Democratizing the Sports Industry with Web3, Natanail Stefanov, GRVTY | ETHSofia

Thank you for the warm welcome. It's great to see you. Uh my name is Nathaniel Stephanov and most probably you have never heard my name but what you should know is that I'm the most successful, most prominent and most beloved football player and this is if you ask my mom. Now I never became a professional but I've been working with quite a few professional athletes and I want to tell you about a few huge problem in sports and because I know we're with the at the web 3 conference my desire is to give you some insights if you want to build in the area that you may know what you could do. So first of all I'm going to give you part of our background.

I'm going to share some of the industry pains and as you know the problem for an entrepreneur is a potential solution meaning you could build sort of u technology to address those pains. I'm going to briefly share what we're building with with Gravity and then I'm going to share another few web three opportunities in terms of products meaning what is already going on in the industry as well as what are potential uh business cases that you could be working on. And finally for those of you who are interested to collaborate I'm going to share how we could potentially collaborate. So are there any sports fans here tonight? Actually this morning good great I'm a huge sports fan.

I wanted to become a football player and six years ago when we entered the industry I had no clue about the sports business. So a brief education part for tech companies there are three main pillars if you want to build a business in sports performance which is usually data related to how athletes perform venue management stadiums tickets etc. And fan engagement where we're focused with Gravity is fan engagement but there are opportunities all across the area. So, part of our background, I told you I'm a huge football fan. And back in 2019, I got invited to join a team called King Football.

So, we were building NFTs before there was such a thing as an NFT at all. We were building an app that verifies that the merch you have purchased is authentic so that you could claim it on the blockchain through smart contract and then it could uh preserve its value and then you could resell it and also purchasers would get access to some exclusive content. By the way, Emil, this is the person who built the technology. So, you can talk to him later on.

Uh, yes, their team. And then our first customer was was a Bulgarian player called Deiter Berbatov. You may have heard his name. So, he was our first customer. He also became our co-founder, which was a great success for us.

And then, because first Bulgaria was never the market, it's a small market. We started working with the PFA to have the player of the year award with our technology. But then, CO struck. So, what did we do? Uh some friends of ours called us uh if you know Lefki, the largest Bulgarian football club.

It was about to go bankrupt. So they asked us, well, can't you do something about it? I'm a huge football fan. I'm a huge Lefki fan. So we had to do something about it.

And with our technology, we launched a crowdfunding campaign with King Football and only for 10 days of digital fan activation, we were able to uh do sales and revenue that was roughly 40% of their annual merchandise sales. So that's how we got into uh everything related to fan engagement. But anyhow, as I mentioned, Bulgaria was a small market. And in back in 2022, we were finally able to relocate to the UK. Uh because we knew the problems in football.

We weren't just in football, there were in sports. And we uh spoke to a very prominent tennis manager and he said, "Well, what you're doing is great, but we're tennis. We're not football." So that's why we decided to rebrand to to Gravity. And our big vision was to build a new type of next generation social media, which addresses many of the pains of uh social media, especially for sports.

If you know, have you heard of own the new types of social media? If you haven't heard of own, our initial vision was very close to what they're building right now. But then one of the issues building such a big thing if you know Europe is very B2B minded and everyone told us, "Yeah, you're doing something great. Good luck." But no one was really willing to to invest in us.

So in the meantime, to survive, what were we doing? We were uh working on some investment deals, M&A deals, because our office is in Mayfair. And for those of you who know this, this is the center of of old money. And we've been also working on a few sponsorship deals with uh many prominent agents. So I'm sharing this by the way if you haven't heard today is more it's more a business presentation rather than a technical one.

I want to share some of the opportunities if you want to build in the space things that may be relevant for you. So as I mentioned probably this is the most important part of the presentation which are the industry pains because once you know what are the pains you could uh develop solutions and I'll be glad to share at the end of the presentation what sort of technical products you could do because beyond the vision of gravity there's so many additional opportunities. So first thing is ownership as in pretty much uh any space and we decided to focus on the US market. If you're following college sports it's huge right now. There's a thing called NIL name, image, and likeness because until four years ago, uh, college athletes weren't allowed to be paid anything.

And now they're allowed to to be paid. But still, one of the issues in the industry is that everyone wants to work with the big clubs, big names, and big stars. So even in America, usually it's the top two or three stars from the football, American football and basketball teams that are monetizing anything. Everyone else doesn't get anything. So that's why with Gravity, we're focused on the longtail of of athletes.

