Archive for June, 2010
‘Apprentice’ champion turned fantasy sports website into major player by adjusting the game plan.
By Alfred Lee, LA Business Journal link: Game Changer Story with Photos
Monday, June 21, 2010
Today, RotoHog hardly bears a resemblance to the fantasy sports website Kelly Perdew took the reins of in June 2008.
The Westchester company has recently made a name for itself as a creator of fantasy games for other businesses, including Sporting News, NASCAR and Us Weekly. But it was initially launched in 2006 as a stand-alone game site that could compete directly with fantasy sports giants like ESPN and Yahoo Sports.
The 43-year-old Perdew was brought on as the company’s new chief executive two years ago with one main objective: to make it profitable. His resume included running companies such as amateur sports website Eteamz.com, but he’s perhaps best known as the winner of season two of the NBC reality television show “The Apprentice.” He beat other contestants for the chance to work for Donald Trump under a 14-month contract.
Almost immediately after arriving at RotoHog, he put into motion a complete transformation of the company’s strategy.
“I don’t think a lot of people could have pulled it off,” said Kent Smetters, who co-founded the company with his partner David Wu. “Kelly evolved the model into a different kind of company.”
Rotohog.com went live in early 2007 offering fantasy leagues for the National Football League, Major League Baseball and other sports with a twist. To make the leagues more competitive and protect against bad trades among contestants, each player was valued in a unique stock exchange.
However, despite raising about $9 million, the site struggled for nearly two years. The problem? Perdew saw that bigger competitors such as ESPN had a captive audience by virtue of their news content, whereas at the end of the football or baseball season, RotoHog’s users left the site.
“They had spent a significant amount of money to drive eyeballs to the website,” Perdew said, “but there was no path to profitability.”
However, Perdew knew that ESPN and other competitors such as Fox Sports were running their games on older computer platforms that would likely need significant upgrades in a few years. He saw an opportunity for the company to reposition itself from a fantasy sports website to a games provider for other brands, moving from a consumer model to a business-to-business model.
“So I said, OK, we should become a platform that could basically replace their entire back end,” he recalled.
Not only that, Perdew moved for the company to expand its games beyond sports to broaden its appeal to other industries that want to use online games to interact with their customers.
After selling RotoHog’s board on the idea, Perdew had the company hunker down for a year while it developed a new Internet platform that could serve as the template for scores of websites.
Within the first three months, he had let go of 25 of the company’s 40 employees, many of whom had been hired to build content for a website that was no longer the focus. But the head count went back up to about 30 as he hired a new team of software developers.
“Don’t mention that time to any of the guys here,” he said, referring to the turmoil.
In September 2009, after more than a year of development, RotoHog launched its new platform. In the 9 months since, it’s developed 37 games for other companies, including those in the entertainment, consumer brands and gaming industries.
Among the games are one developed for ABC reality television show “The Bachelor,” which features trivia questions and gives out sponsored prizes, encouraging users to go back and watch old episodes online to get the answers. Another for Us Weekly allows fans to guess who will be featured in the magazine.
“I think more brands and more webites are looking at different ways to engage readers, and gaming for a certain demographic is interesting,” said Romina Rosado, executive producer of UsMagazine.com.
The company has also been working on a fantasy game on Facebook for newly launched Bloomberg Sports, which sells sports analysis to fans and fantasy players. The game will challenge users to pick successful hitters and will go live by the end of June.
Bill Squadron, the head of Bloomberg Sports, said the idea behind the game was to encourage users to buy the company’s baseball analytics for a leg up on the competition.
“Hopefully that’ll both let them know about it and drive sales of that product, and at the end of the day that’s the real goal we have,” he said. “You’re going to see a big number of major brands experimenting with this in different ways.”
RotoHog hasn’t yet reached profitability, but Perdew said the company is “this close.” Competitors such as Fanball also provide fantasy games for other companies, but Perdew claims no other providers cut across as many industries.
