Dragon Smoke (and mirrors)
Posted on October 22, 2007 by Tim
Filed Under Technology |
Theo Paphitis, you’ve just invested £200,000 in an online gaming affliate play, are you nuts ?!
(Dragons Den, BBC2, Series 5 Episode 2 - http://www.bbc.co.uk/dragonsden/)
I won’t go in to the detail other than to say that the unique angle of ”Gaming Alerts Ltd” (http://www.gamingalerts.co.uk) , a company now valued at over half a million pounds is that it offers a downloadable desktop alert tool to keep you informed on the latest online poker, casino, bookmaker, and bingo offers.
I’m not convinced. Sure Emmie Matthews, the female half of the duo wasn’t a bad looker, and she did say “please” in a very persuasive kind of way; however lets look at the fundamentals behind the business - many of them highlighted for Theo’s benefit by the other Dragons’.
1. For starters, the technology behind it all isn’t theirs. Skinkers (www.skinkers.com) can be customised and rolled out by anyone who believes a user will keep desktop alert software installed for a longer period than the research suggestions:- 3 days. I’ll dig that out asap to back that up, it’s about somewhere. In other words, for the avoidance of doubt, this is not a technology play.
2. The ‘group of websites’ have a Google page rank of no higher than 4. The number of inbound links to their sites is minimal. Sure, searching for “Casino Alerts” brings up their Casino Alerts website on top; but it’s hardly the phrase people will be searching on.
3. The online gaming landscape is so saturated with affiliate deals, whitelabels, online and offline promotion that I find it hard to see how this service will get exposure of sufficient levels to do the numbers proposed.
4. Whilst online gamers are indeed transient as they seek out better experiences and sometimes offers; most online poker, casino and bingo players probably know where they’re going to move to next or will very quickly decide based on recommendation or a search or two.
5. Serious competitive players will be signed up to receive email alerts of all major online competitions. The alert software offers no benefits there.
6. Anyone who is understands anything about betting on fixed odds will be monitoring the various bookmaker websites and/or newspapers. There’s also plenty of odds aggregation tools out there, and anyway, use BetFair - you’ll be much happier for it.
The Bookie Alerts showing this evening on my desktop, Monday 23:00hrs, were :-
a. A preview of the Rugby World cup Final (incase you missed it 2 days ago)
b. We lost the football in Russia (no you can’t bet on it, it closed last Wednesday)
c. Coral are to pay out on Mark Cueto Bets - yes, but I bet they didn’t alert me to bet on him 2 minutes before he ’scored’; and anyway that was in the paper this morning.
..and so on. This is not inspiring stuff. It’s not going to make me open an account anywhere. It’s not useful to my online gaming/gambling experience. It’s uninstalled.
7. The duo asking for investment admitted that they spent a significant part of their time running JackMedia - an online ad buying agency for the gaming industry. Further, that they weren’t prepared to include it. So how does Theo guarantee any level of focus?
Theo, you only make me want to put a wishy washy proposal together even more.
On the flip side, and in all seriousness, I’m sure Theo invested in the people presenting as much as anything else - they clearly did a good job in the eyes of a very successful businessman. I’m even more sure though that the idea really does need expanding rapdily to have any chance. Good luck.
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I too was shocked when he stumped up the £200K! Normally they give the entrepreneurs a thorough grilling about current trading. I must have missed the bit where the Gaming Alerts people said they turned over £100,000 last month. Instead they give a series of dot.commy projections (£1m next year, then £2m, then £3m (I suppose 1,2,4 would have been more dot.commy) and he was sold. Did Theo get carried away in the moment - the investor’s curse?
Also I’m sorry to see the well coiffed Richard Farleigh, as discovered by Interactive Investor, has been replaced by a private equity guy. Private equity trumps venture capital - sign of the times
The alerts software is not even Skinkers idea, it was developed by a company called Screen Bots who had that and a lot more before Skinkers. But skinkers got the funding and took the ideas.
Theo’s team did a rubbish job in researching the idea for who really owns what.
Plus it is bad enough to receieve so much spam from gaming companies know they want to add pop ups on your PC as well.