Blog #4.0: What eSports Business should I launch?

  (Edited: )

So you’re ready to step up to the plate and begin growing your own eSports career. Awesome! Before you take too many steps, allow me to stress a couple of lessons I wish I knew before I started! 

Lesson #1: Unique ideas don’t mean much.

I get a million emails at Day[9]TV in which people mysteriously allude to a brilliant idea that they just had. “We need to meet and talk,” they say. “Our idea is worth millions. We should cooperate and join forces.”

They would like to tell me more but first require that I execute a non-disclosure agreement. Because the idea is that good. Then they warn me: the “idea” is gathering momentum. If I don’t act swiftly, the startup train will leave the station without me and I will end up crying in my beer.  

My response to this is generally to roll my eyeballs.  I myself get about twenty fabulous business ideas in the shower every morning, staff them in my head while brushing my teeth and imagine growing them into giant monopolies over breakfast. This is enormously pleasurable to me, but has very little to do with the realities of running a business.

So this blog is intended to challenge the notion that a start up is all about the “idea.” Don’t get me wrong: a great idea is very, very important, but far more important is how you execute that idea. How you sell it, how you grow it, how you keep it moving.

I see too many people in eSports who have a fantasy that if they could just come up the “winning idea,” they could have a business empire.

Pet Rocks
Credit: Today is a good day / photo on flickr

These folks often cite the pet rock business or the hula hoop business or PlentyofFish.com as examples of a “winning idea.” “That pet rock guy made a killing!” they say. “He did it all by himself out of his apartment! That could have been me!”

The truth is that very few ideas in any marketplace are all that unique. I am pitched the same ideas over and over again by eSports fans, all of whom passionately believe that they are completely original in their thinking. Many of these ideas are almost identical to ones I myself dreamed up in the shower. In fact, the other day I pitched a totally unique idea to Twitch TV, and they promptly sent me to a website where someone was already doing the very thing I’d described. 

I see some folks crumble when they are confronted with the competition. Like a guy rejected by a girl, they mourn the loss of “what could have been.” They feel like their idea has been stolen. They give up.

Don’t do this.

Again, the point is that a start up or a product is not as much about the “idea” as it is about the execution of the idea. Think MySpace, which was an internet sensation until Facebook came along and steamrolled it. Simply do your research on your competitors and figure out how to do things better.

Credit: Google Trends - Myspace vs. Facebook

Lesson #2: Keep the competition out and continually innovate.

The corollary to this is that someone is always going to be trying to beat you at your game.  Even if you come up with a completely original idea, there may folks out there who will be trying to walk off with your market two minutes after you launch. How?  By appreciating your idea and learning from your mistakes. By doing what you already do, but doing it on a grander scale, with more money and more employees. By scaling faster. There is nothing immoral about this. Many ideas are surprisingly difficult to patent or surprisingly easy to spin off into legal variants.  Always be looking over your shoulder and staying one step ahead.

Three innovators, working different ends of the same niche
Credit: Solo / photo on flickr

This leads us to another important question you should be asking yourself when formulating your business idea: how easy will it be for someone to imitate me and push me out of my own niche? What entry barriers exist to keep potential competitors out? 

Ideally, you want to create something that is not only compelling and unique for users but also difficult for competitors to imitate. Alternatively, you want to quickly grow your user base to such a critical size that your competitors can never catch up to you.

Remember you are working in a rapidly evolving marketplace, where the rules and the players change all the time.  You are going to want to keep reinventing your business as you grow, so that you stay ahead of everyone else. (They call it “pivoting” in Silicon Valley). 

Did you know that YouTube started as a video dating site called Tune in Hook Up before its founders changed direction? Or that Flickr was originally conceived of as part of an MMO role playing game? Or that Shopify (which by the way, has a kickass StarCraft team in the After Hours Gaming League) started as an in-house purchasing solution for an online snowboard business?

This means you shouldn't be wed to your original idea to the point of rigidity. Keep it fresh and keep it moving. You may launch one eSports business model and end up running something completely different within a year. That’s fine! You probably wouldn’t even have thought of business number two, if you hadn’t launched business number one. Get into the eSports marketplace now, start to meet people, and start to test your ideas until you find something that works.

Lesson #3: Have a clear plan for gaining audience or customers.

“How do I gain audience or customers?” This is the big question, the one many people don’t want to think about. In fact, I am always amazed by people who tell me they want to build a business but don’t want to get into sales. In fact, they get a funny look on their faces when I mention marketing and sales, as if I just farted in their direction. They hate the very idea of selling. They want to be eSports idealists, not corporate hacks. But the truth is that a great idea is worthless unless you can drive users or audience to it and unless you can generate money to cover your day to day operational expenses.

Start thinking about all the ways you are going market your business from Day One. (We will give you more detailed advice on this in future blogs).

I had a business mentor once tell me that a lot of businesses are by necessity 60-80% sales effort and 20-40% production effort. In other words, money is needed—lots of it—on the front end in order to drive the engine which operates the company on the back end. This was a real eye opener for me. Until then, I’d had a kind of naïve “build it and they will come” attitude.

The Bottom Line.

I’ll say it again: business is like StarCraft. You need to know your opponents’ strategies, you need to know your build orders, you

Terran eSports entrepreneurs
Credit: Dunechaser / photo on flickr
need to have your timings down. You need to practice and learn. You can talk a good game, and still suck on the ladder. You have to implement your strategies in a real world environment. You have to understand that for all your careful preparation, your opponent may pull a cheese rush and totally kill you off before you even get started. Don’t play StarCraft competitively unless you want to seriously study the game and do your homework. What’s one of my favorite sayings? Probes and pylons! That’s the simplest way to say “it’s all in the execution!”

Likewise, don’t gamble on an eSports business until you learn the ropes. Be prepared for lots of setbacks. Be nimble and flexible about changing your tactics. Understand your own shortcomings. Don’t quit your job tomorrow, run up debt on your credit cards, and chase an eSports dream without a solid game plan, a lot of skill, and a coach or two. Start small, gain experience, and make calculated bets that slowly raise the stakes.

As Steve Jobs said: “Follow your heart, but check it with your head.”

Next up:  Producing eSport Tournaments 101