Q&A: Fanvest Wagering Exchange on navigating 2020 and product diversification

After a 2020, the apex of annus horribilis, that no one could have predicted, Fanvest Wagering Exchange co-founder Fern Murias is looking to make up for lost time this year.

The American has big plans for his platform, dubbed the stock market of sports, including launching a mobile app, adding paid contests and expanding beyond its NFL and NCAA roots into new sports.

Here, Murias tells EGR Technology about the strength in being a start-up, the exploding growth of US sports betting and the importance of tech ownership.

EGR Technology: How has Fanvest, as a young company, navigated the coronavirus pandemic?

Fern Murias (FM): We believe that in order to be a successful start-up, you have to be anti-fragile and use shock as an opportunity to grow.

When the pandemic hit last March, we were about to launch a new March Madness product that we’d been working on for months. When the tournament was cancelled, we had to quickly come up with a plan to get the product out to customers and we decided to host a simulated tournament.

This has been a difficult time for everyone in the world but we’ve seen tremendous growth since the start of the pandemic and we’ve nearly doubled the size of our team. We continued raising capital and we launched four new products. I think one of the main reasons that we’ve been able to cope more is because that we’ve always been fully decentralised.

EGR Technology: Can you talk me through some key figures for Fanvest in terms of users, revenue, etc.

FM:  We launched our first beta product 18 months ago for March Madness 2019. Since then, we’ve launched six unique products for the NFL and NCAA basketball and our user base has grown by about 20% each time we launch a new product.

We’ve had over 10,000 users create an account and 40% of our current active traders have played in a previous Fanvest contest. We have a solid base of loyal users that has continued to grow over time.

Our users have completed over 70,000 trades on our platform, plus the average time spent on the site and the average number of trades per week have both tripled compared to last year.

EGR Technology: How did the rollout of the NFL play-off project fair?

FM: Ultimately, we realised that there was a much larger demand than we anticipated from our users for a player-based market product. We quickly designed this new player-based market product, and we were able to get a legal opinion classifying it as a game of skill. We are still gauging interest. This is a new path for us and we’re not saying that we’ll never go back to team-based markets. But this is something that we’re pretty excited about and we’ve seen really great traction so far.

EGR Technology: Are you any closer to RMG or is the focus to retain the DFS stance for the time being?

FM: This is something we have been actively assessing for a while now. Our initial vision for this company to be the stock market of sports was to trade teams like stocks and that was the first iteration.

As we went out, began raising capital and trying to learn as much as possible about our users, we began mapping out how we could come up with a monetisation strategy that our customers felt comfortable with and aligned with their needs. One of the biggest things they wanted was higher cash prizes, they enjoyed the model of joining a contest and competing for cash prizes and they expressed that they’d be willing to pay for that, as long as there were higher cash prizes.

We began exploring that route with our team-based markets and realised if we went down that road, we would likely need a gaming licence and there’s significant legal hurdles and costs associated with that.

We’re targeting one thing that we think makes us unique with our dynamic pricing and the stock market experience. So, taking a familiar experience emphasising what makes Fanvest unique onto that. And simultaneously, doing so in such a way that allows us to start generating revenue.

EGR Technology: Speaking on DFS, do you feel like the appetite is still there for American players given the meteoric rise of sports betting following the PASPA repeal?

FM: We feel that a rising tide lifts all boats. More specifically, we feel that the growth of sports betting has driven increased demand for sports investment products in general. There’s a massive demographic in the US alone, who are avid sports fans and actively invest their own capital, and who used to consider sports betting a vice. That stigma is beginning to disappear as the legal landscape opens up.

You have more people than ever who are ready to invest in sports in whatever form that may take. We believe the meteoric rise in sports betting will lead to increased appetite for alternative sports investments in general. We’ve seen incredible demand recently for trading cards and non-fungible tokens (NFT) and I view that as another bullish sign for the broad industry of sports investment.

EGR Technology: There are a few other exchanges which aim to blend the DFS/stock market experience such as Sporttrade and BallStreet – do you think the vertical is crowded? And if so, how do you stand out?

FM: I think we are just scraping the surface of this market potential. We have a lot of new users come into the space of sports investment and many of the users who are new to the space may be unfamiliar with sports betting and daily fantasy, but they are intimately familiar with personal investment apps like Robin Hood.

Building a familiar user experience for them, we believe lowers barrier to entry there. Our mission is to blend fantasy sports with the stock market investment experience. We want users to open Fanvest and feel like they’re logging into a broker dealer. One of the most important aspects of achieving this is providing the user with information that helps the investment decision. We provide the user with price charts and trading statistics but we also break down detailed market data on our research page. We offer ownership trends and deep insight into what traders on our platform have been buying and this is all to give the users a better understanding of how prices move and how they’re determined.

EGR Technology: Looking towards your in-house technology, how important is it to have ownership over that?

FM: It is of paramount importance for us to have control over this and I break it down into two core segments. The first is our market, and more specifically, the rules which govern our market dynamics. When we launched our first market with user-driven pricing earlier this year, our users immediately identified inefficiencies and they were able to manipulate the market. So, over the first few weeks of the season, we were actively testing out new rules to control pricing and implement trading restrictions to make our market ready to the point where we could feel that we’re offering efficient user-driven pricing.

The second is the user experience. We are constantly iterating and learning from our customers about what they want. I’d say that was probably the big turning point for the company, when we started just ruthlessly sending out customer surveys, scheduling customer interviews, trying to get our users on speed dial, as the expression goes.

That process of speaking with users throughout the week, collecting that feedback and then talking to the engineers about what’s possible, and what are some ways that we can implement this has just allowed for this constant iteration and evolution. We are always learning and always growing, and by reducing that feedback loop, we are shipping products as fast as possible

EGR Technology: Are there any new products you’re looking to launch or platform alterations in the pipeline?

FM: By far the biggest request is for a mobile app. So, we have begun development on the app and our goal is to have this ready within the next three months. We’ve seen demand for NBA and MLB products. But surprisingly, we’ve seen the strongest demand for a golf product, so we expect golf to be a major focus for us moving forward.

EGR Technology: What does the next 12-24 months look like for Fanvest?

FM: The next kind of big hurdle for us is we’re about to launch paid contests. The big objective is converting our user base from free-to-play beta users into paying customers on the product side.

Over the next six months, we are going to develop and launch a mobile app, roll out contests across three new sports and then over the next 12 months use that product development to significantly grow our user base.