We are building a “Bloomberg for sports bettors.”
When you are doing an investment, your every money move is measured and validated, but when you are doing sports betting, you rely only on your inner gut, why so? Why don’t we change it and give every sports bettor the power of investor?
The same as in investing, sports bettors are operating with money, sometimes big money. They wanna know which investment is the best for them, they wanna know their historical ROI and they definitely wanna know the latest news.
Those 3 angles were our main focus. We have built a tool that could have transformed the average sports bettor into a professional betting investor.
I joined the project when the development of a product was going on for 6 months already. Before me, there were 30 developers working on it. The code was quite messy but we made it to production without many bugs and refactoring.
After the launch was made we were partnering with influencers and ran ads for about 3 months. Users were coming and going, a few of them were sticking to the app, and even fewer were clicking on our Sportsbook ADS. Low retention, poor code base, and facing regulatory issues with Google Play made us think of a new idea.
Very Opinionated Retrospective Evaluation
- Team: 4 / 10
Even though the founders had a comprehensive background in sports betting and investing, it was our first product, and there was a lot to learn. Even though the dev team had a comprehensive background in coding, it was our first mobile app. The dev team wasn’t completely established and the smell of change was there.
- Product: 3 / 10
Even though the product was great in solving the problem we targeted, it wasn’t great in making users become loyal to the app. The design was perplexing, user flows were never built, some bugs were still there and a big refactoring was needed. The app wasn’t good enough, and it wasn’t flexible enough to quickly adopt.
- Market: 3 / 10
The app was oriented toward professional sports bettors who are making a living by betting. Which were very rare in the market. The market of sports betting was pretty hot though, and it still is. When we were writing the app sportsbooks were investing a lot in the acquisition, and they still do. There have being an established market of pick sellers and all of them could potentially partner with us.
We are building a “StepN for sports bettors”
When I was joining Scrimmage as a co-founder I had only 3 requirements. One was about equity, the second about location, and the third about using WEB3 in our product. So when the first conversations about pivot started to appear I was ready and full of enthusiasm. It was the summer of 2022. The Bull market was on its pick. WEB3 companies were raising $2Mil pre-seeds and StepN got evaluated in $1Bil.
In our previous app, retention was the biggest issue, and what solves retention better than rewards with crypto? That is how we decided to build WEB3 Play 2 Earn game for sports bettors, inspired by StepN.
The technological challenge was that sports bettors don’t really know web3. So we had to build something which is web2.5. Something which is web3, but without complexities like creating and managing wallets or exchanging ERC20 tokens.
We have built a system similar to Axie Infinity where we had our own private blockchain and a bridge to transfer assets from the game to the public net. It made us save onboarding time and blockchain fees. But the speed was still not great, 5 sec of block minting time was minimal on Kaleido so during NFT transactions it took some time.
We released a collection of 5k Gambling Dragons that were living on the ETH blockchain and were rewarding people for betting. You can buy and equip your dragon from the Scrimmage app, connect your sportsbook, and start earning SCRIM tokens which betting. With time you can level up your dragon, buy more dragons and start withdrawing SCRIM tokens to the public network or to vouchers.
The main revenue generator for the economy should have to be referrals. We had a plan to incentivize our users to have multiple sportsbook accounts which we would get a commission for. It would have added real money into the economy and would bake the price of SCRIM. However, Apple and Google had very strict politics about gambling and NFTs. When the app was ready we spent 3 months in review from the Apple team and they made us remove every NFT or crypto word from the app. Now we were a WEB2 game on the front end and WEB3 on the back end which made almost no sense.
Our revenue stream also was blocked so we needed to earn for alternatives. That is when we noticed how much more people start betting while using our app. Some of them started to bet 5-10 times more after using the app and it was something we wanted to double down on. That is how we started pitching to sportsbooks about revenue share.
The idea was that we could reward SCRIM tokens to sportsbook users in exchange for 1% of their revenue. Our app will make their users bet 5 times more which will increase revenue significantly. The idea seemed interesting to everyone but no one wanted to lead their users to our app. That is when the second pivot happened.