Second thing is clubs and athletes don't have access to meaningful data which they could monetize. Right now data is being monetized by larger service providers and I can tell you so many examples. I mean we have uh confidentiality but I can tell you very very big uh teams and and brands and sponsors who have access to tons of data that they can't use or they don't have access to to data at all. Uh the third big issue is sponsorships. Uh usually they aren't very effective because they're not based on data or brand fit.

there based on whom you know meaning uh K is my friend he sponsors me I'm having a good morning logo on my t-shirt but then is this relevant not necessarily it's great for me as an athlete to have his logo on but it's not relevant for him for him for example because they're building in web 3 and I'm building in sports so there's rarely this fit another thing is that many brands prefer to work with influencers and content creators instead of athletes so athletes are losing ground um and I mentioned the stars and athletes. The other thing is uh brands to work with with influencers and focusing on um the longtail. I believe that's also part of of the web 3 promise. And last but not least, uh image monetization. Uh many athletes and clubs have image rights which are worth millions and they can monetize up to 20 or 30% in the best case scenario.

So having this in mind, um I want to give you a Bulgarian example. For example, you may know Nicole Solof. We had a conversation with some of his Bulgarian sponsors. The main reason to fund him is because he's a Bulgarian. They want to support him.

But but there's little return on investment. So right now, if you're a sponsor, it's very hard to measure how effective your sponsorship is. So that's why we decide to focus specifically on athletes, not on clubs, because there's uh and at the end I'm going to uh share some web 3 solutions that are already focused on uh larger teams, but we decided to focus on the long tail of athletes and support them to uh monetize. So how are we doing this? First of all, we decided to relocate to the US because this is the the major market where things are uh developing and focused mostly on on college sports having a very localized model which is also part of the uh web 3 approach.

By the way, something I just want to say have a disclaimer that we're web3 at the back end but we're really web 2.5. We are targeting the mass market which means they don't care what sort of technology you're using. Um, so as Sandra mentioned, our big vision is to democratize the fan engagement, uh, to democratize the the world of sports through blockchain and explainable AI. Basically, our mission is to support athletes to make money from their name, image, and likeness by owning the connection with their fans and audience data.

So, as vague as this may sound, we're starting our first with a fan engagement platform, which does gamified sponsorships with social impact. Let me give you an example. Right now, there are tons of challenges on Tik Tok, which are one way. Now imagine if your favorite star Deit Berbodof, who's also a good basketball player, he may do five consecutive three-pointers and say, "Hey guys, whoever replicates or performs my challenge is going to win a prize from my sponsors, um, Samsung." And the more people participate, the more fun we're going to get for the talented children in Bulgaria.

And now, not only you can participate, but you can win prizes and awards. you could participate in leaderboards, win different points, participate in different challenges, which of course those points could be transferred to specific uh giveaways and rewards and also it could be tokenized at a certain point. So that's what we're doing uh points being tokenized at at a at a time at at a certain point in time. So right now we're building really a super niche fan community app only for your most loyal fans. We support athletes to own their data, the connection with their fans to be able to to monetize it.

That's the initial part. And then we plan to uh continue and work more in terms of sorry um going with supporting them to get sponsorship deals going back into gamification. Um and also in terms of technology uh chain abstraction is what we're following as I mentioned right now we've been until now we've been building uh on initially on right now we're part of the Solana ecosystem but we want to go multi-chain because we believe this is the right way to go for for a business of course we're use utilizing data we're using explainable AI not because of the buzz but because you can very quickly make it for the end user much easier to to support and and address their needs. Now if you want to build in the web3 space uh the this is our approach and we believe it would be very helpful for you as well. First of all having a very local approach.

So instead of going globally we want to work only initiatives in San Francisco only initiatives in New York City only initiatives in Austin so that you could have utilize local data which makes much more sense for for brands and having local outreach. The other thing is gamification. We're focusing on Gen Z and 90% of them regard themselves as being gamers. So, we believe that's the right way to go. And you've seen multiple mini games on Telegram and and other platforms.

And we also want to combine this with with real sports to get young children go out and play some real games, not just stay on on their phones. And last but not least, having social impact, meaning every athlete that we work with is supporting uh a local social initiative that they care for. Yeah, in terms of market um for especially for tech people, I know it's all about technology, but apparently you really innovation is in terms of business model. So, we're applying a blue ocean strategy, applying some models that have been working very successfully in the areas of community engagement, sports platforms and gaming, but build something um which is specific of its own. Now, uh I could very humbly share that very few teams, tech teams in web3 have the access to the sports world that we have.

These are just some of the brands that our team members have been working with. Meaning if you're building something which may be relevant for the sports industry, I'll be glad to discuss at the end. And although we have this access, our approach is bottomup. We want to work with the longtail, with amateur teams, with high school teams, with university teams. Uh if I need to name drop one of the partners, we work, if you know Gary Vineruk, Gary Vee, uh we're working with Viner Sports, which is his sports agency.

uh just to share that we're aiming at the top but starting from from the bottom and we are in touch with some of the Premier League uh foundations and clubs on the social impact bit. Now in our uh one of the questions that we're constantly getting asked is okay are we going to uh tokenize what you're doing? We are getting ready for this uh and we want to make sure that we would use the right moment but playable ads is a big thing which is relevant not just for gravity but for many web 3 uh projects. Uh have you played Pokémon Go? So we've seen that there are great opportunities for fan engagement at stadium.

