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A Tale of Two Start-ups
Start-ups of the past, start-ups of the present... Matt Broughton talks to an established company and to a relative newcomer about the trials and tribulations of setting up shop on the Isle of Man.
The Isle of Man has become the base of operations for a vast number of egaming operations. Boylespots, Viaden, PokerStars, 12bet, JenningsBet and Paddy Power are just a few of the big names that have enjoyed all the location has to offer.
Casino International Online spoke to two very different companies about their experiences creating businesses on the Island: Goaldash, a relatively new venture, and Iforium, a company long-established on the island. Here are their stories:
Profile: IFORIUM
Casino Interntaional Online: How did Iforium form?
Craig Osborne, Iforium Founder: I accidentally fell into the egaming industry at the backend of 1999 when I was working for a general software company in the Isle of Man. I was developing vessel registration systems, but at the same time the company had embarked upon a sports betting project. It was a total mess and no one even knew what a bet was. Just before Christmas I was asked by one of the directors to look at it over a weekend as a pet project. I worked on it for most of the weekend, worked out how to calculate a bet, how risk management would work, etc. Monday morning came and I gave a damming assessment and recommended that they start again. Much to the company’s surprise, I also handed in my notice in at the same time!
New Year came and I was asked to work on the project during my three month notice period. A team of four us worked ten 100-hour weeks and successfully launched in March of 2000. This momentum led to me rescinding my notice and I was quickly promoted to technical team lead for the betting platform at the age of 23. I continued to work on this for the next five years but the company didn’t understand the gaming industry and it wasn’t going anywhere fast. I decided to leave and gain some wider skills working for a consultancy in the areas of algorithmic trading with the view to bringing this back into sports betting. At this time I also randomly met my first entrepreneurial friend and it quickly became apparent that I was one too; this realisation changed my life forever.
I entered the job market and quickly got job offers but after my recent entrepreneurial realisation it just didn’t feel right; in my eyes it was reconfirming I should really be doing my own thing. I’d also started to put out feelers to some of the customers I’d dealt with previously, and in a twist of fate one of the companies was interested in having me provide their new betting platform because of my past work. It was excellent timing and Iforium was born. I quickly put the previous team back together and off we went with no business plan, just the belief that this was something we should be doing and that the rest will follow.
CIO: Iforium moved from Sportsbook to backroom to casino. How did these changes come about?
Osborne: As part of the sportsbook development we’d created Wagerflex, a sophisticated player management system which integrated into various payment providers, affiliate systems, etc. As part of this process we integrated a number of third-party casino vendor’s products into Wagerflex. It quickly became apparent that there was a gap in the market for a flexible common wallet platform where an operator could start with one casino vendor and bolt on more content as their businesses flourished. The beauty for us was that it could be easily deployed without the sportsbook and quickly adapted for the regulated markets. We can now turn around a new casino with multiple vendors in around six to eight weeks.
CIO: At what point did the company’s location come into play?
Osborne: It was a natural choice to launch Iforium in the Isle of Man. We found it easy to retain our staff because of the great Island community and work/life balance, and as the only true entrepreneurial software engineering-based businesses on the Island, the company has become an aspiration place to work. The talented technical team I originally worked with in the Isle of Man now all work for Iforium.
CIO: Why is the IOM a good place for business?
Osborne: Advantages such as zero corporation tax and favourable personal income tax apply, but as the business has developed I would say the open door policy of the Isle of Man Government has really started to help. They want Isle of Man-based businesses to flourish and succeed. They are always willing to help.
CIO: If you were starting the company up today what might you do differently?
Osborne: Lots of things! I am best classified as a technical entrepreneur. Running an e-gaming software business needs such a broad range of skills I would definitely bring in more experienced commercial and operational people earlier into the business life cycle.
CIO: If you could go back in time and give yourself one piece of advice right at the start of all this, what might that be?
Osborne: Remained focused. One of the great things about Iforium is the team’s collective experiences allow us to quickly turn our hand to most things. We’re very good at getting to the heart of a problem and coming up with great innovative solutions and delivering them working first time. However, in the early years this was also our downfall. We would get too easily side-tracked into different areas and the lack of a detailed business plan with a clear strategy didn’t really help. We now have that and it’s making a big difference.
