Atomico bet on a long shot

Techcrunch recently reported that the fund setup by Skype founders Niklas Zennström and Janus Friis has invested $3M in social betting company Betable.

Atomico must have more money than sense, in my view. Betable has been around for awhile now and has done absolutely nothing. Visit the Betable website and you can see the tumbleweed in front of your eyes. This sensationalist story "The Twitter for Betting..." is nothing more than a last gasp publiscity stunt from a struggling start-up.

With its 'rock star' team and no customers there is no doubt that they need the money. The only question is how long it will take for them to burn through it. I tried to post a bet on betable.com along these lines but the site is clever enough to know that I'm in the US.   

Another thing for the geniuses at Atomico to ponder. Gambling apps are prohibited from using Facebook connect. Betable are very unstable ground with their use of the Facebook platform. Betfair has already found out how Facebook can shutdown apps with no notice and no route for arbitration. Investment down the drain in the flick of a switch.

Social betting, as it has been approached by Betable and many others is based on infrequent bets with low stakes. This is a recipe for disaster.

Facebook Recommended Pages - Uncovering interesting social connections

Facebook has been presenting me with some interesting things in the right hand column recently. Today the 2nd recommended page caught my eye. Many people who like Texas Holdem Poker like the page I LOVE ALLAH. Sounds like an unlikely connection.  

Is betting social?

I was asked my opinion about an article written recently by Ruud Verdellen (an old Betfair collegue) for E Gaming Review. I thought the topic was interesting so I decided to post my response here:


"I think there is both social and non-social forms of betting and that the same customers can engage in both. I think sharing betting data is actually a different issue only loosely related to social betting, e.g. people might want to share betting data because they run a tipster service. For me social betting is entering into a bet which involves your friends.

The key is to build product to be social from the ground up, not build a betting product and tack on social at the end. Building a social experience and tacking betting on the end might work but I don’t think anybody has tried it.

The other issue is making money from social betting. For me social sports betting is based around major events and leads to small infrequent bets. Also, if you build your ‘game’ around the Premiership season ,e.g. lastfan.com what happens to your P+L during the 4 month summer break.

On the issue of sharing betting data. I would happily share data if either I did it in retrospect, e.g. I have had a good run and I want to brag. Or, I knowingly enter a bet which is public, e.g. I enter a fixed duration betting tournament with a leaderboard."

When I think about this question I remember days at the track with gangs of friends, evenings at the dogs with colleagues or nights in the casino with friends. Of course betting can be social! However, you go into these scenarios expecting it to be social and actually being social is the primary reason for taking part in the first place. Betting just adds spice to the mix.

Horse Racing - Alive and Well

Above - racegoers at the Aintree meeting

Saturday sees the latest renewal of one of the greatest Horse Races in the World - The Grand National. The race is run annually at Aintree racetrack in the UK.

The race was initiated by William Philip Molyneux, 2nd Earl of Sefton in 1836 and is the most famous Horse Racing event in the UK. Saturday is the day that pretty much every man, woman and child will have a wager on the Grand National. People will queue down the street to get into bookmakers on every high street in the UK. I remember as a child looking through the daily newspaper and picking out a Horse that caught my eye. Perhaps a catchy name or colour. I'm not much more sophisticated today.

The Grand National is a monster 4m 4f course with 16 of the most challenging jumps anywhere in the world. The jumps being almost as famous as the race itself. Take Bechers Brook, originally a 6ft fence with a stream on the far side, hidden by the fence. Needless to say that most of the 40 runners in this race will not last the distance.

This is a truly exciting race where the whole nation gets involved. For about 10 minutes we are all punters, cheering on our Horse and gutted when it falls at the last fence. I recommend getting involved and watching Horse Racing at its best. 16.15GMT Saturday 10th April.

My picks for this years race are The Package and Character Building. However, with 40 runners jumping 16 fences this race is more like a lottery. The winner last year was Mon Mome a 100/1 outsider.

Are Social Games the New Slot Machines?

I've seen a  few blogs recently asking the questions like 'Are Social Games the New Slot Machines?'. In many respects social games are successful for the same reasons that slot games are successful. However, social games have more mainstream appeal because in addition to being social they use gaming mechanics that slot machines have traditionally lacked.

As I have mentioned in previous posts. Social games push some of the same psychological buttons that gambling games are based on. Game concepts of building points to achieve certain goals have parallels with the gamblers preoccupation with strategies to grow their real-money bank. However, social games layer on other powerful game mechanics like leveling up. In addition, social games leverage social forces like collaboration, competition, altruism, reciprocity etc. The resulting combination is all together a more potent mix that results in high levels of engagement and virality.

Zynga recognize the parallels with gambling. There is nothing subtle about the way they have integrated slot machines as side games within their Texas Hold'em. Or the fact that they launch Poker Blitz as a stepping stone for customers of Farmville to convert to players of Texas Holdem.

Successful social gaming companies have realized that they can use gaming psychology to build vast audiences and to sell things. Social Gaming is not only a new genre of game but it is also a new model for retail and ecommerce in general. Gambling is only one area which has parallels with and which will be affected by the rise of social gaming.

 

Useful stuff on Facebook

My big prediction for 2010. This will be the year that really useful applications are launched on Facebook or using Facebook connect.

Some of them may still contain fluffy animals, cows, pets etc. However, the fluff will be supplemented with ecommerce or collaborative tools that serve a purpose other than wasting time.

Right now I'm only aware of 1 company who have such an application on Facebook - Bonvoy. I predict that there will be a new wave of similar ecommerce applications that blend ecommerce with the social graph. Perhaps even games that sell the real thing as well as the virtual good.

Radical thinking indeed. I'm looking forward to seeing what the latest generation of would be entrepreneurs are cooking up.

What Happens to all those Clicks in Mafia Wars and Farmville?

On Friday, Michael Arrington (Techcrunch founder) asked a deliberately provocative question to a monetization panel at GDC. The panel consisted of representatives from 4 of the largest social game developers - Zynga, Playfish, Playdom, Crowdstar. The question was 'why do Facebook games suck?'

The question was somewhat tongue in cheek. Zynga's games (Mafia Wars, Poker, Farmville) alone have around 50 million daily actives on Facebook and growing. Not bad for shallow games with little if any animation.

I don't think Zynga really cares that their games are not considered groundbreaking within the video game industry. For me Zynga is not a game development company. If we are looking for a parallel I think Zynga is closer to Google than EA.

Zynga is renowned for copying successful mass market game formats, e.g. Poker and Mafia Wars. For Zynga the important thing is reach. The games it develops need to have broad based appeal. They minimize the cost of collecting data by adapting proven game formats from other industries or other games companies. The goal is a large audience and hence more data rather than prizes at gaming awards.

Zynga collects vast amounts of behavioural data about its gaming customers. It then analyses this data to optimise game play, virality, sales of virtual goods and increasingly to drive targeted advertising. This becomes a positive feedback loop that drives usage and increases the data available to analyse. Google works in a very similar way with search data.

My prediction is that we will see more advertising related products coming out of Zynga in the near future. Perhaps a social media equivalent of Google Adwords and Adsense. The growth of Facebook connects will allow Zynga to leverage its vast database to provide targeted advertising across the Internet, not just on Facebook.