Very Opinionated Retrospective Evaluation
- Team: 7 / 10
Before starting building this app we completely renew our team by firing everyone and hiring only 1 person who I know personally and who is my good friend. We both were hardcore senior full-stack developers and I had confidence in building any product we could imagine. However, non of us had experience in WEB3. Not in development, nor in marketing or sales, which made us struggle a little bit.
- Product: 6 / 10
The product was really well designed, had great onboarding and retention wasn’t an issue anymore. Sustainability was. Our only plan to make the economy work was regulated and plan B was rejected by the market. However, the backend infrastructure was great. We could easily change the app in a matter of days which I think is a more important measure for a high-quality architecture of a startup.
- Market: 9 / 10 → 2 / 10
The market made the final move in the story of this app. In 2023 very positive bull market with high evaluation got replaced by the word WEB3 becoming a NO for every door. Corporations and the government are regulating WEB3. Investors are losing money in WEB3. Companies are now afraid of even partnering with WEB3.
We are building a “Stripe for gamification”
If the mountain won't come to Muhammad, then Muhammad must go to the mountain
After realizing that sportsbooks are not ready to lead their user to our app, we decided to make our app a part of theirs. It took us a shocking 1 month to remove WEB3 from our app, transform our backend architecture to SaaS, design and rewrite the front from React Native to React, and release a demo app. Well-designed architecture and weeks of refactoring finally paid off.
Our speed allowed us to finish the pivot before the conference where we won a pitch competition. After the conference, we signed 7 letters of intent from sportsbooks and fantasy sports apps.
Something which we randomly discovered in the previous app got transformed into a separate product. After removing web3 our app became very fast. Now, instead of paying money to third-party providers who aggregate bets from sportsbooks, the sportsbook is sending bets to us directly via API. Now, instead of us trying to build a sustainable economy from the air, the sportsbook is reinvesting money into its ecosystem.
Now, instead of having the potential to become the best WEB3 app for sports bettors, we are having the potential to make the next generation of gamified experiences.
To read more about Scrimmage Rewards and try our public demo go to https://scrimmage.co
Very Opinionated Retrospective Evaluation
- Team: 9 / 10
Our already strong dev team grew by 1 talented junior and 1 more my full-stack developer friend. All of us are passionate about games and see the long-term impact which our app can make. All of our team members have been working with SaaS in the past. I personally was managing the $20k per month SaaS cloud architecture. My founders are coming from a banking market, I always was admiring their ability to raise money, so B2B sales is something they are natural in.
- Product: 9 / 10
Any of our past products had so positive market reaction. We signed 7 LOI in the first month of pitching the solution. We reused 90% of the architecture from our previous app. We implemented code-sharing frameworks and public libraries. Our widget is flexible, fast, and easy to integrate.
- Market: 9 / 10
Everyone wants retention. Especially sportsbooks. The market of loyalty programs and gamification is pretty stable and its hype time is only about to come. When the time comes we will be the best gamification solution out there.
Lessons Learned
- Don’t write tests, but invest in high-quality architecture. Not writing tests saved us months and most of those tests would have been in the trash right now. If we wanna make sure quality is there we just hire a QA for 1 week. However, even without tests, high-quality architecture pays great dividends. Pivot from the first app to the second app took us about 5 months to build MVP. Pivot from the second app to the third took us 1 month.
- Choose technologies that match. When we have chosen web3, we should have been a WEB app, not a mobile app. Those technologies were not vibing together, the support was limited and Apple made our app in review for 3 months.
- Don’t jump on every hype wave. When you are jumping on the hype wave you are already too late and after the hype wave is over you will most probably be out of business. Prepare for hype, don’t react to it.
- Build a culture of trust. When we needed to do a second pivot our whole engineering team was working Saturday and Sunday for a month without any complaints. When a team lost a deadline or one of the team members needs a week left, there are no complaints. In our team everyone feels like a product owner, everyone contributes ideas, and everyone can spend a day doing something which was not planned if he thinks it helps the product. When everyone trusts each other the work is becoming pleasant and productivity skyrockets.
- Sell before building. While doing a second pivot, we initiated it only after getting a couple of verbal YES from partners. All our previous apps were built mostly in stealth and their financial future wasn’t validated. It is actually hard to validate a B2C product and that is a separate art that you have to master as a founder but you better spend 1 month doing it than 6 months building a product and then realizing it is not working out.