Gambling Insider has posted a discussion about startups (new companies). How difficult it is for young developers to break through and where they can look for funding.
The discussion was attended by Alexander Levchenko (AL), director of Evoplay, Ruben Loeches (RL), director of marketing at R. Franco Group, Julian Buhagiar (JB), one of the founders of RB Capital and Dominic Mansour (DM), director of Bragg Gaming Group . Below is a translation of their conversation.
What does a startup need to impress the gaming industry?
DM: On the one hand, this is a bit like brand marketing; you build identity, reputation and strategy. When you know what you're fighting for, you'll do anything to be heard. This does not necessarily require advertising on TV, but simply to make sure that the measures taken make the company stand out from the crowd. Then you have to interact with people and talk about it.
AL: Being better than the competition is no longer enough; if you're small, young and want to make an impact on the industry, you have to turn it upside down. Those who want to be remembered must come up with a new concept or innovative solution. Look at Elon Musk, he didn't create Tesla to improve existing electric cars on the market, he founded it to create the industry's first mass-produced electric sports car. This is the same as in online gaming; if you want to leave the impression of a startup, you have to come up with something revolutionary.
JB: Unique intellectual property is key, especially in young (non-EU) markets. As well as the ability to deliver products on time, with minimal delays and/or lead times when problems inevitably arise. A good sales team that can quickly close contracts with the right players is vital, as is not getting bogged down too early in legal, operational, and administrative bureaucracy.
How easy is it for startups to bring their ideas to life? How do they raise capital?
AL: It depends on the people and ideas behind the startup. Of course, the wave of "unicorns" is not what it used to be. In the recent past, the hype was much more significant in terms of investing in startups, but the situation has changed. Investors today want more details—and more importantly, they want an assessment of whether a startup has the ability (as well as the vision) to solve the problem they plan to solve. This is not to say that investors are no longer interested in startups - there is definitely interest - but today, more than ever, it is important for startups to understand their audience and dream big.
JB: To break into the market quickly, you need a great but small team. When it comes to slots or sports betting, the math engine and UX/UI play a critical role. It is very important to have a reliable, agile development team that can quickly turn wireframing and math logic into a product. Sometimes it is necessary to pay more for the right team, especially when good resources are limited (this is about Malta and Gibraltar).
Raising capital is a completely different beast. You can't get any money until you have a solid, working concept, and even then the capital will come in little by little. Be prepared to bring in family and friends early on to develop a great demo, then start looking for venture capital firms that specialize in growth assets.
How do you react when startups come to you with their grandiose plans?
RL: We welcome the innovation and new thinking that startups bring. This is especially noticeable in Latin America, where the market is still in its infancy. One area where we would particularly like to see startups making a difference is the slot development sector. Latin America is a young market that needs local innovation to suit its unique environment – especially in terms of mobile gaming.
For operators targeting this market, the main products are focused on Europe, which raises the problem of non-compliance with the requirements of players and regulators. To succeed there, it has become more important than ever to work with those who know the local area to tailor inappropriate products and games; we welcome the opportunity for local talent to develop and grow.
Do you find it easier for established companies to invent and come up with new ideas?
AL: Financially, yes. Undoubtedly, it is easier for established companies to deliver innovation through their R&D departments, also thanks to the availability of data collection and analysis tools.
But that's where the benefits end. Startups have an advantage on all other counts. They are not only flexible, they can easily switch from one idea to another, change strategy at the moment as the market requires, and easily move team members. Established companies know this - which is why we're seeing an emerging trend of established companies acquiring small, innovative online gaming startups. They have the right resources and unique ideas, along with the ability to bring a fresh approach to business thinking.
RL: For me, these will always be established companies. Only with the resources, experience, and knowledge can a company apply technology and services to truly invent something new. Of course, there are exceptions. But when it comes to providing a platform that can be approved by regulators in multiple markets and meet the requirements of various operator jurisdictions, a couple of young, bright minds with a few million simply cannot do the job.
DM: I generally think it's harder for established companies. It is important to be aware of the difference between a good idea and its implementation. This is the moment with which large corporations have the most problems. They have a lot of great people with great ideas of all kinds, but getting them through the systems and processes is next to impossible.
Do I need to protect innovative products with a patent?
AL: This is a very interesting topic. If we take, for example, IT - patents can become an obstacle to the evolutionary process within the industry. Granted, getting a patent is a guarantee that competitors won't copy your concept in the future, but if you're looking for protection from someone who's more creative, smart, and agile, you've probably already lost the battle!
In our industry, everything moves faster and research takes less time than development itself. No matter how good you are at copy pasting, you can't copy Google or Netflix. The most important thing is not the technologies themselves, but whether they solve the problems for which they were intended? Competition is good and is the key to innovation. If you spend your whole life looking back, you will never be able to move forward.
JB: A difficult question, the answer to which depends on what kind of intellectual property and where you are going to launch. Math engines and logic can be difficult to patent, mainly because they have, in fact, already been invented. Branding, graphics, and UX are more important and can be easily copied, but the territories in which you plan to launch will determine how protected your intellectual property will be after obtaining a patent. In US/EU/Japan it is very easy to do this but expensive. But China/Southeast Asia is a nightmare. Specialized patent attorneys with experience in software, and ideally in gaming, will be more helpful.
Source: https://www.gamblinginsider.com/in-depth/7705/roundtable-david-vs-goliath-can-startups-really-disrupt-the-industry
