General Background

Having spent five years running a boutique corporate law firm and experiencing the problems faced by companies in the service industry (as well as problems faced by clients in product supply industries), largely that they are restricted by the number of people they can employ and the number of hours in a day, I decided to effectively reverse engineer a business starting with a few key components of what I consider a modern, hugely profitable business would look like.

The key elements I identified for such a business are that:

•          It is not adversely effected by recession
•          It does not sell products or supply services
•          It does not require a large number of employees to operate
•          It is online and therefore has unlimited reach and potential, and is easily scalable.

I concluded that one industry that addressed each of the above is the online gaming industry so, having researched the industry and found that it is growing at an extremely fast rate, I decided to develop a product.

The Game

Players need to predict six any time goal scorers in the football Premier League over a weekend or midweek round of games.  They pay £1 to play and if they win they take the jackpot advertised on the site, or a share of it if there is more than one winner.

The Vision

My vision is for Predict the Six to become the football pools of the 21^st century and, ultimately, a competitor for the National Lottery, with millions of people playing nationally and internationally.  I have already experienced overhearing members of the public playing the game and I visualise it being a normal part of weekly life for football fans in the same way that the football pools was many years ago.

The Background of the Company

I launched Predict the Six (“PT6”) in August 2014 after more than 18 months of development in order to target a niche in the online gaming industry.

It was clear that there is an enormous amount of competition in the mainstream online bookmakers, casino and poker markets, so to break into those markets would take far too much investment as there are now a number of big players all competing for the same space, including long established players such as Betfair, Paddy Power and William Hill, and new entrants such as Betway who are obviously investing huge sums in marketing.

I assessed the current market and established that something which all mainstream sites had in common was that they target the broad range of betting services and can be overly complicated. 

The alternative way into the market was, therefore, to create a simple game that anyone could play and to target a small part of the market in an area in which no-one else was currently operating.

Having played a game predicting goal scorers with friends over 20 years ago, and having seen the same game played in workplaces and amongst friends around the country since then, I realised that bringing that simple game to the market online could potentially be popular, which has turned out to be the case.  By operating it as a pools type competition, there is no direct competition with any of the major players in the industry and it is much easier to demonstrate the value to potential customers of playing with PT6 as opposed to them simply placing an accumulator bet with a mainstream bookmaker. 

To illustrate, the selection placed with Predict the Six is effectively an accumulator picking six goals to be scored at any time in Premier League matches.  If customers choose strikers or midfielders (which they generally do), their odds at a standard bookmakers are likely to be between 100/1 and 400/1, so if they win £1,000 with us they are getting huge value for a £1 stake (and even greater value if the jackpot is increased in the future).  Paddy Power operates a ‘Hotshots’ game which is effectively the same game (launched after PT6) but is a straight forward accumulator with guaranteed minimum odds of only 26/1 for six goal scorers.

As a business, PT6 simply needs more people to play each week than the size of the jackpot (plus general overheads) to make a profit.  If the jackpot is set at £1,000 and 2,000 people play £1 each, the company makes a profit.  The profit that can be made has the potential to rise exponentially as the number of players increases.

The site was launched in August 2014 for the start of the 2014/2015 Premier League season and the key statistics for that season are set out below.  It should be noted that other than an initial marketing spend of around £20,000, only nominal sums have been spent on marketing.

The feedback received from customers in relation to the game and the site has been very positive, and people like to play it as a bit of fun that can lead to winning a large amount of money.  It is effectively soft gambling so no customer can lose their house, but each could win big, which is in line with our ethical approach to gambling.

I obtained a remote gambling licence from the UK Gambling Commission so that the game is fully licensed and regulated in the UK.

Developments Since Launch

Since launching, I have made a number of developments to the site and to the game in order to make it easier to play and more appealing to the customer, but also to increase the customer’s interaction with the game.

