There's been some movement lately in the online gaming industry, with various 'powers that be' planning for a government regulated industry. Most recently, Donald Trump and Marc Lasry announced a joint venture to eventually enter the industry together. It was nice to see Mr. Lasry supporting the case for internet gambling regulation, he's well-connected and respected, smart, and in my few interactions with him, a genuine guy. In short, he's a guy you want on your side of the fight.
I saw this article posted to Forbes.com today and for whatever reason, the first sentence got me to thinking about business success and staying ahead of the curve. It reads "Two years ago Richard Bronson, a former Mirage Resorts executive, came to the conclusion that the Internet would be the next big thing in the casino Industry."
While the sentence is partially stating the obvious so the uninformed know what's going on, it reinforced something in my mind. Apparently "two years ago" Richard Bronson realized that the internet was the next big thing in online gaming. Let me tell you something, I realized that the internet was the next big thing in gaming in roughly 2003. I am no genius, I just happened to love poker and be young and tech savvy enough to naturally turn to the internet to play. It was pretty obvious to me and many in my generation of players that this was going to be "a thing." The evolution of the poker industry is representative of what happens across many industries, and there is something everyone can learn from it.
It goes like this. A group of people find business success. These people often get wildly rich. They tend to see things "their way," after all, they are the ones who were smart enough to become rich, their worldview (industry view) must be correct. For awhile, they are probably right. They have the money, infrastructure, and influence to beat down competitors and reap large economic gains. Then, something changes. Typically these are new technologies or changing tastes (demand) in consumers. The problem for the powers that be are that it usually starts on a small scale.
Here's how it played out in the poker industry. There were a few random online poker websites in the late 1990's that attracted mostly computer/tech enthusiast types. I doubt any casino executives were even aware of these sites until the early 2000's as there were literally only hundreds of regular users at this time. By 2003, there were a handful of sites including PartyPoker, PokerStars, and Ultimate Bet that were doing collectively probably a few hundred million in revenue. Then, thanks in part to Chris Moneymaker and the WPT, internet poker exploded and was a multi-billion dollar industry only a few years later. While no one could have predicted the success of Moneymaker or the WPT, a reasonable person could have predicted that broadband internet and a computer savvy generation of children coming of age would have an impact on many "brick and mortar" only businesses. The 'powers that be' in the gaming industry totally dropped the ball here.
By the time 2005 rolled around it was arguably too late for the casinos to do anything. They were not companies that knew the least bit about running an online gaming business, much less an online business of any type. In order to seriously compete at this point, they would have needed to come up with a ton of money (and take big risk at this point) to acquire one of the big private companies that was having success. They all decided to spend their time and money lobbying against internet gaming in order to try to shut out the companies that now had billion dollar valuations and the means to compete for gambling dollars. Had they decided to enter the industry in 2002, they probably could have beaten down the competitors and also made sure the laws were on their side through their powerful lobbies.
Many of you have heard this story before so I'm not expecting to be telling people something they don't know. What I am hoping people can learn from this blog post is that as an entrepreneur it important to recognize this phenomenon. You almost have to develop a paranoia about "what could disrupt" your business or industry. You must spend time and money investigating seemingly unimportant, small innovations. You must think about what is coming years ahead as opposed to what exists now, or god forbid, what existed a few years ago. You must be relentless in thinking about these things, it can't be something that feels like a job otherwise you are going to get your ass kicked by people who truly enjoy spending all day thinking about what could someday be.
I believe the phenomenon discussed above applies to my new venture, DraftDay. You are going to see short-term contests like the daily fantasy sports games at DraftDay prevail as the most popular type of fantasy sports game. It's going to take a long time for it to go mainstream, but it will happen eventually. When compared to traditional fantasy sports, these games provide an unbeatable combination: they provide instant gratification AND more simplicity, while remaining deceptively complex for the hardcore fantasy sports types. This is a winning combination.
The evolution of the fantasy sports industry will likely have some of the same elements of that of the online poker industry. Most of the 'powers that be' will dismiss these games as niche and unimportant until one day they wake up and realize that they are more important (and profitable) than the traditional games. This is one of those "I might be wrong, but I'm willing to bet a lot of my time and money that I'm not" feelings. As an aside, if you part of the current "powers that be" (note to self: come up with a better term for this) and would like to get in touch regarding DraftDay, please feel free to email me at taylor@draftday.
That's it for now. I continue to urge you to check out DraftDay if you like fantasy sports or even just like getting involved an in industry that is in its infancy. I hope the article I posted and my thoughts on the phenomenon described above will help you think along these lines to find more success in whatever it is that you do. Good luck.