In their recent blog post "AI Inside" Opens New Markets for Vertical SaaS Angela Strange and James da Costa of a16z argue that software replacing labor increases the Total Addressable Market for Vertical SaaS businesses by up to 10x and opens up new markets previously considered sub-venture scale. To test this hypothesis, they pulled data for 620 NAICS industry codes and looked at revenue and labor data. Within that data set, the best proxy for PodPlay Technologies’ target market is code 71394: Fitness and Recreational Sports Centers.

While our technology is not built on AI (yet), the autonomous operating model powered by PodPlay is similarly premised on reducing dependence on labor. By eliminating the need for onsite personnel, PodPlay allows clients to simultaneously increase capacity (stay open more hours) and decrease labor costs. So how does the data from PodPlay venues compare with the benchmark NAICS data for Fitness and Recreational Sports Centers?

For the PingPod network, labor (inclusive of cleaning costs) is running at 11% of revenues, or 66% less than the benchmark. If we conservatively include fees paid to PodPlay the total paid for technology and labor is 18% percent of revenue, or a 44% reduction from what the benchmark is paying for labor alone. 

For mature PingPod units (open >3 years) the data is even more stark. Labor is running at 2.2% of revenue, or 93% less than the benchmark. If we include fees paid to PodPlay, the total paid for technology and labor is 5.5% percent of revenue, or a 83% reduction from what the benchmark is paying for labor alone. 

Making the Impossible Possible

New York City has notoriously high rent and labor costs. Prior to PingPod, it would have been virtually impossible to run a profitable ping pong club in New York City without food and booze to make the margins work. By reducing labor costs as much as 93%, PingPod has been able to offer something new: a network of smaller format tech-enabled clubs spread out around the city, so that anyone looking for a game is never too far away from a PingPod. Very few people can afford to have a ping pong table in their apartment in New York City. With PingPod, that table is across the street, augmented by cool technology like digital scoreboards and video replays, and available on demand 24 hours a day and seven days a week.  

In What Consumers Want we wrote:

"We see this same “barbell” setup in many experience verticals, in which there are high-end options that pursue an eatertainment model, and low-end options that compete on price, with nothing in between. The competitive landscape is dictated by the economics of these businesses. If business owners pay high rent and provide a premium experience, then they’ll need the additional margin and revenue provided by food and beverage (particularly alcohol) to make the numbers work. If they compete on price, then they will compromise on quality of experience, and generally need to locate the venue in less desirable neighborhoods, in order to keep costs at a minimum."

Operating autonomously fundamentally shifts the underlying economics, allowing for a third model that can profitably deliver customers a compelling combination of value, proximity, flexibility, and community. Venue operators can keep labor savings as profits or reinvest in initiatives that drive competitive differentiation:

• Location, location, location. Club owners are better able to afford locations near where customers live, work, and play. 
• Lower prices. Passing savings through to end customers allows those customers to play more for less at autonomous clubs. 
• Marketing. A larger marketing budget can drive higher awareness, increased utilization, and a larger membership base. 
• Facility and equipment. Labor savings can be channeled towards high quality equipment, lighting, and other amenities that improve the in venue customer experience. 

PingPod pioneered the autonomous operating model in New York City, opening its first location on the Lower East Side in February 2020. From day one, we believed that the model had applications beyond ping pong. Now, that vision is becoming a reality.

The Autonomous Operating Model Expands in NYC

When Entrepreneur Magazine profiled PingPod in its November 2023 issue, PodPlay had just begun licensing its technology stack to like-minded venue operators. 

As of the beginning of 2025, PodPlay will be supporting five different autonomous experience verticals in New York City:

• Table Tennis. PingPod operates nine autonomous table tennis clubs in New York City located in: Lower East Side, Midtown West, Upper West Side, Upper East Side (2), Murray Hill, Williamsburg, Astoria, and Downtown Brooklyn. 
• Pool. Sharks Pool Club allows customers to Play Pool Privately, Anytime. Sharks operates three autonomous pool clubs in New York City located in: Lower East Side, Williamsburg and Astoria. 
• Pickleball. Gotham Pickleball allows customers to play Pickleball All Day, Everyday at its location in Hunters Point. Goodland Pickleball allows customers to Play More, Pay Less at its location in Greenpoint. 
• Golf Simulators. Ready Golf Club is New York’s Most Accessible Golf Course. RGC’s first location is located in the East Village. 
• Dog Wash. Maxx & Fluffy’s is New York’s first autonomous dog wash, featuring two stations to wash and groom dogs on the Upper West Side.  

Readers living in or visiting New York are encouraged to try any of the above and send us your feedback on the experience!

The PodPlay Advantage

PodPlay gives venue operators all the tools they need to digitally manage a physical space - integrating video replays, automated scoreboards, and autonomous functionality with a reservation engine, event management, coach connect, membership module, and payments. 

Originally built to power PingPod, the network of futuristic autonomous ping pong clubs, PodPlay is now being used to manage venues across pickleball, padel, ping pong, golf simulators, racing simulators, soccer and pool, with more experience verticals to come in the future.

If you’re interested in learning more, request a demo.