Another edge appears to be Perdew himself. He said the recognition from being on “The Apprentice” has helped the company get exposure through media coverage and speaking engagements. It’s even helped get meetings with potential investors.
“We’re pretty much able to get to anybody we need to talk to about stuff,” he said. “It’s a nice icebreaker for discussions. People are always asking me what’s up with Donald’s hair. I never answer that question.”
CORE BUSINESS: Creates and manages online games for varied clients.
EMPLOYEES: 30 (up from 15 in 2008)
THE NUMBERS: More than $1 million in revenue in the last 12 months.
I hope this note finds you well. It has been some time since we updated you on the progress we are making with RotoHog and our new partners and applications, and with three of our newest partners launching games two in last two weeks for World Cup and one in the very near future for baseball, we wanted to provide you with an update on our continued progress as one of the world’s fastest growing and most efficient developers of white label games for high level media properties both in sports and entertainment.
When I last wrote, we had just launched two very successful games in the entertainment field, one with US Weekly (Season 2 is starting soon: http://bit.ly/bQnAc1) and the other for “The Bachelor.” Those games have been very successful as brand extensions both for the magazine and for the reality show series, and they have led to another series of games that will be announced in the coming weeks, so stay tuned.
However as you know our biggest focus has been in the sports world. Our continued work in producing games for NASCAR.com, Pro Football Weekly, Turner Digital and NBA.com has led to more work in the space, with the afore mentioned new partners. In the last few weeks we have been able to secure a deal to develop a Facebook game for BloombergSports, the recently launched consumer arm of one of the world’s most successful business data analysis brands. This new game, which will be launched in the coming weeks, will take Bloomberg’s new consumer baseball analysis product and give all the data a new fan-friendly platform that can be used by millions of followers and fans of baseball on Facebook. It will be a fun and very easy application that we think will expose this high functioning and very elaborate product BloombergSports has created to a new, wider level of engaged baseball consumer, and we are very proud to be working with them on the project.
Our other two new developments are for the coming World Cup. The first is another Facebook application, this one with Sports Illustrated allows fans to handicap their favorite countries throughout the World Cup draw, giving a new legion of digital soccer fans the ability to enjoy the world’s largest sports spectacle online like never before. You can play it here: http://bit.ly/91NADw.
Our second World Cup application is on a more global level with hi5, the largest social entertainment site for games in the world. We launched “The World Futbol Challenge” for hi5’s 50 million global users. The game, which is featured on hi5.com leading into the start of World Cup, is a confidence “pick em’ game, which gives the user the ability to earn added points in a pari-mutuel-like pool for picks they feel are the real value. Make your own picks here: http://bit.ly/bCR7La. Both these games for our two new partners continue to support our plan of global expansion for all of our games.
Soccer is the fastest-growing sport outside the United States in the fantasy space, and by working with these two premier brands to build their games, we are confident that our position on a global basis will be just as strong as we currently are domestically. When the world’s media companies look to build games, Rotohog will be their partner of choice.
Again these are just some of the new projects we are undertaking as the spring continues along. We are having another solid quarter in challenging times, and are looking forward to continued expansion both in sports and entertainment as the year plays out.
As always, thanks for your support and input, it is invaluable as we grow our business and it is very much welcomed. If there is anything we can assist with or questions we can answer please do not hesitate to ask.
“Operation Stores & Stripes,” where military veterans have the chance to win his or her very own Sears Hometown Store.
Now through June 25, qualified military veterans can enter the “Operation Stores & Stripes” contest online at www.searshometownstores.com/veteran where they will complete an application which serves as their official entry to the contest. Once the recruitment period closes, all applications will be reviewed and qualified candidates will be notified that they will continue on the second phase of competition. Ultimately, one deserving military veteran will earn an entrepreneur’s dream – their very own business. The winner will receive their own Sears Hometown Store which they will independently own and operate. All Sears Hometown Stores are locally owned and operated by dedicated, hard working individuals that take great pride in serving their communities nationwide and we couldn’t think of another group, other than our nation’s military heroes to honor with this program.
Please tell any vets that you think might be interested!