[E]veryone did it a slightly different way. it wasn’t first-mover advantage at that point, because we weren’t first! But we were first to do it with a model that aggregated demand, whereas everyone else had a different model.
The Flutter model, for example, was basically a glorified bulletin board: you took prices which directly opposed yours, but if you wanted to bet £100 at 2/1 and someone wanted to bet against for £50 at 3/1, you didn’t match. The result was that people split their £100 bet down into fifty lots of the minimum £2, so that they could get taken by as many people as possible.
An analogy would be you walking into your local greengrocer and asking him for 10 oranges, at 10p each. If he replied that he didn’t have ten oranges, he had 50; and anyway, they weren’t 10p each, but 5p each, you’d tell him to stop being daft. But that was effectively what happened with the other sites: the two things were not seen to be a match.
In contrast, we aggregated demand, and we gave best execution, so we quickly generated liquidity where others were generating none. It took 9 months before anyone was able to replicate the technology, and by that stage, first-mover advantage was important. Although many people generated levels of liquidity which were well past the level at which people started to take note of us, those levels were by then dwarfed by the levels we had reached, and looked insignificant.
To be fair to our technology team, though, I think there is more to it than simply the liquidity issue. The fact is that it is not an easy thing to run when you get into big volumes, and I think customers understood that there is a difference between matching bets at speed when you aren’t doing many of them, and still doing so when you are handling millions of transaction. I [think] it’s easy enough to make your site LOOK like BetFair; but it’s another thing for it actually to have the same capabilities. Those capabilities haven’t come cheaply. I think that it’s been the continuous investment that has allowed us to stay where we are, but of course we had to get there first, and that was where being the first people to get it right gave us a huge boost. So, thank Bert!