The site now has:

•          a national leader board showing who has scored the most points over the course of the season
•          a mini-league feature so that customers can play in mini-leagues with friends and compete against each other (like in online fantasy football games)
•          a Lucky Dip feature so that customers can ask the site to randomly select six goal scorers for them from a discrete selection of the top scoring players, meaning that even people who don’t know much about football can play
•          further developments to the Lucky Dip system to allow customers to pick some of their own players but also have Lucky Dips on other lines, which they can change if they don’t like the players selected
•          the ability for customers to replicate a selection that they have already placed so that it is easier to place different permutations of similar selections (for example some customers will pick the same five players to score on multiple slips, just changing the last prediction on each one)
•          a ‘ticker-tape’ style banner running across the top of the home page showing the top 20 players from the previous week, so that players feel that they are receiving recognition for getting a number of selections correct even if they don’t predict all six goals
•          mailshots to customers which have been improved dramatically to make their design more in-keeping with the rest of the site

Future Plans

The plan is to secure investment to increase the marketing budget to drive more traffic to the site and, ultimately, more players to the game. As part of that plan, the jackpot could be increased significantly (subject to testing and to the number of new players) and an App for iPhones and Android phones could be developed in the future. The size of the jackpot can be varied to test the impact on new customer registrations and number of bets placed on the site.

Following successful growth, the game could be expanded to have sister games that cover other leagues in the UK such as the Championship, the lower leagues and Scotland, or to go into other countries so that the same game may be played in their leagues (such as La Liga in Spain, the Bundesliga in Germany and Serie A in Italy).

The current game could also be marketed to other jurisdictions such as Ireland, Scandinavia, China and India subject to obtaining the relevant gambling licenses, and could also be expanded into other sports.

In short, I see this business as an exciting opportunity and something that will become a national and international success relatively quickly. The forecasts are divided into those based on an investment of £50,000 being secured, and forecasts based on an investment of £100,000.

With an investment of £100,000, the forecasts are based on the company attracting 49,000 registered users each season over the next four seasons, which I consider to be easily achievable. Based on the £100,000 investment forecasts, at the end of year five the company would have revenue of £3,009,933 with an annual profit of £2,148,605. With an investment of £50,000, by the end of year 5 the company would have annual revenue of £1,513,466 with an annual profit of £1,042,776. These figures do not include any provision for revenue generated by advertising other products on the site or expanding the game into other jurisdictions.

My vision is that the game becomes the new football pools and a competitor to the National Lottery, on the basis that customers can win big but they have more control over whether they win because picking six any time goals is easier than picking six random numbers. The game is also much more fun to play than either the pools or the lottery.

In its first year of trade, the company's total revenue was £9,372 with costs of £61,330 and an overall loss of £51,958.  Detailed forecasts for the next four years and a detailed business plan are available on request.

Investment Opportunity

I have used the most recent Premier League season to test the site’s functionality, the game’s feasibility and the initial marketing strategy. Having received excellent feedback from customers whilst developing the site and dealing with minor problems I am now seeking a large investment to fund a marketing drive in the areas that the initial marketing tests have shown to be effective, such as using ex-professional footballers or celebrities with large numbers of followers on Twitter to play the game and to tweet about it to their followers, as well as testing traditional print advertising. The company has already secured ex-professional footballers Rodney Marsh (72,200 twitter followers) and John Aldridge (155,000 twitter followers) to play the game which has seen a spike in the number of customers registering for accounts, depositing funds and submitting selections.

I am seeking total investment of between £50,000 and £100,000 in order to:

1. fund the next phase of marketing; and
2. underwrite an increased jackpot,

with a view to the company becoming a market leader and establishing a dominant market position before the end of the next Premier League season.

PT6 has the potential to quickly become a multi-million pound, highly profitable business that has minimal costs to operate and would be attractive to a large competitor to purchase for a large sum in the future.

Investors will receive dividends from profits if declared by the company (although it is intended that all profits will be reinvested into the company in its early years), and will also have a capital ownership of the business in the event that it is sold in the future. My intention is to grow the business to a size which makes it attractive to a competitor to buy for a large sum, which may include expanding into other jurisdictions and into other sports.

20% of the company is available to investors for an investment of £50,000, with 33% of the company available for an investment of £100,000. Shares are £5 each with a current issued share capital of 40,000.

The development of the company to date has all been achieved whilst I have also been running a law firm.  If investment is obtained, I will be focussing 100% of my time and energy on the growth of PT6 because I have no doubts that it will become a hugely successful business.  I will not, however, be using any of the funds invested as remuneration for myself.