From Enterprise AI to Racket Sports: How Customization Drives Success in Both Worlds

What Racket Sports Can Learn from Gen AI Success Stories

Working in tech, I occasionally like to skim through some of the industry’s latest research. Recently, I came across McKinsey’s report titled “The state of AI in early 2024: Gen AI adoption spikes and starts to generate value” and probably to no one’s surprise — connected it to racket sports.

In essence, the report explores how generative AI (Gen AI) is being utilized, highlights the business divisions that benefit most from this technology, and explains why some companies are reaping greater rewards from Gen AI than others. The insights from this report made me think about how similar strategies can be applied to the padel industry, revealing important parallels that can drive success in both fields.

The Impact of Customization on Gen AI Performance

McKinsey categorizes companies into three archetypes based on their approach to Gen AI – makers, shapers, and takers.

Makers: Makers develop their own proprietary models

Shapers: Shapers customize existing solutions to meet their specific needs

Takers: Takers rely on off-the-shelf solutions with minimal customization

The shapers and maker archetypes tend to achieve more success with Gen AI because of their strategic customization and development efforts.

Shapers take existing Gen AI solutions and tailor them to their specific needs, leveraging proprietary data and systems to maximize relevance and impact. This customization allows them to extract more precise insights and drive better decision-making.

Makers, on the other hand, develop their own Gen AI models from the ground up, giving them full control over the technology and its applications. This high level of investment and innovation often results in more effective and transformative solutions. Both shapers and makers understand that aligning AI with their unique business contexts and goals is key to unlocking its full potential.

At this point, you may be thinking “Thank you, Will, for summarizing a McKinsey article on Gen AI, but what’s this have to do with padel?” Let me show you how these insights apply to racket sports.

Connecting Gen AI Insights to the Padel Industry

The rise of padel clubs across the United States is impossible to ignore. New courts are emerging everywhere, inspired by the success stories of iconic clubs like Padel Haus, Ultra, Taktika Padel, and Reserve. These clubs have not only built thriving communities but have also sparked a wave of inspiration among potential operators. The question on everyone’s mind is: if these clubs can achieve such success, why can’t we?

Interestingly, the success strategies in the padel industry mirror those found in generative AI. Just as AI companies can be categorized into makers, shapers, and takers based on their approach to technology, padel clubs can be grouped similarly in their adoption and integration strategies.

Makers: The Visionaries

Makers are the visionary clubs that build their padel offerings from the ground up, creating unique and innovative experiences that set them apart. These clubs invest heavily in state-of-the-art facilities, cutting-edge technology, and bespoke programs that cater to the specific demands of their community. They often take significant risks, but the rewards can be substantial.

A prime example of makers in the padel world can be seen in clubs like Reserve, Ultra, and Padel Haus. These clubs have successfully built thriving padel communities in urban areas where there was previously little to no padel presence. Padel Haus, for instance, created the first significant padel community in NYC by developing an experience — blending community, sport, and amenities — perfectly tailored to the needs and preferences of its New York City demographic.

Another strong example is Padel United in Cresskill, New Jersey. They are not simply installing padel courts; they are creating a comprehensive wellness club to meet the high demand for premium fitness and wellness facilities in the region, akin to Equinox and Life Time. Positioned as a top destination for sport, Padel United boasts a world-class coach, top-of-the-line courts imported from Spain, and a partnership with Padel MBA to host premier certification workshops, advancing the future of padel in the United States. With amenities like a sauna, steam room, and indoor pool, Padel United caters to a cosmopolitan crowd, fulfilling Northern New Jersey's demand for a luxurious lifestyle experience.

In the context of Gen AI, makers are those organizations that develop their own proprietary AI models from scratch. They don’t rely on pre-made solutions but instead create highly tailored systems that align perfectly with their business needs. This approach requires a deep understanding of AI technology, significant investment in research and development, and a willingness to innovate continuously. The payoff, however, is a Gen AI system that offers unparalleled performance and is finely tuned to the organization’s goals.

Similarly, these padel clubs understand that a perfectly curated facility is most impactful when there is a strong underlying community, a unique value proposition, and a clear vision. By building physical spaces and programs that resonate deeply with their community, these clubs have created active, engaged membership bases that are the cornerstone of their success. Just as a ground-up Gen AI model thrives on proprietary data and a robust business model, a padel club built from scratch with a focus on community and a unique underlying advantage can redefine the sports and wellness landscape of a given area.

