Business Profile: Fantrax
Sunday, June 6th, 2010
Company: Fantrax
Launch date: October 2008
Became full-time operation: 2006
No. of employees: 8 (Some part-time)
There are many players in the fantasy league management space that the general playing public probably never hears about. That’s due in large part to the big three: Yahoo!, ESPN and CBS Sports. Lee Kleiner and his band of programmers, however, brought to market a slick site that supports a lot of sports and lets you play for free. The president of Fantrax took some time out this week to tell FSB.com about the creation of their system and where the company is headed.
1. Your site talks about starting with “a group of fantasy sports enthusiasts.” How big a group was this to start, how did it come together and what kind of programming experience was brought to the table?
There were five of us at the start, soon after to be seven. As highly skilled software developers, we felt our talent was being “wasted” in the corporate world, which largely lacks innovation and the desire to incur the time and expense to build top-quality software. We felt that if we could find an industry with a high barrier to entry due to software complexity, and where we could build a vastly superior product and have the capability to sell it, we would have a winning combination. Not only did fantasy sports fit the bill, but several of us were already seasoned fantasy sports players. Our team primarily consisted of highly talented and very experienced software architects and developers working in the corporate sector.
2. How long was the “vision” for your platform discussed before you began to develop it? How long was it in development before going live?
We started development on a prototype quite quickly. The product was in development for approximately 5 years before going live.
3. The league-hosting universe is dominated by some of the biggest names and outlets in sports media. What made Fantrax decide to seek a place at the same table? What kind of goals have you set along the way for realistic audience size?
We saw the fantasy sports industry as underserved by the (existing) providers in several ways. Firstly, there was no multi-sport, multi-language leader consolidating the market. Secondly, the technology that the existing providers employed would make it very difficult to extend their products to the kind of customizability we felt was necessary for a true commissioner product with global reach. We also believed that some of the big players were unable or unwilling to offer sports that were not already part of their established business. For example, we didn’t believe CBS would offer Premiership soccer, because they don’t broadcast it.
We set modest growth targets of 50,000 users in our first phase (which we have now surpassed), and significant accelerated growth targets in our next phase.
4. What kind of startup costs went into Fantrax, which features an impressively broad and probably labor intensive platform? How have you gone about marketing the service?
The cost to build such a platform is quite immense, as anyone in the commissioner product business would understand. We have been investing primarily in (research and development) thus far, but are now ready to ramp up our marketing spend. So far, targeted web marketing, cross-promotional activities and, of course, word of mouth have been successful for us.
5. What sports did you offer at the start, and what has been the timeline for adding to that lineup? How do the user bases for your various other sports compare with that for NFL?
Although our platform has always supported all sports, we released NHL hockey and NBA basketball first, since they were a little simpler in their intricacies. We have been able to add new sports in very short order — typically about 3-4 months. That timeline has been even shorter for adding new leagues in sports we already have (e.g. college football and college basketball).
Although NFL is the leader as expected, we are getting solid traction in all our sports (except golf so far, which we released this season in Beta), and our usage in other sports relative to NFL is higher than industry standards.
6. Fantrax prides itself on free offerings, but doesn’t that limit your growth in a marketplace that is so loaded with big-name providers? What kind of revenue is generated by the pay-to-play games?
From the beginning, our strategy has been to balance the user-growth capabilities of offering a free service with the revenue that comes from offering premium products. We will always offer some form of free commissioner product but plan to offer premium products for a fee in the near future.
7. Your site says “free forever,” but is there a level that other revenue generation has to sustain to make that doable?
We have plans to roll out some very exciting “premium” (fee-based) products and contests that a very large number of fantasy sports players are going to use and participate in.
8. The site also touts the speed with which user-requested changes are implemented. How often are such adjustments made, and what have been some of the most significant alterations asked for by users?
New features are added pretty much every week, sometimes several in a week. The product roadmap is a healthy mix of user requests and our own innovations. One recent example is the capability to replicate the player pool across divisions, so each division can draft from their own pool, as opposed to a single pool for the entire league. Requests for this feature came from the football users.
9. How has your rate of audience growth been each year?
About 300 percent.
10. What’s next for Fantrax? Any new sports on the horizon, new wrinkles in the business plan, etc.?
Some of the upcoming sports offered by Fantrax are soccer, Formula 1, and cricket. We are also adding new language translations for our worldwide audience. Plus, we have an exciting lineup of premium products and pay-to-play contests.
