting concurrences with TV stations or streaming stages, where the game can acquire income from broadcasting privileges, promoting during broadcasts, and sponsorships attached to media inclusion.

Drone Deals and Equipment: Specialised racing drones and related equipment are in high demand as a result of the rise in drone racing. By selling racing drones, spare parts, accessories, and upgrades to participants and enthusiasts, drone manufacturers and retailers stand to gain. As the sport gains popularity, the market for racing drones and related equipment may grow.

Reference

Boxstorm, (2023). Cash flow vs profit vs revenue: what’s the difference? Retrieved from https://www.boxstorm.com/articles/what-is-the-difference-between-profits-revenue-and-cash-flow/

Chapman, B. ‘Drone racing comes to UK television, after Sky deal’, Independent 15 September 2016 p.57. https://books.google.co.in/books?hl=en&lr=&id=zz8lDwAAQBAJ&oi=fnd&pg=PP1&dq=%E2%80%98Drone+racing+comes+to+UK+television,+after+Sky+deal&ots=JZZziFBhOs&sig=1sxsrqb3EfrxCu_gD31e3si5jSo&redir_esc=y#v=onepage&q=%E2%80%98Drone%20racing%20comes%20to%20UK%20television%2C%20after%20Sky%20deal&f=false

CIPD. (2023). About CPD. Retrieved from https://www.cipd.org/en/learning/cpd/about/

Duignan, B. (2023). The financial crisis of 2007-08. Retrieved from https://www.britannica.com/event/financial-crisis-of-2007-2008 

Fortune 2023. Fortune 500. Retrieved from https://fortune.com/ranking/fortune500/

Frazier, I. ‘Airborne: Drone racing takes screen lovers back into the actual world’, New Yorker 93(47) 5 February 2018. 

Janneh, I. (2022). How-To: Understand the Advantages and Disadvantages of CPD. Retrieved from https://www.cpdonline.tv/post/how-to-understand-the-advantages-and-disadvantages-of-cpd

Mears, J. (2016). Start-up Success in Sports: An Interview with Opendorse CEO Blake Lawrence. Retrieved from https://frontofficesports.com/start-up-success-in-sports-an-interview-with-opendorse-ceo-blake-lawrence/

Olympic (2012). About the games. Retrieved from https://olympics.com/en/olympic-games/london-2012

SBJ, (2021). Q&A With Opendorse CEO Blake Lawrence: The Company's Crucial for NIL Because ‘99 Percent of Student-Athletes Don’t Have Agents’. Retrieved from https://www.sportsbusinessjournal.com/Daily/Issues/2021/12/08/Technology/q-and-a-with-opendorses-blake-lawrence-hes-here-because-99-percent-of-student-athletes-dont-have-agents

Weiner, Y. (2020). Blake Lawrence: 5 Things I Wish Someone Told Me Before I Founded Opendorse. Retrieved from https://medium.com/authority-magazine/blake-lawrence-5-things-i-wish-someone-told-me-before-i-founded-opendorse-f633ce03a0a1

‘Meet the next sport of the modern age: Drone racing’, New Delhi Times, 4 May 2016. https://www.khaleejtimes.com/business/meet-the-next-sport-of-the-modern-age-drone-racing

‘Whizz kids; Drone-racing’, The Economist 418(8976) 13 February 2016. https://www.economist.com/business/2016/02/13/whizz-kids

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