CIO: What do you think is the toughest thing for companies starting up today to deal with?
Orborne: The e-gaming industry has evolved so much since I started. Software products have become so much more sophisticated and the complexity has gone through the roof. The regulated markets have also raised the bar higher and this all realistically makes the time to market for a new software platform company go from months to years. This isn’t the most attractive commercial proposition to most start-up businesses. The toughest thing is finding the correct niche and marketing to it correctly. Concentrate on this and there’s enough business for everyone. You also need to spend your marketing money wisely. I would recommend that most start-ups think of a marketing budget and then treble it. I would also say don’t spend it all in one go, start gently in the first three or four months, work out what works and what doesn’t, and then hit the second wave hard.
CIO: What’s the best thing about starting up a company?
Orborne: I’ve probably worked too many 80+ hour weeks than I care to remember. However, the sense of achievement when you win a new customer or a new customer’s site goes live is an amazing buzz - something that money can’t buy. Alex Ferguson always says that the only way to replicate the buzz of winning the league is to do it again. I agree.
Profile: GOALDASH
CIO: How was the company started?
Jeremy Bourke, CEO, Goaldash (UK) Limited: The company was started in January 2010 off the back of a unique idea conceived over the previous year. Initial seed capital was invested to build a concept game and development website. This formed the platform for further growth through additional investment with the business receiving its OGRA licence in Jan 2011 in the Isle of Man.
There was a proof of concept launch in April 2011 for the last two weeks of the UK football season. This was preceded by months of beta testing where both the game and software received exhaustive internal and external audits. www.goaldash.com went fully live for the start of the 2011/12 football season on August 4th with the 1st draw on Saturday 7th August when the English and Scottish leagues stated.
CIO: Tell us about the product.
Bourke: Goaldash is an exciting new weekly football game that is currently offered purely online. Combining the well known formats of the Pools and the National Lottery, each and every week of the football season Goaldash selects 24 matches ranging from fixtures in the Barclays Premiership to those from Irn Bru Division 3 in Scotland. To qualify for selection all matches must be 3pm kick-offs giving the game a qualified start time. The teams involved in the panel selection each week are then given a number between 1-48 based on alphabetical order so Aberdeen might be no 1 and Yeovil no 48. Players are then invited to select their six from 48 picks based upon which six teams will score the six quickest goals. The draw is made therefore every Saturday afternoon from 3pm and is normally finished by around 3:15pm. As the goals go in, the winning numbers populate the winning line for that week. All goals are recorded and verified independently by Football Dataco Ltd. and are recorded in minutes and seconds at every ground by the PA. Therefore our winning numbers each week are independently generated and do not rely on any internal Goaldash draw mechanism.
Players can enter their favourite numbers each week, play through a lucky dip or try to work out the results using the comprehensive stats section on the site that offers up to the minute goal scoring data to help with selections. Those players clever or lucky enough to pick the six quickest goals will win £1 million or a share each and every week. Further cash prizes range from £5,000 for five correct balls, £100 for four balls and £10 for three balls.
We are looking at further engaging customers through midweek games and using the “quickest wins” concept in other sports. However the beauty of Goaldash is its simplicity, ease of entry and an exciting Saturday draw based on the Nation’s favourite game.
CIO: At what point did the company’s location come into play?
Bourke: The company is regulated and licensed out of the Isle of Man and operated on a daily basis from London. We were aware at an early stage of the advantages of being based offshore from the gambling tax perspective but there is much more to our decision than that. Going through the licence process with the GSC was pretty tough - quite rightly so in this business sector. The process actually helped us crystallise certain aspects of the business model, and the pre-testing required allowed us a very smooth launch into becoming a live product.
CIO: What do you think is the toughest part of starting up a company today?
Bourke: Depending on the business model, funding and financing the start-up to growth phase has to be a really tough part. Even if the business idea is fundamentally sound and there’s sufficient funding, growth still isn’t guaranteed. It’s hard work to grow a brand and gather customer momentum even with the online platform to help.
CIO: What is the great thing about starting up a company?
Boourke: Well I suppose there is the thought that “I’ve had a good idea and I’ll kick myself if I don’t give it a decent go”. There is also the pleasure of putting a great team together to deliver the product and fulfil the business plan.