So the company by the way they're called gravity jack that developed the air engine for Pokémon Go are friends of ours. So we've been having some developments with them as well of course and of course building graph chain with some give back me meme cards at a certain point. So these are uh products that we have parked on purpose because we want to have very strong focus but these are all initiatives that could be built. Uh the reason I share this share this is I want you to have a better understanding of where we're working if you may be interested but apart from this I want to give you a few other examples in the web3 space that are already running. Um so I mentioned the three pillars in fan engagement where we're focused of course the most the most straightforward thing is NFTs and digital collectibles.

Um so if you know Chili's is if you're interested in sports they're building a blockchain there especially for for sports. So you could uh buy different digital memorabilia in digital moments. For example, the NBA topsh shot is such an example. Another one is fan tokens. Uh so is such a platform.

So many of the big clubs are working with them so that me as a fan I could buy a fan token and I could have access to uh exclusive content to uh limited edition items. At a certain point, by the way, some clubs are starting to use to uh allow fans with tokens to participate in club decisions uh which is not that much for for uh global strategy but for smaller initiatives. And by the way, there are a few clubs that are that want to go the DAO way. And the third one is gamification and play to earn. So if you like fantasy because I spoke earlier with a friend that they've been building something in the fantasy space.

SAR is a great example whereby you buy digital cards and you win earn points based on the real-time performance of of those athletes. So there are um more and more initiatives but once again things are still with with top clubs and the longtail the 99% of athletes and clubs there's nothing there. This is the market that we're targeting and we highly recommend for people who want to who want to start at the beginning to go over there as well. Another thing is related to ticketing. You may know this the the issues with counterfight tickets all across the industry.

Um Guts is a is a very interesting example but if you want to have enhanced ticketing once again with exclusive content AR activations at games that's great and also secondary markets whereby the initial issuer of the ticket would keep the value. So there is not going to be black market. This is available in other areas as well but very big in in sports. So right now we've had like the NFL, the Euro Football Cup in 2020. They've experimented, but it's still not mainstream, meaning it's still I wouldn't say it's early, but it's right about the time to start building in this area.

The third one is data management and monetization. So for example, I me I mentioned what we're building with Gravity on commercial data. With sports performance data, athletes, they don't own the data either. So there are a few examples of if they own the data all the companies that are monetizing on top of them could actually share part of of the value added with with with the teams. Uh another thing is uh generated a fan generated content right now as I mentioned as image rights.

If you do a video with my image on YouTube you may monetize it but I won't be monetizing this. So especially for the younger players that's a big thing and Oracle athletes is an interesting platform you may check out. And the final example that I've given are uh I I briefly mentioned some of the novel ways for monetization and and sponsorships. Uh one very cool ways is tokenized sponsorships. As I mentioned, sponsorships aren't very effective.

So building such sort of an opportunity where the fans who see the commercial uh commercials and sponsorships and can participate and are incentivized to give feedback and their data is very interesting uh initiative. And the final one which is I've put it in last place but I personally think it's one of the most interesting is decentralized funding whereby fans participate in funding the clubs. We had this situation with with Lefkan. Many teams that were about to go bankrupt fans help just for the sake of living the club. But if you tokenize the whole the whole model then there's going to be much more commercial value as well.

So an interesting platform is the gods. They've been supporting uh the big three uh basketball initiative in the US. Uh the football club AFC Wimbledon in the UK. So we see more and more initiatives that are implementing uh blockchain and web3 solutions. Now being a mindful of time why we live sports apart of being sports fans numbers don't lie.

Uh sports is a huge market. Many people they tell you if you want to go big you start you got to start from a niche and we have started from a niche but it's a a huge niche. So my call to action to you guys is if you don't what you want to do or what you want to build sports is a is a great place and uh I honestly believe that web3 as a technology could could provide much value for for the industry. Um if you want to join because I've been told by the organizer that it's always good to have a a call to action. Um as a company we've been bootstrapped but we're always open for for some smart investment if you believe in in our mission and our vision.

Uh the second thing is uh software development. As you saw, our vision is very big and we have a small team. So, we're always open to collaborate with teams who uh want to build product in in this area. And finally, all sort of business and partnership opportunities. As I mentioned, we have great access to the market.

So, if you'd like to collaborate, uh ping me, I'll be glad to share either now or on social media. Nothing else. Stephan, I'm pretty social. I'd love to uh get in touch. These are my my contacts also of my business partner in the UK.

We're all over the place, mostly UK and US. And I'm glad now to be at home in Sophie because home is where your heart is. Thank you so much.