About the European startup scene:
HubDub is a huge success in term of Internet popularity (pageviews, time spent on the site, etc.). However, HubDub has no business model, other than trying to get bought up by some bigger fish. Which is why Nigel Eccles and his smart team have devised a social fantasy sport game, FanDuel. Its business model (allowed under the Unlawful Internet Gambling Enforcement Act of 2006) is simple: you pay to play. –->- $$$
The problem with FanDuel‘-s simple business model (selling social gaming services over the Internet) is that, unlike HubDub (which is free to play), there won’-t be free publicity generated on the Web —-other than the TechCrunch UK post. Just because you have a business model does not mean that you have a marketing strategy.
- Give away content, software, or means for people to connect with each other-
- Sell something else (to the same people or to other people).
Since FanDuel won’-t be free, it won’-t generate any buzz on the Web. [UPDATE: See Nigel Eccles’s comment, just below.]
Nigel Eccles is proud of the fact that his team crafted FanDuel in a matter of weeks. But have they thought long enough about marketing strategy?
The FanDuel press release:
SHAKING UP THE FANTASY SPORTS INDUSTRY
New Fantasy Sports Game Lets You Play Today, Win Today
There are at least 20 million of us playing fantasy sports every year and yet in recent years it has seen very little innovation. For many, one of the major problems with fantasy sports is the huge time-commitment involved –- when you play fantasy, you have to play for the whole season – no breaks, no holidays, no excuses. However, in this era of Facebook and Twitter, people want instant gratification.
This issue is tackled head on by FanDuel.com, a new fantasy sports game which launches today. FanDuel.com lets us play and win in a day instead of waiting the whole season. Players can draft a new team at any time, and pitch it head-to-head against an opponent – a friend, or another FanDuel player – for real money. The player whose team has the most fantasy points at the end of the day’s games wins the cash prize. It’s purely fantasy baseball right now, but the fantasy football game will launch with the start of the football season.
Clever integration with sites like Facebook means that picking opponents is slick, as is bragging about your wins. This is a first for the fantasy sports industry which has been dominated by the big players such as Yahoo, CBS and ESPN for too long.
The game is a competitive draft rather than salary cap – making it much more challenging. However unlike traditional competitive draft both players don’t have to draft at the same time. The way it works is one player drafts their first pick and a back-up for each position. They then order their draft and submit their roster. When they are matched with another user (a friend or another FanDuel user) the system works through each player’s draft in priority order. You get an email telling you and your opponent’s final roster and then you can watch the live stats on both fantasy teams update in real-time as the games progress.
Online social gaming is already well developed but the daily fantasy sports market is quite new. Nigel Eccles, CEO of the company behind FanDuel, admits, “After playing Mafia Wars and other social games on Facebook, going back to playing traditional fantasy sports on CBS felt like going back in time. We felt we could build something faster, more social and exciting.”
Thanks to the fantasy sports carve out of the 2006 Unlawful Internet Gaming Act [Unlawful Internet Gambling Enforcement Act of 2006], FanDuel.com is perfectly legal to play in the US – something that the team behind FanDuel have been very careful to adhere to. FanDuel offers free and paid entry games with users able to enter $5, $10 and $25 competitions.
The general manager of ProPublica:
Today’s newspaper should be about tomorrow’s events, not yesterday’s. This was probably [Barney] Kilgore’s greatest insight, and it was one he first stated as a columnist in the Journal at the age of 23. Readers, Kilgore realized, turn to newspapers not because they are all fascinated by contemporary history, and want to puzzle out what another publisher later called journalism’s “first rough draft” of it. No, they want to know about what happened yesterday so that they can more intelligently cope with today, and tomorrow. More than 75 years after young Barney Kilgore set this rule out in his column, many publishers still haven’t fully absorbed it. Readers instinctively have. This has become even more important in a world where the Internet conveys new facts in real time, while the meaning of those facts often seems lost in a jumble of instant opinions.
Nigel Eccles is the CEO of HubDub (”-Predict The News“-).
Cory Doctorow likes Max Keiser’-s TV show —- I do too.
- Although I don’-t agree with them politically, Max Keiser is exceptionally charismatic and funny, and Stacy Herbert is very lively and competent.
- Max needs to invite a guest who is as lively and as literate in finance than he is. Otherwise, “-The Oracle”- will remain his show, as opposed to a good show.
- The TV format is a winner. Max is on a path to stardom.
- Nigel managed to plug his prediction exchange. Good.
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BELOW IS THE CHART OF A SETTLED PREDICTION MARKET:
Will Patrick Swayze die before April 15, 2008?
It was settled on “-no”-.
HubDub CEO Nigel Eccles thinks that his traders “-quickly came to the conclusion that the [early 2008] story [giving him 5 weeks to live] was bogus.”- And Nigel Eccles asks, “-Is this an example where a death pool prediction market is actually socially valuable?”-
In my view:
- It’-s the opinion makers external to HubDub who should decide this. If most people and/or lawmakers decide that prediction markets on deaths and assassinations are disgusting and unacceptable, then they should be pruned. We need goodwill towards the prediction markets if we want the real-money prediction markets to be legalized everywhere.
- Would Nigel Eccles accept a prediction market about when his wife (or kid) is going to die?
- Is there a social utility in knowing when exactly a celebrity is going to die (supposing that such a prediction market could be accurate)? For a head of state, a running politician, or a Justice, that information might have a value. However, in the case of a Hollywood celebrity, I don’-t see where the value lays. A prediction market on the upcoming death of a celebrity would participate in that big, stupid circus that occurs today, with paparazzi and tabloids taking an importance that they shouldn’-t have in the first place. Our youth would be better off browsing and betting on prediction markets about science and technology. We should elevate our global civilization. I don’-t see any (social or individual) benefit about knowing in advance when exactly Patrick Swayze is going to die. I am scratching my head right now —-and I still don’-t see any reason why we should spend our precious time blogging on this issue, betting on that, or collecting probabilistic predictions on that. I just don’-t. (If you have a counter argument, do publish a comment below.)
- The very best wishes to Patrick Swayze, by the way.
HSX-sucks.com —- I predict that somebody will soon register this domain name.
Many HSX event derivative traders have complained to me privately about the website redesign: they hate it more than they hate the recent financial bailout. One HSX trader went off on the Prediction Markets group discussion area at LinkedIn. Today, another HSX trader is writing a long prosecution of the HSX website redesign. Read it in all, and spot the many comments at the bottom, from fellow HSX traders.
The root of the problem is Alex Costakis —-the director of HSX. My assessment of him is that he doesn’-t get the Web. He is as clueless as a maggot trying to play Jazz. He is not an open person, and the Web is all about openness. This guy is a drag on HSX. I predict he will lead to HSX’-s death.
The only 2 persons that could lead to a revival of HSX are Max Keiser or Nigel Eccles. Let’-s hope that Cantor Fitzgerald will call them for help.
UPDATE: See the comments.
Previously: About Justin Wolfers’-s column
The conversation ended up on a draw.
Robin Hanson was AWOL.