Start-ups

How this basketball start-up raised millions of dollars from investors including David Stern and Magic Johnson

ShotTracker's 'enabled' basketballs
ShotTracker

"If you don't shoot you don't score," entrepreneur Davyeon Ross recently told CNBC.

For Ross, that isn't just a cliché — it's a mantra that's helped him use his love of basketball to secure more than $25 million from investors including NBA legends David Stern and Magic Johnson.

Ross is the co-founder of ShotTracker, a start-up developing new technology to help basketball players, coaches and fans track individual and team performance on the court. The system, currently being used by more than 60 college basketball programs, incorporates wearable devices, "enabled" basketballs and on-court sensors to instantly feed more than 70 statistics — such as shot count and points won — to its users.

Raised in Trinidad and Tobago, Ross came to the U.S. on a basketball scholarship in 1996, studying for his math and computer science degree at Benedictine College before landing a job as a software engineer at Sprint.

ShotTracker

"After that, I traveled while working in software — but I always had a love for basketball," he told CNBC in a phone call. "My current partner called me one day to ask how I used to track my performance when I was playing at college. He was trying to measure his son's performance to help him improve his game."

The call prompted Ross to look at what was available on the market, which he remembers as "a painful process" — and that gap in the market led to the birth of ShotTracker in 2013.

Bet on yourself

When it comes to securing investment, Ross told CNBC that every start-up founder must to be willing to bet on their own idea.

The founding team launched ShotTracker at the annual technology show CES in early 2016, self-funding to create a physical product they could show to would-be investors. The gamble came with no guarantee of securing additional investment.

"We put our money where our mouths were," Ross said. "You have to find ways to show you believe in your idea and that you've valuated it. That was a big, big investment, but it's paid its dividends."

Being fully behind your product or service as a start-up founder is "very powerful," he added.

"A lot of the time entrepreneurs' effort goes into telling people about their ideas, but for me it's about execution," Ross said.

ShotTracker

Stern, former commissioner of the NBA, and legendary player Earvin "Magic" Johnson became investors in ShotTracker in October 2016, and both also act as business advisors. The amount they invested remains undisclosed, but their investments were part of a $5 million seed round for the start-up.

In May last year, Stern led a Series A funding round in ShotTracker, raising $10.4 million and taking the total invested in the company up to $21 million. To date, the team has raised around $27 million.

ShotTracker isn't Ross' first foray into starting a business. He started his first company, Digital Sports Ventures, at the age of 27, developing a platform that organized video and other college sports media.

His partner, Bruce Ianni, is also a seasoned entrepreneur, having founded Innovadex, a company Ross describes as the "Google for chemists," in 1997. Both co-founders sold their first companies to corporations for undisclosed amounts, but Ross told CNBC that their "decent exits" were enough to get ShotTracker off the ground.

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Despite its success, ShotTracker has faced its fair share of challenges Ross told CNBC. Among other things, the co-founders struggled with deploying aspects of the technology, scaling the company, and even adapting to the changing nature of how people practice basketball.

"Setbacks are mandatory experiences that come with entrepreneurship," Ross said. "Start-ups are a learning experience. You try to go down one path and learn it's not the most optimal path, so you find a better one."

Looking forward, the company's growth strategy aims for ShotTracker to become to basketball what "wifi is to coffee shops," he added, with a view to expanding to other sports.

Is sports tech investable?

Technology focused on sports and fitness is a rapidly growing market.

Earlier this year, research firm MarketsandMarkets estimated the global sports tech industry would be worth $31.1 billion by 2024, with researchers valuing the market at $8.9 billion in 2018.

Big tech is helping to drive that growth, with Apple and Samsung investing in fitness tracking technology, while Alphabet's Google announced this month that it was acquiring Fitbit for around $2.1 billion.

In 2015, U.S. athleticwear brand Under Armour bought Endomondo, an app tracking users' performance while running, for $85 million.

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Speaking to CNBC over the phone, Pete Giorgio, head of Deloitte's U.S. Sports Practice, said sports technology fits into two categories, depending on whether it's intended for professional or personal use.

"It's only going to continue to grow on both sides — teams are becoming more and more comfortable with the information these things produce, and more adept at analyzing and gleaning information from it," he said.

"I think you'll continue to see an increased sophistication of the devices, but they already are pretty sophisticated. On the personal or non-professional side I think it will grow as well, but this will be less around increased sophistication and a little more around simplification."

However, companies would be challenged to somehow consolidate the overwhelming amounts of data people were given as more devices and systems flooded the market, Giorgio told CNBC.

"It's starting to become a little bit too much in some instances," he said. "If you have multiple devices and use different ones in different situations, one of the things we'll see is how those can create a collective view of all that information versus individual views of different devices."

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