The eight main challenges facing gambling start-ups

The eight main challenges facing gambling start-ups

iGaming Ideas founder, David Sargeant, explores the main challenges facing start-ups wanting to succeed in today's extremely competitive betting and gaming markets.

So you have an idea. Are you ready for the journey? It's tough being a startup in the gaming space. Every step has its challenge; Ideation, Fundraising, Launching, Growing...

The same themes occur again and again so here are some challenges gaming startups always face.

1. If your USP isn't obvious you will struggle

Explaining your differential is critical at every stage of your business. Crucially this needs to be obvious to investors, potential customers, and the end consumer. Even if you think you have the next big thing if your story isn’t clear then you will be lumped in as just another startup with just another idea.

2. Validate your model cheaply

We work hard to make sure that the risk a startup takes on is minimised. If you can, validate every step before you make the jump or spend the money. If you can’t, then make sure you are learning from every move and gaining metrics to prove your model, and that you are spending in a scalable way. Make sure you can fail everything you do quick and cheaply without killing the whole business or overcommitting to something unproven.

3. Spent money doesn't increase your valuation

This is a common investor bugbear. Just because you have spent millions getting to where you are doesn’t change a thing. You are worth as much as you have and can potentially, not what you have spent.

4. If the integration isn’t cheap and easy you will struggle to get on the roadmap

“Operator integration is easy – it should take about 2 weeks”. This is what every b2b startup claims and then months later are puzzled why they don’t even have VPN access. You have to make sure every step of your integration is as easy as possible.

The cost of integration is one of the biggest hurdles for a startup. This is in terms of time and resource. You may have a contract or an LOI but it counts for nothing if you aren’t live. Make your integration as easy and obvious as possible, have every form of integration documentation ready (even if you are doing all the work!) or you will struggle to get on the roadmap. Note that being number three on the roadmap means you will also never get live – if you aren’t deemed important today then you never will be.

5. Find your evangelists

This counts at every stage too. You need evangelists in your investor group, in you partners, and in your consumers. These are the people that are going to make sure you get the attention you need, and will be the ones who will feedback to help you form those crucial learnings.

6. You don’t have to be first. But you have to be the best.

Make sure you have learnt the lessons from those who have tried and failed before you. Why did they fail? Why won't you? Don’t let yourself by branded by those companies mistakes or everyone will just perceive you to be the next social sports failure before you have even started.

7. Don’t mention NDAs in your first ever email to someone

If you need to protect financial or deal details when things go under the microscope then of course I will sign an NDA but If I don’t know you then why am I going to put a legal obligation on myself? NDAs don’t work with unknown concepts and unknown companies. If you don’t trust someone you shouldn’t work with them. And if you need an NDA to protect your idea then there is no secret sauce.

8. No-one wants to be first. But everyone wants exclusivity.

The customer contradiction. Operators want you to have proven your business model before they launch yet they also want exclusivity because they feel they are going to make you. They can’t have both but it won’t stop them demanding it. Good luck!

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