Shapers: The Strategic Integrators

Shapers are the innovative clubs that integrate padel into their broader strategy. In the U.S. Northeast region, where tennis and country clubs are abundant, many management teams face pressure from members eager to embrace padel. These clubs already offer a mix of racket sports like tennis, pickleball, platform tennis, and squash. Adding padel seems like the next logical step, but it requires careful planning and customization.

For new padel clubs, building a facility often comes with a hefty price tag. In prime locations, the cost of leasing or purchasing land in 2024 is astronomical. However, the U.S. racket sport market has been fortunate to have risk-taking entrepreneurs who have driven the growth of padel across major cities and beyond. Despite the high costs, legacy clubs are in a unique position to capitalize on the growing padel trend.

Many country and racket sport clubs in the United States have been privately owned for decades, some even dating back to the 1800s. These clubs possess vast amounts of land in highly desirable locations. While starting a new padel club from scratch in these areas might be financially prohibitive for aspiring operators, existing clubs with established communities have a significant advantage.

These age-old country and tennis clubs serve as excellent examples of potential shapers. If they integrate padel thoughtfully and strategically, they can leverage their historical presence and established member base to seamlessly incorporate the new sport.

Shapers leverage this advantage by customizing their padel offerings to meet the specific needs of their members. They use data and feedback to create tailored experiences, from personalized coaching to community events and league play. By doing so, they not only add value to their current members but also attract new individuals to their established community.

These clubs understand that the true potential of padel lies in integrating it seamlessly with their existing offerings. By focusing on customization and community-building, shapers ensure that their clubs remain engaging and attractive to both current and prospective members.

Takers: Risking Missing the Mark

While there’s no doubt that padel is rapidly on the rise, operators need to be extremely careful when opening new clubs. Just because padel is hot and desirable right now doesn’t mean it’s always a good idea to jump in, especially if there isn’t an existing community or a strong membership base in your area. In countries like Spain, where the professional circuit is well-established and training is taken seriously, it might be plausible to open a few courts and expect them to be packed. However, applying that same logic in the United States can be risky.

Takers in the padel world are clubs that build padel courts with their primary strategy being that padel alone will drive the business, devoid of any additional amenities or experiences tailored for the surrounding demographic. They rely on off-the-shelf solutions, offering basic services that appeal to a broad audience but lack the depth and customization needed to truly stand out. These clubs might see some benefits, but they often miss out on the full potential that padel can bring to their community.

This approach is especially precarious if the club does not have an established following or membership base from other sports. Just because you’ve built padel courts doesn’t mean your club will automatically succeed.

The taker archetype is even more dangerous if you don’t recognize that you’re a taker and are unaware of your competitive advantage. Having a unique brand name, some social media presence, and padel courts doesn’t necessarily make you a maker – you could very well still be a taker.

The key takeaway for takers is that success in padel requires more than just capitalizing on the sport’s current popularity. Without a strategic approach and a deep understanding of your community, simply adding padel courts can lead to underwhelming results. It’s crucial to build a strong foundation and thoughtfully integrate padel into a broader, well-established community or vision to truly thrive.

Bringing It All Together: Customization as the Key to Success in AI and Padel

The parallels between generative AI and the padel industry highlight a fundamental truth: success is rooted in customization and strategic integration. Whether you’re developing AI models or launching padel clubs, the key is to understand your unique context and build from there.

Shapers and makers in both fields show us that a one-size-fits-all approach rarely works. Instead, it’s about leveraging your strengths, listening to your community, and continuously innovating. Shapers customize and integrate padel into existing communities, while makers build facilities and communities from the ground up, creating bespoke experiences that resonate deeply with their audience.

So, whether you’re looking at the latest advancements in AI or considering how to grow a padel club, remember this: success comes from knowing your audience, customizing your approach, and being willing to innovate. Just like the visionary clubs that have transformed urban landscapes with padel, or the forward-thinking companies that have revolutionized their industries with AI, your path to success lies in your ability to adapt and create something that truly adds value to your customers.